Understanding Real Estate Disclosures: What Sellers Must Reveal to Buyers
April 3, 2025
Real estate transactions can be complicated, and sellers in Tennessee must follow specific rules when it comes to disclosing information to potential buyers.
The goal of real estate disclosures is to give buyers insight into a property’s condition so they can make an informed decision.
Sellers must provide detailed information about the property’s condition, history, and any issues that could affect its value or safety. Buyers, in turn, must be aware of their rights regarding these disclosures. Understanding what sellers must reveal can help both parties avoid disputes and provide a smoother transaction process.
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Why Real Estate Disclosures Matter in Tennessee
The importance of real estate disclosures lies in the need for transparency. In Tennessee, as in many other states, sellers have a legal responsibility to disclose material facts about the property that could influence a buyer’s decision.
The state’s law aims to protect both parties—sellers from legal claims and buyers from unexpected costs or safety hazards after purchasing the property. Real estate disclosures cover a wide range of issues, from the condition of major systems like plumbing and electrical wiring to environmental hazards such as lead paint or radon.
Sellers may face serious consequences if they fail to disclose known problems. In some cases, they could be held liable for repairs or damages that arise after the sale, especially if they intentionally withheld critical information. Buyers should understand what disclosures they should expect and look out for any potential red flags.
A real estate attorney in Tennessee can be helpful in reviewing the disclosures to make sure everything is in order and that no important information is overlooked.
Types of Disclosures Sellers Must Make in Tennessee
In Tennessee, sellers are required to complete a property disclosure form. This form is typically provided to the buyer before the sale is finalized. The disclosure form includes several key sections that help the buyer understand the property’s condition.
While each form may vary slightly depending on the seller’s situation, common disclosures include:
Structural issues: Sellers must report any significant structural issues that could affect the stability or safety of the home. This includes foundation problems, major cracks in the walls, or issues with the roof.
Water damage or mold: Sellers must disclose any history of water damage or mold in the property. Buyers need to know whether the property has had flooding or leaks in the past, as well as any resulting damage that may have affected the property’s structure or air quality.
Environmental hazards: Known environmental hazards like radon, asbestos, or lead paint must be disclosed. If a home was built before 1978, the seller is legally required to provide a lead paint disclosure.
Pest infestation: If the property has a history of pest infestations—such as termites, rodents, or other insects—this must be disclosed. Damage from pests should also be documented.
Electrical and plumbing systems: Sellers need to disclose any issues with the property’s electrical wiring, plumbing, or HVAC systems. If these systems have been repaired or replaced, that information should be noted.
Past or pending legal issues: If there are any ongoing or past legal issues tied to the property, including disputes over boundaries or unresolved property disputes, the seller must disclose them.
Hazardous materials: Any use or storage of hazardous materials on the property, such as chemicals or oil tanks, must be revealed.
Title issues: Sellers must disclose any issues regarding the title of the property, such as claims, liens, or unresolved debts tied to the property.
If a seller fails to make these disclosures or provides misleading or incomplete information, they could face legal consequences. A real estate attorney in Tennessee can help sellers understand exactly what they need to disclose and help protect their interests if issues arise.
Timing of Real Estate Disclosures in Tennessee
Sellers in Tennessee must present the property disclosure form to the buyer before the purchase agreement is signed. Ideally, this should be done as soon as possible to avoid delays in the transaction. The disclosure allows the buyer to review the property’s condition and ask questions or request repairs before moving forward with the sale.
If any major issues are discovered in the disclosures, the buyer can use this information to negotiate a lower price or request repairs be made prior to closing. Once the form is signed, it becomes a part of the contract, and both parties are legally bound by the disclosed information.
If issues arise later that weren’t disclosed, the buyer may have grounds to pursue legal action or cancel the deal. A real estate attorney can guide both the seller and the buyer on how to handle any legal actions that might result from an incomplete or faulty disclosure.
Seller’s Responsibility for Repairs and Corrective Actions
In Tennessee, sellers aren’t required to make repairs to address the issues listed in the disclosure form. However, they must disclose any material facts about the property that could affect its value or safety. If the buyer discovers problems after the sale, they may be entitled to ask for repairs, financial compensation, or even a rescinded sale, depending on the situation.
If a seller chooses to make repairs based on the disclosure form, they should keep records of the work performed and provide these documents to the buyer. If the seller doesn’t wish to make repairs, they might offer a price reduction or credit to the buyer instead.
Regardless of the seller’s choice, full disclosure is required. A real estate attorney can assist in drafting a legally binding agreement for repairs or price reductions to prevent future disputes.
What Happens If Sellers Don’t Disclose Properly?
Failing to disclose certain issues with a property can have serious consequences. In Tennessee, if a buyer discovers that the seller failed to disclose a material issue, the buyer may be entitled to pursue legal action for damages. The law allows the buyer to claim a breach of contract or fraud if the seller knowingly withheld information.
If a seller fails to disclose a material defect and the buyer later discovers it, the buyer can sue the seller for damages, which might include repair costs, the diminished value of the property, and even emotional distress in some cases. In extreme situations, sellers could be forced to repurchase the property or face legal penalties.
To avoid these consequences, sellers should be transparent and thorough when completing the disclosure form. A real estate attorney in Tennessee can assist sellers in reviewing the disclosure to make sure they have met all the legal requirements and help prevent potential lawsuits.
Legal Considerations and the Part of a Real Estate Attorney
A real estate attorney in Tennessee plays an important role in the disclosure process for both buyers and sellers. For sellers, an attorney can help draft and review the property disclosure form, seeing that all necessary information is included and that they comply with state laws.
If legal issues arise during or after the transaction, an attorney can offer valuable advice on how to handle them. Buyers can also benefit from consulting with a real estate attorney. If they suspect that a seller hasn’t been truthful on the disclosure form, an attorney can help investigate and assess whether they have a legal claim.
Attorneys also assist buyers in reviewing documents to confirm that all necessary disclosures have been made. When purchasing or selling property in Tennessee, having a real estate attorney involved can provide protection, minimize risks, and help avoid lengthy disputes.
Consult With an Experience Real Estate Attorney
Disclosures are a critical aspect of property transactions. Working with a Tennessee real estate attorney can help both buyers and sellers face the disclosure process and avoid misunderstandings or legal issues.
By understanding what must be disclosed and addressing any concerns upfront, both parties can work together to complete the transaction smoothly and without unexpected surprises. Reach out to The Law Office of Sheridan Randolph in Cleveland, Tennessee, today.