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[TN] Can a buyer sue a real estate agent or home inspector for misrepresenting that a property was on public sewer?
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I have some questions about a real estate dispute.
I understand that dealing with a real estate dispute can be stressful. Can you please describe the nature of the dispute you are facing?
I bought a vacation rental property 4 years ago with the intension of expanding an existing building into a second rental unit. I found out during the renovation of that building that the county wouldn’t allow me to do the second unit due to their requirements for waste water disposal. When I purchased it I was told it was on public sewer but it turned out the property was in fact in septic making the expansion not possible. Because of this I have lost hundreds of thousands of dollars that I invested in the project. I feel that because I was given bad information from my real estate agent as well as my home inspector about the waste water set up when I purchased the home I may have some kind of case.
Have you already taken any steps to resolve this issue, such as communicating with the other party involved?
No, there is no communication that could undo this that I’m aware of.
Is there anything else the Real Estate Lawyer should know before I connect you? Rest assured they’ll be able to help with your real estate dispute.
I’m not sure.
Hi there! Welcome to our service. My name is Liz and I’ve been an attorney for more than a decade, and I am here to assist with your legal concerns. Just so you are aware, our service is a legal information-only site. No attorney-client relationship is formed from our conversation. So I can best help, did the seller provide disclosures about the waste setup?
So in their listing on the MLS the property was described as being on public water/sewer. I was super clear about how that important that was with my agent at the time and I made them verify with the sellers agent that was in fact the case. Then I used a home inspector that my real estate agent had recommended and when his initial inspection came back he said that the house was on septic. So I spoke to the inspector and explained to him that I was told it was on public sewer and asked him to verify. He then got back to me with a revised inspection claiming he must have made a mistake and it was on public sewer.
Did the seller or real estate agent provide any written disclosures or documents that explicitly stated the property was on public sewer? That could open up a claim against them for failure to properly disclose. Under Tennessee’s Residential Property Disclosure Act, a seller generally must give the buyer a written disclosure statement covering known material defects (TN Code § 66-5-202), and real estate licensees owe every party to a transaction a duty to disclose adverse facts they actually know about (TN Code § 62-13-403).
I guess I’d have to review our closing documents from the sale it would probably be there if it exists anywhere.
Got it, reviewing those documents could be helpful. Do you also have a contract with the inspector? You’d also need to check that for any limitations on their liability.
I don’t think I had a contract with the home inspector.
Thanks for letting me know. If there is no contract, that could open them up to liability since they didn’t verify that it was attached to city sewer. have you priced the cost to actually have it hooked up?
It is not possible to have it hooked up, the municipality won’t do it based on location. The county also has it listed to this day as being on public water/sewer on their map which is very clearly misleading to anyone wanting to know
That is indeed misleading, you could also try to use that to argue they should allow a hook up.
Yeah I did try that 3 years ago, there was just no way they could do it the closest line is something like a mile away.
With the septic, was the value of the property also inflated?
Yeah I’d say so. I paid a premium for that place because my whole plan for it was to develop that other building into a second rental. If I knew I wouldn’t be able to do that from the start I never would have bought it for that price. I’m also in the process now of selling it at about 50k less than what I paid because it never made the amount of rental income I had projected it would be. Not to mention all the money I lost on the renovation which I paid for by borrowing against my own home for 192k and another 120k I borrowed from my parents.
The renovations did not increase its value?
You would think, but no. I bought the property for 545k and after a ton of work and money put in and the realization that I was never going to be able to turn around my investment in it I put it on the market a year and a half ago for 749k and slowly over that time I have lowered the price repeatedly to get it to sell because I was not getting any good offers or Interest in it. I am under contract right now to sell for 495k
Does no one want it because of the septic?
Yeah that has been a recurring issue from potential buyers.
That could potentially add the lost renovation costs as damages.
What do you think I should do to proceed?
Have you been to any local attorneys?
So I don’t live near the property it’s in Tennessee and I live in Florida. I’ve contacted several different attorneys in that local area of Tennessee and some of them said that I may have a case but they were too busy to help me, others said they had a conflict of interest and others just never called me back. And after I spoke with like 20 different people I kinda gave up but that was about 2 years ago. I’ve experienced a lot of depression and anxiety as a result of this entire thing and after that many attempts I felt like I couldn’t keep going with it.
I understand. Litigation can be stressful. You may want to look for TN attorneys who specifically have experience in non disclosures. The state bar does have a referral service, there are also lists like Avvo and Martindale. If I can be of help, please let me know.
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