Tom is purchasing a home in Germantown, Tennessee through an estate sale. The estate's executor provides Tom with a purchase agreement but does NOT provide a Tennessee Residential Property Condition Disclosure form, stating that estate sales are exempt from the disclosure requirement. Tom later discovers significant water damage that was not disclosed. Which of the following is most accurate regarding the disclosure exemption and Tom's rights?
Correct Answer
A) The executor was correct that estate sales are exempt from the mandatory disclosure form, but Tom may still pursue fraud or misrepresentation claims if the defect was actively concealed
Under the Tennessee Residential Property Condition Disclosure Act, Tenn. Code Ann. § 66-5-202, estate sales (transfers by a fiduciary such as an executor or administrator of an estate) are explicitly exempt from the mandatory disclosure form requirement. The executor's statement was correct. However, the exemption from the disclosure form does not immunize the seller or estate from common law claims of fraud, misrepresentation, or concealment. If the executor or estate had actual knowledge of the water damage and actively concealed it, Tom may have viable legal claims outside the Disclosure Act framework.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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