Title 66 Property
Chapter 1 Estates in Property
Part 1 General Provisions
§ 66-1-102. Estates tail abolished.
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Any person seized or possessed of an estate in general or special tail, whether by purchase or descent, shall be held and deemed to be seized and possessed of the same in fee simple, fully and absolutely, without any condition or limitation whatsoever, to that person, that person's heirs and assigns, forever, and shall have full power and authority to sell or devise the same as such person thinks proper; and such estate shall descend under the same rules as other estates in fee simple.
§ 66-1-103. Rule in Shelley's case abolished.
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Where a remainder is limited to the heirs or to the heirs of the body of a person, to whom a life estate in the same premises is given, the persons who, on the termination of the life estate, are heirs or heirs of body of such tenant, shall take as purchasers, by virtue of the remainder so limited to them.
§ 66-1-104. Construction of “dying without heirs.”
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Every contingent limitation in any deed or will, made to depend upon the dying of any person without heir, or heirs of the body, or without issue of the body, or without children, or offspring, or descendants, or other relative, shall be a limitation to take effect when such person dies without heir, issue, child, offspring, or descendants, or other relative, as the case may be, living at the time of such person's death, or born to such person within ten (10) months thereafter; unless the intention of such limitation be otherwise expressly and plainly declared in the face of the deed or will creating it.
§ 66-1-106. Estate with unlimited power of disposition.
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When the unlimited power of disposition, qualified or unqualified, not accompanied by any trust, is given expressly, in any written instrument, to the owner of any particular estate for life or years, legal or equitable, such estate is changed into a fee absolute as to right of disposition, and rights of creditors and purchasers, but subject to any future estate limited thereon or executory devise thereof, in event and so far as the power is not executed or the property sold for the satisfaction of debts during the continuance of the particular estate; provided, that any proceeds from the sale of such estate, not needed for the satisfaction of the debts of such owner during the continuance of the particular estate, shall be held in trust by such owner for the beneficiaries of the remainder interest and the purposes stated in such written instrument.
§ 66-1-107. Survivorship in joint tenancy abolished.
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In all estates, real and personal, held in joint tenancy, the part or share of any tenant dying shall not descend or go to the surviving tenant or tenants, but shall descend or be vested in the heirs, executors, or administrators, respectively, of the tenant so dying, in the same manner as estates held by tenancy in common.
§ 66-1-108. Survivorship in partnership property.
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Nothing in § 66-1-107 is intended to affect the right of a surviving partner to the joint property of the firm to settle the partnership business; such partner shall account with the heirs and personal representatives of the deceased partner for the surviving partner's share in the surplus.
§ 66-1-109. Estate by entireties created by direct conveyance.
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Any married person owning property or any interest therein in such person's own name, desiring to convert such person's interest in such property into an estate by the entireties with such person's spouse, may do so by direct conveyance to such spouse by an instrument of conveyance which shall provide that it is the grantor's intention by such instrument to create an estate by the entireties in and to the entire interest in the property previously held by the grantor.
§ 66-1-111. Doctrine of worthier title abolished.
- (a)
The doctrine of worthier title in both its inter vivos and testamentary branches, as it may apply to any kind of property, and regardless of whether it is applied as a rule of property or of construction, is abolished for all effects and purposes. This section shall not affect any right in property heretofore vested, and shall not affect the reversion of the grantor of any deed heretofore given. The doctrine of worthier title shall not operate to affect the disposition of property by the will of any person dying after July 1, 1983.
- (b)
The consent of the beneficiaries of any express trust whenever created who are described in the trust only as the heirs of the settlor or the heirs of the settlor's body shall not be required for the termination of such trust during the life of the settlor.
§ 66-1-112. Alienability of certain future interests for purpose of merger of interests in grantee — Applicability.
- (a)
A transfer of a possibility of reverter or right of entry by a holder other than the original grantor is invalid; provided, holders of a possibility of reverter or right of entry may freely transfer the interests to the holders of the corresponding fee simple determinable or fee simple subject to condition subsequent for the purpose of merger of the interests in any grantee.
- (b)
This section applies to future interests regardless of whether the interests were created before, on, or after July 1, 2015; provided, this section does not apply to any future interest, the validity of which has been determined by a final judgment in a judicial proceeding or by a settlement among interested persons prior to July 1, 2015.
Chapter 2 Power to Own and Convey Property
Part 1 Aliens
§ 66-2-101. Alien ownership.
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Except as provided in part 3 of this chapter, an alien, resident, or nonresident of the United States, may take and hold property, real or personal, in this state and dispose of or transmit the same as a native citizen.
§ 66-2-102. Heirs or devisees of alien.
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Except as provided in part 3 of this chapter, the heir or heirs, or devisee or devisees, of an alien, resident, or nonresident of the United States, may take lands, held by descent or otherwise, as if a citizen or citizens of the United States.
Part 2 Religious Entities
§ 66-2-201. Ownership of land.
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Any religious denomination, religious society, or church, whether incorporated or not, may take, by deed or otherwise, and hold any amount of acreage at one (1) place for purposes of public worship, or for a parsonage, or for a burial ground.
§ 66-2-202. Title in trustees.
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All lands bought or otherwise acquired by any religious denomination or society shall be vested in a board of trustees or other persons designated by the members of such denomination or society, for the use and benefit of the denomination or society.
§ 66-2-203. Conveyance by church officers.
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In all cases where any elders, trustees, or other church officers, in any of the churches or organizations of any religious denomination, shall have any lands conveyed to them for the use of their respective churches or congregations as building sites, or for any other purpose, by deed, grant, devise, or in any other manner, they or their successors in office, according to the regulations of such church or congregation, may sell and convey the same by deed, which deed, when officially signed by such elders, trustees, or other church officers, or their successors in office, shall pass the title, whether for life, for years, or in fee, to such land to the purchaser in as full and ample a manner as if the officers held the same as a corporation, and had conveyed it by deed under the corporate name.
Part 3 Restrictions on Land Purchases by Sanctioned Aliens or Entities
§ 66-2-301. Part definitions.
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As used in this part:
- (1)
“Real property” means one (1) or more defined parcels or tracts of land or interests, benefits, and rights inherent in the ownership of real estate, including easements, water rights, agricultural land, or any other interest in real property;
- (2)
“Sanctioned foreign business” means:
- (A)
A corporation incorporated under the laws of a foreign country of a sanctioned foreign government;
- (B)
A business entity whether or not incorporated, in which a majority interest is owned directly or indirectly by sanctioned nonresident aliens. As used in this subdivision (2)(B), the determination of “owned,” in terms of ownership or control of a foreign business, is not affected by legal entities, including, but not limited to, trusts, holding companies, multiple corporations, and other business arrangements; or
- (C)
A corporation or business entity, whether or not incorporated, that is identified on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list;
- (3)
“Sanctioned foreign government” means a government other than the government of the United States, its states, its territories, or its possessions, that is identified by the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list; and
- (4)
- (A)
“Sanctioned nonresident alien” means an individual who is either:
- (i)
A citizen of a sanctioned foreign government; or
- (ii)
A person identified on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list; and
- (B)
“Sanctioned nonresident alien” does not include:
- (i)
A citizen of the United States; or
- (ii)
A person lawfully admitted into the United States for permanent residence by the United States immigration and naturalization service, even if such status is conditional.
§ 66-2-302. Sanctioned individuals or entities prohibited from purchase of real property — Applicability of prohibition — Prohibition on transfer of title or interest.
- (a)
- (1)
A sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, shall not purchase or otherwise acquire real property in this state if the country where the sanctioned nonresident alien resides, the sanctioned foreign business is located, or the official sanctioned foreign government representing the country, or agents, trustees, or fiduciaries thereof, is on the office of foreign assets control of the U.S. department of the treasury's sanctions programs and country information list.
- (2)
This part applies to the extent that the purchase of real property is not prohibited under subdivision (a)(1).
- (b)
The restriction in subsection (a) does not apply to:
- (1)
Real property acquired by devise or descent;
- (2)
A bona fide encumbrance on real property taken for purposes of security; and
- (3)
Real property acquired by a process of law in the collection of debts; by a deed in lieu of foreclosure, pursuant to a forfeiture of a contract for deed; or by a procedure for the enforcement of a lien or claim on the real property, whether created by mortgage or otherwise. However, real property so acquired must be sold or otherwise disposed of within two (2) years after the title is transferred. Pending the sale or disposition, the real property must not be used for a purpose other than what it was used for immediately prior to the time the property was put up for sale, and the property must not be used except under lease to an individual, trust, corporation, partnership, or other business entity not subject to the restriction imposed by subsection (a).
- (c)
Notwithstanding subdivision (a)(2), a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, who holds real property in this state on July 1, 2023, may continue to own or hold the real property, but shall not purchase or otherwise acquire additional real property in this state on or after July 1, 2023.
- (d)
A sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, shall not transfer title to, or an interest in, real property to a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, except by devise or descent.
§ 66-2-303. Divestment of right or title by sanctioned individual or entity — Exception.
- (a)
A sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, who acquires real property or an interest in real property, by devise or descent after July 1, 2023, shall divest itself of all right, title, and interest in the real property within two (2) years from the date of acquiring the real property or interest.
- (b)
This section does not require divestment of real property or an interest in real property, acquired by devise or descent from a sanctioned nonresident alien, if the real property or an interest in the real property was acquired by a sanctioned nonresident alien prior to July 1, 2023.
§ 66-2-304. Divesting of right, title, and interest upon status change.
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A person, business, or other entity who purchases or otherwise acquires real property in this state except by devise or descent, after July 1, 2023, and whose status changes so that it becomes a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, subject to this part, shall divest itself of all right, title, and interest in the real property within two (2) years from the date that its status changed.
§ 66-2-305. Registration requirements of real property with the secretary of state.
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A sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, who owns an interest in real property in this state on or after July 1, 2023, shall register the real property with the secretary of state. The registration must be made within sixty (60) days after July 1, 2023, or within sixty (60) days after acquiring the real property or the interest in real property, whichever time is the later. The registration must be in the form and manner prescribed by the secretary of state and contain the name of the owner and the location and number of acres of the real property by municipality and county. If the owner of the real property or owner of the interest in real property is an agent, trustee, or fiduciary of a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, then the registration must also include the name of any principal for whom that real property, or interest in real property, was purchased as agent, trustee, or fiduciary.
§ 66-2-306. Violation of this part — Initiation of action — Notice of action — Escheatment to the state — Civil penalty — Liability limitations.
- (a)
If the secretary of state finds that a sanctioned nonresident alien, sanctioned foreign business, sanctioned foreign government, or an agent, trustee, or other fiduciary thereof, has acquired or holds title to or interest in real property in this state in violation of this part, the secretary of state shall report the violation to the attorney general and reporter.
- (b)
Upon receipt of a report from the secretary of state under subsection (a), the attorney general and reporter shall initiate an action in the circuit court of any county in which the real property is located.
- (c)
The attorney general and reporter shall file a notice of the pendency of an action initiated under subsection (b) with the recorder of deeds of each county in which any of the real property is located.
- (d)
- (1)
In an action initiated under subsection (b), if the court finds that the real property in question has been acquired or held in violation of this part, then the court shall enter an order so declaring and shall file a copy of the order with the recorder of deeds of each county in which any portion of the real property is located.
- (2)
If the court finds that the real property in question has been acquired in violation of this part, then the court shall declare the real property escheated to the state and order the sale of the real property in the manner provided by law for the foreclosure of a mortgage on real estate for default of payment. The proceeds of the sale must be used to pay court costs, and the remaining funds, if any, must be paid to the person divested of the real property.
- (e)
If the secretary of state finds that a sanctioned nonresident alien, sanctioned foreign business, sanctioned foreign government, or an agent, trustee, or other fiduciary thereof, violated this part by failing to timely register as required under § 66-2-305, the secretary of state shall assess a civil penalty not to exceed two thousand dollars ($2,000) for each violation.
- (f)
This part does not impose liability on a person licensed under the Tennessee Real Estate Broker License Act of 1973, compiled in title 62, chapter 13; an attorney licensed in this state; or a title insurance company or an agent licensed in this state who is involved in a transaction in which a sanctioned nonresident alien, sanctioned foreign business, sanctioned foreign government, or an agent, trustee, or other fiduciary of such alien, business, or government, acquired property in violation of this part.
Chapter 3 Fraudulent Conveyances and Devises
Part 1 Conveyances
§ 66-3-101. Conveyances in fraud of creditors or purchasers void.
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Every gift, grant, conveyance of lands, tenements, hereditaments, goods, or chattels, or of any rent, common or profit out of the same, by writing or otherwise; and every bond, suit, judgment, or execution, had or made and contrived, of malice, fraud, covin, collusion, or guile, to the intent or purpose to delay, hinder, or defraud creditors of their just and lawful actions, suits, debts, accounts, damages, penalties, forfeitures; or to defraud or to deceive those who shall purchase the same lands, tenements, or hereditaments, or any rent, profit, or commodity out of them, shall be deemed and taken, only as against the person, such person's heirs, successors, executors, administrators, and assigns, whose debts, suits, demands, estates, or interest, by such guileful and covinous practices, shall or might be in any wise disturbed, hindered, delayed, or defrauded, to be clearly and utterly void; any pretense, color, feigned consideration, expressing of use, of any other matter or thing, to the contrary notwithstanding.
§ 66-3-102. Personal property conveyed without consideration.
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If a conveyance be of goods or chattels, and be not on consideration deemed valuable in law, it shall be taken to be fraudulent, unless the same be by will duly proved and recorded, or by bill of sale or other instrument acknowledged or proved and registered according to law, or unless possession remain with the donee.
§ 66-3-103. Presumption of ownership from possession of personal property.
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Possession of goods and chattels continued for five (5) years, without demand made and pursued by due process of law, shall, as to the creditors of the possessor or purchasers from the possessor, be deemed conclusive evidence that the absolute property is in such possessor, unless the contrary appear by bill of sale, deed, will, or other instrument in writing, proved or acknowledged and registered.
Part 2 Devises
§ 66-3-201. Devises declared void.
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All devises of lands, tenements, and hereditaments, or of any rent, profit, term, or charge out of the same, contrived and made to defraud creditors of their just debts, shall be deemed and taken to be null and void only as against such creditors, their heirs, successors, executors, administrators, and assigns, and every one of them.
§ 66-3-202. Action against devisees.
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Every such creditor may maintain an action or suit against such devisee, and, severally or jointly, against the debtor and the heirs at law of the debtor, in all cases, and in like manner, as such action or suit could be brought or maintained against the debtor's heirs at law.
§ 66-3-203. Execution for value of alienated lands.
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If the devisee sells, aliens, or makes over the lands so devised, before an action is brought or process sued out against the devisee, such devisee shall be answerable for such debt to the value of the lands, sold, aliened, or made over; and execution shall be taken out upon the judgment or decree obtained against such devisee to the value of the lands, as if the same were the devisee's own proper debt.
Chapter 4 Contracts to Convey Real Property
Part 1 Conveyances by Deceased Persons
§ 66-4-101. Execution by personal representative of deceased vendor.
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In all cases of written agreements or contracts for the conveyance of land in this state, where the person executing the agreement or contract dies before final conveyance is made, the decedent's personal representatives may execute the conveyance to the person with whom such agreement or contract was made, or the decedent's heirs or assigns, according to the forms prescribed for the conveyance of real estate.
§ 66-4-102. Registration of contract required.
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The personal representative cannot be required to execute a conveyance under § 66-4-101, unless the written agreement or contract, duly registered, or a certified copy of the agreement or contract from the register's books, is produced and delivered to the representative.
§ 66-4-104. Description of land used in deed.
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In case the agreement or contract is for part of a tract of land, not ascertained by metes and bounds, the personal representative shall execute the conveyance according to the description given in the contract.
§ 66-4-105. Execution of contract with personal representative.
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If the person with whom such agreement or contract was made is also the personal representative, the court granting administration may appoint a guardian or representative of the heirs, who shall make the conveyance according to the written agreement.
Part 2 Champertous Sales
§ 66-4-202. Sale without possession.
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Any such agreement, bargain, sale, promise, covenant or grant shall be utterly void where the seller has not personally, or by the seller's agent or tenant, or the seller's ancestor, been in actual possession of the lands or tenements, or of the reversion or remainder, or taken the rents or profits for one (1) whole year next before the sale.
§ 66-4-203. Dismissal of suit on disclosure of facts.
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Any suit at law or equity brought for the recovery of the lands or tenements bargained or contracted for, whether the agreement, sale, bargain, covenant, grant, or promise be executed or executory, shall be forthwith dismissed, with costs, by the court in which such suit may be pending, upon the facts being disclosed.
§ 66-4-204. Bona fide sales unimpaired.
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This part shall not prevent an absolute and bona fide sale or mortgage of lands or tenements not possessed and held adversely at the time of such sale or mortgage; nor a sale by execution; nor a sale and conveyance by a nonresident of this state, of lands which such nonresident may own, and of which lands no person, at the time of such sale, holds adverse possession by deed, devise, or inheritance.
Part 3 Loans by Nonprofit Lenders
§ 66-4-301. Restrictive covenants on loans by nonprofit lenders at a zero or low interest rate.
- (a)
All contracts for home loans made by a nonprofit lender with a zero percent (0%) interest rate or low interest rate loan must contain the following restrictive covenant:
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This zero percent (0%) interest or low interest rate loan cannot be refinanced, replaced or consolidated without the prior, written approval of the local board of directors of the nonprofit lender that financed the loan so long as this initial, zero percent (0%) interest or low interest rate loan is in existence.
- (b)
As used in this section:
- (1)
“Home loan” means a term loan which secures a one (1) to four (4) family dwelling used as the primary residence of the borrower; and
- (2)
“Low interest loan” means a home loan that carries an interest rate that is two (2) percentage points or more below the yield on United States treasury securities with a comparable maturity at the time the loan is made.
- (c)
Each mortgage or deed of trust securing a home loan as provided in subsection (a) shall state on the face of the instrument prominently displayed:
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THIS INSTRUMENT SECURES A ZERO INTEREST OR LOW INTEREST RATE LOAN AS DEFINED UNDER TENNESSEE CODE ANNOTATED SECTION 66-4-301 AND IS SUBJECT TO THE RESTRICTIONS THEREIN.
- (d)
A lender may reasonably rely on such statement or lack thereof appearing on the face of the instrument as conclusive proof of the existence or nonexistence of a restricted home loan as provided in subsection (a).
Chapter 5 Conveyances of Property
Part 1 General Provisions
§ 66-5-101. Grants or devises passing full estate.
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Every grant or devise of real estate, or any interest therein, shall pass all the estate or interest of the grantor or devisor, unless the intent to pass a less estate or interest shall appear by express terms, or be necessarily implied in the terms of the instrument.
§ 66-5-102. Mineral estates in coal.
- (a)
In any instrument heretofore or hereafter executed purporting to sever the surface and mineral estates which does not describe the manner or method of mineral extraction in express and specific terms, it shall be presumed that the intention of the parties to the instrument was that the minerals be extracted only in the principal manner and method of mineral extraction prevailing in this state at the time the instrument was executed.
- (b)
This section is not intended to exclude evidence that would otherwise be admissible to show the intentions of the parties.
- (c)
This section shall only apply to mineral estates in coal.
§ 66-5-103. Forms of conveyances.
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The following or other equivalent forms, varied to suit the precise state of facts, are sufficient for the purposes contemplated, without further circumlocution:
- (1)
- (A)
For a deed in fee with general warranty: “I hereby convey to A. B. the following tract of land (describing it), and I warrant the title against all persons whomsoever;”
- (B)
Covenants of seisin, possession, and special warranty: “I covenant that I am seized and possessed of this land, and have a right to convey it, and I warrant the title against all persons claiming under me;”
- (2)
For a quitclaim deed: “I hereby quitclaim to A. B. all my interest in the following land” (describing it);
- (3)
For a mortgage: “I hereby convey to A. B. the following land (describing it), to be void upon condition that I pay,” etc; and
- (4)
For a deed of trust: “For the purpose of securing to A. B. a note of this date, due at twelve (12) months, with interest from date (or as the case may be), I hereby convey to C. D., in trust, the following property (describing it). And if the note is not paid at maturity, I hereby authorize C. D. to sell the property herein conveyed (stating the manner, place of sale, notice, etc.), to execute a deed to the purchaser, to pay off the amount herein secured, with interest and costs, and to hold the remainder subject to my order.”
§ 66-5-104. Execution by agent or attorney.
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Instruments in relation to real or personal property, executed by an agent or attorney, may be signed by such agent or attorney for the principal, or by writing the name of the principal by that person as agent or attorney; or by simply writing the agent's or attorney's own name or the principal's name, if the instrument on its face shows the character in which it is intended to be executed.
§ 66-5-106. Authentication and registration required — Formal ceremonies unnecessary.
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No deed of conveyance for lands, in whatever manner or form drawn, shall be good and available in law, as to strangers, unless it is acknowledged by the vendor, or proved by two (2) witnesses upon oath, in the manner prescribed in chapters 22 and 23 of this title, and registered by the register of the county where the land lies. All deeds so executed shall be valid and pass estates in land, or right to other estates, without livery of seisin, attornment, or other ceremony in the law whatever.
§ 66-5-107. Correction of errors.
- (a)
Whenever an error or mistake is made in any deed of conveyance, or in the registration thereof, either in courses, distances, or names, the person liable to injury by such error or mistake may prefer a petition to the circuit court of the county in which the land is situated, setting forth the nature of the mistake or error, and all and singular the matters relative thereto.
- (b)
Before the petition shall be heard and determined, the petitioner shall advertise in a newspaper published in the judicial district in which the land is situated; and if no newspaper is published in the district, then in a newspaper in the adjoining district, setting forth the substance of the petition, and the term at which petitioner will make application for a hearing, three (3) weeks in succession, at least thirty (30) days before the petition shall be heard.
- (c)
The court may also direct written notice to be served upon such persons as may be interested in or affected by the relief sought, unless such notice shall appear to the court to have been previously given.
- (d)
When any person chooses to oppose the granting of the petition, that party may personally enter as a defendant, and, each party having given security for cost, the cause shall stand for hearing as other argument cases.
- (e)
The court shall examine such testimony as the petitioner may produce; and whenever it shall appear evident, from such testimony, that there was an error or mistake committed in drawing the deed of conveyance, the court shall order the same to be rectified, so as to comport with the intention of the parties; and shall further order the register of the county, in which the land is situated, to register the conveyance agreeably to the correction.
- (f)
Either party may appeal from the judgment of the court, or prosecute a writ of error thereto.
§ 66-5-108. Preservation, or extinguishment and reversion of mineral interests.
- (a)
- (1)
The general assembly finds that many owners of agricultural property who have separated titles have difficulty acquiring loans and in other ways have been hindered in fully developing the surface of land.
- (2)
The general assembly further finds that there are mineral estates, separated from the surface, that have not been properly registered in the counties in which they are located, and are, therefore, not on the tax rolls, causing a significant loss of revenue to many Tennessee counties.
- (3)
Further, the general assembly finds that many surface owners cannot discover from records at their courthouses whether they own the underlying mineral estate, or if they do not, who does, and that this situation causes undue hardship and title uncertainty for surface owners.
- (4)
The general assembly further finds that where there are abandoned mineral estates, those on which no development has taken place, no taxes paid and no claim filed pursuant to this section, the rational development of minerals in Tennessee is hindered.
- (5)
Thus, to promote commerce and agriculture and proper development of surface and mineral estates and to remedy uncertainties in title, the general assembly adopts this section.
- (b)
For the purposes of this section and §§ 67-5-804(b), 67-5-809 and 67-5-2502(e):
- (1)
“Mineral interest” means the interest which is created by an instrument, transferring either by grant, assignment, or reservation, or otherwise, an interest, of any kind, in coal, oil and gas, and other minerals;
- (2)
“Statement of claim” means a document or instrument to be filed by the owner of a mineral interest in real property to make claim to that mineral interest; and
- (3)
“Use of mineral interest” means that a mineral interest shall be deemed to be used when there are any minerals being produced thereunder or when operations are being conducted thereon for injection, withdrawal, storage or disposal of water, gas or other fluid substances, or when rentals or royalties are being paid to the owner thereof for the purposes of delaying or enjoying the use or exercise of such rights, or when any such use is being carried out on any tract with which such mineral interest may be unitized or pooled for production purposes, or when taxes are paid on such mineral interest by the owner of the land.
- (c)
Any interest in coal, oil and gas, and other minerals shall, if unused for a period of twenty (20) years, be extinguished, unless a statement of claim is filed in accordance with subsection (d), and the ownership of the mineral interest shall revert to the owner of the surface.
- (d)
- (1)
The statement of claim provided in subsection (c) shall be filed by the owner of the mineral interest prior to the end of the twenty-year period set forth in subsection (c) or within three (3) years after July 1, 1987, whichever is later.
- (2)
The statement of claim shall contain the name and address of the owner or owners of such mineral interest. The claim shall cite tax maps and parcel numbers for the owner or owners of surface above the mineral estate, and a reference to the instrument under which the interest is claimed.
- (3)
The statement of claim shall be filed with the office of the register of deeds in the county in which such land is located.
- (4)
Upon filing of the statement of claim within the time provided, it shall be prima facie evidence in any legal proceedings that such mineral interest was being used on the date the statement of claim was filed.
- (e)
- (1)
Any person who will succeed to the ownership of any mineral interest upon the lapse thereof may commence such lapse by filing, with the clerk and master of the county in which the mineral interest is located, a complaint of claim of abandoned mineral interest which may be in the following or a similar form:
- (2)
The complaint shall be verified and filed by the clerk and master upon payment of the fee provided in subdivision (e)(8).
- (3)
Upon the filing of a complaint of claim of abandoned mineral interest the clerk and master shall give notice that the mineral interest identified in the complaint shall lapse in sixty (60) days by publishing the same once a week for three (3) consecutive weeks in a newspaper of general circulation in the county in which such mineral interest is located, and shall send by certified mail within ten (10) days after such publication a copy of such notice to the owner of such mineral interest identified by the plaintiff in the complaint of claim of abandoned mineral interest.
