Your eyes may not always catch flaws in property regardless of how hard you look. Tennessee and other states require owners to disclose negative information on a written disclosure statement when they sell their property.
Disclosure statements contain defects or details about residential real estate that could reduce its value or cause expensive repairs later. Federal, Tennessee and local laws typically govern what should be disclosed.
Property owners who buy homes and resell them for profit after making improvements, known as flippers, should pay special attention to disclosure requirements. You should also be wary about hidden defects in homes that are being sold at a lower price.
Most sellers of residential property must complete a disclosure statement under Tennessee’s Residential Property Disclosure Act. Accurate disclosure statements are important to buyers and sellers because failure to disclose this information may constitute grounds for canceling the purchase contract or for other legal action.
The statement needs to contain the property’s address and the age of the house. It must also include:
- List of amenities that will be included in the sale and their condition.
- Defective or malfunctioning structural or mechanical components.
- Environmental hazards.
- Flooding or drainage issues.
- Remodeling performed without compliance with building, property, and maintenance codes.
Having a home inspection option in a real estate contract can help protect you and uncover hidden problems. Buyers may negate the contract and withdraw their bid if the inspection reveals required repairs or undisclosed defects.
Inspectors have various certifications that enable them to uncover defects. They are trained to communicate to home buyers about the conditions of the property’s significant systems and components.
Purchasers of real estate in industrial or commercial property areas should be on the lookout for unseen environmental hazards. Assessments about the real estate may disclose existing or potential environmental problems.
Purchasers should also learn about any activities that occurred in the home. For example, making meth in the home is not only illegal but involves the use of hazardous chemicals and indivisible residue can contaminate the home’s interior.
Attorneys can advise participants in real estate transactions. They can also help protect their rights if disagreements cannot be resolved and the case goes to court or arbitration.