Secure Your Tennessee Real Estate Deals with Strong Contracts

Why Contracts Matter in Tennessee Real Estate

Real estate contracts are the backbone of property transactions in Tennessee. A clear, enforceable agreement reduces risk, allocates responsibilities, sets timelines, and creates remedies if something goes wrong. Whether you are purchasing a home, selling investment property, or entering a commercial lease or purchase, a strong contract can prevent disputes and protect your financial interests.

Essential Elements of a Tennessee Real Estate Contract

To be enforceable, real estate contracts generally require an identifiable property, clear parties, consideration, mutual assent, and compliance with Tennessee’s statute of frauds (agreements for the sale of land must be in writing and signed by the party to be charged, subject to limited exceptions). In practice, your agreement should also include:

• Parties and capacity: Legal names and authority to sign (including entity approvals if using an LLC or corporation).
• Property description: Street address and a legal description sufficient for recording.
• Purchase price and earnest money: Amount, form of payment, and handling by the escrow agent.
• Key dates: Offer expiration, target closing, and other milestone dates set to allow due diligence and financing.
• Contingencies: Financing, appraisal, title, survey, and inspection rights and cure periods.
• Disclosures: Required seller disclosures and any known material defects.
• Title and closing: Title commitment, permissible exceptions, cure obligations, and closing deliverables.
• Risk of loss and possession: Who bears risk before closing and when possession transfers.
• Remedies and dispute resolution: Default remedies, attorney’s fees where appropriate, and dispute resolution methods.
• Signatures: Proper execution, including entity authority and any required notarization for recordable instruments.

Residential Deals: Offers, Contingencies, and Disclosures

Tennessee residential contracts often use standardized forms through licensed brokers, supplemented by addenda for unique terms. Important considerations include:

• Inspection and due diligence: Define scope (general home, termite, radon, sewer, roof), access, and timelines to request repairs or credits.
• Financing and appraisal: Protect the buyer if financing is denied or the property does not appraise at or above the purchase price.
• Property condition and repairs: Clarify as-is terms, repair standards, and who pays for reinspection.
• Fixtures and personal property: List what stays and what goes to avoid disputes.
• Homeowners’ associations: Require prompt delivery of governing documents and fee schedules, with a right to review.
• Disclosures: Tennessee law requires most residential sellers to provide a written disclosure statement of known material defects, with defined exemptions. See the Tennessee Residential Property Disclosure Act at Tenn. Code Ann. § 66-5-202 (disclosure form) and § 66-5-209 (exemptions).

Commercial Transactions: Tailored Protections

Commercial purchase and sale agreements are heavily negotiated. Key provisions often include:

• Extended due diligence: Access rights, environmental assessments (Phase I/II), zoning confirmations, lease audits, and operating statement reviews.
• Title and survey: Detailed objection and cure mechanisms, endorsements, and allocation of survey costs.
• Estoppels and SNDA: Seller delivery of tenant estoppel certificates and subordination, non-disturbance, and attornment agreements when financing is involved.
• Representations and warranties: Scope, survival, caps, baskets, and exclusive remedies.
• 1031 exchanges: Cooperation provisions without added cost or liability.
• Post-closing obligations: Prorations, security deposits, assignment of contracts, and transition of warranties.

Title, Survey, and Closing Logistics

Clear title is fundamental. Contracts should require a title commitment from a licensed title company, permit objections to unacceptable exceptions, and outline the seller’s duty to cure. A current ALTA/NSPS survey helps confirm boundaries, easements, and encroachments. Closing instructions should address:

• Escrow and wiring: Verified wiring instructions and fraud prevention protocols.
• Recording and transfer tax allocation: Who pays state and local transfer and recordation taxes and recording fees.
• Prorations: Taxes, rents, association fees, and utilities as of the closing date.
• Closing deliverables: Deed form, bill of sale, assignments, affidavits, lien releases, and entity resolutions.

Common Pitfalls to Avoid

• Ambiguous contingency language that leaves deadlines or standards unclear.
• Missing disclosures or incomplete property descriptions.
• Earnest money terms that fail to specify default, notice, and disbursement rules.
• Title exceptions that allow problematic easements or liens to remain.
• Failure to plan for appraisal shortfalls, repair limits, or lender-required conditions.
• Not addressing occupancy, short-term rental rules, zoning compliance, or unpermitted work.

Dispute Resolution and Remedies

Well-drafted contracts specify notice procedures, cure periods, and remedies for default. Options may include termination with earnest money disbursement, specific performance, liquidated damages where appropriate, and recovery of attorney’s fees if the agreement provides for it. Consider staged dispute resolution—negotiation, then mediation, and only then litigation or arbitration—consistent with your contract.

Practical Tips for Buyers, Sellers, and Investors

• Use written, signed agreements for all real estate terms and amendments. In Tennessee, contracts for the sale of real property generally must be in writing and signed by the party to be charged. See Tenn. Code Ann. § 29-2-101.
• Align contingencies with realistic due diligence and financing timelines.
• Order title work and surveys early; review exceptions closely.
• Confirm HOA rules, zoning, and short-term rental restrictions before waiving contingencies.
• Verify entity authority and obtain corporate approvals where needed.
• Protect against wire fraud: call to confirm instructions using a known phone number.
• Keep communications in writing and track all notices per the contract.

FAQ

Do Tennessee real estate contracts have to be in writing?

Generally yes. Under Tennessee’s statute of frauds, agreements for the sale of land must be in writing and signed by the party to be charged. See Tenn. Code Ann. § 29-2-101.

What disclosures must a residential seller provide?

Most sellers must give a written disclosure of known material defects, subject to statutory exemptions. See § 66-5-202 and § 66-5-209.

Can I use liquidated damages or specific performance?

Many contracts allow one or both. Enforceability depends on how the clause is drafted and the circumstances. Discuss remedy options with counsel before signing.

How Our Firm Can Help

We draft and negotiate Tennessee residential and commercial purchase agreements, leases, and related documents. Our team coordinates title and survey review, evaluates disclosures, structures contingencies, and manages closing logistics. If a dispute arises, we help pursue efficient resolution consistent with your contract and goals. Contact us to discuss your transaction today.

Sources

• Tennessee Residential Property Disclosure Act: Tenn. Code Ann. § 66-5-202 (seller disclosure statement) and § 66-5-209 (exemptions).
• Statute of Frauds: Tenn. Code Ann. § 29-2-101 (agreements for sale of land to be in writing and signed).

Disclaimer

This publication is for general informational purposes only and reflects Tennessee law as of the last reviewed date below. It is not legal advice and does not create an attorney-client relationship. Laws and timelines can change and may vary by circumstance. Consult a licensed Tennessee attorney about your specific transaction.

Last reviewed: October 13, 2025