In Tennessee, it is not highly unusual for a buyer to discover, after buying a piece of property, that it contains less acreage than was represented in the deed. For example, a buyer’s deed might state the property contains 22 acres “more or less” or 22 acres “approximately” after giving a legal description of the land in question. After buying the property, our hypothetical buyer might have a survey done which reveals that the property described consisted of only 18 acres.
Under Tennessee law, what are the chances that our hypothetical buyer can recover part of the purchase price or rescind the contract altogether and recover the entire purchase price? In most cases, based on my experience and familiarity with Tennessee real estate cases, the answer is that the chances are not very good. This is certainly not to say that a buyer cannot be successful in receiving a partial refund or rescission. As well, that pessimistic opinion applies only to real estate transactions in which the sales of property were “in gross” and not by the acre.
In its simplest terms, a sale in gross occurs when the purchase price is not determined by an amount per acre, but by a lump sum for land, the location and boundaries of which are described. In my experience, sales in gross account for most all real estate transactions.
Where a sale is in gross, a seller is not liable for any deficiency in the quantity of land unless the buyer can show facts establishing that the seller acted fraudulently or that the seller made such a substantial mistake that fraud should be inferred. The rationale for this rule is that, where the seller has described the boundaries of the property, the buyer is free to have his or her own survey done to verify the accuracy of the seller’s representations as to the acreage contained within those boundaries.