When buying a home, you might have heard the phrase “buyer beware.” But what does this phrase mean? Traditionally, “buyer beware” came from the Latin term “caveat emptor.” This common law doctrine places responsibility on a buyer when making a purchase, assuming the buyer has had the opportunity to inspect the goods or property and make an informed decision. In real estate, it means that a homebuyer is responsible for checking a property’s condition before making an offer.
However, there’s now a more balanced approach that shares responsibility between buyers and sellers. Tennessee law requires sellers to disclose certain information about a property’s condition. This law aims to protect buyers from hidden issues that could affect their decision to buy a property.
What are the disclosure requirements?
Sellers must complete a standardized Residential Property Condition Disclosure form that covers a wide range of property aspects, including:
- Structural elements of the home
- Mechanical systems (plumbing, electrical, heating and air conditioning)
- Presence of hazardous substances like asbestos or lead-based paint
- History of water intrusion or wood-destroying insects
- Known encroachments or easements
- Any major repairs or renovations
It’s important to note that Tennessee law focuses on known issues. Sellers must disclose defects they are aware of, but they’re not obligated to hire inspectors to uncover hidden problems.
What are the exceptions to the rule?
While Tennessee law generally requires sellers to provide property disclosures, there are circumstances where a property transfer may be exempt from disclosure requirements. These exemptions include:
- Transfers pursuant to a court order, such as probate, eminent domain or bankruptcy
- Foreclosure sales or deed in lieu of foreclosure
- Transfers between co-owners
- Transfers to or from a government entity
- Transfers of newly constructed residences, if never inhabited
- Transfers by an executor, administrator, trustee or guardian
It’s important to note that even in these situations, real estate agents still have a duty to disclose any adverse facts about the property that they’re aware of.
Understand your rights and responsibilities
Tennessee law is clear on buyer and seller responsibilities, but property transactions can still come with a range of complications. If you’re dealing with disclosure-related issues or simply want to ensure you’re fully informed, get in touch with a real estate attorney.
