BEDROOMS AND SEWAGE DISPOSAL SYSTEM LAW

SECTION 1. Tennessee Code Annotated, Section 47-18-104(b), is amended by adding the following language as a new, appropriately designated subdivision:

(A) Knowingly advertising or marketing for sale a residence as having more bedrooms than are permitted by the residence's subsurface sewage disposal system permit, as defined in Section 68-221-402, unless prior to the execution of any sales agreement the permitted number of bedrooms is disclosed in writing to the buyer.

(B) If a residence is marketed for sale as having more bedrooms than are permitted by the subsurface sewage disposal system permit and no disclosure of the actual number of bedrooms permitted occurs prior to the execution of a sales agreement, then the buyer shall have the right to rescind the sales agreement and may recover treble damages as provided in Section 47-18-109.

(C) A subsurface sewage disposal system permit issued in the name of the owner of the residence shall serve as constructive notice to that owner of the residence and that owner's real estate agent for the purpose of establishing knowledge as to the number of bedrooms of the residence for the purpose of finding a violation of this subdivision.

THE EFFECTIVE DATE OF THIS ACT IS JULY 1, 2006

This Act prohibits "Knowingly" advertising or marketing for sale a residence as having more bedrooms than are permitted by the septic system permit issued by the appropriate governmental permitting authority.

When listing a Seller’s property, a Real State licensee must now require the Seller        to furnish you as the listing agent with a copy of the Residence's Subsurface Sewage Disposal System Permit. Licensee should not obtain the Permit on their own. This is a requirement of the Seller and Licensees have the right to rely on the PERMIT SUPPLIED BY THE Seller. Remember the Law says that the Licensee and the Seller cannot “Knowingly” make a false statement in marketing or advertising the number of bedrooms allowed by the Residence's Subsurface Sewage Disposal System Permit. A Licensee acting as a listing agent should secure a copy of this permit prior to entering the property into the MLS or taking any other steps to advertise it for sale.

 A Licensee representing a Buyer as a Buyer’s Agent by contract now has a duty to request that the listing agent or Seller provide the Buyer Client with a copy of the Residence's Subsurface Sewage Disposal System Permit. The Buyer’s Agent has a duty to protect the Buyer Client’s interest in purchasing the property and to protect the Buyer Client’s future ability to resell the property with the same number of bedrooms as advertised when it was purchased by the Buyer. This information must be made available to the Buyer prior to preparing an offer to purchase a property. 

 Licensees who “Knowingly” misrepresent the number of bedrooms allowed by the Residence's Subsurface Sewage Disposal System Permit will find both themselves and their Broker in a lawsuit. However, there generally could be no cause of action brought against a Licensee and Broker for any negligent or unintentional misrepresentation under the Consumer Protection Act of Tennessee unless the Licensee acted to misrepresent the situation ”Knowingly”.

USE TAR FORMS F84 AND F85 “SUBSURFACE SEWAGE DISPOSAL SYSTEM PERMIT DISCLOSURE” FOR THIS ACT