- (4)
If, within sixty (60) days after publication provided in subdivision (e)(3), the mineral interest owner does not file with the clerk and master an answer alleging a claim to the mineral interest, the clerk and master shall so certify to the chancellor who shall enter the following order declaring the mineral interest has lapsed and vesting title to the mineral interest in the owner of the surface estate:
- (5)
All notices provided for in this section shall state the name of the owner of the mineral interest, if known, as shown of record, a description of the land and the name of the person filing the complaint of claim of abandoned mineral interest.
- (6)
In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census, upon the filing of the statement of claim provided in subsection (d) or the order provided in subdivision (e)(4) in the register of deeds office for the county where such interest is located, the register shall record the same in a book to be kept for that purpose, which shall be known as the “Dormant Mineral Interest Record,” and shall indicate by marginal notation on the instrument creating the original mineral interest and the instrument creating the interest of the current surface owner, the filing of the statement of claim or order.
- (7)
In order for the judicially determined lapse to be effective as to the subsequent interest holders, a certified copy of the final order evidencing the same must be recorded in the register of deeds office in the county where the property is located.
- (8)
The clerk and master shall charge a fee of thirty dollars ($30.00) for the filing of the complaint of claim of abandoned mineral interest and the order provided for in this section and shall collect the fees necessary for the publication required in this section.
- (9)
No complaint for claim of abandoned mineral interest shall be accepted for filing prior to July 1, 1990.
- (f)
- (1)
Upon the filing of the statement of claim as provided in subsection (c), the register shall record the same in a book to be kept for that purpose which shall be known as the “Dormant Mineral Interest Record” and shall enter in the index where the instrument creating the original mineral interest is indexed a notation referencing the statement of claim. Upon the filing of the order as provided in subdivision (e)(4), the register shall record the order in the Dormant Mineral Interest Record and shall enter the filing of the order in the indexes referencing the instrument creating the original mineral interest and the instrument creating the interest of the current surface owner.
- (2)
In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census, upon the filing of the statement of claim as provided in subsection (c) or the proof of service of notice as provided in subsection (e) in the register of deeds office for the county where such interest is located, the register shall record the same in a book to be kept for that purpose, which shall be known as the “Dormant Mineral Interest Record,” and shall indicate by marginal notation on the instrument creating the original mineral interest the filing of the statement of claim or affidavit of publication and service of notice.
- (g)
Chapter 282 of the Public Acts of 1987 may not be waived at any time prior to the expiration of the twenty-year period provided in subsection (c).
- (h)
This section applies in all ways to property owned by the state.
- (i)
This section may not be waived at any time prior to the expiration of the twenty-year period provided in subsection (c).
- (j)
No action shall be brought by any person to contest the lapse of a mineral interest pursuant to this section after three (3) years from the date such interest lapsed.
- (k)
- (1)
Any person who prevails in an action to quiet title to challenge a statement of claim or a complaint for claim of abandoned mineral interests filed pursuant to this section may be awarded reasonable attorney's fees and costs if the court finds that the statement of claim or the complaint was not filed in good faith. A court may find that a statement of claim or the complaint was not filed in good faith if such was filed without reasonable inquiry, with no factual basis, and for purposes of harassment.
- (2)
If the court finds no record of taxes paid or statement of claim filed for the lapsed mineral interests which references the mineral estate by tax map and parcel number, then a complaint for claim of abandoned mineral interest shall be deemed to have been filed in good faith.
- (l)
The only parties of interest pursuant to this section shall be an owner of the mineral interest and a person who shall succeed to the ownership of the mineral interest upon its lapse. Any third person claiming title or interest in any matter pursuant to this section shall prove by verified complaint, affidavit or other evidence that the third person's rights are or will be violated and that such third person will suffer injury, loss or damage if not allowed to become a party thereto.
§ 66-5-109. Effective date of conveyance.
- (a)
The effective date of any conveyance of real property in this state is presumed to be the date of the instrument of conveyance, and shall not be affected by a notary acknowledgment in such conveyance which may be dated prior or subsequent to the date of the conveyance.
- (b)
- (1)
If an instrument conveying real property is not dated, but contains a notary acknowledgment which is dated, the effective date of the instrument shall be the date of the notary acknowledgment.
- (2)
If the instrument is not dated, but contains more than one (1) notary acknowledgment, containing more than one (1) date, the latest date of a notary acknowledgment in the instrument shall be the effective date of the instrument.
§ 66-5-110. Identification of specific mineral interests to be conveyed.
-
Notwithstanding any law to the contrary, where an owner of surface and mineral rights to real property enters into a contract for the conveyance of mineral rights in such property resulting in a severance of such interests, the parties to such conveyance shall identify the specific mineral interests to be conveyed to the purchaser of the mineral rights. The purchaser of the mineral interests shall identify such interests purchased by providing a deed reference number in accordance with § 67-5-804(c) for the mineral interest with the property assessor in the county in which the interests are located as prescribed in this section. For the purposes of this section, “specific mineral interests” means only those minerals listed in the deed as contemplated by the parties. All rights to minerals not described in the deed shall remain with the surface owner. This section shall apply to all contracts entered into on or after July 1, 2011, and shall not impair the obligation of any existing contract or be construed to direct courts in determining the intent of the parties who entered into a contract prior to such date.
Part 2 Residential Property Disclosures
§ 66-5-201. General provisions.
-
This part applies only with respect to transfers by sale, exchange, installment land sales contract or lease with option to buy residential real property consisting of not less than one (1) nor more than four (4) dwelling units, including site-built and nonsite-built homes, whether or not the transaction is consummated with the assistance of a licensed real estate broker or salesperson. The disclosure statement referenced in § 66-5-202 is not a warranty of any kind by a seller and is not a substitute for inspections either by the individual purchasers or by a professional home inspector. The disclosure required by this part shall be provided to potential buyers for their exclusive use and may not be relied upon by purchasers in subsequent transfers from the original purchaser who received the property disclosure. The required disclosure shall be given in good faith by the owner or owners of property that is being transferred and shall be subject to the requirements of this part.
§ 66-5-202. Required disclosures or disclaimers.
-
With regard to transfers described in § 66-5-201, the owner of the residential property shall furnish to a purchaser one of the following:
- (1)
A residential property disclosure statement in the form provided in this part regarding the condition of the property, including any material defects known to the owner. Such disclosure form may be as included in this part and must include all items listed on the disclosure form required pursuant to this part. The disclosure form shall contain a notice to prospective purchasers and owners that the prospective purchaser and the owner may wish to obtain professional advice or inspections of the property. The disclosure form shall also contain a notice to purchasers that the information contained in the disclosure are the representations of the owner and are not the representations of the real estate licensee or sales person, if any. The owner shall not be required to undertake or provide any independent investigation or inspection of the property in order to make the disclosures required by this part; or
- (2)
A residential property disclaimer statement stating that the owner makes no representations or warranties as to the condition of the real property or any improvements thereon and that purchaser will be receiving the real property “as is,” that is, with all defects which may exist, if any, except as otherwise provided in the real estate purchase contract. A disclaimer statement may only be permitted where the purchaser waives the required disclosure under subdivision (1). If the purchaser does not waive the required disclosure under this part, the disclosure statement described in subdivision (1) shall be provided in accordance with the requirements of this part.
§ 66-5-203. Delivery of disclosure or disclaimer statement.
- (a)
The owner of residential real property subject to this part shall deliver to the purchaser the written disclosure or disclaimer statement, if agreed upon by the purchaser required by this part prior to the acceptance of a real estate purchase contract. For purposes of this part, a “real estate purchase contract” means a contract for the sale, exchange or lease with option to buy of real estate subject to this part, and “acceptance” means the full execution of a real estate purchase contract by all parties. The residential property disclaimer statement or residential property disclosure statement may be included in the real estate purchase contract, in an addendum to the contract, or in a separate document.
- (b)
Failure to provide the disclosure or disclaimer statement required by this part shall not permit a purchaser to terminate a real estate purchase contract; however, a purchaser shall not be restricted by this part from bringing such other actions at law or in equity that are otherwise permitted.
§ 66-5-204. Liability for errors or omissions — Experts' reports.
- (a)
The owner shall not be liable for any error, inaccuracy or omission of any information delivered pursuant to this part if:
- (1)
The error, inaccuracy or omission was not within the actual knowledge of the owner or was based upon information provided by public agencies or by other persons providing information as specified in subsection (b) that is required to be disclosed pursuant to this part, or the owner reasonably believed the information to be correct; and
- (2)
The owner was not grossly negligent in obtaining the information from a third party and transmitting it.
- (b)
The delivery by a public agency or other person, as described in subsection (c), of any information required to be disclosed by this part to a prospective purchaser shall be deemed to comply with the requirements of this part, and shall relieve the owner of any further duty under this part with respect to that item of information.
- (c)
The delivery by the owner of a report or opinion prepared by a licensed engineer, land surveyor, geologist, wood destroying insect control expert, contract or other home inspection expert, dealing with matters within the scope of the professional license or expertise, shall satisfy the requirements of subsection (a) if the information is provided to the owner pursuant to request therefor, whether written or oral. In responding to such a request, an expert may indicate, in writing, an understanding that the information provided will be used in fulfilling the requirements of this part and, if so, shall indicate the required disclosure or portions thereof, to which the information being furnished is applicable. Where such a statement is furnished, the expert shall not be responsible for any items of information, or portions thereof, other than those expressly set forth in this statement.
§ 66-5-205. Liability for changed circumstances.
-
If information disclosed in accordance with this part is subsequently rendered or discovered to be inaccurate as a result of any act, occurrence, information received, circumstance or agreement subsequent to the delivery of the required disclosures, the inaccuracy resulting therefrom does not constitute a violation of this part; provided, however, 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. If, at the time the disclosures are required to be made, an item of information required to be disclosed is unknown or not available to the owner, the owner may state that the information is unknown or may use an approximation of the information; provided, that the approximation is clearly identified as such, is reasonable, is based on the actual knowledge of the owner and is not used for the purpose of circumventing or evading this part.
§ 66-5-206. Duties of real estate licensees.
-
A real estate licensee representing an owner of residential real property as the listing broker has a duty to inform each such owner represented by that licensee of the owner's rights and obligations under this part. A real estate licensee representing a purchaser of residential real property or, if the purchaser is not represented by a licensee, the real estate licensee representing an owner of residential real estate and dealing with the purchaser has a duty to inform each such purchaser of the purchaser's rights and obligations under this part. If a real estate licensee performs those duties, the licensee shall have no further duties to the parties to a residential real estate transaction under this part, and shall not be liable to any party to a residential real estate transaction for a violation of this part or for any failure to disclose any information regarding any real property subject to this part. However, a cause of action for damages or equitable remedies may be brought against a real estate licensee for intentionally misrepresenting or defrauding a purchaser. A real estate licensee will further be subject to a cause of action for damages or equitable relief for failing to disclose adverse facts of which the licensee has actual knowledge or notice. “Adverse facts” means conditions or occurrences generally recognized by competent licensees that significantly reduce the structural integrity of improvements to real property, or present a significant health risk to occupants of the property.
§ 66-5-207. Liability for nondisclosure of communicable diseases or criminal acts on property.
-
Notwithstanding any of the provisions of this part, or any other statute or regulation, no cause of action shall arise against an owner or a real estate licensee for failure to disclose that an occupant of the subject real property, whether or not such real property is subject to this part, was afflicted with human immunodeficiency virus (HIV) or other disease which has been determined by medical evidence to be highly unlikely to be transmitted through the occupancy of a dwelling place, or that the real property was the site of:
- (1)
An act or occurrence which had no effect on the physical structure of the real property, its physical environment or the improvements located thereon; or
- (2)
A homicide, felony or suicide.
§ 66-5-208. Remedies for misrepresentation or nondisclosure.
- (a)
The purchaser's remedies for an owner's misrepresentation on a residential property disclosure statement shall be either:
- (1)
An action for actual damages suffered as a result of defects existing in the property as of the date of execution of the real estate purchase contract; provided, that the owner has actually presented to a purchaser the disclosure statement required by this part, and of which the purchaser was not aware at the earlier of closing or occupancy by the purchaser, in the event of a sale, or occupancy in the event of a lease with the option to purchase. Any action brought under this subsection (a) shall be commenced within one (1) year from the date the purchaser received the disclosure statement or the date of closing, or occupancy if a lease situation, whichever occurs first;
- (2)
In the event of a misrepresentation in any residential property disclosure statement required by this part, termination of the contract prior to closing, subject to § 66-5-204; or
- (3)
Such other remedies at law or equity otherwise available against an owner in the event of an owner's intentional or willful misrepresentation of the condition of the subject property.
- (b)
No cause of action may be instituted against an owner of residential real property subject to this part for the owner's failure to provide the disclosure or disclaimer statement required by this part. However, such owner would be subject to any other cause of action available in law or equity against an owner for misrepresentation or failure to disclose material facts regarding the subject property that exists on July 1, 1994.
- (c)
No cause of action may be instituted against a closing agent or closing attorney for the failure of an owner to provide the disclaimer or disclosure required by this part or for any misrepresentations made by a seller on the disclosure form supplied to the purchaser pursuant to this part.
- (d)
- (1)
No cause of action may be instituted against a real estate licensee for information contained in any reports or opinions prepared by an engineer, land surveyor, geologist, wood destroying inspection control expert, termite inspector, mortgage broker, home inspector, or other home inspection expert. A real estate licensee may not be the subject of any action and no action may be instituted against a real estate licensee for any information contained in the form prescribed by § 66-5-210, unless the real estate licensee is signatory to such.
- (2)
Nothing in this subsection (d) shall be construed to exempt or excuse a real estate licensee from making any of the disclosures required by § 62-13-403, § 62-13-405 or § 66-5-206, nor shall it be construed to remove, limit or otherwise affect any remedy provided by law for such a failure to disclose.
- (e)
The failure of an owner to provide a purchaser the disclosure or disclaimer required by this part shall not have any effect on title to property subject to this part and the presence or absence of such disclosure or disclaimer is not a cloud on title and has no effect on title to such property.
§ 66-5-209. Exempt property transfers.
-
The following are specifically excluded from this part:
- (1)
Transfers pursuant to court order including, but not limited to, transfers ordered by a court in the administration of an estate, transfers pursuant to a writ of execution, transfers by foreclosure sale, transfers by a trustee in bankruptcy, transfers by eminent domain and transfers resulting from a decree of specific performance;
- (2)
Transfers to a beneficiary of a deed of trust by a trustor or successor in interest who is in default; transfers by a trustee under a deed of trust pursuant to a foreclosure sale; or transfers by a beneficiary under a deed of trust who has acquired the real property at a sale conducted pursuant to a foreclosure sale under a deed of trust or has acquired the real property by a deed in lieu of foreclosure;
- (3)
Transfers by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship or trust;
- (4)
Transfers from one (1) or more co-owners solely to one (1) or more co-owners. This subdivision (4) is intended to apply and only does apply in situations where ownership is by a tenancy by the entirety, a joint tenancy or a tenancy in common and the transfer will be made from one (1) or more of the owners to another owner or co-owners holding property either as a joint tenancy, tenancy in common or tenancy by the entirety;
- (5)
Transfers made solely to any combination of a spouse or a person or persons in the lineal line of consanguinity of one (1) or more of the transferors;
- (6)
Transfers between spouses resulting from a decree of divorce or a property settlement stipulation;
- (7)
Transfers made by virtue of the record owner's failure to pay any federal, state or local taxes;
- (8)
Transfers to or from any governmental entity of public or quasi-public housing authority or agency;
- (9)
Transfers involving the first sale of a dwelling provided that the builder offers a written warranty;
- (10)
Any property sold at public auction;
- (11)
Any transfer of property where the owner has not resided on the property at any time within three (3) years prior to the date of transfer; and
- (12)
Any transfer from a debtor in a chapter 7 or a chapter 13 bankruptcy to a creditor or third party by a deed in lieu of foreclosure or by a quitclaim deed.
§ 66-5-210. Disclosure form.
-
Following is the form prescribed by the general assembly which is necessary to comply with this part. The form used does not have to be the one included in this section, but it is the intent of the general assembly that any such form includes all items contained in the form below with all acknowledgement provisions of such form:
§ 66-5-211. Disclosure of impact fees or adequate facilities taxes — Definitions.
- (a)
In transfers involving the first sale of a dwelling, the owner of residential property shall furnish to the purchaser a statement disclosing the amount of any impact fees or adequate facilities taxes paid to any city or county on any parcel of land subject to transfer by sale, exchange, installment land sales contract, or lease with an option to buy.
- (b)
For the purpose of this section, unless the context otherwise requires:
- (1)
“Adequate facilities tax” means any privilege tax that is a development tax, by whatever name, imposed by a county or city, pursuant to any act of general or local application, on engaging in the act of development;
- (2)
“Development” means the construction, building, reconstruction, erection, extension, betterment, or improvement of land providing a building or structure, or the addition to any building or structure or any part of any building or structure that provides, adds to, or increases the floor area of a residential or nonresidential use; and
- (3)
“Impact fee” means a monetary charge imposed by a county or municipal government pursuant to any act of general or local application, to regulate new development on real property. The amount of impact fees are related to the costs resulting from the new development and the revenues for this fee are earmarked for investment in the area of the new development.
§ 66-5-212. Disclosure of known percolation tests or soil absorption rates — Disclosure of foundation move — Disclosure of presence of sinkhole.
- (a)
In addition to any other disclosure required by this part, the seller shall, prior to entering into a contract with a buyer, disclose in the contract itself or in writing, including acknowledgement of receipt, the presence of any known exterior injection well and the results of any known percolation test or soil absorption rate performed on the property that is determined or accepted by the department of environment and conservation.
- (b)
Prior to entering into a contract with a buyer on or after May 20, 2009, the seller shall, where such information is known to the seller, also disclose in the same manner whether any single family residence located on the property has been moved from an existing foundation to another foundation.
- (c)
- (1)
In addition to any other disclosure required by this part, the seller shall, prior to entering into a contract with a buyer, disclose in the contract or in writing, including acknowledgment of receipt, the presence of a known sinkhole on the property.
- (2)
For purposes of this section, “sinkhole”:
- (i)
Means a subterranean void created by the dissolution of limestone or dolostone strata resulting from groundwater erosion, causing a surface subsidence of soil, sediment, or rock; and
- (ii)
Is indicated through the contour lines on the property's recorded plat map.
§ 66-5-213. Disclosure requirement where property is located in a planned unit development.
-
- (a)
As used in this section, unless the context otherwise requires:
- (1)
“Bylaws” mean guidelines for the operation of a homeowner's association that define the duties of the various offices of the board of directors, the terms of the directors, the membership's voting rights, required meetings and notices of meetings and the principal office of the association, as well as other specific items that are necessary to run the homeowner's association as a business;
- (2)
“Planned unit development (PUD)” means an area of land, controlled by one (1) or more landowners, to be developed under unified control or unified plan of development for a number of dwelling units, commercial, educational, recreational or industrial uses, or any combination of these, the plan for which does not correspond in lot size, bulk or type of use, density, lot coverage, open space or other restrictions to the existing land use regulations; and
- (3)
“Restrictive covenant” means any written provision that places limitations or conditions on some aspect of use of the property, such as size, location or height of structures, materials to be used in structure exterior, activities carried out on the property or restrictions on future subdivision or land development.
- (b)
In addition to any other disclosures required in this part with regard to transfers described in § 66-5-201, the owner of the residential property shall, prior to entering a contract with a buyer, disclose in the contract itself or in writing, including acknowledgement, if the property is located in a PUD, and make available to the buyer a copy of the development's restrictive covenants, homeowner bylaws and master deed upon request.
Chapter 6 Tennessee Coordinate System
§ 66-6-101. Designation of geodetic survey system.
- (a)
The most recent system of plane coordinates which has been established by the United States Department of Commerce, National Oceanic and Atmospheric Administration's National Geodetic Survey, based on the National Spatial Reference System, and known as the State Plane Coordinate System, for defining and stating the geographic positions or locations of points on the surface of the earth within the State of Tennessee shall hereafter be known as the Tennessee State Plane Coordinate System.
- (b)
The system of plane coordinates, known as the North American Datum of 1983, which has been established by the United States Department of Commerce, National Oceanic and Atmospheric Administration's National Geodetic Survey, formerly the United States Coast and Geodetic Survey, for defining and stating the geographic positions or locations of points on the surface of the earth within this state is hereafter to be known and designated as the Tennessee Coordinate System of 1983.
- (c)
The system of plane coordinates which was established in 1927 by the United States Coast and Geodetic Survey for defining and stating the positions or locations of points on the surface of the earth within this state is hereafter to be known and designated as the Tennessee Coordinate System of 1927.
- (d)
For the purpose of the use of either system, this state has one (1) zone as defined by the National Geodetic Survey.
- (e)
After December 31, 2022, the “Tennessee State Plane Coordinate System” is the sole system recognized and utilized in Tennessee for the purposes of this chapter. Any use prior to December 31, 2022, may continue to use the Tennessee Coordinate System of 1927 or the Tennessee Coordinate System of 1983 in its applications relative to redistricting.
§ 66-6-102. Coordinates used.
-
The plane coordinate values for a point on the earth's surface, used to express the geographic position or location of such point, must consist of two (2) distances expressed in United States survey feet and decimals of a foot when using the Tennessee Coordinate System of 1927, expressed in either United States survey feet and decimals of a foot or meters and decimals of a meter when using the Tennessee Coordinate System of 1983, and expressed in either International feet and decimals of a foot or meters and decimals of a meter when using the Tennessee State Plane Coordinate System. One (1) of these distances, to be known as the “East X-coordinate,” must give the distance east of the Y axis; the other, to be known as the “North Y-coordinate,” must give the distance north of the X axis. The Y axis of any zone must be parallel with the central meridian of that zone. The X axis of any zone must be at right angles to the central meridian of that zone.
§ 66-6-103. Technical definitions of systems.
- (a)
For purposes of more precisely defining the Tennessee Coordinate System of 1927, the following definition by the United States coast and geodetic survey, now the national ocean survey/national geodetic survey, is adopted:
-
The “Tennessee Coordinate System of 1927” is a Lambert conformal conic projection of the Clarke spheroid of 1866, having standard parallels at north latitudes 35° 15′ and 36° 25′, along which parallels the scale shall be exact. The origin of coordinates is at the intersection of the meridian 86° 00′ west of Greenwich and the parallel 34° 40′ north latitude. This origin is given the coordinates: x (easting) = two million feet (2,000,000′) and y (northing) = one hundred thousand feet (100,000′).
- (b)
For purposes of more precisely defining the Tennessee Coordinate System of 1983, the following definition by the national ocean survey/national geodetic survey is adopted:
-
The “Tennessee Coordinate System of 1983” is Lambert conformal conic projection of the North American Datum of 1983, having standard parallels at north latitudes 35° 15′ and 36° 25′, along which parallels the scale shall be exact. The origin of coordinates is at the intersection of the meridian 86° 00′ west of Greenwich and the parallel 34° 20′ north latitude. This origin is given the coordinates: x (easting) = six hundred thousand meters (600,000 m.) and y (northing) = zero meters (0 m.).
- (c)
The definition of the “U.S. Survey Foot” is exactly 1,200/3,937 meters.
§ 66-6-104. Proximity to horizontal control monuments required for use of coordinates.
-
Unless established by Global Navigation Satellite Systems (GNSS) methods, no coordinates based on the systems of plane coordinates defined in this chapter, purporting to define the position of a point on a land boundary, shall be presented to be recorded in any public land records or deed records unless such point is within ten kilometers (10 km) of a horizontal control monument existing or newly established in conformity with the standards of accuracy for first or second order geodetic surveying as prepared and published by the federal geodetic control committee of the United States department of commerce. Standards of the federal geodetic control committee or its successor in force on the date of such survey shall apply. The accuracy limitations described in this section may be modified by any governmental agency to meet local conditions.
§ 66-6-105. Description of location of survey stations or land boundary corners — Reliance on system not required.
- (a)
For purposes of describing the location of any survey station or land boundary corner in this state, it is considered a complete, legal, and satisfactory description of such location to give the position of such survey station or land boundary corner on any system of plane coordinates defined in this chapter; provided, that any person choosing to use a system of plane coordinates to describe any such survey station or land boundary after December 31, 1992, shall use the Tennessee Coordinate System of 1983 and after December 31, 2022, shall use the Tennessee State Plane Coordinate System.
- (b)
Nothing contained in this chapter requires a purchaser or mortgagee of real property to rely wholly on a property description, any part of which depends exclusively upon any Tennessee coordinate system.
§ 66-6-106. Use of term system on documents — Designation of system used.
- (a)
The terms Tennessee Coordinate System of 1927, Tennessee Coordinate System of 1983, or Tennessee State Plane Coordinate System must not be used on any map, report of survey, or other document, unless the coordinates contained within such document are based on the Tennessee coordinate system as defined in this chapter.
- (b)
Any document containing coordinates based upon a system of plane coordinates defined in this chapter shall contain a statement that indicates whether the Tennessee Coordinate System of 1927, the Tennessee Coordinate System of 1983, or the Tennessee State Plane Coordinate System was used.
- (c)
This chapter must not be construed to prohibit the appropriate use of other datums and other geodetic reference networks.
Chapter 7 Leases
§ 66-7-102. Effect of injury to buildings.
- (a)
Where any building which is leased or occupied is destroyed or so injured by the elements, or any other cause, as to be untenantable and unfit for occupancy, and no express agreement to the contrary has been made in writing, the lessee or occupant may, if the destruction or injury occurred without fault or neglect by the lessee, surrender possession of the premises, without liability to the lessor or owner for rent for the time subsequent to the surrender.
- (b)
A covenant or promise by the lessee to leave or restore the premises in good repair shall not have the effect to bind the lessee to erect or pay for such buildings as may be so destroyed, unless in respect of the matter of loss or destruction there was neglect or fault on the lessee's part, or unless the lessee has expressly stipulated in writing to be so bound.
§ 66-7-103. Maximum term of oil and gas leases.
- (a)
- (1)
Any lease of oil or natural gas rights or any other conveyance of any kind separating such rights from the freehold estate of land shall expire at the end of ten (10) years from the date executed, unless, at the end of such ten (10) years, natural gas or oil is being produced from such land for commercial purposes. If, at any time after the ten-year period, commercial production of oil or natural gas is terminated for a period of six (6) months, all such rights shall revert to the owner of the estate out of which the leasehold estate was carved. No assignment or agreement to waive this subsection (a) shall be valid or enforceable.
