2.2 Tennessee Property Disclosure Requirements

Tennessee imposes a statutory seller disclosure duty in residential sales, separate from the licensee's adverse-facts duty.

The Residential Property Condition Disclosure (T.C.A. 66-5-201 et seq.)

The Tennessee Residential Property Disclosure Act requires the owner of residential real property (1-4 dwelling units) to deliver a written Residential Property Condition Disclosure to a prospective buyer.

Important: The standard is good faith, meaning honesty to the best of the seller's actual knowledge. The seller is not required to hire an inspector or investigate hidden conditions - only to truthfully report what they know.

What the Disclosure Covers

The form asks the seller to report the known condition of the property's systems and history.

Disclosure vs. Disclaimer ('As Is')

Tennessee gives the owner a limited alternative to a full disclosure:

Exam trap: A disclaimer does not let a seller conceal a known material defect. Active concealment or affirmative misrepresentation is still fraud, and the licensee's adverse-facts duty under 62-13-403 still applies.

Exemptions From the Disclosure Requirement

The statute exempts certain transfers where the seller is unlikely to know the condition or the transfer is involuntary:

Key point: The 3-year non-occupancy exemption is heavily tested. A landlord-investor who never lived in the home, or an heir who inherited it, can use the Property Condition Exemption Notification rather than completing a full disclosure - but must still avoid fraud.

Two Separate Disclosure Duties

Do not confuse the seller's statutory disclosure with the licensee's duty.

Even when a seller is exempt, the licensee must still disclose any adverse fact actually known to the licensee.

Stigmatized / Psychologically Impacted Property

Tennessee, like most states, treats certain non-physical facts as not material defects requiring disclosure:

Note: If a buyer directly asks and the licensee knows the truthful answer to a lawful question, the licensee must not lie. But protected health information may not be disclosed.

Federal Lead-Based Paint Disclosure (Pre-1978)

For any dwelling built before 1978, federal law (Residential Lead-Based Paint Hazard Reduction Act / TSCA Title X) requires the seller and licensee to:

Critical: Lead-based paint disclosure is federal and applies in every state regardless of Tennessee law. It is the one disclosure that overrides an 'as is' disclaimer.

Reconciling the Seller's Duty With the Licensee's Duty

The most useful framing for the exam is to keep the two duties on separate tracks and then see where they overlap. The seller's Residential Property Condition Disclosure under T.C.A. 66-5-201 is about the property's known condition and is satisfied in good faith. The licensee's adverse-facts duty under 62-13-403 is about what the licensee actually knows and runs to all parties, agent or facilitator. A licensee can be liable for staying silent about a known adverse fact even when the seller was exempt from completing a disclosure or chose a disclaimer.

The overlap appears when a licensee learns something the seller failed to disclose. If the agent knows the basement floods and the seller's form says 'no water issues,' the agent cannot pass along a statement they know to be false. The safe practice is to insist the disclosure be corrected or to disclose the adverse fact directly. Active concealment by either the seller or the licensee converts a disclosure problem into fraud, which supports both a civil suit and TREC discipline.

Practical Disclosure Scenarios the Exam Likes

Watch for fact patterns that test the 3-year non-occupancy exemption: an out-of-state heir, a long-term landlord-investor, or a relocation company selling a home it never occupied may use the Property Condition Exemption Notification rather than a full disclosure - yet must still avoid affirmative lies. Another pattern is stigma: a buyer asks whether a death occurred in the home.

Tennessee does not treat a natural death, a death by violence, or the prior occupant's illness as a material defect, and protected health information (such as a prior occupant's HIV status) must not be disclosed; but the licensee may not lie in response to a direct, lawful question.

Finally, expect the lead-based paint overlay. For any pre-1978 dwelling, the federal requirement to disclose known lead hazards, deliver the EPA pamphlet, and offer a 10-day inspection applies even when the seller is otherwise exempt or selling 'as is.' If a single question combines a 1972 house sold 'as is' by an exempt estate, the correct answer still requires the lead-based paint disclosure - the one disclosure that no state exemption or disclaimer can override.