General information, not legal advice

Tennessee Seller Disclosure Explained

If you are selling a home in Manchester or anywhere in Coffee County, one of the first pieces of paperwork you will see is the seller disclosure. Tennessee covers it in the Tennessee Residential Property Disclosure Act, found at Tenn. Code Ann. section 66 5 201 and the sections after it. This page walks through what the statute says in plain language so you know what to expect.

This is general information, not legal advice. Every sale is different, so please talk with a Tennessee attorney about your own situation.

Which sales the law covers

Under TCA 66 5 201, the disclosure rules apply to transfers by sale, exchange, installment land sales contract or lease with option to buy of residential property with one to four dwelling units. That includes site built and nonsite built homes, and it applies whether or not a licensed real estate agent is involved in the sale.

Your two choices: disclosure or disclaimer

TCA 66 5 202 says the owner must give the buyer one of two documents:

A residential property disclosure statement about the condition of the property, including any material defects known to the owner. The owner is not required to hire anyone or do an independent investigation or inspection to fill it out.
A residential property disclaimer statement saying the owner makes no representations or warranties about the condition of the property and the buyer takes it as is, with all defects that may exist, except as the purchase contract provides.

There is an important catch. The disclaimer is only allowed if the buyer waives the disclosure statement. If the buyer does not waive it, the seller must provide the disclosure statement.

What the disclosure statement is, and is not

TCA 66 5 201 says the statement is not a warranty of any kind by the seller and is not a substitute for inspections by the buyer or a professional home inspector. It must be given in good faith by the owner. It is for the exclusive use of that buyer, and a later buyer cannot rely on it.

The form itself is set out in TCA 66 5 210. A different form may be used, but it must include every item and acknowledgment in the state form. Under TCA 66 5 202, the form tells buyers and owners that they may wish to get professional advice or inspections, and that the answers are the owner's representations, not the real estate licensee's.

When it must be delivered

TCA 66 5 203 says the owner must deliver the written disclosure or disclaimer statement before the purchase contract is accepted. Acceptance means the contract is fully signed by all parties. The statement can be part of the purchase contract, an addendum or a separate document.

Sales the statute exempts

TCA 66 5 209 lists transfers that are excluded from these disclosure rules. In summary, they include:

Transfers under a court order, such as transfers ordered in administering an estate, foreclosure sales, transfers by a bankruptcy trustee, eminent domain and decrees of specific performance
Transfers connected with a deed of trust foreclosure or a deed in lieu of foreclosure
Transfers by a fiduciary while administering an estate, guardianship, conservatorship or trust
Transfers only between people who already own the property together
Transfers only to a spouse or to a direct descendant or ancestor of a seller
Transfers between spouses under a divorce decree or property settlement
Transfers because the owner failed to pay federal, state or local taxes
Transfers to or from a government housing authority or agency
The first sale of a dwelling when the builder offers a written warranty
Property sold at public auction
Sales where the owner has not lived in the property at any time within three years before the transfer
Certain transfers from a debtor in a Chapter 7 or Chapter 13 bankruptcy by deed in lieu of foreclosure or quitclaim deed

The exact wording matters, so read the statute or ask your attorney if you think your sale may be exempt.

Separate disclosures in Tennessee law

Other sections of the same part of the code add specific items. Even if your sale is exempt from the disclosure statement, ask your attorney whether any of these still apply to you.

Injection wells and soil tests. Under TCA 66 5 212, before entering a contract the seller must disclose, in the contract or in writing with acknowledgment of receipt, any known exterior injection well and the results of any known percolation test or soil absorption rate on the property that is determined or accepted by the Tennessee Department of Environment and Conservation. This can matter for rural Coffee County homes on septic systems.
A house moved to a new foundation. The same section requires the seller, where known, to disclose whether a single family home on the property was moved from an existing foundation to another foundation.
Sinkholes. TCA 66 5 212 also requires disclosure of a known sinkhole on the property, whether or not it shows in the contour lines on the recorded plat. The statute defines a sinkhole as an underground void created when limestone or dolostone dissolves through groundwater erosion, causing the surface to sink.
Planned unit developments. Under TCA 66 5 213, the owner must disclose if the property is in a planned unit development and make the restrictive covenants, homeowner bylaws and master deed available to the buyer on request.
Impact fees on a first sale. Under TCA 66 5 211, on the first sale of a dwelling the owner must give the buyer a statement of any impact fees or adequate facilities taxes paid to a city or county on the parcel.