- (2)
This subsection (a) shall not be construed to affect the validity or the expiration date of any lease or other instrument executed prior to March 16, 1939, nor shall it be construed to affect the validity or the expiration date of any lease, conveyance or other instrument insofar as it may convey underground natural gas storage rights, or otherwise separate such rights from the freehold estate, whenever executed.
- (b)
- (1)
For a period of one (1) year after the ten-year period provided for in subsection (a) has expired, “production,” as used in subsection (a), includes the actual production of minerals under any lease hereof or by the owner of any mineral interest, or when operations are being conducted by any owner of a lease or mineral interest for injection, withdrawal, storage, or disposal of water, gas, or other fluid substances, or when rentals or royalties are being paid by the owner of such leases for the purpose of delaying or enjoying the use of exercise of the rights thereunder or when the same is being carried out on any tract with which such leasehold interest may be unitized or pooled for production purposes. During the one-year period provided for in this subsection (b), any act by the owner of any leasehold or mineral interest pursuant to or authorized by the instrument creating such interest shall be effective to continue in force all rights granted by such instrument, notwithstanding subsection (a).
- (2)
This subsection (b) applies to a drilling unit of no more than the number of acres provided for under the pooling clause of the lease and provided there is compliance with the rules of the Tennessee oil and gas board as set forth in paragraph 1040-02-04 of such rules (well spacing).
§ 66-7-104. Physically disabled persons' access to housing accommodations.
- (a)
Totally or partially blind persons and other physically disabled persons shall be entitled to full and equal access, as other members of the general public, to all housing accommodations offered for rent, lease or compensation in this state, subject to the conditions and limitations established by law and applicable to all persons.
- (b)
“Housing accommodations” means any real property or portion thereof which is used to occupy or is intended, arranged or designed to be used or occupied, as the home, residence or sleeping place of one (1) or more human beings, but does not include any single family residence, the occupants of which rent, lease or furnish for compensation not more than one (1) room in the residence.
- (c)
- (1)
Nothing in this section shall require any person renting, leasing, or providing for compensation any real property to modify such property in any way or manner or to provide a higher degree of care for a totally blind or partially blind person or other physically disabled person than for a person who is not blind or disabled.
- (2)
- (A)
Notwithstanding subdivision (c)(1), any person renting, leasing, or providing for compensation any real property that is three (3) or more stories tall shall give priority in access to housing units on floors one (1) and two (2) of such property to physically disabled persons whose disability would prevent such persons from having reasonable access to units located on higher floors; provided, that the person shall not be required to seek out physically disabled occupants or forego occupancy of the unit for any period of time if a physically disabled occupant is not available. Nothing in this subdivision (c)(2) shall prevent the lessor from using or applying other factors in determining whether or not to rent to a disabled person.
- (B)
A violation of subdivision (c)(2)(A) is a Class C misdemeanor punishable only by a fine not to exceed fifty dollars ($50.00).
- (d)
Every totally blind or partially blind person who has a guide dog, or who obtains a guide dog, shall be entitled to full and equal access to all housing accommodations included within subsection (a) or any accommodations provided for in §§ 71-4-201, 71-4-202 and this section, and such person shall not be required to pay extra compensation for such guide dog, but shall be liable for any damages done to the premises by such animal.
§ 66-7-105. Adult bookstores and movie houses — Leases unenforceable.
-
Hereby declared against public policy and unenforceable are all leases or rental contracts, whether or not in writing, on real estate or buildings which are used for the purpose of sale, display, distribution or exhibition of obscene live performances or obscene material of any other kind including, but not limited to, the business of operating a store or house for the sale, or the commercial display, distribution or exhibition of an obscene book or magazine or other printed matter, motion pictures or peep shows. Occupants claiming the right to possess, use or occupy any building or real estate because of such an unenforceable lease or rental contract shall be immediately subject to eviction for unlawful detainer thereof in a suit by the owner of the building or real estate or by the state or by the county or by the incorporated municipality in which the building or real estate is located. Any person, firm, partnership or corporation that knowingly leases or rents any real estate or building to any person, firm, partnership or corporation for such purpose shall not have standing to use the courts or legal processes to enforce such lease or rental contract or to collect rentals or any other consideration because of such an unenforceable lease or rental contract.
§ 66-7-106. Leasing to blind persons.
- (a)
Any legally blind person in this state whose loss of sight necessitates a guide dog for mobility purposes, which has been obtained from a recognized school of training for such purposes, may not be denied the right to lease an apartment or other types of dwellings as a consequence of having a guide dog.
- (b)
Because the guide dog is essential to the mobility of its master, no deposit may be required to be paid, with respect to the dog, by the legally blind person to the owner, manager, landlord or agent of any such attendance.
- (c)
No restrictions may be imposed upon the legally blind person regarding the whereabouts of the animal so long as its master is in attendance.
- (d)
Any owner, manager, landlord or agent who refuses to lease living space to any legally blind person because of a guide dog, or violates this section, commits a Class C misdemeanor.
§ 66-7-107. Termination for knowing controlled substance or prostitution violations.
- (a)
- (1)
An occupant's tenancy may be terminated where the premises or the area immediately surrounding the premises is knowingly used or occupied in whole or in part to violate § 39-13-513, § 39-13-515 or § 39-17-417.
- (2)
The identity of any person who provides evidence or other information that results in an eviction or other termination of residency pursuant to this section shall be kept confidential and shall not be made a public record by the law enforcement agency or the district attorney general.
- (b)
The district attorney general for the district in which the real property is located may serve personally upon the owner or landlord of the premises so used or occupied, or upon the owner's or landlord's agent, or may send by registered return receipt or certified return receipt mail, a written notice requiring the owner or landlord to inform such district attorney general in writing of the owner's or landlord's intent to diligently and in good faith seek the eviction of the tenants or occupants so using or occupying the premises. If the owner or landlord or the owner's or landlord's agent does not so inform such district attorney general in writing within five (5) days of receiving written notice or, having so done, does not in good faith diligently prosecute such eviction, the district attorney general may bring a proceeding under this section in general sessions court, specifically including any general sessions court designated as an environmental court, or circuit court for such eviction as though the district attorney general was the owner or landlord of the premises, and such proceeding shall have precedence over any similar proceeding thereafter brought by such owner or landlord or to a proceeding previously brought by such owner or landlord and not prosecuted diligently and in good faith. The person in possession of the property and the owner or landlord shall be made respondents in such a proceeding.
- (c)
A court granting relief pursuant to this section may order, in addition to any other costs provided by law, the payment by the respondent or respondents of reasonable attorney fees and the prepaid costs of the proceeding to the district attorney general. In such cases, multiple respondents are jointly and severally liable for any payment so ordered. Any costs collected shall be remitted to the office of the district attorney general, and any attorney fees collected shall be remitted to the general fund of the county where the proceeding occurred.
- (d)
A proceeding brought under this section for possession of the premises does not preclude the owner or landlord from recovering monetary damages from the tenants or occupants of such premises in a civil action.
- (e)
The owner or landlord of the real property is obligated to pay the costs required to physically remove the tenant's personal belongings from the rental property in compliance with an eviction order of the court in all eviction proceedings brought under this section by the district attorney general; such costs not to exceed two hundred dollars ($200) for each such eviction order.
§ 66-7-108. Commercial lease disclosure statement — Remedies for misrepresentation.
- (a)
At the request of a prospective tenant, the owner of commercial or industrial real property where the commercial property space is one thousand five hundred square feet (1,500 sq. ft.) or less, and the industrial real property is five thousand square feet (5,000 sq. ft.) or less, shall furnish to such prospective tenant a signed disclosure statement detailing the extent to which such real property is understood by the owner to be in compliance with local and state fire, plumbing, and electrical codes for a building of the type under construction. If, at the time such disclosure is made, an item of information required to be disclosed is unknown or not available to the owner, the owner may state that such information is unknown.
- (b)
If the owner knowingly misrepresents information required to be disclosed by this section, the lessee's remedies, at the option of the lessee, for such misrepresentation on the disclosure statement shall be either:
- (1)
An action for actual damages suffered as a result of known defects existing in the property as of the date of execution of the lease. Any action brought under this subdivision (b)(1) shall be commenced within one (1) year from the date the lessee received the disclosure statement or the date of occupancy, whichever occurs first; or
- (2)
Termination of the lease.
- (c)
Nothing in this section shall affect other remedies at law or equity otherwise available against an owner in the event of an owner's intentional or willful misrepresentation of the condition of the subject property.
§ 66-7-109. Notice of termination by landlord — Testimony of manager against tenant.
- (a)
- (1)
Except as provided in this section, fourteen (14) days' notice by a landlord shall be sufficient notice of termination of tenancy for the purpose of eviction of a residential tenant, if the termination of tenancy is for one of the following reasons:
- (A)
Tenant neglect or refusal to pay rent that is due and is in arrears, upon demand;
- (B)
Damage beyond normal wear and tear to the premises by the tenant, members of the household, or guests; or
- (C)
The tenant or any other person on the premises with the tenant's consent willfully or intentionally commits a violent act or behaves in a manner which constitutes or threatens to be a real and present danger to the health, safety or welfare of the life or property of other tenants, the landlord, the landlord's representatives or other persons on the premises.
- (2)
If the notice of termination of tenancy is given for one of the reasons set out in subdivision (a)(1)(A) or (a)(1)(B) and the breach is remediable by repairs or the payment of rent or damages or otherwise and the tenant adequately remedies the breach prior to the date specified in the notice from the landlord, the rental agreement will not terminate. If substantially the same act or omission which constituted a prior noncompliance of which notice was given recurs within six (6) months, the landlord may terminate the rental agreement upon at least fourteen (14) days' written notice specifying the breach and the date of termination of the rental agreement.
- (b)
For all other defaults in the lease agreement, a thirty-day termination notice from the date such notice is given by the landlord shall be required for the purpose of eviction of a residential tenant.
- (c)
This section shall not apply to a tenancy where the rental period is for less than fourteen (14) days.
- (d)
Notwithstanding § 66-7-107 or this section to the contrary, three (3) days' notice by a landlord is sufficient notice of termination of tenancy to evict a residential tenant in a housing authority created pursuant to title 13, chapter 20, part 4 or 5, or a residential tenant, who is not mentally or physically disabled, in a rental property located in any county not governed by the Uniform Residential Landlord and Tenant Act, compiled in chapter 28 of this title, if the tenant, in either case, or any other person on the premises with the tenant's consent, willfully or intentionally:
- (1)
Commits a violent act;
- (2)
Engages in any drug-related criminal activity; or
- (3)
Behaves in a manner that constitutes or threatens to be a real and present danger to the health, safety, or welfare of the life or property of other tenants, the landlord, the landlord's representatives, or other persons on the premises.
- (e)
- (1)
If domestic abuse, as defined in § 36-3-601, is the underlying offense for which a tenancy is terminated, only the perpetrator may be evicted. The landlord shall not evict the victims, minor children under eighteen (18) years of age, or innocent occupants, any of whom occupy the subject premises under a lease agreement, based solely on the domestic abuse. Even if evicted or removed from the lease, the perpetrator shall remain financially liable for all amounts due under all terms and conditions of the present lease agreement.
- (2)
If a lease agreement is in effect, the landlord may remove the perpetrator from the lease agreement and require the remaining adult tenants to qualify for and enter into a new agreement for the remainder of the present lease term. The landlord shall not be responsible for any and all damages suffered by the perpetrator due to the bifurcation and termination of the lease agreement in accordance with this section.
- (3)
If domestic abuse, as defined in § 36-3-601, is the underlying offense for which tenancy could be terminated, the victim and all adult tenants shall agree, in writing, not to allow the perpetrator to return to the subject premises or any part of the community property, and to immediately report the perpetrator's return to the proper authority, for the remainder of the tenancy. A violation of such agreement shall be cause to terminate tenancy as to the victim and all other tenants.
- (4)
The rights under this section shall not apply until the victim has been judicially granted an order of protection against the perpetrator for the specific incident for which tenancy is being terminated, a copy of such order has been provided to the landlord, and the order:
- (A)
Provides for the perpetrator to move out or vacate immediately;
- (B)
Prohibits the perpetrator from coming by or to a shared residence;
- (C)
Requires that the perpetrator stay away from the victim's residence; or
- (D)
Finds that the perpetrator's continuing to reside in the rented or leased premises may jeopardize the life, health, and safety of the victim or the victim's minor children.
- (5)
Failure to comply with this section, or dismissal of an order of protection that allows application of this section, abrogates the rights provided to the victim, minor children, and innocent occupants under this section.
- (6)
The rights granted in this section shall not apply in any situation where the perpetrator is a child or dependent of any tenant.
- (7)
Nothing in this section shall prohibit the eviction of a victim of domestic abuse for non-payment of rent, a lease violation, or any violation of this chapter.
- (f)
Three (3) days' notice by a landlord is sufficient notice of termination of tenancy for the purpose of eviction of an unauthorized subtenant or other unauthorized occupant, if the termination of tenancy is for refusal by the unauthorized subtenant or other unauthorized occupant to vacate the premises.
- (g)
Nothing in this section shall apply to rental property located in any county governed by the Uniform Residential Landlord and Tenant Act.
- (h)
Notwithstanding a rental agreement to the contrary, a manager may testify against a tenant under this chapter in the same manner as a landlord or owner.
- (i)
- (1)
As used in this subsection (i):
- (A)
“Facility” means a facility that:
- (i)
Provides housing for older persons, as defined in 42 U.S.C. § 3607(b)(2)(C); and
- (ii)
Receives federal financial assistance that subjects it to Section 504 of the federal Rehabilitation Act of 1973 (29 U.S.C. § 794);
- (B)
“New property development” means:
- (i)
Razing a facility to use the real property on which the facility is located for purposes other than to provide housing for older persons, as defined in 42 U.S.C. § 3607(b)(2)(C); or
- (ii)
Renovating a facility in a manner that requires the tenants of the facility to vacate the facility in order to turn the facility into residential housing offered at a market rate; and
- (C)
“Residential tenant” means a residential tenant who has a lease or other agreement to live in a facility and who is fifty-five (55) years of age or older.
- (2)
A landlord shall provide sixty (60) days' notice of termination of tenancy for the purpose of eviction of a residential tenant of a facility if:
- (A)
The tenant has paid the tenant's rent due and is not in arrears on rent payments; and
- (B)
The termination and eviction are to allow for new property development.
- (3)
This subsection (i) does not abrogate a landlord's right to terminate a tenancy for a violation of another law or of the lease or tenancy agreement.
§ 66-7-110. Rental termination rights for persons with physical disabilities.
-
A person with a physical disability shall be permitted to terminate a rental lease relative to such person's primary residence without incurring penalties or being obligated to pay rent after ceasing to occupy the property if such person is accepted as a resident of a public housing facility, unless the person's current landlord has made significant modifications to the residence to address issues of accessibility for persons with a physical disability. The person with a physical disability who terminates a rental lease pursuant to this section shall present written evidence of the public housing facility acceptance to the rental leaseholder and the rental leaseholder shall provide written acknowledgement of the lease termination to the lessee. For the purposes of this section, a “person with a physical disability” means a person who meets the standard for being “permanently and totally disabled” under § 71-4-1102.
§ 66-7-111. Exception to policy prohibiting or limiting, or requiring payment for, animals or pets for tenant or prospective tenant with disability who requires use of service animal or support animal.
- (a)
As used in this section:
- (1)
“Disability” means:
- (A)
A physical or mental impairment that substantially limits one (1) or more major life activities;
- (B)
A record of an impairment described in subdivision (a)(1)(A); or
- (C)
Being regarded as having an impairment described in subdivision (a)(1)(A);
- (2)
“Health care” means any care, treatment, service, or procedure to maintain, diagnose, or treat an individual's physical or mental condition;
- (3)
“Healthcare provider” means a person who is licensed, certified, or otherwise authorized or permitted by the laws of any state to administer health care in the ordinary course of business or practice of a profession;
- (4)
“Reliable documentation” means written documentation provided by:
- (A)
A healthcare provider with actual knowledge of an individual's disability;
- (B)
An individual or entity with a valid, unrestricted license, certification, or registration to serve persons with disabilities with actual knowledge of an individual's disability; or
- (C)
A caregiver, reliable third party, or a governmental entity with actual knowledge of an individual's disability;
- (5)
“Service animal” means a dog or miniature horse that has been individually trained to work or perform tasks for an individual with a disability; and
- (6)
“Support animal” means an animal selected to accompany an individual with a disability that has been prescribed or recommended by a healthcare provider to work, provide assistance, or perform tasks for the benefit of the individual with a disability, or provide emotional support that alleviates one (1) or more identified symptoms or effects of the individual's disability.
- (b)
A tenant or prospective tenant with a disability who requires the use of a service animal or support animal may request an exception to a landlord's policy that prohibits or limits animals or pets on the premises or that requires any payment by a tenant to have an animal or pet on the premises.
- (c)
A landlord who receives a request made under subsection (b) from a tenant or prospective tenant may ask that the individual, whose disability is not readily apparent or known to the landlord, submit reliable documentation of a disability and the disability-related need for a service animal or support animal. If the disability is readily apparent or known but the disability-related need for the service animal or support animal is not, then the landlord may ask the individual to submit reliable documentation of the disability-related need for a service animal or support animal.
- (d)
A landlord who receives reliable documentation under subsection (c) may verify the reliable documentation. However, nothing in this subsection (d) authorizes a landlord to obtain confidential or protected medical records or confidential or protected medical information concerning a tenant's or prospective tenant's disability.
- (e)
A landlord may deny a request made under subsection (b) if a tenant or prospective tenant fails to provide accurate, reliable documentation that meets the requirements of subsection (c), after the landlord requests the reliable documentation.
- (f)
- (1)
It is deemed to be material noncompliance and default by the tenant with the rental agreement, if the tenant:
- (A)
Misrepresents that there is a disability or disability-related need for the use of a service animal or support animal; or
- (B)
Provides documentation under subsection (c) that falsely states an animal is a service animal or support animal.
- (2)
In the event of any violation under subdivision (f)(1), the landlord may terminate the tenancy and recover damages, including, but not limited to, reasonable attorney's fees.
- (g)
Notwithstanding any other law to the contrary, a landlord is not liable for injuries by a person's service animal or support animal permitted on the premises as a reasonable accommodation to assist the person with a disability pursuant to the Fair Housing Act, as amended, (42 U.S.C. §§ 3601 et seq.); the Americans with Disabilities Act of 1990 (42 U.S.C. §§ 12101 et seq.); Section 504 of the Rehabilitation Act of 1973, as amended, (29 U.S.C. § 701); or any other federal, state, or local law.
- (h)
Only to the extent it conflicts with federal or state law, this section does not apply to public housing units owned by a governmental entity.
§ 66-7-112. Termination of residential lease by domestic abuse victim, sexual assault victim, or stalking victim.
- (a)
As used in this section:
- (1)
“Domestic abuse victim” has the same meaning as defined in § 36-3- 601;
- (2)
“Household member” means a member of the tenant's family who lives in the same household as the tenant;
- (3)
“Sexual assault victim” has the same meaning as defined in § 36-3- 601; and
- (4)
“Stalking victim” has the same meaning as defined in § 36-3-601.
- (b)
- (1)
A tenant who meets the requirements established in this subsection (b) may terminate a residential rental or lease agreement entered into or renewed on or after July 1, 2021, upon the tenant providing the landlord with written notice stating that the tenant or household member is a domestic abuse victim, sexual assault victim, or stalking victim, regardless of whether the victim is an adult or a child. In order for a tenant to terminate the tenant's rights and obligations under the rental or lease agreement and vacate the dwelling without liability for future rent and early termination penalties or fees, the tenant must provide the landlord with:
- (A)
Written notice requesting release from the rental or lease agreement;
- (B)
A mutually agreed upon release date within the next thirty (30) days from the date of the written notice; and
- (C)
One (1) of the following:
- (i)
A copy of a valid order of protection issued or extended pursuant to § 36-3-605, following a hearing at which the court found by a preponderance of the evidence that the tenant or household member is a domestic abuse victim, sexual assault victim, or stalking victim, regardless of whether the victim is an adult or child; or
- (ii)
Documentation evidencing a criminal charge of domestic abuse, sexual assault, or stalking, based on a police report reflecting that the tenant or household member was subject to domestic abuse, sexual assault, or stalking, regardless of whether the alleged victim is an adult or a child.
- (2)
The documentation the tenant offers in support of the termination request must be dated no more than sixty (60) days prior to the tenant's notice to the landlord.
- (3)
- (A)
Unless otherwise required by law or a court of competent jurisdiction, a landlord shall not reveal any identifying information concerning a tenant who has terminated a rental or lease agreement pursuant to this subsection (b) without the written consent of the tenant.
- (B)
As used in this subdivision (b)(3), “identifying information” means any information that could reasonably be used to locate the former tenant or household member, including a home or work address, telephone number, or social security number.
- (4)
The tenant shall vacate the premises within thirty (30) days of giving notice to the landlord or at another time as may be agreed upon by the landlord and the tenant.
- (c)
A tenant terminating the rental or lease agreement pursuant to this section is responsible for:
- (1)
The rent payment for the full month in which the tenancy terminates; and
- (2)
The previous obligations outstanding on the termination date.
- (d)
This section does not:
- (1)
Release other parties to the rental or lease agreement from the obligations under the rental or lease agreement;
- (2)
Authorize the landlord to terminate the tenancy and cause the eviction of a residential tenant solely because the tenant or a household member is a domestic abuse victim, sexual assault victim, or stalking victim, regardless of whether the victim is an adult or child; or
- (3)
Authorize the landlord or tenant, by agreement, to waive or modify any provision of this section other than subdivision (b)(4).
Chapter 8 Redemption of Real Estate Sold for Debt
§ 66-8-101. Right of redemption — Waiver.
-
Real estate sold for debt shall be redeemable at any time within two (2) years after such sale:
- (1)
Where it is sold under execution;
- (2)
Where it is sold under any decree, judgment, or order of a court of chancery, whether founded upon a foreclosure of a mortgage, or deed of trust, or otherwise, unless, upon application of the complainant, the court orders that the property be sold on a credit of not less than six (6) months, nor more than two (2) years; and that, upon confirmation thereof by the court, no right of redemption or repurchase shall exist in the debtor or the debtor's creditor, but that the title of the purchaser shall be absolute; and
- (3)
Where it is sold under a deed of trust or mortgage without a judicial sentence, unless the right of redemption is expressly waived by the deed or mortgage; and a waiver of the “equity of redemption,” or a waiver using words of similar import, shall be sufficient to waive the right of redemption afforded by this section in all deeds of trust and mortgages, whether heretofore or hereafter existing.
§ 66-8-102. Period in which redeemable.
-
Real estate sold for debt and made redeemable shall continue redeemable to the debtor and the debtor's creditors for two (2) years after the sale, upon the terms set forth in this chapter, no matter how often it had been previously redeemed.
§ 66-8-103. Waiver of right in mortgage or trust deed.
-
The right of redemption does not extend to any sale under and by virtue of a power contained in any deed of trust, mortgage, or other instrument, whereby the right is waived or surrendered by such mortgage or conveyance.
§ 66-8-104. Timber on land subject to redemption — Waste.
-
No person holding the temporary title to real estate, subject to redemption, shall use more of the wood growing thereon than the timber required to keep the improvements in good repair, and firewood necessary for those occupying the same; nor shall that person destroy or remove from the land any fencing or buildings.
§ 66-8-105. Remedies against waste.
-
The person having the right to redeem such real estate may file a bill in chancery for an injunction to restrain waste; and, after redemption, may recover damages occasioned by such waste.
§ 66-8-106. Purchase price paid on redemption.
-
Any debtor whose interest in real estate has been so sold, and is subject to redemption, may redeem the interest by paying to the purchaser, or to anyone claiming under the purchaser, the amount bid or paid by the purchaser, with interest thereon at the current composite prime rate as published by the federal reserve board as of the date of purchase per annum, together with all other lawful charges.
§ 66-8-107. Advance on bid by purchasing creditor.
-
If the purchaser is a bona fide creditor by judgment, decree, or debt acknowledged by deed, and, within twenty (20) days after the sale, the purchaser makes an advance on the purchaser's bid, and credits the purchaser's debt by depositing a receipt therefor with the clerk of the court in which the judgment or decree was rendered, or, if the sale was under a deed of trust or mortgage, the purchaser acknowledges a receipt for such advance before the county clerk for registration, and causes the same to be registered in the county where the land lies, then the purchaser shall hold the property subject to redemption at the price bid and such an advance, just as if the whole sum had been bid at the time of the sale.
§ 66-8-108. Redemption from redeeming creditor.
-
A bona fide creditor, who redeems from the purchaser at the sale, shall hold the property subject to redemption by the original debtor, or any other of the original debtor's creditors, upon the same terms on which it was redeemable in the hands of the first purchaser or any person claiming under that purchaser; that is to say, by the party proposing to redeem paying or tendering to the person holding the land the amount of money paid or credited by that purchaser, with interest at the current composite prime rate as published by the federal reserve board as of the date of purchase per annum thereon, and also agreeing to pay to the debtor the further sum of ten percent (10%) or more on the sum bid for the land when sold, or crediting the debtor with that amount or more on the debt owing to the purchaser by the debtor, or with a sum equal to ten percent (10%) or more upon the judgment of the creditor, at the election of the creditor.
§ 66-8-109. Advance on redemption price by redeeming creditor.
-
When any such creditor has redeemed land from the original purchaser, or from one who has previously redeemed, that creditor may, within twenty (20) days after such redemption, advance upon the bid any sum to the extent of that creditor's debt or debts, just as if such creditor had been the original purchaser.
§ 66-8-110. Total amount payable on redemption.
-
The person proposing to redeem shall always pay, or tender, to the holder of the land, the amount of money lawfully paid by the holder, with interest thereon, at the current composite prime rate as published by the federal reserve board as of the date of purchase per annum; and, if the holder is a creditor, shall pay to the debtor or credit the debtor's debt with a sum equal to ten percent (10%) or more on the sum bid at the original sale, or with a sum equal to ten percent (10%) or more upon the judgment of the creditor, at the election of the creditor.
§ 66-8-111. Unauthorized increase of bid.
