What remedies exist for seller's failure to disclose mold in the home?
The issue will require examination of the property condition disclosure signed by the sellers. They are required by Tennessee law to dislcose all known conditions that affect the value of the property. If they were reasonably unaware of certain conditions, they may not be held liable for any damages suffered by the presence of the condition. However, if the previous owner hid or failed to disclose any such fact that affected a potential buyer, he/she may have the right to ask for a failure-to-disclose claim.
TENNESSEE PROPERTY DISCLOSURE LAW
SECTION 4. (a)The owner shall not be liable for any error, inaccuracy or omission or any information delivered pursuant to this act if:
The error, inaccuracy or omission was not within the actual knowledge of the owner or was based upon information provided by public agencies or by other persons providing information as specified in subsection
(b) that is required to be disclosed pursuant to this act, or the owner reasonably believed the information to be correct; and
The owner was not grossly negligent in obtaining the information from the third party and transmitting it.
The delivery by a public agency or other person, as described in subsection (c) below, of any information required to be disclosed by this act to a prospective purchaser shall be deemed to comply with the requirements of this act and shall relieve the owner of any further duty under this act with respect to that item of information.
(c) The delivery by the owner of a report or opinion prepared by a licensed engineer, land surveyor, geologist, wood destroying insect control expert, contractor other home inspection expert, dealing with matters within the scope of the professional license or expertise, shall satisfy the requirements of subsection (a) if the information is provided to the owner pursuant to request therefor, whether written or oral. In responding to such a request, an expert may indicate, in writing, an understanding that the information provided will be used in fulfilling the requirements of this act and, if so, shall indicate the required disclosure or portions thereof, to which the information being furnished is applicable. Where such a statement is furnished, the expert shall not be responsible for any items of information, or portions thereof, other than those expressly set forth in this statement.
If you suspect that the sellers made misrepresentations in their disclosure, you would want to review the following remedies with a local attorney:
SECTION 8. (a) The purchasers remedies hereunder for an owner's misrepresentation on a residential property disclosure statement shall be either:
An action for actual damages suffered as a result of defects existing in the property as of the date of execution of the real estate purchase contract, provided that the owner has actually presented to a purchaser the disclosure statement required by this act, and of which the purchaser was not aware at the earlier of closing or occupancy by the purchaser, in the event of a sale, or occupancy in the event of a lease with the option to purchase. Any action brought under this subsection shall be commenced within one (1) year from the date the purchaser received the disclosure statement or the date of closing (or occupancy if a lease situation), whichever occurs first; or
In the event of a misrepresentation in any residential property disclosure statement required by this act, termination of the contract prior to closing, subject to the provisions of Section 4 of this act; or
Such other remedies at law or equity otherwise available against an owner in the event of an owner’s intentional or willful misrepresentation of the condition of the subject property.
(b) No cause of action may be instituted against an owner of residential real property subject to this act for the owner’s failure to provide the disclosure or disclaimer statement required by this act. However, such owner would be subject to any other cause of action available in law or equity against an owner for misrepresentation or failure to disclose material facts regarding the subject property that exists on the effective date of this act.
(c) No cause of action maybe instituted against a closing agent or closing attorney for the failure of an owner to provide the disclaimer or disclosure required by this act or for any misrepresentations made by a seller on the disclosure form supplied to the purchaser pursuant to this act.
(d) The failure of an owner to provide a purchaser the disclosure or disclaimer required by this act shall not have any effect on title to property subject to this act and the presence or absence of such disclosure or disclaimer is not a cloud on title and has no effect on title to such property.