Residential Real Estate Sales Disclosure Statement
Tennessee Code: Title 66, Ch 5, Part 2: Residential Property Disclosures
66-5-201. General provisions.
The provisions of this part apply only with respect to transfers by
sale, exchange, installment land sales contract or lease with option to
buy residential real property consisting of not less than one (1) nor more
than four (4) dwelling units, including site-built and nonsite-built homes,
whether or not the transaction is consummated with the assistance of a
licensed real estate broker or salesperson. The disclosure statement referenced
in § 66-5-202 is not a warranty of any kind by a seller and is not
a substitute for inspections either by the individual purchasers or by
a professional home inspector. The disclosure required by this part
shall be provided to potential buyers for their exclusive use and may not
be relied upon by purchasers in subsequent transfers from the original
purchaser who received the property disclosure. The required disclosure
shall be given in good faith by the owner or owners of property that is
being transferred and shall be subject to the requirements of this part.
[Acts 1994, ch. 828, § 1; 2000, ch. 771, § 1.]
66-5-202. Required disclosures or disclaimers.
With regard to transfers described in § 66-5-201, the owner of
the residential property shall furnish to a purchaser one of the following:
(1) A residential property disclosure statement in the form provided
in this part regarding the condition of the property, including any material
defects known to the owner. Such disclosure form may be as included in
this part and must include all items listed on the disclosure form required
pursuant to this part. The disclosure form shall contain a notice to prospective
purchasers and owners that the prospective purchaser and the owner may
wish to obtain professional advice or inspections of the property. The
disclosure form shall also contain a notice to purchasers that the information
contained in the disclosure are the representations of the owner and are
not the representations of the real estate licensee or sales person, if
any. The owner shall not be required to undertake or provide any
independent investigation or inspection of the property in order to make
the disclosures required by this part; or
(2) A residential property disclaimer statement stating that the owner
makes no representations or warranties as to the condition of the real
property or any improvements thereon and that purchaser will be receiving
the real property "as is," that is, with all defects which may exist, if
any, except as otherwise provided in the real estate purchase contract.
A disclaimer statement may only be permitted where the purchaser waives
the required disclosure under subdivision (1). If the purchaser does
not waive the required disclosure under this part, the disclosure statement
described in subdivision (1) shall be provided in accordance with the requirements
of this part.
[Acts 1994, ch. 828, § 2.]
66-5-203. Delivery of disclosure or disclaimer statement.
(a) The owner of residential real property subject to this part
shall deliver to the purchaser the written disclosure or disclaimer statement,
if agreed upon by the purchaser required by this part prior to the acceptance
of a real estate purchase contract. For purposes of this part, a "real
estate purchase contract" means a contract for the sale, exchange or lease
with option to buy of real estate subject to this part, and "acceptance"
means the full execution of a real estate purchase contract by all parties.
The residential property disclaimer statement or residential property disclosure
statement may be included in the real estate purchase contract, in an addendum
thereto, or in a separate document.
(b) Failure to provide the disclosure or disclaimer statement
required by this part shall not permit a purchaser to terminate a real
estate purchase contract; however, a purchaser shall not be restricted
by this part from bringing such other actions at law or in equity that
are otherwise permitted.
[Acts 1994, ch. 828, § 3.]
66-5-204. Liability for errors or omissions - Experts' reports.
(a) The owner shall not be liable for any error, inaccuracy or
omission of any information delivered pursuant to this part if:
(1) The error, inaccuracy or omission was not within the actual knowledge
of the owner or was based upon information provided by public agencies
or by other persons providing information as specified in subsection (b)
that is required to be disclosed pursuant to this part, or the owner reasonably
believed the information to be correct; and
(2) The owner was not grossly negligent in obtaining the information
from a third party and transmitting it.
(b) The delivery by a public agency or other person, as described
in subsection (c), of any information required to be disclosed by this
part to a prospective purchaser shall be deemed to comply with the requirements
of this part, and shall relieve the owner of any further duty under this
part with respect to that item of information.