Homes built before 1978

Federal rules also apply. The U.S. Environmental Protection Agency says that for most housing built before 1978, sellers must disclose known lead based paint and lead based paint hazards, provide any available reports, give the buyer the EPA pamphlet Protect Your Family From Lead in Your Home, include a Lead Warning Statement, and give the buyer a 10 day opportunity to have the home inspected for lead unless the buyer waives it. Foreclosure sales and housing built after 1977 are among the exceptions the EPA lists.

Mistakes, unknowns and changes

Unknown items. TCA 66 5 205 says if an item is unknown or not available, the owner may say it is unknown or give an approximation, as long as the approximation is clearly labeled, reasonable and based on the owner's actual knowledge.
Information from others. Under TCA 66 5 204, the owner is not liable for an error that was not within the owner's actual knowledge or that came from a public agency or a licensed expert's report, as long as the owner was not grossly negligent in getting and passing along that information.
Changes before closing. TCA 66 5 205 says that at or before closing, the owner must disclose any material change in the physical condition of the property or certify that the condition is substantially the same as when the disclosure was given.

What buyers can do if something is wrong

TCA 66 5 208 lists a buyer's remedies for a misrepresentation on the disclosure statement:

An action for actual damages from defects that existed when the contract was signed and that the buyer did not know about by closing or occupancy. It must be brought within one year of the date the buyer received the statement or the date of closing, whichever comes first.
Termination of the contract before closing, subject to TCA 66 5 204
Other remedies available for an owner's intentional or willful misrepresentation

Failing to provide the statement does not by itself let the buyer terminate the contract, according to TCA 66 5 203, and it does not affect title under TCA 66 5 208. But the statute also preserves other claims a buyer may have for misrepresentation or failure to disclose material facts. Honest, complete answers protect you.

Things the statute says sellers are not liable for

TCA 66 5 207 says no cause of action arises against an owner or real estate licensee for not disclosing that a past occupant had HIV or another disease that medical evidence shows is highly unlikely to be spread by living in a home, or that the property was the site of a homicide, felony or suicide, or of an event that had no effect on the physical structure, its physical environment or the improvements.

How I help

Tennessee law gives a listing agent the duty to inform the sellers they represent of their rights and obligations under the disclosure act, under TCA 66 5 206. When we work together, I will make sure you have the current form early, explain each section and help you gather records like repair receipts, septic information and HOA documents. Legal questions go to your Tennessee attorney.

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Common questions

Do sellers have to fill out a disclosure in Tennessee?

In most sales of homes with one to four units, yes. Under TCA 66 5 202 the owner must give the buyer a residential property disclosure statement, or a disclaimer statement only if the buyer waives the disclosure. Some transfers are exempt under TCA 66 5 209.

Can I sell my house as is in Tennessee without a disclosure?

The as is disclaimer statement is only allowed if the buyer waives the disclosure statement. If the buyer does not waive it, the seller must provide the disclosure statement, according to TCA 66 5 202.

When is the seller disclosure due in Tennessee?

Before the purchase contract is accepted, meaning before it is fully signed by all parties, according to TCA 66 5 203.

Do I have to disclose a sinkhole in Tennessee?

Yes, if you know about it. TCA 66 5 212 requires disclosure of a known sinkhole on the property before entering a contract, whether or not it shows on the recorded plat.

Who is exempt from the Tennessee disclosure requirement?

TCA 66 5 209 lists exempt transfers, including court ordered transfers, foreclosures, fiduciary sales of an estate or trust, the first sale of a home with a builder warranty, public auctions and sales where the owner has not lived in the home within three years. Ask a Tennessee attorney whether your sale qualifies.

Matt Sargent is a Tennessee licensed affiliate broker with Keller Williams who helps buyers and sellers in Manchester and Coffee County. Call (615) 497 1658 or send a message.