-
In no case shall the holder or claimant of the property increase such holder's or claimant's bid against the debtor, or any bona fide creditor offering to redeem the real estate, except as provided in § 66-8-110.
§ 66-8-112. Rent during redemption period.
-
The debtor, permitted by the purchaser to remain in possession, shall not be liable for rent from the date of the sale to the time of the redemption; and if the purchaser or the purchaser's assignee takes possession under the purchase, upon redemption by the debtor, the debtor shall have a credit for the fair rent of the premises during the time they were in the purchaser's possession.
§ 66-8-113. Payment of redemption money through clerk of court — Failure of clerk to pay over.
- (a)
Where the purchaser is absent from the purchaser's usual place of residence, so that personal tender to the purchaser is prevented, or resides out of the county where the land lies, the debtor, or party entitled to redeem, may pay the redemption money to the clerk of the circuit court of the county in which the land lies, or in case the land is sold by the judgment or decree of a court, then to the clerk of the court from which the same is sold, to be held by the clerk for the person entitled to it, and such payment shall be good to all intents and purposes.
- (b)
If the clerk fails or refuses to pay over such money to the person entitled to it, on application, it may be recovered by motion, in the same way as money paid to the clerk on execution, and not paid over on demand.
§ 66-8-114. Enforcement of right to redemption.
- (a)
If the purchaser, or the purchaser's vendee, fails or refuses to reconvey to such party entitled and offering to redeem, as set forth in this chapter, such party so paying or tendering payment shall have the right to file in the chancery court a bill to enforce the purchaser's rights of redemption.
- (b)
- (1)
In any suit to enforce a right of redemption brought by a transferee from the debtor:
- (A)
The debtor shall be made a party;
- (B)
The suit shall be dismissed on the motion of any party if it appears that the transferee is engaged in speculation or profiteering in such rights of redemption;
- (C)
Such speculation and profiteering shall be presumed if it appears that the transfer of the right of redemption was made for a consideration less than the fair market value of the real property minus the amount the debtor would have been required to pay to redeem the property under this chapter; and
- (D)
The party seeking to redeem the real property shall complete the tender required by this chapter by paying the amount required for redemption to the clerk of the court.
- (2)
It is the intent of this subsection (b) to further the public policy of the state to protect the interests of owners of real property subject to debt and to prohibit the profiteering and speculation in rights of redemption.
- (3)
The purpose of this subsection (b) is remedial and it shall be construed to apply to any existing rights of redemption. This subsection (b), however, shall not apply to any rights of redemption arising out of judicial foreclosures or tax sales.
Chapter 9 Easements and Restrictive Covenants
Part 1 Preservation Restrictions
§ 66-9-101. Part definitions.
-
As used in this part, unless the context otherwise requires:
- (1)
“Historically significant” means any structure more than fifty (50) years old; and
- (2)
“Preservation restriction” means a right, whether or not stated in the form of a restriction, easement, covenant or condition, in any deed, will or other instrument executed by or on behalf of the owner of the land or in any order of taking, appropriate to preservation of either a structure or a structure and the land upon which such structure is located, historically significant for its architecture or archaeology, to prohibit or limit any or all of the following:
- (A)
Alterations in exterior or interior features of the structure;
- (B)
Changes in appearance or condition of the land upon which such structure is located;
- (C)
Uses not historically appropriate; or
- (D)
Other acts or uses detrimental to appropriate preservation of the structure, or land upon which such structure is located.
§ 66-9-102. Enforceability of preservation restrictions.
-
No preservation restriction held by any governmental body or by any nonprofit corporation or trust not for profit shall be unenforceable because of lack of privity of estate or contract, or lack of benefit to particular land, or assignability of the benefit.
§ 66-9-103. Enforcement of preservation restriction — Entry on land — Recovery of damages.
-
A preservation restriction may be enforced by injunction or other proceeding in equity, and shall entitle representatives of the holder of such restriction to enter the land in a reasonable manner and at reasonable times to assure compliance. Nothing in this section shall prevent the holder from also recovering any damages to which the holder may otherwise be entitled.
Part 2 Solar Access Law of 1979
§ 66-9-202. Legislative findings and declarations.
-
The general assembly finds that the use of solar energy can help reduce reliance on depletable energy resources such as oil, natural gas and coal, and that solar energy development should, therefore, be encouraged. Further, that as the use of solar energy systems increases, the possibility of future shading of such systems by buildings or vegetation will also increase. Therefore, the general assembly declares that solar easements may be established to allow the owner of a solar energy system to negotiate for assurance of continued access to sunlight. The general assembly further finds that encouragement and protection of solar energy systems is a valid objective which counties and municipalities may consider in promulgating zoning regulations.
§ 66-9-203. “Solar energy system” defined.
-
As used in this part, “solar energy system” means any device, mechanism, structure, apparatus, or part thereof, whose primary purpose is to collect solar energy and convert and store it for useful purposes including heating and cooling buildings or other energy saving processes, or to produce generated power by means of any combination of collecting, transferring, or converting solar generated energy.
§ 66-9-204. Instruments creating solar easements — Contents.
- (a)
Any instrument creating a solar easement shall include, but the contents need not be limited to:
- (1)
A description of the real property subject to the solar easement and a description of the real property benefiting from the solar easement;
- (2)
The vertical and horizontal angles, expressed in degrees or otherwise, at which the solar easement extends over the real property subject to the solar easement;
- (3)
Any terms or conditions, or both, under which the solar easement is granted or will terminate;
- (4)
Any provisions for compensation of the owner of the property benefiting from the solar easement in the event of interference with the enjoyment of the solar easement or compensation of the owner of the property subject to the solar easement for maintaining the solar easement; and
- (5)
The period of time for which the easement shall run.
- (b)
The office of energy programs of the department of environment and conservation, pursuant to powers granted in §§ 4-3-510 and 4-3-512(8), is directed to prepare a sample solar easement instrument for use in this state.
§ 66-9-205. Easement to run with the land — Abandonment of easement.
-
A solar easement shall be presumed to run with the land or lands benefited and burdened, unless the parties to the easement provide otherwise in writing, and shall be deemed to pass with the property when title is transferred unless stated to the contrary in § 66-9-204(a)(3). Any solar easements granted under this part may be abandoned in the same manner as other easements as provided by law.
§ 66-9-207. Solar power facility agreements.
- (a)
As used in this section, unless the context otherwise requires:
- (1)
“Decommissioning cost” means the estimated cost of performing the removal and restoration obligations set forth in subsection (c), less the estimated salvage value of the components of the solar power facility as of the date of removal;
- (2)
“Grantee” means a person, other than a public utility, as defined by § 65-4-101, who leases property from a landowner or holds an easement interest pursuant to a solar power facility agreement;
- (3)
“Landowner” means the owner or owners of a fee simple interest in land;
- (4)
“Premises” means the real property leased or granted by a landowner to a grantee pursuant to a solar power facility agreement;
- (5)
- (A)
“Solar power facility” means, collectively, a device or structure, or series thereof, that provides for the collection of solar energy for electricity generation, together with all facilities and equipment, other than any facility or equipment owned by a public utility, as defined by § 65-4-101, located proximate to and in support of the operation of such electricity generation device or structure, including, without limitation, all underground and aboveground electrical collection, distribution, and transmission lines; inverters; transformers; substations; energy storage facilities; telecommunications equipment and communication lines; meteorological towers; maintenance yards; switchgear; fences; and foundations supporting other components of the solar power facility; and
- (B)
“Solar power facility” does not include a solar-generating device or structure that is less than ten megawatts (10 MW) in size, measured in alternating current at the point of interconnection to the electrical grid, unless the application of this part is expressly provided for in the solar power facility agreement; and
- (6)
“Solar power facility agreement” means a lease or easement agreement for real property between a grantee and a landowner for the construction, installation and operation of all or a part of a solar power facility on such real property that generates electricity primarily for use and consumption off the premises.
- (b)
All solar power facility agreements:
- (1)
Must provide, at a minimum, that the grantee shall, upon or prior to the expiration or termination of the solar power facility agreement, safely remove or cause the removal of all components of the solar power facility located on the premises, except for any electrical or communications lines buried more than three feet (3') below the surface grade of the land, and restore the land comprising the premises to, as near as reasonably possible, its condition as of the date of the commencement of construction of the solar power facility; and
- (2)
Must either contain or provide that the grantee shall deliver to the landowner a decommissioning plan detailing the grantee's plan for performing or causing the performance of the obligations in subdivision (b)(1).
- (c)
- (1)
A solar power facility agreement must require the grantee to obtain and deliver to the landowner financial assurance in the following amounts to secure the performance of the grantee's removal and restoration obligations in subsection (b):
- (A)
No less than five percent (5%) of the decommissioning cost on the date the solar power facility commences commercial operation;
- (B)
No less than fifty percent (50%) of the decommissioning cost on the tenth anniversary of the date the solar power facility commences commercial operation; and
- (C)
No less than the decommissioning cost on the fifteenth anniversary of the date the solar power facility commences commercial operation.
- (2)
Acceptable forms of financial assurance must be set forth in the solar power facility agreement and must include one (1) or more of the following in the amount required by subdivision (c)(1):
- (A)
A surety bond;
- (B)
A collateral bond;
- (C)
An irrevocable letter of credit;
- (D)
A parent guaranty;
- (E)
Cash;
- (F)
A cashier's check;
- (G)
A certificate of deposit;
- (H)
A bank joint custody receipt;
- (I)
An approved negotiated instrument not described in subdivisions (c)(2)(A)-(H); or
- (J)
A combination of the forms of security described in subdivisions (c)(2)(A)-(I).
- (3)
A landowner has the right to expressly extend the date the financial assurance required by this subsection (c) is first delivered to the landowner to no later than the fifteenth anniversary of the date the solar power facility commences commercial operation.
- (d)
This section does not prohibit a local government from regulating solar power facilities pursuant to its zoning authority granted in title 13, except that a local government shall not impose removal or restoration obligations or require financial assurance securing such obligations that are more stringent than or additional to those provided for in this section.
- (e)
Except as provided in subdivision (c)(3), a provision of a solar power facility agreement that purports to waive a right or exempt a grantee from a liability or duty established by this section is void unless the landowner and the grantee are affiliated entities.
- (f)
A person who is harmed by a violation of this section is entitled to relief provided under title 29, chapter 14.
- (g)
The requirements of this section only apply to solar power facility agreements initially entered into on or after the effective date of this act. If a grantee and landowner agree to amend a solar power facility agreement initially entered into before the effective date of this act, the parties may include the rights and obligations established by this section, and this section must govern such amended agreements.
Part 3 Conservation Easement Act of 1981
§ 66-9-302. Legislative findings.
-
It is the finding of the general assembly that the protection of the state's land, water, geological, biological, historical, architectural, archaeological, cultural, and scenic resources is desirable for the purposes of maintaining and preserving the state's natural and cultural heritage, and for assuring the maintenance of the state's natural and social diversity and health, and for encouraging the wise management of productive farm and forest land.
§ 66-9-303. Part definitions.
-
As used in this part, unless the context otherwise requires:
- (1)
- (A)
For purposes of easements granted before July 1, 2005, “conservation easement” means an easement in land or structures which:
- (i)
Is held for the benefit of the people of this state;
- (ii)
Is specifically enforceable by its holder or beneficiary;
- (iii)
Limits or obligates the holder of the servient estate, the holder's heirs, and assigns with respect to the use and management of the servient land, structures or features thereon, and/or activities conducted thereon, which limitations and obligations are intended to preserve, maintain or enhance the present condition, use or natural beauty of the land, geological, biological, historic, architectural, archaeological, cultural or scenic resources of this state; and
- (iv)
Is recorded in the register's office of the county in which the easement is located;
- (B)
For purposes of easements granted on or after July 1, 2005, “conservation easement” means a nonpossessory interest of a holder in real property imposing limitations or affirmative obligations on the owner of the servient estate, the owner's heirs, and assigns with respect to the use and management of the servient land, structures or features thereon, and/or activities conducted thereon, which limitations and affirmative obligations are intended to preserve, maintain or enhance the present condition, use or natural beauty of the land, the open-space value, the air or water quality, the agricultural, forest, recreational, geological, biological, historic, architectural, archaeological, cultural or scenic resources of the servient estate and is recorded in the register's office of the county in which the easement is located;
- (C)
“Conservation easement” also means an easement of view over the facade, or restrictions on the use of a structure included in the National Register or Tennessee Register whereby the external appearance of the structure is preserved by the sale, donation, or other surrender by the owner of the easement to a public body or exempt organization either:
- (i)
In fee simple;
- (ii)
For the owner's life or the life of another; or
- (iii)
For a term of years; and
- (iv)
Is recorded in the register's office of the county in which the easement is located;
- (2)
“Exempt organization” includes any organization which has received a determination of exemption from the Internal Revenue Service under § 501(c)(3) and § 509(a)(1) or (a)(2) of the Internal Revenue Code (26 U.S.C. §§ 501, 509);
- (3)
For purposes of conservation easements granted on or after July 1, 2005:
- (A)
“Holder” means a public body empowered to hold an interest in real property under the laws of the state or the United States; or
- (B)
“Holder” means a charitable corporation, charitable association, or charitable trust, the purposes or powers of which include retaining or protecting the natural, scenic, or open-space values of real property, assuring the availability of real property for agricultural, forest, recreational, or open-space use, protecting natural resources, maintaining or enhancing air or water quality, or preserving the historical, architectural, archaeological, or cultural aspects of real property;
- (4)
“National Register of Historic Places,” or “National Register,” means that listing of the state's historic, archaeological, architectural, cultural, and environmental resources as nominated by the state's liaison officer and which is kept by the national park service, the United States department of the interior, pursuant to the National Historic Preservation Act of 1966 (P.L. 89-665) (16 U.S.C. § 470 et seq.). Such listing is published in the federal register on a regular basis;
- (5)
“Public body” means the United States, states, counties, municipalities, metropolitan governments, the historic commission of any state, county, municipal, or metropolitan government, park or recreation authorities, and any other state, federal or local governmental entity;
- (6)
“Tennessee Register of Historic Places,” or “Tennessee Register,” means that listing of districts, sites, buildings, structures, and objects significant in Tennessee history, architecture, archaeology, and culture kept by the Tennessee historical commission pursuant to title 4, chapter 11, part 2; and
- (7)
“Third-party right of enforcement” means a right expressly provided in a conservation easement to enforce any of its terms granted to a public body, charitable corporation, charitable association, or charitable trust that, although eligible to be a holder, is not a holder.
§ 66-9-304. Easement severed from fee — Right of entry.
- (a)
A conservation easement shall remain severed from the fee unless returned by specific conveyance to the holder of the fee.
- (b)
Conservation easements may contain public use clauses.
- (c)
The holder of a conservation easement shall maintain the right of entry at reasonable times for inspection whether or not the easement specifically permits such rights of entry.
§ 66-9-305. Acquisition by public bodies.
- (a)
In order to carry out the purposes of this part, any public body or organization may acquire and dispose of interests in land or structures or features thereon in the form of conservation easements. No conservation easement shall be acquired by eminent domain unless such easement is necessary for the accomplishment of a specific public project which has been authorized by statute. Any such acquisition by a state entity shall be subject to approval by the state building commission.
- (b)
No private nonprofit organization shall exercise a power of eminent domain to acquire an easement under this part even though such organization may otherwise have such power.
- (c)
Any public body may designate a conservation easement in any real property in which it has an interest, if such property is listed on the National Register or the Tennessee Register, in order to provide protection to and assist in the preservation and protection of such property.
- (d)
A public body has all powers necessary or convenient to carry out the purposes and provisions of this chapter, including the following powers in addition to others granted by this chapter:
- (1)
Appropriate or borrow funds and make expenditures necessary to carry out the purposes of this chapter; and
- (2)
Apply for and accept and utilize grants and any other assistance from the federal government and any other public or private source, to give such security as may be required and to enter into and carry out contracts or agreements in connection with such grants or assistance.
§ 66-9-306. Validity of easement.
-
No conservation easement shall be held unenforceable because of privity of estate or contract or lack of benefit to any other land, whether or not appurtenant to the servient land. No conservation easement shall be held automatically extinguished because of violation of its terms or frustration of its purposes.
§ 66-9-307. Enforcement.
- (a)
An action affecting any conservation easement granted on or after July 1, 2005, may be brought by:
- (1)
An owner of an interest in the real property burdened by the easement;
- (2)
A holder of the easement;
- (3)
A person having third-party right of enforcement;
- (4)
The attorney general and reporter, if the holder is no longer in existence and there is no third-party right of enforcement; or
- (5)
A person authorized by other law.
- (b)
Conservation easements granted before July 1, 2005, may be enforced by the holders or beneficiaries of the easement, or their bona fide representatives, heirs, or assigns.
- (c)
Conservation easements may be enforced by injunction, proceedings in equity, or actions at law.
§ 66-9-308. Assessment for taxation purposes.
- (a)
- (1)
When a conservation easement is held by a public body or exempt organization for the purposes of this chapter, the subject real property shall be assessed on the basis of the true cash value of the property or as otherwise provided by law, less such reduction in value as may result from the granting of the conservation easements.
- (2)
The value of the easement interest held by the public body or exempt organization shall be exempt from property taxation to the same extent as other public property.
- (3)
If a conservation easement in a structure is held by a public body or exempt organization for the term of a person's life or a term of years, the exemption shall apply for the length of the term and no longer.
- (b)
The owner of the fee shall have all rights and powers to appeal any assessment of such interest on the same basis as provided by law for property tax assessment appeals.
§ 66-9-309. Applicability.
-
This part shall not affect any easement entered into prior to July 1, 1981, nor any rights, privileges or duties pursuant to such easements.
Part 4 Restrictive Covenants
§ 66-9-401. Effect of waiver.
-
Any waiver of a restrictive covenant applicable to a subdivision lot, when granted for a specifically named business, shall be effective as a waiver for any other business, regardless of name, which operates substantially the same type of business as the business for which the waiver was originally granted.
§ 66-9-402. Exemptions from actions.
-
No action shall lie in any court of law or equity against an owner or lessee of real property whose use of real property satisfies the conditions established in § 66-9-401 and in which it is alleged that the owner or lessee of the real property has violated restrictive covenants as to the use of property.
§ 66-9-403. Applicability.
-
This part shall not be construed to apply to preservation restrictions, solar easements, or conservation easements, as defined in this chapter, or to any waiver of a restrictive covenant which by its express terms states that this part shall not be applicable.
Chapter 10 Vendor's Liens
§ 66-10-101. Right to sell land for payment of vendor.
-
The vendor of land, as each payment of the purchase money becomes due, may bring an action to enforce such vendor's lien as vendor, and may have so much of the land sold as may be necessary to pay the money then due.
§ 66-10-104. Sale of land as a whole.
-
If the land cannot be divided without material injury to the parties, or, if the vendee so direct, the court shall order it all to be sold at one (1) time, making the payments to fall due at such times as the purchaser has agreed to pay the vendor; and the money, as collected, shall be applied to the payment of the installments due the vendor.
§ 66-10-105. Redemption.
-
Whether the land is all sold, or is sold in parcels, the defendant shall have the right of redemption, as in other cases.
Chapter 11 Mechanics' and Materialmen's Liens
Part 1 General Provisions
§ 66-11-101. Chapter definitions.
-
As used in this chapter, unless the context otherwise requires:
- (1)
“Contract” means an agreement for improving real property, written or unwritten, express or implied, and includes extras as defined in this section;
- (2)
“Contract price” means the amount agreed upon by the contracting parties to be paid for performing work or labor or for furnishing materials, machinery, equipment, services, overhead and profit, included in the contract, increased or diminished by the price of extras or breach of contract, including defects in workmanship or materials. If no price is agreed upon by the contracting parties, “contract price” means the reasonable value of all work, labor, materials, services, equipment, machinery, overhead and profit included in the contract;
- (3)
“Extras” means labor, materials, services, equipment, machinery, overhead and profit, for improving real property, authorized by the owner and not included in previous contracts;
- (4)
- (A)
“Furnish materials” means:
- (i)
To supply materials that are intended to be and are incorporated in the improvement;
- (ii)
To supply materials that are intended to be and are delivered to the site of the improvement and become normal wastage in construction operations;
- (iii)
To specially fabricate materials for incorporation in the improvement and, if not delivered to the site of the improvement, are not readily resalable by the lienor;
- (iv)
To supply materials that are used for the construction and do not remain in the improvement, subject to diminution by the salvage value of such material; or
- (v)
To supply tools, equipment, or machinery as permitted by § 66-11-102(g);
- (B)
The delivery of materials to the site of the improvement shall be prima facie evidence of incorporation of such materials in the improvement;
- (5)
“Improvement” means the result of any action or any activity in furtherance of constructing, erecting, altering, repairing, demolishing, removing, or furnishing materials or labor for any building, structure, appurtenance to the building or structure, fixture, bridge, driveway, private roadway, sidewalk, walkway, wharf, sewer, utility, watering system, or other similar enhancement, or any part thereof, on, connected with, or beneath the surface; the drilling and finishing of a well, other than a well for gas or oil; the furnishing of any work and labor relating to the placement of tile for the drainage of any lot or land; the excavation, cleanup, or removal of hazardous and nonhazardous material or waste from real property; the enhancement or embellishment of real property by seeding, sodding, or the planting on real property of any shrubs, trees, plants, vines, small fruits, flowers, nursery stock, or vegetation or decorative materials of any kind; the taking down, cleanup, or removal of any existing shrubs, trees, plants, vines, small fruits, flowers, nursery stock, or vegetation or decorative materials of any kind then existing; excavating, grading or filling to establish a grade; the work of land surveying, as defined in § 62-18-102, and the performance of architectural or engineering work, as defined in title 62, chapter 2, with respect to an improvement actually made to the real estate. As the context requires, “improvement” also means the real property thus improved;
- (6)
“Laborer” means any individual who, under contract, of any degree of remoteness, personally performs labor for improving real property on the site of the improvement;
- (7)
“Lienor” means any person having a lien or right of lien on real property by virtue of this chapter, and includes the person's successor in interest;
- (8)
“Owner” includes the owner in fee of real property, or of a less estate in real property, a lessee for a term of years, a vendee in possession under a contract for the purchase of real property, and any person having any right, title or interest, legal or equitable, in real property, that may be sold under process;
- (9)
“Owner-occupant” means any owner of real property who, at the time the owner contracts for the improvement of the real property, occupies the real property as the owner's principal place of residence;
- (10)
“Perform”, when used in connection with the words labor or services, means performance by the lienor or by another for the lienor;
- (11)
“Person” means an individual, corporation, limited liability company, partnership, limited partnership, sole proprietorship, joint venture, association, trust, estate, or other legal or commercial entity;
- (12)
“Prime contractor” means a person, including a land surveyor as defined in § 62-18-102, a person licensed to practice architecture or engineering under title 62, chapter 2, and any person other than a remote contractor who supervises or performs work or labor or who furnishes material, services, equipment, or machinery in furtherance of any improvement; provided, that the person is in direct privity of contract with an owner, or the owner's agent, of the improvement. A “prime contractor” also includes a person who takes over from a prime contractor the entire remaining work under such a contract;
- (13)
“Real property” includes real estate, lands, tenements and hereditaments, corporeal and incorporeal, and fixtures and improvements thereon;
- (14)
“Remote contractor” means a person, including a land surveyor as defined in § 62-18-102 and a person licensed to practice architecture or engineering under title 62, chapter 2, who provides work or labor or who furnishes material, services, equipment or machinery in furtherance of any improvement under a contract with a person other than an owner;
- (15)
“Single family residence” means any real property owned and occupied by no one other than the owner and the owner's immediate family; and
- (16)
“Visible commencement of operations” means the first actual work of improving upon the land or the first delivery to the site of the improvement of materials, that remain on the land until actually incorporated in the improvement, of such manifest and substantial character as to notify interested persons that an improvement is being made or is about to be made on the land, excluding, however, demolition, surveying, excavating, clearing, filling or grading, placement of sewer or drainage lines or other utility lines or work preparatory therefor, erection of temporary security fencing and the delivery of materials therefor.
§ 66-11-102. Lien for work and materials.
- (a)
There shall be a lien on any lot or tract of real property upon which an improvement has been made by a prime contractor or any remote contractor; provided, that the lienor has complied with title 62, chapter 6. If the lienor has not fully complied with title 62, chapter 6, no lien is established by this chapter. The lien shall secure the contract price.
- (b)
The lien established by this section shall include a lien on any lot or tract of real property in favor of any land surveyor who has, by contract with the owner or agent of the owner of the real property, performed on the property the practice of land surveying, as defined in § 62-18-102. The lien shall secure the contract price.
- (c)
- (1)
The lien established by this section shall include a lien on any lot or tract of real property upon which an improvement has been made, by contract with the owner or the owner's agent, in favor of any person licensed to practice architecture or engineering under title 62, chapter 2, for architectural or engineering services performed with respect to the improvement actually made. The lien shall secure the contract price.
- (2)
The lien provided for in subdivision (c)(1) shall attach as of the time of visible commencement of operations as provided in § 66-11-104.
- (3)
This subsection (c) shall not apply to owner-occupants of one-family or two-family detached unit homes.
- (d)
Notwithstanding any other provision of this chapter, no prime contractor or remote contractor of a lessee of real property may encumber the fee estate unless the lessee is deemed to be the fee owner's agent. In determining whether a lessee is the fee owner's agent, the court shall determine whether the fee owner has the right to control the conduct of the lessee with respect to the improvement and shall consider:
- (1)
Whether the lease requires the lessee to construct a specific improvement on the fee owner's property;
- (2)
Whether the cost of the improvement actually is borne by the fee owner through corresponding offsets in the amount of rent the lessee pays;
- (3)
Whether the fee owner maintains control over the improvement; and
- (4)
Whether the improvement becomes the property of the fee owner at the end of the lease.
- (e)
A lien arising under this chapter shall not include in the lien amount any interest, service charges, late fees, attorney fees, or other amounts to which the lienor may be entitled by contract or law that do not result in an improvement to the real property or are otherwise not permitted by this chapter.
- (f)
When a lienor, without default, is prevented from completely performing the lienor's part, the lienor is entitled to a lien for as much of the contract price as the lienor has performed in proportion to the contract price for the whole, and the lienor's claim shall be adjusted accordingly.
