Top 8 Things to Know About Tennessee Residential Property Disclosure Law

property disclosure lawyer in memphis tennesseeIf you are thinking of buying or selling a home, you may have questions about the basics on Tennessee property disclosure law. The Tennessee Residential Property Disclosure Act, Tenn. Code Ann. 66-5-201, et. seq., requires the Seller of a home to provide the Buyer with a Property Disclosure Statement.  Despite this law, there is still a large amount of civil litigation arising from defects discovered in a home after the Buyer has moved in. Be aware of these top things to know about Tennessee real estate property disclosure law:

Tennessee Property Disclosure Law

  1. Sellers are required to disclose the condition of the home, including any “material defects.” What does “material” mean? Generally, any fact or condition that might affect a Buyer’s decision to purchase the home.
  2. Sellers are only required to disclose based on the information they have.  Sellers are not required to have a home inspection, hire experts, or conduct an independent investigation to discover everything that might be wrong with their home.
  3. The Disclosure Statement is not a warranty. The disclosure form is not a substitute for a thorough home inspection.  If you are the Buyer, you shouldn’t just rely on the disclosure form. Hire your own home inspector.
  4. Some sellers are exempt from making disclosures. Common exceptions include sales or transfers between co-owners, new construction, purchases from lenders after foreclosure, auction sales, or if the Seller has not lived in the home within the 3 years before the Closing.
  5. Sellers are NOT Required to Repair Items listed in the Disclosure.  If you are the Buyer, be aware that Sellers don’t have to fix anything listed as broken or defective. If you want an item repaired, you must contract for it. In other words, both Buyer and Seller must agree in the final contract that an item will be repaired by the Seller before closing.
  6. Sellers ARE required to update their disclosures before closing. Sellers must update to address any material changes that have taken place since the original date of disclosure, or to confirm to the buyer that the original form is still accurate. Tenn. Code. Ann. 66-5-205.  If you are the Buyer, you should not close on a home without seeing an updated Disclosure Form signed and dated by the Seller.
  7. Representations in the Disclosure Form are those of the Seller only, and not the Real Estate Agents.  The Disclosure Act applies only to Sellers.  An agent can’t be sued under the Disclosure Act for information contained in a Seller’s disclosure form unless the agent is a signatory. Tenn. Code. Ann. 66-5-202; 66-5-208. However, real estate agents have certain disclosure duties pursuant to the Tennessee Real Estate Broker License Act of 1973.   Under the Real Estate Broker License Act, a real estate agent is required to “[d]isclose to each party to the transaction any “adverse facts” of which the licensee has actual notice or knowledge.”  Tenn. Code Ann. § 62-13-403.  What are adverse facts? Both Acts define adverse facts as conditions or occurrences generally recognized by competent agents that significantly reduce the structural integrity of improvements to real property or present a significant health risk to occupants of the property. Tenn. Code Ann. § 62–13–102(2); § 66–5–206. However, the definition of adverse facts found in the Real Estate Broker License Act also contains a third prong, for conditions or occurrences that “have negative impact on the value of the real estate.” Tenn. Code Ann. §62-13-102(2). See Ledbetter v. Schacht, 395 S.W.3d 130, 136 (Tenn. Ct. App. 2012).
  8. Any lawsuit against a Seller for a misrepresentation in a Disclosure Statement must be filed within one (1) year.  Any cause of action based directly on the disclosure law statutes will be lost if not filed within one (1) year from the date the buyer received the disclosure statement or the date of closing, or occupancy, whichever occurs first. Tenn. Code Ann. § 66-5-208.

Discovered a problem after closing?

If there is “trouble in paradise” with your new home and you think the Seller or a Real Estate Agent made a misrepresentation concerning the home, speak with an attorney as soon as possible.

While a lawsuit is not always necessary to resolve a legal issue, remember there are deadlines within which to file a lawsuit, if necessary.  An experienced litigation attorney can advise you of your options based on the particular facts of your situation.

Want to speak with an Attorney?

The attorneys at Wiseman Bray PLLC are experienced litigation and contract lawyers. We understand real estate transactions and sales, and we know the disclosure laws applying to both home sellers and real estate agents and brokers in Tennessee.  Call us today at (901) 372-5003.

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Read more about Lawsuit Deadlines: How Long Do I have to File a Lawsuit in Tennessee?

Lawsuit Deadlines: How long do I have to file a lawsuit in Tennessee?

lawsuit deadlines, personal injury lawyer memphis

Don’t let lawsuit deadlines kill your case before it even starts.

Why are there statutes of limitation or lawsuit deadlines?

In Tennessee, there are lawsuit deadlines called “statutes of limitations,” so it is important to speak to a lawyer as soon as possible if you believe you may need to file a lawsuit.  If you wait too late, you may lose your ability to seek a remedy or recovery in court.

Statutes of limitation serve a number of purposes.  They promote stability in personal and business relationships; they prevent undue delay in filing lawsuits; they help to avoid uncertainty in pursuing and defending old claims; and they help to ensure that evidence is preserved and not lost due to the lapse of time, fading memories, or death of witnesses or parties.

What time limit applies to my case?

It depends on what kind of case you have. Even our courts sometimes struggle with which statute of limitation applies. Generally, a court looks to the “gravamen” of the complaint to determine which statute of limitation applies. Think of the “gravamen” as the “real purpose” or the “main point” of a lawsuit.

The Tennessee Supreme Court, in Benz-Elliott v. Barrett Enterprises  said that when determining the gravamen of a complaint in order to decide which statute of limitation applies, “a court must first consider the legal basis of the claim and then consider the type of injuries for which damages are sought. This analysis is necessarily fact-intensive and requires a careful examination of the allegations of the complaint as to each claim for the types of injuries asserted and damages sought.”

You may have multiple legal theories and claims available to you in your case, but those claims could have different statutes of limitation that will affect your ability to recover.  Because this analysis can be difficult, and it is to your advantage to include as many viable claims for recovery as possible, you should consult an attorney as soon as possible to discuss your case.

Statutes of Limitation in Tennessee for Common Claims

Below are statutes of limitation for common types of claims. There are others, so make sure and consult with an attorney to make sure you understand what time limit applies to your case.

  • Personal injury or wrongful death – 1 year
  • Property damage – 3 years
  • Conversion – 3 years
  • Breach of Contract – 6 years
  • Fraud/Misrepresentation – 3 years
  • Legal or medical malpractice – 1 year
  • Consumer Protection Act claims – 1 year
  • Sale of Goods Contract Claims – 4 years
  • Slander (spoken defamation) – 6 months
  • Libel (written defamation) – 1 year

Exceptions

There are certain exception to the statutes of limitation in Tennessee, but you should never assume an exception will apply to your case. For example, if a person took active steps to keep you from discovering an injury or claim (i.e., fraudulent concealment), then you may have additional time to file suit.

Courts will not allow you extra time to file suit simply because you did not know the applicable statute of limitation, or because you suffered an injury but didn’t find out the full facts or extent of your damage until later in time. Consult with an attorney as soon as you think you have a claim.

Don’t Lose Your Ability to Recover. Call us today.

Statutes of limitations and lawsuit deadlines can kill your case before it even starts. If you think you may have a legal claim against someone, please call us today at 901-372-5003 or email us here. Don’t wait too late and lose your ability to file suit or recover damages. Let the attorneys of Wiseman Bray PLLC help you today.