Selling a house as-is in Tennessee: what you still have to disclose

You can sell a house as-is in Tennessee, but the law lets you hand the buyer an as-is disclaimer in place of the disclosure form only when the buyer waives the disclosure. Even then, the disclaimer does not protect you from a claim that you misrepresented the house or failed to disclose material facts. A separate section still requires you to disclose a known sinkhole, a known exterior injection well, known soil test results, and a house moved to a new foundation.

Which sales the law covers

Tennessee’s residential property disclosure rules sit in Title 66, Chapter 5, Part 2. Section 66-5-201 applies them to transfers by sale, exchange, installment land contract, or lease with an option to buy, of residential property with one to four dwelling units. They apply whether or not a real estate licensee is involved, so a sale straight to a cash buyer is covered unless an exemption fits.

Disclosure statement or as-is disclaimer

Under § 66-5-202, you give the buyer one of two documents. The first is a residential property disclosure statement on the statutory form, covering the condition of the property and any material defects you know about. You do not have to hire an inspector to fill it in; it covers what you know.

The statute also puts two notices on the form. One tells you and the buyer that you may want professional advice or inspections. The other tells the buyer that the answers are the owner’s representations, not the real estate licensee’s. The form records what you know, and a buyer who wants more orders an inspection.

The second is a disclaimer stating that you make no representations or warranties about the condition of the property and that the buyer takes it “as is,” with all defects that may exist, except as the purchase contract provides. The statute permits the disclaimer only where the buyer waives the disclosure statement. If the buyer does not waive it, you provide the disclosure statement.

An as-is sale, in other words, is a deal the buyer agrees to, in writing. A listing that says “as-is” does not do it on its own.

What an as-is sale does not excuse

Section 66-5-208 limits one kind of lawsuit: a buyer cannot sue you for failing to hand over the disclosure or disclaimer form. The same section keeps every other claim available in law or equity for misrepresentation or failure to disclose material facts, and it addresses intentional or willful misrepresentation of the property’s condition. A disclaimer changes the paperwork. It does not make concealment safe.

Section 66-5-212 adds specific written disclosures, made in the contract or in a signed acknowledgment before the contract is signed:

• the presence of any known exterior injection well;
• the results of any known percolation test or soil absorption rate test on the property;
• whether a single-family house was moved from one foundation to another;
• a known sinkhole on the property, whether or not the recorded plat shows it.

The statute defines a sinkhole as a hollow in limestone or dolostone rock that causes the ground above to sink. If you know of one on the lot, put it in writing.

Sales the law exempts

Section 66-5-209 lists twelve exempt transfers. The ones sellers under pressure run into:

• court-ordered transfers, including those in the administration of an estate, foreclosure sales and bankruptcy;
• transfers by a fiduciary administering an estate, guardianship, conservatorship or trust;
• transfers from co-owners to other co-owners;
• transfers to a spouse or to lineal descendants, and transfers between spouses under a divorce decree;
• transfers that result from failure to pay taxes;
• sales at public auction;
• transfers by an owner who has not lived on the property at any time in the three years before.

That last one can cover a landlord who moved out years ago, or an heir who never lived in the house. An exemption removes the form. It is not permission to misstate the condition of the house, and the claims § 66-5-208 preserves still apply.

What to tell a buyer like us

We buy houses as they sit and price the repairs into the number, so the condition questions are about the offer, not about blame. Our intake asks about four things by name: the roof, the heat and air, the foundation, and water damage. Tell us what you know, including “not sure.” How we calculate an offer shows how repairs come off the price, and our post on the cost to sell a house in Tennessee covers what repairs cost you on a listed sale instead. If the house is part of an estate, our post on selling an inherited house covers who can sign.

Whichever document your sale calls for, the disclosure statement or the disclaimer with the buyer’s written waiver, sign it before the contract and keep a copy with your closing papers.

This is general information, not legal or tax advice. Talk to a Tennessee attorney or CPA about your situation.