- (g)
A lien for furnishing tools, equipment, or machinery arises under this chapter to the following extent:
- (1)
For the reasonable rental value for the period of actual use and any reasonable period of nonuse taken into account in the rental contract; except that the reasonable rental value and reasonable periods of use and nonuse need not be determined solely by the contract; or
- (2)
For the purchase price of the tools, equipment or machinery, but the lien for the price only arises if the tools, equipment or machinery were purchased for use in the course of the particular improvement and have no substantial value to the lienor after the completion of the improvement on which they were used.
§ 66-11-103. Contract with owner's spouse.
-
When the contract for improving real property is made with a husband or a wife who is not separated and living apart from that person's spouse, and the property is owned by the other spouse or by both spouses, the spouse who is the contracting party shall be deemed to be the agent of the other spouse unless the other spouse serves the prime contractor with written notice of that spouse's objection to the contract within ten (10) days after learning of the contract.
§ 66-11-104. Time of attachment of lien.
- (a)
The lien provided by this chapter shall attach and take effect from the time of the visible commencement of operations, excluding however, demolition, surveying, excavating, clearing, filling or grading, placement of sewer or drainage lines, or other utility lines or work preparatory therefor, erection of temporary security fencing and the delivery of materials therefor.
- (b)
If there is a cessation of all operations at the site of the improvement for more than ninety (90) days and a subsequent visible resumption of operations, any lien for labor performed or for materials furnished after the visible resumption of operations shall attach and take effect only from the visible resumption of operations.
- (c)
Nothing in this section shall affect the priority or parity of any liens as established by any section of this chapter.
§ 66-11-105. Extent of lien — Removal of property.
- (a)
The lien shall extend to, and only to, the owner's right, title or interest in the real property and improvements on the real property existing at the time of the visible commencement of operations or thereafter acquired or constructed.
- (b)
If any part of the real property or improvements subject to the lien is removed by the owner or any other person at any time before discharge of the lien, the removal shall not affect the rights of the lienor either in respect to the real property and improvements or the part so removed.
§ 66-11-106. Duration of lien.
-
A prime contractor's lien shall continue for one (1) year after the date the improvement is complete or is abandoned, and until the final decision of any suit properly brought within that time for its enforcement.
§ 66-11-107. Parity of liens — Priority of laborers' liens.
-
All liens provided by this chapter, except those of laborers, shall be on a parity, and shall be treated pro rata. All liens of laborers shall be on a parity one with another, and shall have priority over all other liens created by this chapter.
§ 66-11-108. Priority over mortgage.
-
If the contract for an improvement is made with a mortgagor, and the lienor has served the mortgagee with written notice of the same by certified or registered mail before the work is begun or materials furnished by the lienor, and the mortgagee gives written consent thereto by certified or registered mail, the lien provided by this chapter to that lienor shall have priority over the mortgage; and if the mortgagee fails to serve a written objection by certified or registered mail within ten (10) days after receipt of the notice, the mortgagee's consent shall be implied; provided, that the person giving notice shall include a name and return address to which the written objection shall be served. If notice is not served in accordance with this section, then the lien shall not have priority over a mortgage otherwise entitled to priority over the lien under applicable law.
§ 66-11-110. Effect of judgment lien.
-
A judgment lien of record shall not defeat a lien provided by this chapter, if the lien provided by this chapter is fixed on the real property in good faith and without collusion.
§ 66-11-111. Authentication and registration of lien.
-
Where the lienor's contract is in writing, and has been acknowledged, or in lieu of acknowledgment is sworn to by the prime contractor as to its execution by the owner, it may be recorded in the lien book in the register of deeds of the county where the real property, or any part of the affected real property, lies. Subsequent purchasers or encumbrancers for value shall be deemed to have notice of the lien so long as the recorded contract sets forth the contract price and describes the real property with reasonable certainty.
§ 66-11-112. Preservation of priority of lien for subsequent purchasers or encumbrancers — Abandonment — Lien on structure with water furnished by well — Form for notice of lien.
- (a)
In order to preserve the priority of the lien provided by this chapter as of the date of its attachment, as concerns subsequent purchasers or encumbrancers for a valuable consideration without notice of the lien, though not as concerns the owner, the lienor, who has not recorded the lienor's contract pursuant to § 66-11-111, is required to record in the office of the register of deeds of the county where the real property, or any part affected, lies, a sworn statement of the amount for, and a reasonably certain description of the real property on, which the lien is claimed. The recording party shall pay filing fees, and shall be provided a receipt for the filing fees, which amount shall be part of the lien amount. Recordation is required to be done no later than ninety (90) days after the date the improvement is complete or is abandoned, prior to which time the lien shall be effective as against the purchasers or encumbrancers without the recordation. The owner shall serve thirty (30) days' notice on prime contractors and on all of those lienors who have served notice in accordance with § 66-11-145 prior to the owner's transfer of any interest to a subsequent purchaser or encumbrancer for a valuable consideration. If the sworn statement is not recorded within that time, the lien's priority as to subsequent purchasers or encumbrancers shall be determined as if it attached as of the time the sworn statement is recorded.
- (b)
A building, structure or improvement shall be deemed to have been abandoned for purposes of this chapter when there is a cessation of operation for a period of ninety (90) days and an intent on the part of the owner or prime contractor to cease operations permanently, or at least for an indefinite period.
- (c)
Any other provision to the contrary notwithstanding, any lien acquired under contract executed on or after April 17, 1972, by virtue of § 66-11-141, may be filed within ninety (90) days after completion of the structure that is, or is intended to be, furnished water by virtue of drilling a well.
- (d)
The statement provided for in subsection (a) may be in substantially the following form:
§ 66-11-113. Materials exempt from attachment, execution or other process to enforce debt.
-
Whenever materials have been furnished to improve real property and delivered to the real property by or for a lienor, and payment for the materials has not been made by the owner of the real property, the materials shall not be subject to attachment, execution, or other legal process to enforce any debt due by the purchaser of the materials, except a debt due for the purchase price of the materials, so long as in good faith the materials are about to be applied to improve the real property; but if the owner has made payment for materials furnished, the materials shall not be subject to attachment, execution, or other process to enforce any debt, including the debt due for the purchase price for the materials.
§ 66-11-114. Repossession and removal of materials.
- (a)
If for any reason an improvement is abandoned before completion or, though completed, materials delivered are not used for the improvement, a person who furnished materials for the improvement that have not been incorporated in the improvement, and for which the person has not received payment, may repossess and remove the materials; and thereupon the person shall not be entitled to any lien on the real property or improvements for the price of the materials, but shall have the same rights in regard to the materials as if the person had never parted with the possession.
- (b)
- (1)
The right to repossess and remove the materials shall not be affected by their sale, encumbrance, attachment or transfer from the site of the improvement subsequent to delivery to the site, except that the right to repossess shall not be effective as against a purchaser or encumbrancer of the materials in good faith whose interest in the materials arose since removal from the site of the improvement, or as against a creditor attaching after the removal.
- (2)
The right of repossession and removal given by this section shall extend only to materials whose purchase price does not exceed the amount remaining due to the person repossessing; but where materials have been partly paid for, the person delivering them may repossess them as allowed in this section on refunding the part of the purchase price that has been paid.
§ 66-11-115. Liens by remote contractors.
- (a)
Every remote contractor shall have the lien provided by this part for work or labor performed or materials, services, equipment, or machinery furnished by the remote contractor in furtherance of the improvement; provided, that the remote contractor:
- (1)
Satisfies all of the requirements set forth in § 66-11-145, if applicable; and
- (2)
Within the time provided for recording sworn statements set out in § 66-11-112(a), serves a notice of lien, in writing, on the owner of the property on which the improvement is being made.
- (b)
The lien shall continue for the period of ninety (90) days from the date of service of notice in favor of the remote contractor, and until the final termination of any suit for its enforcement properly brought pursuant to § 66-11-126 within that period.
- (c)
The notice of lien may be in substantially the form provided in § 66-11-112(d).
§ 66-11-118. Multiple lots or improvements.
- (a)
- (1)
Where the amount due is for work or labor performed or materials, services, equipment, or machinery furnished for a single improvement on contiguous or adjacent lots, parcels or tracts of land and the work or labor is performed or the materials, services, equipment, or machinery is furnished under the same contract or contracts, a lienor shall be required to serve or record only one (1) claim of lien covering the entire claim against the real property.
- (2)
If two (2) or more lots, parcels, or tracts of land are improved under the same contract or contracts and the improvements are not to be operated as a single improvement, a lienor who has performed work or labor or furnished materials, services, equipment, or machinery for the improvement shall, in claiming a lien, apportion the lienor's contract price between the several lots, parcels, or tracts of land and improvements on the lots, parcels, or tracts of land, and serve a separate notice of lien for the amount claimed against each lot, parcel, or tract of land and the improvements on the lot, parcel, or tract of land.
- (b)
- (1)
Unless the improvements are to be operated as a single improvement, whenever more than one (1) building or unit is constructed upon or other improvement is made to a single lot, parcel or tract of land or to contiguous lots, parcels or tracts of land, the visible commencement of operations as defined in this chapter with respect to each separate building, unit or other improvement shall not be deemed to constitute or otherwise relate to the visible commencement of operations with respect to any other building, unit or improvement on any single lot, parcel or tract of land or any contiguous lots, parcels or tracts of land. In connection therewith, a lienor who has performed work or labor or furnished materials, services, equipment, or machinery shall, in claiming a lien, apportion the lienor's contract price between the separate buildings, units or improvements on the buildings or units as applicable and serve or record a separate claim of lien for the amount claimed against each separate building, unit or improvement; in such event, the time prescribed in §§ 66-11-112 and 66-11-115 for serving or recording notice of lien shall commence to run with respect to each building, unit or improvement immediately upon the completion or abandonment of the building, unit or improvement.
- (2)
Whenever a lienor has furnished work, labor, or materials, services, equipment, or machinery for improvements that are to be operated as a single improvement on a single lot, parcel or tract of land or contiguous lots, parcels or tracts of land, the lienor shall be required to serve or record only a single notice of lien covering the lienor's entire claim against the real property.
- (c)
Except as expressly provided in the Horizontal Property Act, compiled in chapter 27 of this title, and notwithstanding any other provision of this chapter, a lien arising under this chapter by reason of an improvement that is part of a common interest community does not attach to the common elements, but attaches to the units as follows:
- (1)
If the improvement was contracted for by the association of unit owners, however denominated, the lien attaches to all the units in the common interest community for which the association acts, unless the association notifies the lienor, when the contract is made, that the lien may attach only to the unit or units on or for the benefit of which the improvement was made; and
- (2)
If the improvement was contracted for by a unit owner, the lien attaches only to that owner's unit.
§ 66-11-119. Amendment of notice of lien.
- (a)
Any notice of lien served or recorded as provided in this chapter may be amended at any time during the period allowed for serving or recording the notice; provided, that the notice and amendment are served or recorded in good faith and the amendment is not shown to be prejudicial to another interested person.
- (b)
Any amendment of the notice of lien shall be served or recorded in the same manner as is provided for the original notice.
§ 66-11-121. Insurance proceeds subject to liens.
- (a)
The proceeds of any insurance that by the terms of the policy are payable to the owner of real property improved, and are actually received by or are to be received by the owner because of the destruction or removal by fire or other casualty of an improvement on which lienors have performed labor, or for which they have furnished materials, services, equipment, or machinery shall, after the owner has been reimbursed from the proceeds for premiums paid for the insurance by the owner, if any, be subject to liens provided by this chapter to the same extent and in the same order of priority as the real property would have been had the improvement not been so destroyed or removed.
- (b)
The proceeds of any insurance that by the terms of the policy are payable to a prime contractor or remote contractor, and are received or to be received by the prime contractor or remote contractor, shall, after the prime contractor or remote contractor has been reimbursed from the proceeds for premiums paid for the insurance by the prime contractor or remote contractor, if any, be liable for the payment for labor or materials, services, equipment, or machinery furnished and for which the prime contractor or remote contractor is liable in the same manner and under the same conditions as payments to the prime contractor or remote contractor under the contract would have been had the improvements not been so destroyed or removed.
§ 66-11-124. Waiver of lien — Payment bonds.
- (a)
The acceptance by the lienor of a note or notes for all or any part of the amount of the lienor's claim shall not constitute a waiver of the lienor's lien, unless expressly so agreed in writing, nor shall it in any way affect the period for serving or recording the notice of lien under this chapter.
- (b)
- (1)
Any contract provision that purports to waive any right of lien under this chapter is void and unenforceable as against the public policy of this state.
- (2)
- (A)
If a prime contractor or remote contractor solicits any person to sign a contract requiring the person to waive a right of lien in violation of this section, then the person shall notify the state board for licensing contractors of that fact. Upon receiving the information, the executive director of the board shall notify the prime contractor or remote contractor within a reasonable time after receiving the information that the contract is against the public policy of this state and in violation of this section. If the prime contractor or remote contractor voluntarily deletes the waiver of lien provision from the contract and affirmatively states that the language will not be included in any future contracts to perform construction work in this state, then no further action shall be taken by the board against the prime contractor or remote contractor unless a later complaint is filed against the prime contractor or remote contractor for a violation of this section.
- (B)
If the prime contractor or remote contractor does not delete the waiver of lien provision from the contract, then the executive director shall schedule a hearing for appropriate action by the board. If the board finds after a hearing that the contracts of the prime contractor or remote contractor are in violation of this section, then the board shall immediately revoke the prime contractor's or remote contractor's license.
- (C)
The board shall send notice of the revocation to the prime contractor's or remote contractor's licensing authority in all states in which the prime contractor or remote contractor is licensed as a contractor.
- (D)
In any action for damages based on the waiver of a right of lien filed by a person solicited by the prime contractor or remote contractor, the person has the right to recover from the prime contractor or remote contractor reasonable attorney's fees and costs in connection with the enforcement of the lien.
- (c)
Notwithstanding any other provision of this chapter, no liens by remote contractors are allowed under this chapter if, prior to any work or labor being provided or materials, services, equipment, or machinery furnished in furtherance of the improvement, the owner, or the owner's agent, provides a payment bond, equal in amount to one hundred percent (100%) of the prime contractor's contract price, in favor of the remote contractors who provide work or labor or furnish materials, services, equipment, or machinery in furtherance of the improvement pursuant to a contract. The payment bond shall be executed with sufficient surety by one (1) or more sureties authorized to do business in this state. The bond shall be recorded in the office of the register of deeds of every county where the real property to be improved, or any affected part, lies.
§ 66-11-125. Maintaining an action on a contract not precluded.
-
Nothing in this chapter shall be construed to prevent any lienor under any contract from maintaining an action on the contract as if the lienor had no lien for the security of the lienor's debt, and the bringing of the action shall not prejudice the lienor's rights under this chapter.
§ 66-11-126. Methods of enforcement.
-
Liens under this chapter, except as provided in subdivision (5)(A), shall be enforced only by the filing of a complaint, petition, or civil warrant seeking the issuance of an attachment in the manner as follows:
- (1)
For a prime contractor, the lien shall be enforced in a court of law or equity by complaint and writ of attachment or in a court of general sessions having jurisdiction by a warrant for the sum claimed and writ of attachment, filed under oath, setting forth the facts, describing the real property, with process to be served on the person or persons whose interests the prime contractor seeks to attach and sell;
- (2)
For a remote contractor, the lien shall be enforced in a court of law or equity by complaint and writ of attachment or in a court of general sessions having jurisdiction by a warrant for the sum claimed and writ of attachment, filed under oath, setting forth the facts and describing the real property with process to be served on the person or persons whose interests the remote contractor seeks to attach and sell. In the discretion of the plaintiff or complainant, the complaint or warrant may also be served on the prime contractor or remote contractor in any degree, with whom the plaintiff or complainant is in contractual privity. In either event, the person or persons whose interest the remote contractor seeks to attach and sell shall have the right to make the prime contractor or remote contractor a defendant by third-party complaint or cross-claim as is otherwise provided by law;
- (3)
A complaint, petition, or civil warrant under this chapter is timely filed if a suit seeking the issuance of an attachment is filed within the applicable period of time, even if the attachment is not issued or served within the applicable period. The clerk of the court in which the suit is brought shall issue the attachment writ without obtaining fiat of a judge or chancellor;
- (4)
The clerk of the court to whom application for attachment is made shall, before issuing the attachment, require the plaintiff, or the plaintiff's agent or attorney to execute a bond with sufficient surety, payable to the defendant or defendants in the amount of one thousand dollars ($1,000) or the amount of the lien claimed, whichever is less; provided, that a party may petition the court for an increase in the amount for good cause shown, and conditioned that the plaintiff will prosecute the attachment with effect or, in case of failure, pay the defendant or defendants all costs that may be adjudged against the defendant or defendants and all such damages as the defendant or defendants may sustain by the wrongful suing out of the attachment; and
- (5)
- (A)
Where a bond has been provided pursuant to § 66-11-124, § 66-11-136, or § 66-11-142, an attachment on the real property shall not be necessary after the bond has been recorded, and the claim shall be enforced by a complaint, petition, or civil warrant on the bond before the circuit or chancery court, or before a court of general sessions where the amount is within its jurisdiction, filed under oath, setting forth the facts and describing the real property with process to be served on the obligors on the bond. In the discretion of the plaintiff or complainant, the complaint or warrant may also be served on the owner or owner's agent, prime contractor or remote contractor in any degree with whom the plaintiff is in contractual privity. In either event, the obligors on the bond shall have the right to make the owner or owner's agent, prime contractor, or any remote contractor of any degree a defendant by third-party complaint or cross-claim as is otherwise provided by law. Any complaint, petition, or civil warrant on the bond shall be filed in the county where any portion of the real property is located;
- (B)
Where a lien is enforced pursuant to this subdivision (5), or after suit is commenced on a bond provided pursuant to § 66-11-124, § 66-11-136, or § 66-11-142, the plaintiff shall, in case of failure to prosecute the suit with effect, pay the defendant or defendants all costs adjudged against the defendant or defendants and all the damages the defendant or defendants may sustain by the wrongful assertion of the lien; and
- (C)
Where a complaint, petition, or civil warrant is brought pursuant to this subdivision (5), or after suit is commenced on a bond provided pursuant to § 66-11-124, § 66-11-136, or § 66-11-142, the defendants shall retain all defenses to the validity of the underlying lien.
§ 66-11-128. Enforcement against persons adjudicated incompetent.
- (a)
If the labor, improvements, materials, services, equipment, or machinery are furnished for work done on the lands of any infant, person adjudicated incompetent, or cestui que trust, and in excusable ignorance on the part of the prime contractors or remote contractors, of the person's lack of legal capacity, the prime contractors or remote contractors shall have the right, after serving ten (10) days' notice on any guardian, conservator or trustee of the person, within which period satisfaction may be made, to take and remove the parts of the property on which their labor was performed, or their materials, services, equipment, or machinery or other property was used, the removal to be only of enough to satisfy their true claim and to be without substantial injury to the property of the person as it stood prior to improvement.
- (b)
As an alternative to the remedy under subsection (a), the court, in the enforcement of a lien provided by this chapter, may order the improvement to be separately sold and the purchaser may remove the improvement within such reasonable time as the court may fix. The purchase price for the improvement shall be paid into court. The owner of the land upon which the improvement was made may demand that the land be restored to substantially its condition before the improvement was commenced, in which case the court shall order its restoration, and the reasonable charge for the restoration shall be first paid out of the purchase price and the balance shall be paid to lienors and other encumbrancers in accordance with their respective rights.
§ 66-11-130. Demand for enforcement of lien.
-
Upon written demand of the owner, the owner's agent, or prime contractor, served on the lienor, requiring the lienor to file a complaint, petition, or civil warrant to enforce the lienor's lien, and describing the real property in the demand, the proceeding must be commenced, or the claim filed in a creditors' or foreclosure proceeding, within sixty (60) days after service, or the lien is forfeited.
§ 66-11-131. Joinder of petitioners.
-
Where there are several persons entitled to the lien given by this chapter, all or any number of them may join in one (1) suit; or upon the filing by one (1) or more of the lienors of a complaint, petition, or civil warrant for the benefit of all lienors, any other lienor may come in by petition, under oath, without suing out a new attachment, by giving bond and security, with effect as if the attachment, if any, had been taken out by the petitioner.
§ 66-11-132. Consolidation of proceedings.
-
If separate complaints, petitions, or civil warrants to enforce liens provided by this chapter are brought in the same court, then they must be consolidated; and if in different courts, the proceedings may, upon application, be removed into the court, if a court of record, in which the first complaint, petition, or civil warrant was filed, and there consolidated, unless the later proceeding is one for the benefit of all lienors, in the nature of a lien-creditors' bill, in which event earlier proceedings not of that nature must be consolidated into the lien-creditors' bill, on petition.
§ 66-11-134. Enforcement in general sessions court.
- (a)
When the lien is enforced by a civil warrant before a court of general sessions, and when an attachment has been levied on the lot or land and judgment rendered, the papers shall be returned to the circuit court, there to be proceeded with as in the case of a court of general sessions execution levied on land.
- (b)
- (1)
No court of general sessions' attachment in any such case shall be a lien on the land, unless, within twenty (20) days after the levy of attachment, an abstract of the levy of attachment, showing the name of the plaintiff and defendant, the date and amount of the claim, and a description of the premises affected, is filed for registration in the lien book in the office of the register of the county in which the real property, or any affected portion of the real property, lies.
- (2)
The register shall index the abstract, as the indexer is required to index deeds, and, for the registration and indexing, the indexer shall receive the sum prescribed by § 8-21-1001.
§ 66-11-135. Release of lien — Recording release.
- (a)
If a lienor whose lien has been forfeited, expired, satisfied or adjudged against the lienor in a proceeding on the lien, fails to cause the lien provided by this chapter to be released within thirty (30) days after service of written notice demanding release, the lienor shall be liable to the owner for all damages arising therefrom, and costs, including reasonable attorneys' fees, incurred by the owner.
- (b)
The release shall be recorded in the office where the notice of lien was recorded. The fee for recording shall be the fee required for the recording of a release or satisfaction of a mortgage as provided by law.
- (c)
For the purpose of this section, a lien shall be deemed released on the day on which the release of the lien is recorded in the proper office.
§ 66-11-136. Property owner's right to bond against enforcement of liens.
-
The owner of the property on which the improvement is made has the right to demand a bond from the prime contractor to protect the owner in case of the enforcement of a lien under this chapter by one (1) or more remote contractors; and in the event the prime contractor is paid for the work done, or any part of it, that is subject to a lien by a remote contractor, then on payment by the owner to the remote contractor of the amount due, the owner shall have judgment for the amount by filing a complaint, petition, or civil warrant against the bond in any court having jurisdiction in such cases; but the prime contractor shall have the right to contest the legality and amount of the claim of the remote contractors before the prime contractor is held liable.
§ 66-11-137. Owner's misapplication of loan proceeds — Violation.
- (a)
Any owner who procures a loan secured by a mortgage or other encumbrance on certain real property, representing that the proceeds of the loan are to be used for the purpose of improving real property, and who, with intent to defraud, uses the proceeds or any part of the proceeds for any other purpose than to pay for labor performed on, or materials, services, equipment, or machinery furnished for the real property, and overhead and profit related thereto while any amount for the labor, materials, services, equipment, machinery, overhead or profit remains unpaid, or while any amount of which the owner has received notice of nonpayment prescribed by this chapter remains unpaid, shall be liable to an injured party for any damages and actual expenses incurred, including attorneys' fees, if the damages and expenses incurred are the result of the misapplication of the loan proceeds.
- (b)
A violation of subsection (a) is a Class E felony.
§ 66-11-138. Contractor's misapplication of payments — Violation.
- (a)
- (1)
Any prime contractor or remote contractor who, with intent to defraud, uses the proceeds of any payment made to that contractor on account of improving certain real property for any purpose other than to pay for labor performed on, or materials, services, equipment, or machinery furnished by that contractor's order for the real property, and overhead and profit related thereto, while any amount for the labor, materials, services, equipment, machinery, overhead, or profit remains unpaid shall be liable to an injured party for any damages and actual expenses incurred, including attorneys' fees, if the damages and expenses incurred are the result of the misapplication of the payment.
- (2)
A violation of subdivision (a)(1) is a Class E felony.
- (b)
Notwithstanding subsection (a), there is no violation of this section when:
- (1)
Funds are disbursed pursuant to written agreement; or
- (2)
The use of funds received and deposited in a business account for use on multiple construction projects is based on the allocation of costs and profits in accordance with generally accepted accounting principles for construction projects.
§ 66-11-139. Exaggeration of claims by lienor.
-
If, in any proceeding to enforce the lien provided by this chapter, the court finds that any lienor has willfully and grossly exaggerated the amount for which that person claims a lien, as stated in that person's notice of lien or pleading filed, in the discretion of the court, no recovery may be allowed thereon, and the lienor may be liable for any actual expenses incurred by the injured party, including attorneys' fees, as a result of the lienor's exaggeration.
§ 66-11-140. Misuse of proceeds prima facie evidence of intent to defraud.
-
Use of the proceeds as enumerated in §§ 66-11-137 — 66-11-139 for any purpose other than either payment pursuant to written agreement between the parties or in accordance with the allocation of costs and profits under generally accepted accounting principles for construction projects shall be prima facie evidence of intent to defraud. Use of a single business bank account for multiple projects shall not be evidence of intent to defraud.
§ 66-11-141. Well-drilling lien.
- (a)
There is created a lien against the tract of land, on which any person, firm or corporation has drilled a well by contract with the owners of the land or their duly authorized agent, for all labor, materials and equipment used or furnished by the driller of the well, including any pump, apparatus or other fixtures attached to the well, installed by the driller.
- (b)
The lien shall remain against the land for a period of two (2) years after the completion of the well or after the furnishing of any pump or apparatus attached to the well, unless sooner discharged by full payment.
- (c)
The lien may be enforced by attachment of the land in a proceeding brought in any court of competent jurisdiction prior to the expiration of the lien, and the land may be sold in satisfaction of the unpaid indebtedness owing to the driller.
- (d)
The rights of the lienor under this section shall be subject to the terms of § 66-11-112.
§ 66-11-142. Bond to indemnify against recorded lien — Recording bond — Recording of contractor's payment bond.
