Selling a Home in East Tennessee: What You Must Disclose

When you’re getting ready to list your property, the focus is usually on the fun stuff: decluttering the living room, sprucing up the curb appeal, and figuring out the right listing price. But for homeowners in Knoxville, Chattanooga, and the Tri-Cities, selling a home involves more than just staging; it requires legal compliance.

The state of Tennessee has historically been considered a “Caveat Emptor” or “Buyer Beware” state. When this is called out, this would indicate strongly that buyers are left to discover everything themselves and alike this way, but this has varied over time and has swung well and truly toward sellers having any number of mandates to be truthful about known issues about which they are obligated to inform buyers about with which failure to comply leaving buyers open to suits for actions leading to cancellation of contracts and financial repercussions to come.

Let’s walk through the Tennessee Residential Property Disclosure Act and what it actually means for you as you prepare for selling a home in Knoxville or the surrounding areas.

The Tennessee Residential Property Disclosure Act Explained

The guide that sets the tone for seller transparency in our state is the Tennessee Residential Property Disclosure Act. This is the Tennessee statute that applies to most residential sales affecting one through four units. Its main purpose is to discourage fraud and allow the consumer a fair idea about the product they are purchasing prior to signing on the contract.

In regard to this law, you are basically compelled to furnish a statement in which you describe the condition of the property. This in no way relates to being friendly. In fact, it is simply a law of which both sides are to abide in order to guard against being wronged in any manner. More importantly, providing a thorough and honest account helps anchor a realistic property valuation East Tennessee buyers can trust. When you clarify the age of your roof or the condition of your HVAC, you are providing the factual evidence that justifies your asking price and ensures that the final sale price is based on the home’s true condition rather than guesswork or fear of the unknown.

One critical detail many sellers miss is the timing. You must provide this disclosure form to the buyer before a purchase contract is signed or accepted. If you wait until after the deal is inked to hand over the disclosure, the buyer may have the right to terminate the contract. It’s always best to have this paperwork ready the moment your home hits the market.

Disclosure vs. Disclaimer: Choosing the Right Form

When you sit down with your agent, you will likely face a choice between two specific forms. Understanding the difference is vital because they serve very different purposes depending on how you plan on selling your home as-is and how long you plan to sell.

The Tennessee Residential Property Condition Disclosure Form This is the standard route for most traditional home sales. It is a detailed checklist where you answer “Yes,” “No,” or “Unknown” to a long list of questions about the property. It covers everything from the foundation to the electrical wiring. By filling this out, you are sharing your knowledge of the home’s history and current state.

The Tennessee Residential Property Condition Disclaimer Statement This form is used when a seller wants to sell their home “As-Is” and makes no representations about its condition. However, there is a catch. You cannot just choose this form unilaterally; the buyer must explicitly agree to accept the Disclaimer statement and waive their right to the full disclosure. If the buyer refuses to sign the waiver, you must provide the full Disclosure form.

It is important to note that even if you use the Disclaimer form, you generally cannot fraudulently conceal known latent defects. If you paint over a massive crack in the foundation to hide it, a Disclaimer form likely won’t protect you from a fraud claim.

What Must Be Disclosed? (The Checklist)

If you are using the standard Disclosure form, you’ll need to go through the house mentally and physically to answer questions accurately. The form is comprehensive, covering the structural integrity and the mechanical systems that keep the home running.

You will need to report on the condition of the following:

• Structural & Exterior: This includes the age of the roof, presence of leaks, condition of the driveway, and any foundation cracks or settling.
• Systems: The status of the HVAC, electrical wiring, plumbing, and water heater.
• Land & Site: Any known drainage issues, encroachments (like a neighbor’s fence on your land), or easements.
• Statutory Requirements: Tennessee specifically asks about the presence of injection wells, results of percolation tests (if available), and known sinkholes.

Honesty is your best defense here. If the dishwasher makes a weird noise but still works, note it. If the garage door sticks in winter, write it down.

East Tennessee Specifics: Radon, Slopes, and Septic

While the state form is standard, the unique geography of East Tennessee brings its own set of challenges. Whether you are in the valley around Knoxville or up in the mountains near the Smokies, there are environmental factors local buyers—and their inspectors—will be looking for. Addressing these issues before you list is one of the best ways to increase home value in East Tennessee while ensuring a smooth, transparent sale.