(c) The delivery by the owner of a report or opinion prepared
by a licensed engineer, land surveyor, geologist, wood destroying insect
control expert, contract or other home inspection expert, dealing with
matters within the scope of the professional license or expertise, shall
satisfy the requirements of subsection (a) if the information is provided
to the owner pursuant to request therefor, whether written or oral. In
responding to such a request, an expert may indicate, in writing, an understanding
that the information provided will be used in fulfilling the requirements
of this part and, if so, shall indicate the required disclosure or portions
thereof, to which the information being furnished is applicable.
Where such a statement is furnished, the expert shall not be responsible
for any items of information, or portions thereof, other than those expressly
set forth in this statement.
[Acts 1994, ch. 828, § 4.]
66-5-205. Liability for changed circumstances.If information disclosed in accordance with this part is subsequently
rendered or discovered to be inaccurate as a result of any act, occurrence,
information received, circumstance or agreement subsequent to the delivery
of the required disclosures, the inaccuracy resulting therefrom does not
constitute a violation of this part. However, at or before closing, the
owner shall be required to disclose any material change in the physical
condition of the property or certify to the purchaser at closing that the
condition of the property is substantially the same as it was when the
disclosure form was provided. If, at the time the disclosures are required
to be made, an item of information required to be disclosed is unknown
or not available to the owner, the owner may state that the information
is unknown or may use an approximation of the information; provided, that
the approximation is clearly identified as such, is reasonable, is based
on the actual knowledge of the owner and is not used for the purpose of
circumventing or evading this part.
[Acts 1994, ch. 828, § 5.]
66-5-206. Duties of real estate licensees.
A real estate licensee representing an owner of residential real property
as the listing broker has a duty to inform each such owner represented
by that licensee of the owner's rights and obligations under this part.
A real estate licensee representing a purchaser of residential real property
or, if the purchaser is not represented by a licensee, the real estate
licensee representing an owner of residential real estate and dealing with
the purchaser has a duty to inform each such purchaser of the purchaser's
rights and obligations under this part. If a real estate licensee performs
those duties, the licensee shall have no further duties to the parties
to a residential real estate transaction under this part, and shall not
be liable to any party to a residential real estate transaction for a violation
of this part or for any failure to disclose any information regarding any
real property subject to this part. However, a cause of action for damages
or equitable remedies may be brought against a real estate licensee for
intentionally misrepresenting or defrauding a purchaser. A real estate
licensee will further be subject to a cause of action for damages or equitable
relief for failing to disclose adverse facts of which the licensee has
actual knowledge or notice. "Adverse facts" means conditions or occurrences
generally recognized by competent licensees that significantly reduce the
structural integrity of improvements to real property, or present a significant
health risk to occupants of the property.
[Acts 1994, ch. 828, § 6.]
66-5-207. Liability for nondisclosure of communicable diseases
or criminal acts on property.
Notwithstanding any of the provisions of this part, or any other statute
or regulation, no cause of action shall arise against an owner or a real
estate licensee for failure to disclose that an occupant of the subject
real property, whether or not such real property is subject to this part,
was afflicted with human immunodeficiency virus (HIV) or other disease
which has been determined by medical evidence to be highly unlikely to
be transmitted through the occupancy of a dwelling place, or that the real
property was the site of:
(1) An act or occurrence which had no effect on the physical structure
of the real property, its physical environment or the improvements located
thereon; or
(2) A homicide, felony or suicide.
[Acts 1994, ch. 828, § 7.]
66-5-208. Remedies for misrepresentation or nondisclosure.
