Final Property Condition Disclosure Procedures:

In the age of “split closings” it can be difficult to gather certain required paperwork. The buyers and the sellers may not be closing at the same location or at the same time.

The TN Residential Property Disclosure Act requires (66-5-205. Liability for changed circumstances) “that at or before closing, the owner shall be required to disclose any material change in the physical condition of the property or certify to the purchaser at closing that the condition of the property is substantially the same as it was when the disclosure form was provided.”  

So how do you meet the legal requirements when the parties are closing separately, especially when the buyer may close first?

Solution: Agents need to coordinate (prior to closing) the completion of the Sellers Final Property Disclosure (page 5 of the TN Residential Property Condition Disclosure) with the cooperating agent.

Listing agents need to get this completed and signed by their sellers and deliver it to the buyer’s agent (or closing company) BEFORE the buyers go to closing.

Buyer agents need to insure that they have received this prior to their buyer's closing time. It is not proper to have the buyer’s sign a blank form, or one that was checked off by the closing agent.

Sellers must disclose in writing first, and then the buyers must acknowledge in writing. The date and time of signatures can be critical in audits and litigation. This is the individual responsibility of every agent.

- The cooperating agent not providing it is not an excuse.

- The other broker not requiring it is not an excuse.

- The title company forgetting it is not an excuse.

- Split closings are not an excuse.

It is state law, and it is your responsibility. Get it done a day or two before closing to be sure it gets completed properly. Be sure to use our paperwork checklist to make sure all other required documents are completed as well so that you can receive that well-deserved commission check!