• Radon Gas: East Tennessee has high radon potential due to the limestone and shale geology beneath our feet. Counties like Knox, Anderson, and Blount are often classified as Zone 1 (high risk) by the EPA. If you have ever had radon testing performed and the levels were high, or if you have a mitigation system installed, you must disclose this.
• Steep Topography: Our beautiful mountain views often come with steep driveways and retaining walls. Sellers should be transparent about any history of erosion, driveway washouts, or retaining wall failures. Foundation issues related to slope creep are real concerns in our hilly terrain.
• Septic Systems: Public sewer isn’t available everywhere, especially in rural communities surrounding Chattanooga and the Tri-Cities. If your home is on a septic system, you must disclose that. It is also helpful to disclose the location of the tank and field lines, as septic tank inspections are a common contingency for buyers here.
• Termites: In our humid climate, wood-destroying insects are a fact of life. You will be asked to disclose any past infestation or damage, as well as any current termite bond or treatment contract you have on the property.

Federal Requirements: Lead-Based Paint

If your home was built before 1978, state law isn’t the only thing you need to worry about; federal law steps in as well. This applies regardless of where you are in Tennessee.

For these older homes, you must comply with the Residential Lead-Based Paint Hazard Reduction Act. This involves three main steps:

1. Providing the buyer with the official EPA pamphlet titled “Protect Your Family from Lead in Your Home.”
2. Disclosing any known presence of lead-based paint or lead hazards in the home.
3. Giving the buyer a 10-day window (or another mutually agreed period) to conduct a lead paint inspection or risk assessment.

Stigmatized Properties: What You Don’t Have to Share

We often get asked about “stigmas” that might make a buyer uncomfortable but don’t actually affect the building’s structure. This is one area where Tennessee law is very favorable to sellers. Under Tennessee Code § 66-5-207, you are protected from liability for non-disclosure of certain events.

You generally do not have to disclose:

• Homicides, suicides, or felonies that occurred on the property.
• Paranormal activity (ghosts or “hauntings”).
• That a previous occupant had HIV/AIDS (this is also protected under Federal Fair Housing laws).

The general rule is that if the event did not affect the physical structure or integrity of the home, it usually does not need to be disclosed. However, if a crime resulted in physical damage—like a broken door or bullet holes—the damage itself would need to be noted if not repaired.

Who Is Exempt from Providing a Disclosure Form?

Not every property transfer requires this level of paperwork. The law recognizes that some sellers simply don’t have enough information about the property to fill out a disclosure honestly.

You may be exempt from providing the disclosure form if:

• You have not resided on the property at any time during the three years prior to the date of transfer (this is common for investors or owners of rentals).
• The transfer is between spouses, co-owners, or direct lines in specific estate situations.
• It is a new construction home (the first sale) and comes with a builder’s warranty.
• The property is being sold at auction.
• The sale is a result of foreclosure or bankruptcy.

If you fall into the non-resident category, keep in mind that while you might be exempt from the form, you should still avoid hiding known defects to stay safe from fraud claims.

Risks of Non-Disclosure or Concealment

It might be tempting to cross your fingers and hope the buyer doesn’t notice the moisture in the crawlspace, but the risks far outweigh the benefits. If a buyer discovers a defect after closing that you knew about and failed to disclose, things can get ugly quickly.

A buyer can sue for actual damages, which means you could be on the hook for the cost of repairs. In some cases, they may also seek attorney fees. If the concealment is egregious enough to be considered fraud, the court could even order a rescission of the contract, effectively unwinding the entire sale and forcing you to take the house back.

The best advice we give when working with a real estate agent is simple: “When in doubt, disclose it.” Disclosing an issue usually doesn’t kill a deal—it just allows you to negotiate it upfront. Furthermore, being transparent helps you avoid unexpected legal disputes and secondary negotiations that could significantly increase your total seller closing costs in East Tennessee, ensuring your net proceeds remain exactly what you expected at the end of the day.

FAQs

Can I sell a house ‘as is’ in Tennessee without disclosing defects?

You can sell a house “as is,” but you generally must use the Disclaimer Statement, which requires the buyer’s consent to waive the full disclosure. However, selling “as is” does not give you the legal right to fraudulently conceal known defects or lie about the property’s condition.

Do I have to disclose a death in the house in Tennessee?

No, Tennessee law generally does not require you to disclose a death, suicide, or felony that occurred on the property. These are considered “stigmas” rather than material defects, provided they didn’t cause physical damage to the structure.

What happens if I find a defect after I already filled out the disclosure?

If your home’s condition changes—for example, a pipe bursts a week before closing—you are required to update or amend the disclosure form. You must present the corrected information to the buyer before the closing date.

Do FSBO sellers in East Tennessee have to fill out disclosure forms?

Yes, the Tennessee Residential Property Disclosure Act applies to the owner of the property, regardless of whether they are using a real estate agent. For Sale By Owner (FSBO) sellers must still comply with the law and provide the correct forms to avoid liability.

Is a home inspection still necessary if I disclose everything?

Yes, a home inspection is highly recommended for buyers even if the seller discloses everything they know. A seller can only disclose what they are aware of, whereas a professional home inspector is trained to find hidden issues the current owner might not even know exist.