(a) The purchaser's remedies hereunder for an owner's misrepresentation
on a residential property disclosure statement shall be either:
(1) An action for actual damages suffered as a result of defects existing
in the property as of the date of execution of the real estate purchase
contract; provided, that the owner has actually presented to a purchaser
the disclosure statement required by this part, and of which the purchaser
was not aware at the earlier of closing or occupancy by the purchaser,
in the event of a sale, or occupancy in the event of a lease with the option
to purchase. Any action brought under this subsection shall be commenced
within one (1) year from the date the purchaser received the disclosure
statement or the date of closing (or occupancy if a lease situation), whichever
occurs first;
(2) In the event of a misrepresentation in any residential property
disclosure statement required by this part, termination of the contract
prior to closing, subject to the provisions of § 66-5-204; or
(3) Such other remedies at law or equity otherwise available against
an owner in the event of an owner's intentional or willful misrepresentation
of the condition of the subject property.
(b) No cause of action may be instituted against an owner of residential
real property subject to this part for the owner's failure to provide the
disclosure or disclaimer statement required by this part. However,
such owner would be subject to any other cause of action available in law
or equity against an owner for misrepresentation or failure to disclose
material facts regarding the subject property that exists on July 1, 1994.
(c) No cause of action may be instituted against a closing agent
or closing attorney for the failure of an owner to provide the disclaimer
or disclosure required by this part or for any misrepresentations made
by a seller on the disclosure form supplied to the purchaser pursuant to
this part.
(d) The failure of an owner to provide a purchaser the disclosure
or disclaimer required by this part shall not have any effect on title
to property subject to this part and the presence or absence of such disclosure
or disclaimer is not a cloud on title and has no effect on title to such
property.
[Acts 1994, ch. 828, § 8.]
66-5-209. Exempt property transfers.
The following are specifically excluded from the provisions of this
part:
(1) Transfers pursuant to court order including, but not limited to,
transfers ordered by a court in the administration of an estate, transfers
pursuant to a writ of execution, transfers by foreclosure sale, transfers
by a trustee in bankruptcy, transfers by eminent domain and transfers resulting
from a decree of specific performance;
(2) Transfers to a beneficiary of a deed of trust by a trustor or successor
in interest who is in default; transfers by a trustee under a deed of trust
pursuant to a foreclosure sale, or transfers by a beneficiary under a deed
of trust who has acquired the real property at a sale conducted pursuant
to a foreclosure sale under a deed of trust or has acquired the real property
by a deed in lieu of foreclosure;
(3) Transfers by a fiduciary in the course of the administration of
a decedent's estate, guardianship, conservatorship or trust;
(4) Transfers from one (1) or more co-owners solely to one (1) or more
co-owners. This provision is intended to apply and only does apply
in situations where ownership is by a tenancy by the entirety, a joint
tenancy or a tenancy in common and the transfer will be made from one (1)
or more of the owners to another owner or co-owners holding property either
as a joint tenancy, tenancy in common or tenancy by the entirety;
(5) Transfers made solely to any combination of a spouse or a person
or persons in the lineal line of consanguinity of one (1) or more of the
transferors;
(6) Transfers between spouses resulting from a decree of divorce or
a property settlement stipulation;
(7) Transfers made by virtue of the record owner's failure to pay any
federal, state or local taxes;
(8) Transfers to or from any governmental entity of public or quasi-public
housing authority or agency;
(9) Transfers involving the first sale of a dwelling provided that the
builder offers a written warranty;
(10) Any property sold at public auction;
(11) Any transfer of property where the owner has not resided on the
property at any time within three (3) years prior to the date of transfer;
and
(12) Any transfer from a debtor in a chapter 7 or a chapter 13 bankruptcy
to a creditor or third party by a deed in lieu of foreclosure or by a quitclaim
deed.
[Acts 1994, ch. 828, § 9; 2000, ch. 771, §§ 2-4.]
66-5-210. Disclosure form.
Following is the form prescribed by the general assembly which is necessary
to comply with the provisions of this part. The form used does not have
to be the one included in this section, but it is the intent of the general
assembly that any such form includes all items contained in the form below
with all acknowledgement provisions of such form:
[See USLF Form TN-37014]
[Acts 1994, ch. 828, § 10; 1998, ch. 727, § 1; 2000, ch.
771, § 5.]