- (a)
If a lien, other than a lien granted in a written contract, is fixed or is attempted to be fixed by a recorded instrument under this chapter, any person may record a bond to indemnify against the lien. The bond shall be recorded with the register of deeds of the county in which the lien was recorded. The bond shall be for the amount of the lien claimed and with sufficient corporate surety authorized and admitted to do business in the state and licensed by the state to execute bonds as surety, and the bond shall be conditioned upon the obligor or obligors on the bond satisfying any judgment that may be rendered in favor of the person asserting the lien. The bond shall state the book and page or other reference and the office where the lien is of record. The recording by the register of a bond to indemnify against a lien shall operate as a discharge of the lien. After recording the bond, the register shall return the original bond to the person providing the bond. The register shall index the recording of the bond to indemnify against the lien in the same manner as a release of lien. The person asserting the lien may make the obligors on the bond parties to any proceeding in which the person files a complaint, petition, or civil warrant to enforce the claim, and any judgment recovered may be against all or any of the obligors on the bond.
- (b)
- (1)
When a prime contractor or remote contractor has provided a valid payment bond for the benefit of potential lien claimants, a copy of that bond may be recorded, in lieu of the recording of another bond, to discharge a lien asserted by the lien claimants. A copy of the bond may be recorded with the register of deeds in lieu of the bond provided in subsection (a) to discharge such a lien. Upon recording with the register of deeds, the prime contractor, remote contractor, or owner shall notify the surety executing the bond, and the lien on the property shall be discharged. The person asserting the lien may make the obligors on the bond parties to any proceeding in which the person files a complaint, petition, or civil warrant to enforce the claim, and any judgment recovered may be against all or any of the obligors on the bond.
- (2)
The bond recorded pursuant to this subsection (b) shall:
- (A)
Be in a penal sum at least equal to the total of the original contract amount;
- (B)
Be in favor of the owner;
- (C)
Be executed by:
- (i)
The original prime contractor or remote contractor as principal; and
- (ii)
A sufficient corporate surety authorized and admitted to do business in this state and licensed by this state to execute bonds as surety; and
- (D)
Provide for payment of the lien claimant, whether the lien claimant was employed or contracted with by the person who originally contracted with the owner of the premises or by a remote contractor.
- (c)
The register of deeds may record any bond recorded under this section and return the original to the person providing the bond.
§ 66-11-143. Protection from unrecorded lien claims — Notice of completion — Expiration of lien rights — Form of notice of completion.
- (a)
In order to be protected from lien claims that have not previously been recorded, as provided in § 66-11-111 or § 66-11-112, the owner or purchaser of improved real property or their agent or attorney may, upon the completion of the improvement, record in the office of the register of deeds in the county where the real property or any affected part of the real property is located a notice of completion, or the owner or purchaser may require a person or organization with whom the owner or purchaser has contracted for the improvement to do so upon the completion of the improvement, and the owner or purchaser of improved real property or any other authorized party shall simultaneously serve a copy of any notice of completion recorded with the register of deeds on the prime contractor; provided, however, that no copy of the notice of completion is required to be served on any prime contractor when the owner, or an entity controlled by the owner, also acts as the general contractor, as defined in § 66-11-146(b)(1), in furtherance of the improvement to the property. If a prime contractor is entitled to be served with a copy of any notice of completion recorded with the register of deeds, then the lien rights of the prime contractor not so served a copy shall not be affected by the notice of completion.
- (b)
The notice of completion shall contain the following:
- (1)
The legal name of the owner or owners of the real property;
- (2)
The name of the prime contractor or prime contractors;
- (3)
The location and description of the real property;
- (4)
Date of the completion of the improvement;
- (5)
A statement that a transfer of ownership of all or a part of the real property or an interest in the real property and encumbrance on the real property, or a settlement of the claims of parties entitled to the benefits of this part, will take place not less than ten (10) days after the date of the recording of the notice of completion; provided, that the ten-day expiration for lien claimants shall only apply to contracts for improvement to or on real property, for one-family, two-family, three-family and four-family residential units. On all other contracts for improvement to or on real property, the expiration time for lien claimants shall be thirty (30) days after the date of the recording of the notice of completion in the register's office;
- (6)
The name and address of the person, firm, or organization on which parties entitled to the benefits of this chapter may serve notice of claim;
- (7)
Acknowledgment by the person filing the notice, or by that person's agent or attorney; and
- (8)
The name and address of the preparer of the instrument in compliance with § 66-24-115.
- (c)
The register of deeds shall make a permanent record of all notices of completion filed in the office of the register and the records shall be available for public examination. The register of deeds shall be entitled to the fees, provided in § 8-21-1001, for the register's services in receiving and maintaining notices of completion required in this section.
- (d)
If a remote contractor has served a required notice of nonpayment pursuant to § 66-11-145, then any party recording a notice of completion shall simultaneously serve a copy of the notice of completion on the remote contractor. The remote contractor shall have thirty (30) days from the date of the recording of the notice of completion to serve a written notice in response to the notice of completion in accordance with subsection (e). The lien rights of a remote contractor that has not been served a copy, shall not be affected by the notice of completion.
- (e)
- (1)
Any prime contractor or remote contractor claiming a lien under this chapter on the property described in the notice of completion, who has not previously registered the person's contract as provided in § 66-11-111 or registered a sworn statement as provided in § 66-11-112 and served a copy of the registration to the owner, shall serve written notice, addressed to the person, firm or organization and at the address designated in the notice of completion for receiving notice of claim, stating the amount of the claim and certifying that the claim does not include any amount owed to the claimant on any other job or under any other contract.
- (2)
- (A)
For improvements to or on real property for one-family, two-family, three-family and four-family residential units, the written notice shall be served not more than ten (10) days from the date of the recording of the notice of completion in the register's office, and if notice is not served within that time, the lien rights of the claimant shall expire.
- (B)
For all other contracts for improvements to or on real property, the written notice shall be served not more than thirty (30) days from the date of the recording of the notice of completion in the register's office, and if notice is not served within that time, the lien rights of the claimant shall expire.
- (f)
Any notice of completion recorded as provided in this section before the completion of the improvement or the demolition is void and of no effect whatsoever.
- (g)
The notice of completion may be in substantially the following form:
-
This Instrument prepared by:
-
Name
-
Address
-
-
NOTICE OF COMPLETION
-
Legal name of owner or owners of the real property:
-
-
Names of all applicable prime contractors:
-
-
The location and description of the real property:
-
-
-
-
-
Date of completion of the entire improvement:
-
-
A transfer of ownership of all or part of the real property or an interest therein and encumbrance thereon or a settlement of the claims of parties entitled to the benefits of Title 66, Chapter 11 of the Tennessee Code Annotated will take place not less than ten (10) days after the date of the recording of this Notice of Completion; provided, that the ten-day expiration for lien claimants shall only apply to contracts for improvements to or on real property for one-family, two-family, three-family, and four-family residential units. On all other contracts for improvement to or on real property, the expiration time for lien claimants shall be thirty (30) days after the date of the recording of this Notice of Completion. The name and address of the person, firm, or organization on which parties entitled to the benefits of Title 66, Chapter 11, may serve notice is as follows:
-
Name:
-
Street Address:
-
City:
-
State: Zip Code:
-
Dated this the day of , 20
-
Signature
-
(Check One)
-
, Owner
-
, Purchaser
-
, Prime Contractor
-
[Notary Acknowledgment]
§ 66-11-145. Notice of nonpayment — Form of notice.
- (a)
Every remote contractor with respect to an improvement, except one-family, two-family, three-family and four-family residential units, shall serve, within ninety (90) days of the last day of each month within which work or labor was provided or materials, services, equipment, or machinery furnished and for which the remote contractor intends to claim a lien under this chapter, a notice of nonpayment for the work, labor, materials, services, machinery, or equipment to the owner and prime contractor in contractual privity with the remote contractor if its account is, in fact, unpaid. The notice shall contain:
- (1)
The name of the remote contractor and the address to which the owner and the prime contractor in contractual relation with the remote contractor may send communications to the remote contractor;
- (2)
A general description of the work, labor, materials, services, equipment, or machinery provided;
- (3)
The amount owed as of the date of the notice;
- (4)
A statement of the last date the claimant performed work and/or provided labor or materials, services, equipment, or machinery in connection with the improvements; and
- (5)
A description sufficient to identify the real property against which a lien may be claimed.
- (b)
A remote contractor who fails to provide the notice of nonpayment in compliance with this section shall have no right to claim a lien under this chapter, except this section shall not apply to a certain amount or percentage of the contract amount retained to guarantee performance of the remote contractor.
- (c)
A notice of nonpayment provided in accordance with this section shall not be considered notice required by § 66-11-115.
- (d)
The notice of nonpayment may be in substantially the following form:
-
§ 66-11-146. “Residential real property” defined — “General contractor” defined — Liens on residential real property.
- (a)
- (1)
As used in this subsection (a), “residential real property” means a building consisting of one (1) dwelling unit in which the owner of the real property intends to reside or resides as the owner's principal place of residence, including improvements to or on the parcel of property where the residential building is located, and also means a building consisting of two (2), three (3) or four (4) dwelling units where the owner of the real property intends to reside or resides in one (1) of the units as the owner's principal place of residence, including improvements to or on the parcel of property where the residential building is located.
- (2)
Notwithstanding any other law to the contrary, except as provided in subsection (b), on contracts to improve residential real property, a lien or right of lien on the property shall exist only in favor of a prime contractor.
- (b)
- (1)
As used in this subsection (b):
- (A)
“General contractor” means the person responsible for the supervision or performance of substantially all of the work, labor, and the furnishing of materials in furtherance of the improvement to the property; and
- (B)
“Residential real property” means improvements to or on a parcel of property upon which a building is constructed or is to be constructed consisting of one (1) dwelling unit intended as the principal place of residence of a person or family.
- (2)
When the owner of residential real property and the general contractor are one and the same person, or a person controls entities owning the property and a general contracting business, a lien or right of lien upon the property shall exist only in favor of the lienors in contractual privity with the owner or general contractor.
§ 66-11-147. Liens on gas, oil or other mineral leaseholds.
- (a)
Any person who performs labor or furnishes materials, supplies, fixtures, machinery or other things of value to a lessee holding or owning a leasehold, or any right conferred by a lease, relating to oil, gas or other minerals, in the development or improvement of the leasehold, by contract with or by the written consent of the owner or the agent or representative of the owner of the leasehold, shall have a lien on the leasehold or the entire interest of the lessee, including oil or gas wells, machinery and equipment, to secure the payment for the labor or things furnished. If the labor or things are furnished at the written request or by written consent of any prime contractor or remote contractor, or the agent of either, the lien shall be for the benefit of whomever furnishes any of the labor or things mentioned. The lien provided for in this section shall be effective against the leasehold, or the entire interest of the lessee, including all improvements belonging to the lessee.
- (b)
The lien shall relate to and take effect from the time of the delivery of the materials, supplies, fixtures, or machinery, or from the date of furnishing of any labor.
- (c)
If unpaid, the lien shall expire and be of no effect after ninety (90) days, unless the person furnishing the labor, materials, or supplies, files with the register's office in the county in which the leasehold is located, the sworn statement as provided in § 66-11-112. A copy of the notice shall also be served to the owner of the property and the holder of the leasehold.
- (d)
A lien provided in this section shall have precedence over all other subsequent liens or conveyances after the time of attachment; provided, that the sworn statement is filed within the ninety-day period provided in this section.
- (e)
Section 66-11-120 shall apply to this lien.
§ 66-11-148. Construction of chapter — Jurisdiction of courts to enforce — Errors and omissions.
- (a)
This chapter is to be construed and applied liberally to secure the beneficial results, intents, and purposes of the chapter.
- (b)
Substantial compliance with this chapter is sufficient for the validity of liens arising under this chapter and to give jurisdiction to the court to enforce the liens.
- (c)
Any document required or permitted to be served, recorded or filed by this chapter that substantially satisfies the applicable requirements of this chapter is effective even if it has nonprejudicial errors or omissions.
§ 66-11-149. Presumption of correctness of information on building permit — Service on listed agents or owners — Method of service — Presumption of complete service.
- (a)
For purposes of § 66-11-145, the name of any owner, the owner's agent, any prime contractor, any remote contractor, or any other person, their addresses, and the real property description stated in a building permit authorizing the improvement shall be presumed to be correct and, in the case of property description, sufficient to identify the real property.
- (b)
If one (1) or more agents are specified on the building permit, service on a listed agent shall be deemed to be service on all of the agent's principals, including those who have not separately listed an agent. If one (1) or more owners are specified on the building permit, service on the listed owner or owners shall be deemed to be service on all owners, including those not listed.
- (c)
For the purposes of this chapter, except as provided in § 66-11-108, any notice or other document required or permitted to be served shall be served by one (1) or more of the following means:
- (1)
Registered or certified mail, return receipt requested;
- (2)
Hand delivery, evidenced by a sworn statement, properly notarized, confirming delivery; or
- (3)
Any other commercial delivery service that provides written confirmation of delivery.
- (d)
For purposes of this chapter, there is a rebuttable presumption that service is complete:
- (1)
Upon receipt by the party being served by hand delivery;
- (2)
Within three (3) business days of mailing if served by registered or certified mail, return receipt requested; or
- (3)
One (1) business day after commercial, overnight delivery if served by that means.
§ 66-11-150. Prohibited liens.
-
Notwithstanding any law in this chapter or any other law to the contrary, no lien, otherwise authorized pursuant to this chapter, shall be available on residential real property, as that term is defined by § 66-11-146(b)(1), to any person, firm or corporation that performs residential construction, including home improvement as defined by § 62-6-501(4), if:
- (1)
The person, firm or corporation is not licensed pursuant to title 62, chapter 6; and
- (2)
The jurisdiction in which the work is performed requires such person, firm or corporation to be licensed in accordance with such chapter.
Part 2 Truth in Construction and Consumer Protection Act of 1975
§ 66-11-201. Short title.
-
This part shall be known and may be cited as the “Truth in Construction and Consumer Protection Act of 1975.”
§ 66-11-202. Part definitions.
-
As used in this part, unless the context or subject matter indicates another meaning, the words and phrases defined in § 66-11-101, as amended and as may from time to time be amended, have the same meaning as set out in that section and such § 66-11-101 as amended and as may from time to time be amended is incorporated in this part by reference.
§ 66-11-203. Notice to owner.
-
Any contractor who is about to enter into a contract, either written or oral, for improving residential real property, as that term is defined by § 66-11-146, with the owner or owners thereof shall, prior to commencing the improvement of the residential real property or making of the contract, deliver, by registered mail or otherwise, to the owner or owners of the residential real property to be improved written notice in substantially the following form:
-
-
The above-captioned contractor hereby gives notice to the owner of the property to be improved, that the contractor is about to begin improving the property according to the terms and conditions of the contract and that under the provisions of the state law (§§ 66-11-101 — 66-11-141) there shall be a lien upon the real property and building for the improvements made in favor of the above-mentioned contractor who does the work or furnishes the materials for such improvements for a duration of one (1) year after the work is finished or materials furnished.
-
Contractor
§ 66-11-204. Rejection of contracts.
-
An owner of residential real property may reject a contract by notifying the contractor by written notice by registered mail within three (3) days after receipt of the notice required in § 66-11-203; otherwise the contract is affirmed.
§ 66-11-205. Contractor's notice to owner that all liens have been paid — Guarantee — Form.
-
Upon completion of the contract or improvement and upon receipt of the contract price, the prime contractor shall deliver by registered mail or otherwise to the owner or owners of the real property a sworn affidavit and receipt substantially in the following form:
-
-
State of Tennessee
-
County of
-
On this day of , 20, before me personally appeared (if a corporation use “ President (or other officer) of (Corporate Name) a corporation”), prime contractor, to me personally known, who being duly sworn by oath, did say that all of the persons, firms, and corporations, including the prime contractor and all remote contractors and laborers, who have furnished services, labor, or materials according to the plans or specifications, or extra items used in the construction or repair of buildings and improvements on the real estate hereinafter described, have been paid in full or will be paid in full no later than ten (10) days from the date a bill is rendered for such services, labor, or materials and that such work has been fully completed and accepted by the owner, and further that such owner has paid the contract price in full, the receipt of which is hereby acknowledged. Affiant further says that no claims have been made to affiant by, nor is any suit pending on behalf of the prime contractor or any remote contractors or laborers, and further that no chattel mortgages or conditional bills of sale have been given or are now outstanding as to any materials, appliances, fixtures, or furnishings placed upon or installed in the aforementioned premises. Affiant as a party does for a valuable consideration hereby agree and guarantee to hold the owner of the real estate, the owner's successors, heirs and assigns, harmless against any lien, claim, or suit by any remote contractor or laborer and against chattel mortgages or conditional bills of sale in conjunction with the construction of such buildings or improvements on such real estate.
-
The real estate and improvements referred to herein are situated in the County of , State of Tennessee, and are described as follows: (give street address)
-
-
-
Prime Contractor
-
Sworn to and subscribed before me
-
on the date above first written.
-
-
-
Notary Public
-
My Commission Expires:
§ 66-11-206. Noncompliance by contractor — Misdemeanor — Penalties — Owner remedies.
- (a)
In the event that any materialmen's liens or mechanics' liens are perfected, filed or enforced under part 1 of this chapter against any real estate for transactions covered under §§ 66-11-203 and 66-11-205 and the contractor has not complied with §§ 66-11-203 and 66-11-205 or if having technically complied with this part has willfully, knowingly and unlawfully falsified any statements or fraudulently obtained any permission, the contractor commits a Class B misdemeanor.
- (b)
Nothing contained in this part shall abrogate the right of any person who is materially or personally damaged or injured by any contract covered by this part to seek such person's remedies against the responsible person in the courts.
- (c)
Noncompliance with §§ 66-11-203 and 66-11-205 shall in no way affect the lien rights of a contractor, actually performing the work and having a contract directly with an owner, or the owner's agent, to enforce a lien as provided in § 66-11-102.
§ 66-11-207. Effect on other laws.
-
This part shall not operate to repeal or affect any of the laws of the state relating to mechanics' and materialmen's liens, specifically part 1 of this chapter, but shall be held and construed as ancillary and supplemental thereto.
§ 66-11-208. Real estate improvement contracts — Certain venue provisions prohibited.
- (a)
Except as provided in subsection (b), a provision in any contract, subcontract or purchase order for the improvement of real property in this state is void and against public policy if it makes the contract, subcontract or purchase order subject to the substantive laws of another state or mandates that the exclusive forum for any litigation, arbitration or other dispute resolution process is located in another state.
- (b)
The prohibition of subsection (a) shall not apply to any contract, subcontract or purchase order for the improvement of real property which is located partially in this state and partially in another state or states. Venue in a dispute over such contract may be in any state in which part of the property is located.
Chapter 12 Crop Liens
§ 66-12-101. Landlord's lien for rent.
-
A landlord and one controlling land by lease or otherwise shall have a lien on all crops grown on the land during the year for the payment of the rent for the year, whether the contract of rental be verbal or in writing, and this lien shall inure to the benefit of the assignee of the lienor.
§ 66-12-102. Lien for goods and money supplied.
-
A landlord and one controlling land by lease or otherwise shall have a like lien on all crops of tenants or sharecroppers, grown during the year on the land, for the payment of necessary food, household fuel, money and clothing supplied during the year to such tenant or sharecropper or those dependent upon such tenant or sharecropper.
§ 66-12-103. Lien for farm implements and supplies.
-
A landlord and one controlling land by lease or otherwise shall have a like lien on all crops of tenants or sharecroppers grown during the year on the land, for the payment of necessary fertilizer, implements, work stock, feed for stock, seed, labor and insecticide, furnished to and used by such tenants or sharecroppers in the production of the crops.
§ 66-12-105. Expiration of liens.
-
The liens shall expire and be barred after July 1, following the crop year, unless a proceeding for its enforcement be commenced before that date.
§ 66-12-106. Enforcement of liens.
- (a)
All of the crop liens may be enforced in any court of competent jurisdiction, by original suit, execution and levy, or by original suit, attachment and garnishment, and all or any number of demands may be joined in one (1) suit or each established in a separate suit.
- (b)
Before any proceeding shall be instituted for the enforcement of the lien, the lienholder shall itemize the lienholder's claim and, either personally or through an agent, make affidavit in the manner required by law, in which affidavit it shall be stated that the claim is correct, owing, unpaid, and bona fide, and not subject to any setoff or credit.
§ 66-12-107. Liability of purchaser of crop.
-
A purchaser, with or without notice, of a crop subject to any of such liens shall be liable to the lienholder for the value of the crop, or any part of it, so purchased, not, however, to exceed the amount of rent due and/or supplies furnished and costs incurred in collecting same, if the crop, or part thereof, is delivered to or taken possession of by such purchaser before July 1 after the crop year; provided, the lienholder shall bring the action against the purchaser within one (1) year from the date of delivery to or possession taken by the latter.
§ 66-12-108. Liability of broker selling crop.
-
Any factor, broker, commission merchant, or other person who sells the crop of a tenant or sharecropper, or any portion of it, with or without notice of such lien, before its bar, and applies the proceeds to the payment of the tenant's indebtedness to such seller, shall be liable as a purchaser to the person entitled to the rent and/or amount due for supplies.
§ 66-12-110. Criminal liability avoided by payment of claim.
-
If the person so disposing of the property shall pay over to the lienor or owner of the debt so secured the proceeds of the sale, or sufficient thereof to satisfy the lien, or in case the owner of the debt shall have received or recovered from the purchaser of the property the value thereof, then if the party so disposing of such property shall pay to the purchaser the proceeds of sale, and all costs of the prosecution accrued, and all before the person so disposing of such property is arraigned for trial, the person so disposing of such property shall not be so held liable.
§ 66-12-111. Landlord's portion of crop unaffected.
-
Nothing in §§ 66-12-101 — 66-12-112 shall affect the portion of the crop reserved as rent by the landlord of a sharecropper, or for the rent or use of land producing same, whether divided or undivided, it being the intention to treat the title to such portion of the crop as vested in the landlord, unless the contract expressly provides otherwise.
§ 66-12-112. Joint payment by purchaser.
-
Should a tenant, by the consent and permission of the tenant's landlord, which consent and permission shall be in writing and signed by such landlord, sell the tenant's crop or any part thereof to any purchaser, upon which there exists a lien in favor of the landlord for either rent or supplies of any kind, the purchaser shall pay the purchase price for such crop to the tenant and landlord jointly, or the purchaser shall issue the check or other written instrument given in lieu of the money for such crop, payable to the landlord and tenant jointly, and before such check or other written instrument shall be cashed or paid, it shall have written or endorsed on the back thereof the genuine signature of the landlord in the landlord's own handwriting, or in the handwriting of the landlord's duly authorized agent or attorney.
§ 66-12-113. Laborer's lien on crops.
-
When any person shall perform any labor or render services to another in accordance with a contract, written or verbal, for cultivating the soil, and shall produce a crop, such person shall have a lien upon the crop produced, which shall be the results of such person's labor, for the payment of such compensation or wages as agreed upon in the contract.
§ 66-12-114. Duration of laborer's lien.
-
The lien provided for in § 66-12-113 shall exist three (3) months from November 15 of the year in which the labor is performed; provided, that an account of such labor rendered be sworn to before some court of general sessions, or clerk of the court issuing the writ of attachment.
Chapter 13 Employees' Lien
§ 66-13-101. Lien on business property.
-
All employees and laborers of any corporation, or firm, carrying on any corporate or partnership business shall have a lien upon the corporate or firm property of every character and description, for any sums due them for labor and service performed for the corporation or firm, and such lien shall prevail over all other liens, except the vendor's lien or the lien of a mortgage, or deed of trust to secure purchase money.
§ 66-13-102. Duration.
-
The lien created in § 66-13-101 shall only extend to and protect those claims as may have accrued within three (3) months of the bringing of any suit for the enforcement of the lien, and shall continue during the pendency of any suit brought for its enforcement.
§ 66-13-103. Priority over other liens.
-
No corporation or partnership doing business in this state shall have the power to execute a mortgage or deed of trust or other instrument creating a lien upon the property of the corporation prior to that in favor of the employees and laborers, except to secure purchase money.
Chapter 14 Artisans' Lien
§ 66-14-101. Right to sell unclaimed articles left for repairs.
- (a)
Silversmiths, lock and gunsmiths, blacksmiths, watchmakers and repairers, and artisans generally, who do work for the public, shall have the common law lien, and the right, at the expiration of six (6) months from the time of the contract and the leaving with them of the goods or products to be repaired, developed, processed or improved, if not claimed or called for by the owner, to sell the same at public outcry after complying with this chapter.
- (b)
“Artisans” are further defined as including persons who make, clean, mend, repair, alter or otherwise perform work on shoes or boots, as well as persons with whom are left goods or products to be repaired, developed, processed, or improved.
- (c)
The lien established by this section shall not apply to work performed on a “motor vehicle” as defined in § 55-12-102.
§ 66-14-102. Notice to persons interested.
- (a)
The artisan shall give a written notice to the person for whose account the goods were repaired, and to any other person known to the artisan who claims an interest in the goods. This notice shall be given by delivery in person, or by registered mail addressed to the last known place of business or abode of the person to be notified.
- (b)
Artisans, other than entities licensed and regulated pursuant to title 55, chapter 17, shall make reasonable inquiry to identify parties claiming an interest in the goods and shall give written notice to such parties as provided in subsection (a).
- (c)
In the event the goods are motor vehicles or other goods requiring certificates of title pursuant to title 55, “reasonable inquiry” as required by subsection (b) shall be satisfied by an inquiry of the title and registration division of the department of revenue or a county clerk as agent for the division to determine the interest of all title owners and all lienholders.
§ 66-14-103. Contents of notice.
-
The notice shall contain:
- (1)
An itemized statement of the artisan's claim and the date, or dates, when it became due;
- (2)
A brief description of the goods against which the lien exists;
- (3)
A demand that the amount of the claim as stated in the notice, and of such other claim as shall accrue, shall be paid on or before a date mentioned, not less than ten (10) days from the delivery of the notice, if it be personally delivered, or from the time when the notice should reach its destination, according to the due course of post, if the notice is sent by mail; and
- (4)
A statement that unless the claim is paid within the time specified, the goods will be advertised for sale and sold by auction at a specified time and place.
