A Tennessee buyer, Angela, uses the three-day rescission right under the Tennessee Residential Property Condition Disclosure Act to cancel a purchase contract after receiving the disclosure form post-execution. The seller argues that Angela cannot rescind because the property is a duplex that Angela intends to occupy in one unit while renting the other. The seller claims duplexes are exempt from the Disclosure Act. Is the seller correct?
Correct Answer
B) No, because the Disclosure Act applies to all residential properties with up to four units, including duplexes, regardless of the buyer's intended use
The Tennessee Residential Property Condition Disclosure Act, Tenn. Code Ann. § 66-5-201 et seq., applies to the sale of residential real property consisting of one to four units. A duplex is a two-unit residential property and falls squarely within the Act's coverage. The seller's claim that a duplex is exempt is incorrect. Angela's rescission right is valid, and the seller cannot avoid the Act's requirements by characterizing a duplex as something other than residential property covered by the statute.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
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.
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