Property Disclosure Fraud
Real Estate Lawyer Franklin TN
The purchase of a home is the largest transaction most individuals make. The state of Tennessee recognizes this and requires certain disclosures be made by the Seller to a Buyer of a property. Property Disclosure Fraud is not cut and dry and truly requires an attorney to guide you through the legal issues, both in contract and in tort, along with the facts of your case.
If you have discovered a defect in your home, do not wait to speak with an attorney. These cases involve a short deadlines by which you must file your lawsuit or forfeit your ability to sue the other party. Alternatively, if you are a seller and have received a communication from a buyer post closing about possible defects, you should immediately consult with an attorney.
What is a Tennessee Property Disclosure?
Pursuant to T.C.A. 66-5-201, the State of Tennessee requires that certain Sellers of real property make disclosures to a buyer. If your realtor used a Tennessee Realtors Association form, it will be entitled "Tennessee Residential Property Condition Disclosure." A Seller usually prepares this document, generally, for any seller to view, sign, and return with an offer.
What Is A Seller Required To Disclose?
A Seller must disclose all known material defects and answer the questions on the Disclosure form in good faith to the best of the Seller's knowledge. A Seller also has a duty to update the disclosure should they learn of any defects after originally filling out the disclosure but before the closing.
Is A Property Disclosure A Warranty?
No. The Property disclosure is a notice and not a warranty. Many buyers believe if they discover a defect after closing then the seller is automatically liable. This is not true. A seller had to actually know about the defect prior to closing.
What If The Inspection Report Mentions The Defect?
It is critical when you receive an inspection report you make further inquiries to the Seller. If the Seller did not disclose a defect but the inspection report put the Buyer on notice, then the Seller may not be liable. Our office provides initial consultation wherein we will initially look at these issues to see possible strengths and weaknesses in your case.
How Long Does A Buyer Have To Sue A Seller?
T.C.A. 66-5-208 provides a statue of limitations of one year from the date the purchaser received the disclosure statement or the date off closing, or the date of occupancy in a lease, whichever occurs first. These statutes are subject to change and should not be taken as legal advice. Rather, you should be aware there is a narrow time by which you can bring a statutory claim against a seller or agent. However, even if you have passed a year, the deadline may have extended if the Seller fraudulently concealed the defects. This is why it is critical you meet with an attorney immediately if you are a buyer considering seeking damages from a seller for failure to make a disclosure.
What is Fraudulent Concealment?
Fraudulent concealment occurs when the Seller affirmatively concealed the defect, the buyer could not have discovered the defect despite reasonable efforts, the Seller knew the Buyer had been or would be injured by the defect, and the Seller concealed the defect. More plainly stated, if the Seller just failed to mention the disclosure then it may not be fraudulent concealment. If, however, the Seller actively disguised or hid a defect from the Buyer, then that is likely fraudulent concealment.
Fraudulent concealment is important as it may toll the statue of limitations (deadline) by which to file a claim under the Tennessee Property Disclosure Act. Speak with an attorney as soon as you discover the problem and do not delay.
Can I Sue Or Be Sued For Intentional Misrepresentation?
While the statute of limitations may have expired under the Tennessee Property Disclosure Act, a buyer still may be able to bring a claim for intentional misrepresentation (fraud) with a longer statute of limitations. Schedule a consultation with our office if you are a buyer or seller dealing with potential claims of fraud regarding the sale of a home.
Can I Sue My Home Inspector?
Yes, possibly. As with any profession, there are always some that operate below minimal industry standards sometimes. Inspectors contracts are important and you should carefully review them before signing. These boilerplate documents often try to disclaim any liability possible leaving a buyer wondering what they are actually paying for. Two key provisions a buyer should be on the lookout for are whether the inspector agreement requires arbitration if there is a dispute and whether you are entitled to attorney fees if you have to sue the inspector for negligence.
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Sam Cross is a Franklin Tennessee Real Estate Attorney who focuses his practice on enforcing the rights of tenants, homeowners, contractors, and consumers. If you'd like to learn more, you can schedule an initial consultation by clicking the schedule button below.