§ 66-14-104. Advertisement and sale.
-
In accordance with the terms of the notice provided for in § 66-14-102, a sale of the goods by auction may be had to satisfy the lien on the goods. The sale shall be had in the place where the lien was acquired, or, if such place is unsuitable for the purpose, at a convenient suitable place. After the time for the payment of the claim specified in the notice has elapsed, an advertisement of the sale describing the goods to be sold, and stating the name of the owner or person on whose account the goods are held, and the time and place of the sale, shall be published once a week for two (2) consecutive weeks, in a newspaper published in the place where the sale is to be held. The sale shall not be held less than fifteen (15) days from the time of the first publication. If there is no newspaper published in the place where the sale is to be held, the advertisement shall be posted at least ten (10) days before the sale in not less than six (6) conspicuous places in the place.
§ 66-14-105. Satisfaction of lien by owner.
-
At any time before the goods are sold, any person claiming a right of property or possession therein may pay the artisan the amount necessary to satisfy the lien and pay the reasonable expenses and liabilities incurred in serving notice and advertisement and preparing for the sale up to the time of such payment. The artisan shall deliver the goods to the person making such payment if that person is entitled, under this chapter, to the possession of the goods on payment of such expenses and liabilities.
§ 66-14-106. Disposition of proceeds of sale.
-
If the goods are sold, from the proceeds of such sale the artisan shall satisfy such artisan's lien, including the reasonable charges of notice, advertisement, and sale. The balance, if any, of the proceeds shall be held by the artisan, and delivered on demand to the person to whom the artisan would have been bound to deliver or justified in delivering the goods. If no person claims the balance within twelve (12) months, the artisan shall turn over the balance to the trustee of the county for the benefit of the common schools of the county in which the goods were sold.
Chapter 15 Manufacturers' and Processors' Liens
§ 66-15-101. Cotton ginners' lien.
- (a)
The charges and tolls of ginners are secured by a lien on all cotton ginned and baled by them, covering all ginning and baling charges.
- (b)
The lien created by subsection (a) is second only to the landlord and furnishers liens.
- (c)
The lien shall continue for six (6) months after such tolls and charges become due and payable, and until the termination of any and all litigation pertaining thereto, commenced before the expiration of the six (6) months.
§ 66-15-102. Textile processors' lien.
- (a)
All persons or corporations engaged in the business of manufacturing, bleaching, mercerizing, dyeing, printing or finishing cotton, silk, artificial silk, wool, synthetic fibers or goods of which cotton, silk, artificial silk, wool or synthetic fibers form a component part, shall be entitled to a lien upon the goods and property of others that may come or may have come into their possession for the purpose of being manufactured, bleached, mercerized, dyed, printed or finished, or for any other purpose, for the amount that may be due them from the owners of such goods or other property, by reason of any freight advanced or any work or labor performed or materials furnished in and about the manufacturing, bleaching, mercerizing, dyeing, printing or finishing or otherwise treating or processing of the same or other goods of such owner or owners.
- (b)
The lien shall not be waived, suspended or impaired by the recovery of any judgment, or the taking of any bill or note, for the money due, for such work, labor or materials and such lien may be enforced as though such judgment had not been recovered or such bill or note taken.
- (c)
- (1)
When any person or corporation engaged in the business of manufacturing, bleaching, mercerizing, dyeing, printing or finishing cotton, silk, artificial silk, wool, synthetic fibers or goods of which cotton, silk, artificial silk, wool or synthetic fibers form a component part, may have a lien on the goods and property of others that may have come into the possession of such person or corporation for the purpose of being manufactured, bleached, mercerized, dyed, printed, or finished, or otherwise treated and processed, or for any other purpose, and the amount due on the goods or property shall remain due and unpaid either in whole or part for the space of two (2) months after the same becomes due and payable, it shall be lawful for the person or corporation having the lien to expose the cotton, silk, artificial silk, wool, synthetic fibers or goods and property for sale at public auction, upon a notice of sale being first published for the space of two (2) weeks, at least once in each week, preceding the day of sale, in some newspaper published in the county in which the goods or property are located, and also upon five (5) days' notice of sale set up in three (3) or more public places in the county, one (1) whereof shall be in the town or city, if any, in which the goods or property are located; and, if the residence of the owner or owners can be ascertained, a copy of the printed notice shall be mailed to the owner or owners at least five (5) days before the day of sale.
- (2)
- (A)
The proceeds of the sale shall be applied to the payment of the lien and the expenses of the sale.
- (B)
No more of the goods or property shall be sold, if they are easily separated or divided, than shall be necessary, as near as may be, to pay such lien and expense.
- (C)
The balance of the proceeds of sale of the goods or property, if any, shall be paid or delivered to the owner or owners entitled to the proceeds.
- (3)
Nothing in this section contained shall be construed to be in derogation of the right of the lienor to enforce the lien by any other lawful procedure.
- (4)
The lien created by this section shall not continue after the property has been transferred from the lienor.
§ 66-15-103. Printers' and binders' lien.
- (a)
Typographers, printers, lithographers, photoengravers, electrotypers, stereotypers, bookbinders, and/or book manufacturers are given a lien on all type set by them, electrotype, stereotype, photoengraved or lithographic plates or stones made by them and on all plates, dies, engravings and/or materials of any sort prepared or supplied by the manufacturer, or furnished by the customer to facilitate production, so long as the items shall remain in the plant warehouses, vaults or custody of the manufacturer, which the lien or liens shall act to secure amounts owing by the customer to such manufacturer, and remaining unpaid on any part of the work performed and materials or services supplied by the manufacturer, and shall be a prior lien on same.
- (b)
The lien created by subsection (a) shall not be lost or waived; provided any of the completed work or partially completed work remains in the plant, custody or control of those to whom the lien is given, as set out in subsection (a), except by special written release by the printer, binder, worker or manufacturer, and the acceptance of notes, trade acceptance, and/or guarantees of payments, whether matured or not, in payment of the debt or account, shall not invalidate or affect the lien or its priority.
- (c)
Before the lien can be enforced, written notice of intention to claim the lien must be given by the lienee to the party for whom the work was done, by giving the notice to such party by registered mail at that party's last known place of address; and not earlier than ten (10) days thereafter the lien shall be enforceable in chancery as provided for the enforcement of other similar liens.
- (d)
The lienee or claimant of the lien shall have a period of ninety (90) days from giving of the notice of the intention to claim the lien to file a bill in chancery for the enforcement of same, and, if such action is not brought within that period of time, the lien shall expire.
Chapter 16 Launderers', Cleaners' and Storage Liens
§ 66-16-101. Enforcement against articles left for storage.
- (a)
If articles received for storage by a retail launderer or retail dry cleaner are not ordered from storage within sixty (60) days from the expiration of the storage date, as fixed upon the memorandum at the time the articles were received for storage, then a notice by registered mail shall be sent to the address given at the time each article was received for storage, or to the new address of the person from whom the article was received, if such person is known to have changed such person's address, demanding that the article be taken from storage within thirty (30) days, or the storage charges paid and a new contract for storage entered into.
- (b)
If at the expiration of thirty (30) days the article has not been removed from storage or a new storage contract made, then a second registered letter shall be sent, setting out a general description of the article, the charges against it, and a date not less than twelve (12) days from the date of mailing the letter when the article will be offered by public sale at the principal plant of the person who received it for storage. A copy of the letter shall be posted in a prominent place in the laundry or cleaning plant of the person mailing the letter, where the letter or notice is open to public inspection.
- (c)
If the charges are not paid by the date fixed for the sale, the article shall be offered for sale and sold to the highest bidder for cash and the proceeds applied to paying the cost of storage and mailing the necessary letters, and the balance shall be retained for a period of six (6) months for the benefit of the person from whom the article was received and shall at any time during those six (6) months be paid to that person on demand. At the expiration of six (6) months from the date of sale, the sum shall be paid to the state treasurer who shall deal with it in accordance with the Uniform Unclaimed Property Act, compiled in chapter 29 of this title.
§ 66-16-102. Sale of articles — Notice to customer.
- (a)
If a garment or article left with a retail launderer or retail dry cleaner for laundering or dry cleaning is not redeemed by the customer within ninety (90) days, the launderer or dry cleaner may, without liability or responsibility for the article or garment, dispose of it at a public or private sale or in any other manner; provided, that the launderer or dry cleaner has notified the customer by registered letter mailed to the customer's last known address that the article or garment will be disposed of unless it is redeemed within thirty (30) days from the date of the letter.
- (b)
If a garment or article left with a retail launderer or retail dry cleaner for laundering or dry cleaning is not redeemed by the customer within one hundred eighty (180) days, the launderer or dry cleaner may, without any liability or responsibility for the article or garment, and without notification to the customer, dispose of the article or garment in any manner suitable to the launderer or dry cleaner.
Chapter 17 Innkeeper's Lien
§ 66-17-101. Scope of lien.
-
All keepers of hotels, boardinghouses, and lodging houses, whether licensed or not, shall have a lien on all furniture, baggage, wearing apparel, or other goods and chattels brought into any such hotel, boardinghouse, or lodginghouse, by any guest or patron of the same, to secure the payment by such guest of all sums due for board or lodging.
Chapter 18 Molders' lien
§ 66-18-101. Chapter definitions.
-
As used in this chapter, unless the context otherwise requires:
- (1)
“Customer” means any individual or entity who causes or caused a molder to fabricate, cast or otherwise make a die, mold, form, or pattern or who provides a molder with a die, mold, form, or pattern to manufacture, assemble, cast, fabricate or otherwise make a product or products for a customer; and
- (2)
“Molder” means any individual or entity who fabricates, casts, or otherwise makes or uses a die, mold, form, or pattern for the purpose of manufacturing, assembling, casting, fabricating, or otherwise making a product or products for a customer. “Molder” includes, but is not limited to, a tool or die maker.
§ 66-18-102. Scope, attachment and enforcement of lien.
- (a)
Molders, shall have a lien, dependent on possession, on all dies, molds, forms or patterns in their hands belonging to a customer, for the balance due them from such customer for any manufacturing or fabrication work, and in the value of all material related to such work. Such liens shall attach upon the commencement of work by the molder and shall be subject to any prior perfected security interest in such property as of the commencement date. The molder may retain possession of the dye, mold, form or pattern until the charges are paid, or until repossessed by a creditor with a prior perfected security interest.
- (b)
Before enforcing the lien, notice in writing shall be given to the customer, whether delivered personally or sent by registered mail to the last known address of the customer. This notice shall state that a lien is claimed for the damages set forth in or attached to such writing for manufacturing or fabrication work contracted or performed for the customer. This notice shall also include a demand for payment.
- (c)
If the molder has not been paid the amount due within sixty (60) days after the notice has been received by the customer as provided in subsection (b), the molder may sell the die, mold, form or pattern in a commercially reasonable manner pursuant to title 47, chapter 9, part 5.
Chapter 19 Liens on Vehicles and Conveyances
Part 1 Miscellaneous Provisions
§ 66-19-101. Lien for repairs to conveyances generally.
-
There shall be a lien upon any type of conveyance used in the transportation of persons or merchandise either by land or by water or through the air, propelled by any sort of power, for any repairs or improvements made or parts or fixtures furnished at the request of the owner, or the owner's agent, in favor of the mechanic, contractor, founder, or machinist who makes on any such vehicle mentioned any repairs or puts thereon any improvements, fixtures, machinery, or materials; provided, that:
- (1)
The lien shall not extend to, nor shall this section and § 66-19-102 be construed as in any way affecting the right and title acquired by a purchaser without notice; and
- (2)
Any notice of the lien provided to an owner or the owner's agent and any advertisement of a sale to satisfy the lien, if authorized, shall include a brief description of the conveyance against which the lien exists and the vehicle identification number, if applicable and ascertainable.
§ 66-19-102. Duration of lien.
-
The lien shall be upon and include the conveyance and improvements thereon, and continue for twelve (12) months after the work is finished or repairs made or material furnished and until the final decision of any suit that may be brought within that time for the debt to the contractor, or undertaker, or furnisher, and bind the conveyance and improvements thereon; provided, that the conveyance with improvements thereon has not been transferred in good faith to a purchaser without notice.
§ 66-19-103. Garagekeeper's or towing firm's lien.
- (a)
- (1)
- (A)
Garagekeepers or establishments substantially in the business of towing vehicles for hire, pursuant to title 55, chapter 16, hereinafter referred to as “towing firms,” shall be entitled to a lien upon all vehicles that lawfully come into their possession and are retained in their possession until all reasonable charges due are paid. A garagekeeper may, after thirty (30) days, enforce this lien in the manner prescribed for the enforcement of artisans' liens under §§ 66-14-102 — 66-14-106, except the garagekeeper shall:
- (i)
Only be required to advertise the sale one (1) time in a newspaper published in the place where the sale is to be held; and
- (ii)
Include the vehicle identification number, if it is ascertainable, in the notice required pursuant to § 66-14-103 and in the advertisement of the sale described in § 66-14-104.
- (B)
If the motor vehicle, including any associated rental equipment, clearly identifies the rental vehicle company, the United States department of transportation (USDOT) number issued by the federal motor carrier safety administration (FMCSA), a registration plate issued and attached to the motor vehicle described in § 55-4-113(a)(2), or a registration plate issued and attached to the trailer described in § 55-4-113(a)(5), and a garage keeper or towing firm lawfully comes into possession of the vehicle and any associated equipment, then the garage keeper or towing firm shall notify the rental vehicle company, the owner of the motor vehicle identified by the USDOT number or the owner assigned to the registration plate issued and attached to the motor vehicle described in § 55-4-113(a)(2) or a registration plate issued and attached to the trailer described in § 55-4-113(a)(5), at the address identified with the USDOT number, rental equipment information, or the vehicle's registration within three (3) working days of taking possession of such vehicle or equipment by registered mail return receipt requested.
- (2)
The commissioner of commerce and insurance or the commissioner's designee shall notify the commissioner of safety of violations of subdivision (a)(1). Upon receiving such notice, the commissioner of safety shall suspend any contract that the state may have for towing services with the garagekeeper or towing firm for a period of sixty (60) days or notify the appropriate authority to suspend all such contracts with the state.
- (3)
In addition to any other penalty provided for a violation of this section, a violation of subdivision (a)(1) is also deemed to be a violation of title 47, chapter 18, part 1, and the rental vehicle company, the owner of the motor vehicle identified by the USDOT number or the owner assigned to the registration plate issued and attached to the motor vehicle described in § 55-4-113(a)(2) or a registration plate issued and attached to the trailer described in § 55-4-113(a)(5) may seek relief under that part.
- (4)
A garagekeeper or towing firm may not collect any storage or related fees for any period of time in which the garagekeeper or towing firm was in violation of subdivision (a)(1) with respect to a motor vehicle or associated equipment.
- (5)
The commissioner of commerce and insurance is authorized to promulgate rules and regulations to effectuate the purposes of this subsection (a) in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
- (6)
Subdivisions (a)(1)(B) and (a)(2)-(5) and § 55-16-112 shall not apply to new or used motor vehicle dealers licensed under title 55, chapter 17, part 1.
- (b)
As used in this section:
- (1)
“Garagekeeper” means an operator of a parking place or establishment, motor vehicle storage facility, or establishment for the servicing, repair, or maintenance of vehicles; and
- (2)
“Rental vehicle company” means a person or entity, or a subsidiary or affiliate of the person or entity, including a franchisee, in the business of renting vehicles to the public.
- (c)
A person, firm, or entity shall not have a right to a lien on a vehicle that has been towed in violation of title 55, chapter 16. If the owner of the vehicle is not present, then within fifteen (15) minutes of a person, firm, or entity towing the vehicle pursuant to this chapter, the person, firm, or entity shall notify local law enforcement of the vehicle identification number (VIN), registration information, license plate number, and description of the vehicle. A violation of this notification requirement by a person, firm, or entity is a Class A misdemeanor. Local law enforcement shall keep a record of that information, which must be available for public inspection.
- (d)
- (1)
Any authorization made by a police department to tow a vehicle shall be made in writing. Such authorization shall include:
- (A)
The name of the officer giving authorization;
- (B)
The year, make and model, and color of the vehicle to be towed;
- (C)
The reason for the tow;
- (D)
The license plate number, if any; and
- (E)
The vehicle identification number, if it is ascertainable.
- (2)
A copy of such authorization shall be posted with the vehicle by the officer giving authorization, and shall remain with the vehicle until the vehicle is claimed by the owner.
- (e)
No person, firm, or entity, unless licensed and regulated under title 55, chapter 17, part 1, shall have a right to a lien against a lienor, who is also the seller of such motor vehicle or who retains title under a title retention or conditional sale agreement, for repairs in excess of two hundred fifty dollars ($250) made on such motor vehicle, unless the person, firm or entity making the repairs has received a written authorization from lienor/seller to make such repairs on the motor vehicle.
§ 66-19-104. Duty to inform consumer of rights.
- (a)
Before beginning any repair work on a motor vehicle, an automotive repair facility shall inform the consumer for whom the repairs are to be done of the following rights:
- (1)
That a consumer:
- (A)
May request a written estimate for repairs that cost in excess of two hundred fifty dollars ($250); and
- (B)
May not be charged an amount over twenty-five percent (25%) in excess of the written estimate without the consumer's consent or good faith attempt to acquire the consent; and
- (2)
That repairs not originally authorized by the consumer may not be charged to the consumer without the consumer's consent unless a repair facility makes a good faith attempt to acquire the consent prior to providing additional repairs. A good faith attempt shall entail at least an attempted telephone call to the consumer.
- (b)
The consumer's rights provided in subsection (a) shall be:
- (1)
Displayed immediately before the space for the signature of the consumer conspicuously in easily readable type;
- (2)
Physically separated from the other terms of the form used for authorization of repairs; and
- (3)
Listed under the printed heading “Consumer's Rights.”
- (c)
If any automotive repair facility informs a consumer orally of the consumer's rights, the facility shall record in writing:
- (1)
The name of the persons who were notified or whom the facility attempted to notify;
- (2)
The date and time of the notification or attempt; and
- (3)
The signature of the person who made the notification or attempted notification.
- (d)
Failure to comply with this section shall abrogate the repair facility's rights under § 66-19-103.
- (e)
Nothing in this section shall apply to any person or entity licensed under title 55, chapter 17.
§ 66-19-105. Abandoned vehicles on campgrounds.
- (a)
Campgrounds substantially in the business of providing accommodations for recreational vehicles, as defined in § 55-50-102, shall be entitled to a lien upon all abandoned vehicles that lawfully come onto their premises. Such abandoned vehicles shall be retained in the campground owners' or managers' possession until all reasonable charges due are paid. A campground may, after sixty (60) days, enforce this lien in the manner prescribed for the enforcement of artisans' liens under §§ 66-14-102 — 66-14-106, except the campground shall:
- (1)
Only be required to advertise the sale of an abandoned vehicle one (1) time in a newspaper published in the place where the sale is to be held; and
- (2)
Include the vehicle identification number, if it is ascertainable, in the notice required pursuant to § 66-14-103 and in the advertisement of the sale described in § 66-14-104.
- (b)
A campground may collect any storage or related fees for any period of time in which a vehicle or associated equipment is abandoned upon the campground premises.
- (c)
The commissioner of commerce and insurance is authorized to promulgate rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to effectuate the purposes of this section.
- (d)
For purposes of providing notice to persons having an interest as provided in § 66-14-102, the campground shall notify any person that the campground:
- (1)
Has actual notice of an interest; and
- (2)
If the property is required to have a title, conduct a search request with the department of safety, or such other state where the vehicle license tag indicates it is registered, and in the case of property which is not titled as a motor vehicle, submit a search request for the filing of a security interest under the Uniform Commercial Code, compiled in title 47, chapters 1-9, with the secretary of state and, in the state that is the apparent residence of the owner of the property, if other than Tennessee. The campground owner shall send, by certified mail, return receipt requested, notice of intent to enforce the lien to all known owners, all known interested parties, and to any other or interested party discernable through reasonable effort as provided in this subsection (d). For purposes of notice, there shall be a rebuttable presumption of reasonable inquiry and notice to interested parties, if the inquiry and notice provided in this subsection (d) is fulfilled.
Part 2 Liens on Boats
§ 66-19-201. Possessory lien on boats.
-
Any debt contracted by the master, owner, agent, or consignee of any boat within this state on account of any work done, or materials or articles furnished for the building, repairing, fitting, furnishing, or equipping of such boat, or for wages due to the employees of such debtor, or for lease rent for dockage or storage, shall be a possessory lien upon such boat, its tackle, and furniture. It is the legislative intent that the holder of a material and furnishings lien shall not be able to charge additional dockage and storage during that period when the holder is exercising this lien.
§ 66-19-202. Pleading of lienor.
-
The pleading of the lienor shall be in writing, on oath, stating:
- (1)
By whom and for what boat the debt was contracted;
- (2)
The items composing the debt;
- (3)
That it is justly due and unpaid; and
- (4)
That demand has been made of one (1) of the defendants, or of the captain or agent of the defendants, being at the time in the county.
§ 66-19-203. Joinder of plaintiffs in suit.
-
Any two (2) or more of such creditors or claimants may join in the same warrant; and any such who has not joined may be made a party plaintiff in the suit, on motion, before the trial; and in such case the party shall be liable in all things, just as the party would have been had the party originally joined in the suit.
§ 66-19-204. Plaintiffs' bond.
-
Before issuing process against the boat, the judge or clerk shall take bond, with security, from the plaintiff or complainant, in the penalty of two hundred fifty dollars ($250), payable to the defendant, conditioned to prosecute the suit with effect, or to pay all costs and damages to the defendant, and all claimants subsequently applying to be made parties to the suit shall first be required to sign the bond before being admitted as plaintiffs or complainants.
§ 66-19-205. Warrant to attach boat.
-
Following the taking of the bond provided for in § 66-19-204, the judge shall issue the process, against the owners of the boat, or some of them, and direct it to the sheriff of the county, commanding the sheriff to attach the boat, its furniture and tackle, or so much thereof as may be necessary, and safely keep the same until security is given, or further order of the court.
§ 66-19-206. Retention of possession by sheriff.
-
The sheriff, after seizing the property, shall retain possession of it until the termination of the action, unless bond and security are given in a penalty as prescribed by statute, payable to the plaintiff or complainant conditioned to abide by and perform the judgment of the court.
§ 66-19-208. Sale of boat.
-
If no bond has been given, the court shall, at the appearance term, order the boat, or such part of the furniture and tackle as may be sufficient, to be sold for the satisfaction of the judgment; and the sheriff shall accordingly sell the same, first advertising the time and place of sale at least ten (10) days prior to the sale.
§ 66-19-209. Protection of prior liens.
-
Where there are prior liens on the boat by judgments obtained by the general creditors of the owners, the sheriff shall attach the boat, subject to such prior liens, and when the boat is sold to satisfy such prior liens, the surplus, if any, shall be paid into court, where the attachment is pending, to be paid to the attaching creditors, if they obtain judgment.
§ 66-19-211. Wharfage lien.
-
The owners and/or proprietors of wharves and landings, where wharfage is allowed by law, have a lien on boats, rafts, and other water crafts, and their loading, for the payment of their wharfage fees, and the same may be enforced by attachment within three (3) months after the lien accrued.
§ 66-19-212. Marina lien — Definitions.
- (a)
A marina shall be entitled to a lien upon any vessel or personal watercraft, which lawfully comes into the marina's possession and is retained pending payment of all reasonable charges due. IF three (3) months or more have elapsed since the contractually-prescribed due date for payment of such charges, THEN the marina may enforce such lien in the manner prescribed for the enforcement of artisans' liens under §§ 66-14-102 — 66-14-106, after reasonable inquiry and notice to interested parties.
- (b)
Notwithstanding any law to the contrary,
- (1)
IF, in the case of a personal watercraft, the marina submits a search request for the filing of a security interest under the Uniform Commercial Code, compiled in title 47, chapters 1-9; OR, in the case of a vessel, the marina submits a search request to the United States coast guard; AND
- (2)
IF, thereafter, the marina sends, by certified mail, return receipt requested, notice of intent to enforce the lien to all known owners, all known interested parties, and to any other owner or interested party discernible through reasonable effort; AND
- (3)
IF, thereafter, the marina advertises notice of intent to enforce the lien at least once a week for two (2) or more consecutive weeks in a newspaper of general circulation within the locality where the sale is to be held; THEN
- (4)
For purposes of subsection (a), there shall be a rebuttable presumption of reasonable inquiry and notice to interested parties.
- (c)
In addition to the method of enforcement authorized by this section, the lien may be enforced, in the alternative, by the marina complying with the provisions contained in the other sections of this part.
- (d)
As used in this section:
- (1)
“Marina” means a marina, boat dock, dry dock, or dry storage facility;
- (2)
“Personal watercraft” has the same meaning as this term is defined in § 69-9-501; and
- (3)
“Vessel” has the same meaning as this term is defined in § 69-9-204.
§ 66-19-213. Marina's lien on floating cabin.
- (a)
- (1)
A marina has a lien on a floating cabin for any assessment levied against the floating cabin pursuant to a written lease or service contract between the marina and the owner of the floating cabin from the time the assessment becomes due, which lien may be enforced by judicial action.
- (2)
Notwithstanding subdivision (a)(1), a written lease or service contract between a marina and the owner of a floating cabin may provide that the marina's lien may be enforced in like manner as a security interest under title 47, chapter 9, if the marina gives notice of its action to the owner and to all lienholders of record.
- (3)
Notice shall be deemed sufficient if sent by United States mail, postage prepaid:
- (A)
If to the owner, at the address of the floating cabin, or, if different, the last address for the owner on file with the marina; or
- (B)
If to a lienholder, other interested party, or the nominee of record, at the address set forth in an instrument of record; or, if different, at such other address as the lienholder or other interested party may have on file with the marina.
- (4)
Notice shall be deemed received three (3) days after deposit in the United States mail, postage prepaid. Fees, service charges, late charges, fines, and interest are enforceable as assessments under this section unless the written lease or service contract between the marina and the owner of the floating cabin provides otherwise. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due.
