Contracts
In Tennessee, a seller's 'disclosure of known material defects' is required because:
AAll real estate is sold 'as-is'
BBuyers have a right to material information affecting their decision, and non-disclosure can constitute fraud✓ Correct
CIt is optional but recommended
DTREC requires it for all new construction only
Explanation
The Tennessee Residential Property Condition Disclosure Act and general fraud principles require sellers to disclose known material defects — conditions that a buyer would likely consider important in their purchasing decision.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
State-Specific Concepts
TREC Regulation
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