A Tennessee seller completes the Property Condition Disclosure form but intentionally marks 'No' on a question about roof leaks, knowing the roof has leaked repeatedly. The buyer closes on the property and discovers the roof damage six months later. Under Tennessee law, which of the following best describes the seller's exposure?
Correct Answer
B) The seller may be liable for fraudulent misrepresentation because knowingly providing false information on the disclosure form can constitute fraud
Under Tennessee law, knowingly providing false information on the Property Condition Disclosure form can constitute fraudulent misrepresentation. The Tennessee Residential Property Condition Disclosure Act (Tenn. Code Ann. § 66-5-201 et seq.) requires sellers to disclose known material defects. A seller who intentionally marks 'No' on a known defect item may face a fraud claim, which can survive closing and allow the buyer to seek damages including rescission of the transaction or monetary compensation.
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Related Topics & Key Terms
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Related Concepts
Environmental hazards disclosure involves informing buyers about environmental contamination or hazards affecting or potentially affecting a property, including underground storage tanks, contaminated soil, hazardous waste, and proximity to Superfund sites.
Flood zone disclosure requires informing buyers whether a property is located in a designated flood zone as mapped by FEMA. Properties in high-risk flood zones may require mandatory flood insurance.
HOA disclosure requires informing buyers about the existence, rules, fees, financial health, and restrictions of a homeowners association governing the property. This information helps buyers understand their obligations before purchase.
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