- (b)
- (1)
A lien under this section is prior to all other liens and encumbrances on a floating cabin, except:
- (A)
Liens and encumbrances recorded before the date of the written lease or service contract between the marina and the owner of the floating cabin;
- (B)
A first or purchase money lien recorded before the date on which the assessment sought to be enforced became delinquent; and
- (C)
Liens for taxes and other governmental assessments or charges against the floating cabin.
- (2)
Upon a foreclosure action initiated by a lienholder or the marina under title 47, chapter 9, the marina is entitled to a priority in the proceeds from the foreclosure sale to satisfy the lien under subsection (a) up to the extent of the assessments that are past due during the twelve (12) months immediately preceding institution of an action to enforce the lien. However, notwithstanding this subsection (b) or any law to the contrary:
- (A)
Any foreclosure by the marina of its lien for assessments shall be subject to any prior lien encumbering the floating cabin and shall not extinguish such lien;
- (B)
Upon any foreclosure and sale by the holder of a security interest, the sale and foreclosure will be subject to the marina lien up to the payment priority amount set forth in this subdivision (b)(2); and
- (C)
Any right of foreclosure or priority of the marina shall not be transferable and shall be extinguished if assigned or transferred to a third party.
- (c)
If two (2) or more marinas have liens for assessments at any time on the same floating cabin, the priority of the liens shall be determined based on the date that each lien was created, with an earlier created lien having priority over a later created lien.
- (d)
A lien for any delinquent assessment under this section up to the priority in payment provided in subdivision (b)(2) is perfected without recording. Any other delinquent amount above the priority of payment provided in subdivision (b)(2) is perfected by filing a financing statement with the secretary of state, and shall have priority over any subsequently filed liens.
- (e)
A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within one (1) year after the date the lien for the assessment becomes effective.
- (f)
A judgment or decree in any action brought under this section may include costs and reasonable attorney's fees for the prevailing party.
- (g)
The marina, upon written request, shall furnish to an owner or to a holder of any security interest encumbering the floating cabin, or the owner's or holder's respective authorized agents, a written statement setting forth the amount of unpaid assessments against the floating cabin. The statement must be furnished within seven (7) days after receipt of the written request and is binding on the marina.
- (h)
As used in this section:
- (1)
“Floating cabin” means a watercraft or other floating structure:
- (A)
Primarily designed and used for human habitation or occupation; and
- (B)
Not primarily designed or used for navigation or transportation on water; and
- (2)
“Marina” means a marina, boat dock, dry dock, or dry storage facility.
Part 3 Lien Against Aircraft
§ 66-19-301. Filing of lien — Notice.
- (a)
A lien against any type of conveyance used in the transportation of persons or merchandise through the air, propelled by any sort of power, asserted pursuant to § 66-19-101, shall be filed with the register for the county in which the actions giving rise to the lien occurred, within ninety (90) days after the work is finished or repairs made or materials furnished.
- (b)
A copy of the notice of lien to be filed shall be sent by first class mail to the last known address of the party for whose account the work was performed, repairs made or materials furnished, and upon any other party known by the party asserting the lien to claim an ownership interest in the subject property.
- (c)
The notice prescribed in subsection (a) shall contain:
- (1)
The name of the party asserting the lien;
- (2)
The name of the party for whom the work was performed, repairs made or materials furnished, and of any other party known to claim an ownership interest in the subject property;
- (3)
A statement of the amount claimed and the date or dates the amount became due;
- (4)
A description of the property against which the lien exists;
- (5)
A brief description of the nature of services giving rise to the lien; and
- (6)
The signature, under oath, of the party asserting the lien or of such party's authorized representative.
§ 66-19-302. Scope of lien — Parts, repairs and improvements — Lessees.
- (a)
The lien created by § 66-19-101 also extends to any aircraft engine, aircraft propeller, and any other part or spare part used in, or which under normal circumstances would be used in, an aircraft, aircraft engine or aircraft propeller, whether or not any such component has been attached to or incorporated into an aircraft.
- (b)
The lien created by § 66-19-101, as to any type of conveyance used in the transportation of persons or merchandise through the air, propelled by any sort of power, shall also arise for any repairs or improvements made or parts or fixtures furnished at the request of any lessee of the subject property or any other party having possession of the subject property with the knowledge or permission of the owner or owner's agent.
Chapter 20 Liens on Animals
§ 66-20-101. Pasturage lien.
-
When any horse or other animal is received to pasture for a consideration, the farmer shall have a lien upon the animal for the farmer's proper charges, the same as the innkeeper's lien at common law; and in addition the farmer shall have a statutory lien for six (6) months.
§ 66-20-102. Lien on female for service of male.
- (a)
Where the lien for pasturage shall occur in virtue of § 66-20-101, the charges shall include also those for the service of any jack, bull, ram, or boar; provided, that the charge for the service of such animal to the female shall have been agreed upon between the parties.
- (b)
This section shall likewise include the service of any stud or stallion.
§ 66-20-103. Livery stable keeper's lien.
-
Livery stable keepers shall be entitled to the same lien provided for in § 66-20-101 on all stock received by them for board and feed, or vehicle kept and/or conditioned, until all reasonable charges are paid.
§ 66-20-105. Duration of lien on offspring.
- (a)
The lien provided for in § 66-20-104, so far as it affects the offspring of jacks and bulls shall exist for two (2) years from the birth of such offspring and so far as it affects rams and boars shall continue for twelve (12) months from the birth of such offspring.
- (b)
This section shall likewise include the service of any stud or stallion.
§ 66-20-107. Lien on female and offspring for artificial insemination.
- (a)
When any female animal is inseminated by artificial means for a fee, the person providing the service shall have for a charge a lien on the female and on any offspring resulting from such service.
- (b)
The duration of the lien on offspring shall be for twelve (12) months from the date of birth of such offspring.
Chapter 21 Recording and Enforcement of Liens
Part 1 General Provisions
§ 66-21-101. Enforcement of liens where method not prescribed.
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Any and all liens given by statute on personal property, except attorney's lien, where no method of enforcing the same is specifically prescribed by statute, may be enforced by original attachment issued by any court having jurisdiction of the amount claimed to be due without necessity of fiat, on affidavit that the debt is due and unpaid, to be levied on the property upon which the lien exists, be it either in the hands of the creditor, owner, or other party not an innocent purchaser.
§ 66-21-102. Lien book furnished to register.
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It is imperative that the county legislative body purchase and furnish to the register of each county a well-bound book to be known as and labeled “Lien Book,” in which all pages shall be blank except the index pages described in § 66-21-103.
§ 66-21-103. Form and contents of lien book.
- (a)
The register shall enter in the notebook the time of reception, and record in the lien book or a combined lien book, all abstracts, memoranda or certified copies of judgments, decrees, lis pendens, mechanics' or furnishers' liens, and such other liens as are required or authorized to be recorded. The register shall also enter in the notebook the time of reception of the release of any lien of record and record the release in the lien book.
- (b)
The register shall index the recordings of liens and releases and shall note the nature of the lien in the index. The register shall have discretion to maintain a separate direct and reverse index, or to combine the index with the federal lien direct and reverse index or to combine it with the other indexes of the office in a master direct and reverse index.
§ 66-21-104. Notation of time of filing.
- (a)
The register shall note in the notebook the date, hour and minute of receiving each instrument evidencing or releasing a lien.
- (b)
In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700) according to the 1980 federal census or any subsequent federal census, the register shall note on each such abstract, memorandum or copy the date, hour and minute of the filing.
§ 66-21-105. Public official's contest of lien, encumbrance, or other document that constitutes cloud on title of real property interest.
- (a)
As used in this section, “public official” means:
- (1)
An individual who is a current or retired elected or appointed government official, including a state, county, metropolitan, or municipal official;
- (2)
An individual who is the head of a division or major unit or department within an agency or office of the executive, judicial, or legislative branch of state, county, metropolitan, or municipal government, regardless of the title of the position, and who, as a substantial part of the individual's duties, provides meaningful input on the development of policy goals or the implementation of policy;
- (3)
A high-ranking employee within the executive, judicial, or legislative branch of state, county, metropolitan, or municipal government who has a primary responsibility for one (1) or more of the following functions:
- (A)
Public information and legislative affairs;
- (B)
Fiscal, budget, and audit matters;
- (C)
Legal, security, or internal affairs;
- (D)
Information technology systems; and
- (E)
Human resources;
- (4)
A first responder, as defined in § 29-34-203; or
- (5)
A law enforcement officer, as defined in § 39-11-106.
- (b)
- (1)
A public official who is the subject of a lien, encumbrance, or any other document that reasonably constitutes a cloud on the title of a real property interest, filed with the register of any county, may file with the register a notarized affidavit, signed under penalty of perjury, that contains:
- (A)
A recital designating the type of instrument, office, book, and page number of the instrument;
- (B)
The affiant's mailing address;
- (C)
A statement that the affiant is a public official;
- (D)
A statement that the affiant believes that the document was filed without any reasonable basis or legal cause, and the affiant's factual basis for why the filed document lacks any reasonable basis or legal cause; and
- (E)
A statement that the affiant is not filing the affidavit contesting any document held by any entity listed in subsection (k).
- (2)
The secretary of state shall adopt a form of affidavit for use under subdivision (b)(1) and a form of certification for use under subsection (f).
- (c)
Once an affidavit is filed with the register pursuant to subdivision (b)(1), the register shall indicate on any available indices that the document referenced in subdivision (b)(1)(A) is “Contested — Under Review.”
- (d)
- (1)
Within three (3) business days of filing an affidavit filed pursuant to subdivision (b)(1), the public official shall send a copy of the affidavit, by registered or certified mail, with return receipt requested, addressed to the filing party at the address listed on the lien, encumbrance, or other document.
- (2)
The copy of the affidavit is deemed delivered upon:
- (A)
Acceptance by the filing party;
- (B)
A showing that the filing party refused to accept delivery and it is so stated in the return receipt of the United States postal service; or
- (C)
The United States postal service returning the affidavit as undeliverable or unclaimed.
- (3)
The refusal or failure of the filing party to accept delivery of the registered or certified mail, or the refusal or failure to sign the return receipt, does not affect the validity of delivery of the affidavit, and a filing party who refuses or fails to accept delivery of the registered or certified mail is charged with knowledge of the contents of the affidavit.
- (e)
- (1)
Within twenty (20) business days of delivery of the affidavit to the filing party or refusal or failure to sign the return receipt, or notice by the United States postal service that the affidavit is undeliverable, a filing party who believes in good faith that the lien, encumbrances, or other document was filed with a reasonable basis or legal cause, may file an action seeking a determination in the chancery court of the county where the document was filed pursuant to title 29, chapter 14. The action must name the public official as an interested party in its caption.
- (2)
A petition filed pursuant to subdivision (e)(1) must set forth the factual basis showing that the filed lien, encumbrance, or other document was filed with a reasonable basis or legal cause, and must be accompanied by a cost bond in the amount of two hundred dollars ($200).
- (3)
Any person who shares a property interest with the public official that is adversely affected by the filed lien, encumbrance, or other document may join in the action as an interested party.
- (4)
Following a reasonable period for responsive pleadings and discovery, the chancellor shall preside over a hearing at which proof may be offered on the issues raised and shall make a determination and issue a decree as to whether the lien, encumbrance, or other document was filed with any reasonable basis or legal cause at the close of the proceedings.
- (f)
- (1)
If, within twenty (20) business days of delivery of the affidavit to the filing party under subdivision (d), a petition and cost bond has not been filed as required by subdivision (e)(2), the public official may file with the register a certification, signed by the public official under penalty of perjury and verified by the clerk and master, stating that no petition has been filed.
- (2)
If the lien, encumbrance, or other document described in subdivision (b)(1) does not contain the name or address of the filing party, plaintiff, complainant, lienor, or owner of the lien, the public official may file with the register a certification, signed by the public official under penalty of perjury stating that the aforementioned name or address was not available.
- (3)
Any certification filed pursuant to subdivision (f)(1) or (f)(2) must include a recital designating the type of instrument, office, book, and page number of the instrument identifying the lien, encumbrance, or other document referenced in the affidavit filed pursuant to subdivision (b)(1) and shall serve as a release of the lien, encumbrance, or other document.
- (g)
If, following the hearing on a petition filed under subsection (e), the chancellor determines that there is reasonable basis or legal cause for the filing of the document, the filing party may file a final, unappealable court decree with the register, and the register shall remove the “Contested — Under Review” indication from the public records and the effectiveness of the lien, encumbrance, or other document must be reflected as the original date of filing.
- (h)
If, following the hearing on a petition filed under subsection (e), the chancellor determines that the lien, encumbrance, or other document was filed without any reasonable basis or legal cause, the public official may file a final, unappealable court decree with the register which shall serve as a release of the lien, encumbrance, or other document.
- (i)
The prevailing party in any action filed pursuant to subsection (e), including any person sharing a property interest with the public official, may recover costs and expenses, including reasonable attorneys' fees that are incurred in the action.
- (j)
Any governmental entity, as defined in § 29-20-102, may elect to insure or indemnify any public official for the cost of defending and removing liens, encumbrances, or other documents as described in this section, or any financing statements similarly filed and challenged pursuant to § 47-9-513(e), and for any other costs related to defending and removing a lien, encumbrance, or other document, but not including consequential damages. Any insurance or indemnification pursuant to this subsection (j) must be upon terms and conditions as the governmental entity establishes.
- (k)
This section providing for affidavits filed by public officials contesting liens, encumbrances, or other documents that reasonably constitute a cloud on the title of a real property interest does not apply to liens, encumbrances, or other documents if the originator, owner, or holder of the debt is any of the following:
- (1)
A state or national bank or trust company insured by the federal deposit insurance corporation or an operating subsidiary of such a bank or trust company;
- (2)
A state or federal credit union insured by the national credit union administration;
- (3)
A residential mortgage lender or an industrial loan and thrift company licensed by the Tennessee department of financial institutions;
- (4)
An entity regulated by the federal farm credit administration;
- (5)
The federal housing administration (FHA);
- (6)
A federal home loan bank;
- (7)
The federal national mortgage association (FannieMae);
- (8)
The federal home loan mortgage corporation (FreddieMac);
- (9)
The federal agricultural mortgage corporation (FarmerMac);
- (10)
The veterans administration (VA); or
- (11)
Any lien, encumbrance, or other document that is filed with the register, where the mortgage electronic registration system is listed as the nominee for the originator, owner, or holder of the debt.
§ 66-21-106. Penalty for failure to release.
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If the plaintiff, complainant, lienor or owner of any lien filed and registered pursuant to this part fails, neglects or refuses to release a lien that is satisfied, within fifteen (15) days after written demand of the defendant or lienee, such person shall be liable to the penalty prescribed for failure to release a mortgage on demand after the payment of the debt secured.
§ 66-21-110. Tolling of limitations period for perfection or enforcement of liens against debtor in bankruptcy.
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Notwithstanding any other law to the contrary, if due to the filing of a bankruptcy petition under title 11 of the United States Code (11 U.S.C.), a creditor is stayed from filing the necessary documents to create or enforce a lien or security interest against the debtor's property, then any statute of limitations created or established by law for the perfection or enforcement of a lien or security interest shall be tolled until ninety (90) days after any of the following actions occur with respect to the filing of the bankruptcy petition:
- (1)
The stay is lifted as to the creditor;
- (2)
The case is discharged; or
- (3)
The case is dismissed.
§ 66-21-111. Entry of release of lien — Fee.
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In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700) according to the 1980 federal census or any subsequent federal census the record of liens so provided may be released by the plaintiff, complainant, lienor or owner of the lien, or such person's attorney of record, entering in the blank space under the record of such lien the words “Released in full,” or their equivalent, dating and signing the same, which entry shall be witnessed in writing on the record by the register or the register's deputy, for which service the register is entitled to a fee of three dollars ($3.00) to be paid by the lienor, unless the contract provides otherwise.
Part 2 Federal Tax Liens
§ 66-21-201. Recording of notices of liens—Fees.
- (a)
Notices of liens for taxes or other obligations payable to the United States, and certificates discharging and notices affecting such liens, including certificates of redemption relating to the liens, shall be recorded in the office of the register of deeds of the county within which the property subject to such lien is situated.
- (b)
There shall be no fees collected by the county register at the time the notice of the lien or certificate discharging the lien is recorded, but the register shall extend credit to the United States for such recording fees as are chargeable, and submit the bill at the end of each month to the district director of the internal revenue service or other appropriate federal official in order to obtain payment. Notices of federal liens and any certificates of discharge or certificates of redemption, after proper indexing, shall be recorded in a separate book of federal liens or in any combined system of recording.
§ 66-21-202. Lien index, lien books, and filing of notices.
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When notice of the lien is filed, the register shall forthwith enter the same in an alphabetical federal lien index, or the lien book, showing on one (1) line the name and residence of the lien debtor named in such notice, the serial number of such notice, the date and hour of filing, and the amount of tax or other obligation with interest, penalties and costs.
§ 66-21-203. Book furnished for notices.
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The federal lien index, or lien book in lieu, and file or files for the federal lien notices shall be furnished to the county register in the manner now provided by law for the furnishing of books in which deeds are recorded.
§ 66-21-204. Discharge of lien or certificate of redemption.
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When a certificate of discharge of any lien or certificate of redemption issued by the director of the internal revenue service or other proper officer is recorded in the office of the register where the original notice of lien is recorded, the register shall enter the same with the date of filing in the proper index.
§ 66-21-205. Applicability of part.
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This part applies to federal tax liens and to all other federal lien notices, including certificates of redemption, which, under any act of congress or any regulation adopted pursuant thereto, are required or permitted to be recorded in the same manner as notices of federal tax liens or in the one (1) office designated within the state for the recording of federal liens, and to designate the one (1) office within this state for these purposes.
Chapter 22 Acknowledgment of Instruments
§ 66-22-101. Authentication.
- (a)
Unless otherwise provided by law, to authenticate an instrument or document for registration or recording in the office of the county register, the maker or the natural person acting on behalf of the maker shall execute the instrument or document by that person's original signature, and the signature shall be either acknowledged according to law or proved by at least two (2) subscribing witnesses. The county register may refuse to record any instrument or document not authenticated in accordance with this section.
- (b)
For purposes of this section, “person's original signature” includes an electronic signature as defined in § 8-16-302.
- (c)
For purposes of this title and subject to subsection (d), a person may personally appear before the officer taking the acknowledgment by:
- (1)
Appearing physically before the officer; or
- (2)
Appearing by means of an interactive two-way audio and video communication that meets the online notarization requirements under rules promulgated by the secretary of state pursuant to the Online Notary Public Act, compiled in title 8, chapter 16, part 3, to provide for the orderly administration of this chapter.
- (d)
The acknowledging officer must designate in the acknowledgment form whether the principal personally appeared before the officer by means of an interactive two-way audio and video communication pursuant to subdivision (c)(2). If the person appears by means of an interactive two-way audio and video communication, the appearance and the certificate shall be deemed compliant with this chapter if the acknowledging officer amends the acknowledgment forms set forth in §§ 66-22-107, 66-22-108, and 66-22-114, to read “personally appeared before me by audio-video communication” or “personally appeared by audio-video communication” or “before me appear by audio-video communication” rather than “personally appeared before me” or “personally appeared” or “before me appear”.
§ 66-22-102. Persons authorized to take acknowledgments within state.
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If the person executing the instrument resides or is within the state, the acknowledgment shall be made before the county clerk, or legally appointed deputy county clerk, or clerk and master of chancery court of some county in the state or before a notary public of some county in this state.
§ 66-22-103. Acknowledgment in other states or territories.
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If the person executing the instrument resides or is beyond or without the limits of the state, but within the union or its territories or districts, the acknowledgment may be made:
- (1)
Before any court of record, or before the clerk of any court of record; or, before a commissioner for Tennessee, appointed by the governor; or before a notary public authorized there to take proof or acknowledgments. If the acknowledgment is made before a court of record, a copy of the entry of the acknowledgment on the record shall be certified by the clerk, under the clerk's seal of office; and the judge, chief justice, or presiding magistrate of the court shall certify as to the official character of the clerk; or
- (2)
Before any other officer of such state, territory or district, authorized by the laws there to take the proof and acknowledgment of deed. There shall in cases under this subdivision (2) be subjoined or attached to the certificate of proof or acknowledgment, signed by such other officer, a certificate of the secretary of state of the state or territory in which such officer resides, under the seal of such state, territory, or a certificate of the clerk of a court of record of such state, territory, or district, in the county in which the officer resides or in which the officer took such proof or acknowledgment under the seal of such court, stating that such officer was, at the time of taking such proof or acknowledgment duly authorized to take acknowledgments and proof of deeds of lands in the state, territory, or district, and that the secretary of state or clerk of court is well acquainted with the handwriting of such officer, and that the officer verily believes that the signature affixed to such certificate of proof or acknowledgment is genuine.
§ 66-22-104. Acknowledgment in foreign countries.
- (a)
If the person executing the instrument resides or is beyond the limits of the union and its territories, the acknowledgment may be made:
- (1)
Before a commissioner for Tennessee appointed in the country where the acknowledgment is made, having an official seal;
- (2)
Before a notary public of such country, having an official seal; and
- (3)
Before a consul, charge d'affaires, envoy, minister, or ambassador of the United States in the country to which such person is accredited and where the acknowledgment is made.
- (b)
When the seal affixed contains the name or official style of such officer, any error, in stating or failing to state otherwise such name or official style of the officer, shall not render the certificate defective.
§ 66-22-105. Authentication of instruments by or to county clerk.
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The probate or acknowledgment of any deed or other instrument, made by or to a clerk of any county, may be taken and made before the judge having probate jurisdiction in the clerk's county, the clerk and master or the notary public, and the authentication entered on record in the office of the county clerk as other instruments; provided, that the clerk collect and account for the state tax on all such instruments as though the acknowledgment had been taken before the clerk.
§ 66-22-106. Postponement pending identification.
- (a)
If the clerk or deputy clerk does not know, is not personally acquainted with, or does not have satisfactory evidence of a person wishing to make acknowledgment of the execution of an instrument, the clerk or deputy clerk shall file it, and note, on the record of the probate of deeds, the date of the presentation of the instrument, and the reason of the postponement of the acknowledgment; and then, within twenty (20) days, the party may produce witnesses before the clerk or deputy clerk, to prove the identity of the person so offering to acknowledge the same; and the deed, when acknowledged after such proof, shall take effect from the filing with the clerk.
- (b)
For purposes of this chapter, “know” or “personally acquainted with” means having an acquaintance, derived from association with the individual in relation to other people and based upon a chain of circumstances surrounding the individual, which establishes the individual's identity with at least reasonable certainty.
- (c)
For the purposes of this chapter, “satisfactory evidence” means the absence of any information, evidence, or other circumstances which would lead a reasonable person to believe that the person making the acknowledgment is not the individual such person claims to be and any one (1) of the following:
- (1)
The oath or affirmation of a credible witness personally known to the officer that the person making the acknowledgment is personally known to the witness;
- (2)
Reasonable reliance on the presentation to the officer of any one of the following, if the document is current or has been issued within five (5) years:
- (A)
An identification card or driver's license issued by the department of safety; or
- (B)
A passport issued by the United States department of state; or
- (3)
Reasonable reliance on the presentation of any one (1) of the following, if the document is current or has been issued within five (5) years and contains a photograph and description of the person named on it, is signed by the person, bears a serial or other identifying number, and, in the event that the document is a passport, has been stamped by the United States immigration and naturalization service:
- (A)
A passport issued by a foreign government;
- (B)
A driver's license issued by a state other than this state;
- (C)
An identification card issued by a state other than this state; or
- (D)
An identification card issued by any branch of the armed forces of the United States.
- (d)
An officer who has taken an acknowledgment pursuant to this section shall be presumed to have operated in accordance with this chapter.
- (e)
Any party who files an action for damages based on the failure of the officer to establish the proper identity of the person making the acknowledgment shall have the burden of proof in establishing the negligence or misconduct of the officer.
§ 66-22-107. Form of certificate of acknowledgment.
- (a)
If the acknowledgment is made before a county clerk or deputy, or clerk and master, or notary public, or before any of the officers out of the state who are commissioned or accredited to act at the place where the acknowledgment is taken, and having an official seal, viz: those named in §§ 66-22-103 and 66-22-104, and, also, any consular officer of the United States having an official seal, such officer shall write upon or annex to the instrument the following certificate, in which the officer shall set forth such officer's official capacity:
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State of Tennessee )
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Personally appeared before me, (name of clerk or deputy), clerk (or deputy clerk) of this county, (bargainor's name), the within named bargainor, with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who acknowledged that such person executed the within instrument for the purposes therein contained.
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Witness my hand, at office, this day of , 20.
- (b)
Or, in the alternative, the following certificate, in case of natural persons acting in their own right:
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State of Tennessee )
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On this day of , 20, before me personally appeared , to me known to be the person (or persons) described in and who executed the foregoing instrument, and acknowledged that such person (or persons) executed the same as such person's (or persons') free act and deed.
- (c)
Or, in case of natural persons acting by attorney:
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State of Tennessee )
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On this day of , 20, before me personally appeared , to me known (or proved to me on the basis of satisfactory evidence) to be the person who executed the foregoing instrument in behalf of acknowledged that such person executed the same as the free act and deed of .
§ 66-22-108. Acknowledgment for record of corporate or partnership instrument.
- (a)
The authentication or acknowledgment for record of a deed or other instrument in writing executed by a corporation, whether it has a seal or not, shall be good and sufficient, when made in substantially the following form:
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State of Tennessee )
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Before me, of the state and county mentioned, personally appeared , with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged such person to be president (or other officer authorized to execute the instrument) of , the within named bargainor, a corporation, and that such president or officer as such , executed the foregoing instrument for the purpose therein contained, by personally signing the name of the corporation as .
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Witness my hand and seal, at office in , this day of .
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Or, alternatively as follows:
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State of Tennessee )
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On this day of , 20, before me appear , to me personally known (or proved to me on the basis of satisfactory evidence), who, being by me duly sworn (or affirmed) did say that such person is the president (or other officer or agent of the corporation or association) of (describing the corporation or association), and that the seal affixed to the instrument is the corporate seal of the corporation (or association), and that the instrument was signed and sealed in behalf of the corporation (or association), by authority of its Board of Directors (or Trustees) and acknowledged the instrument to be the free act and deed of the corporation (or association).
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(In case the corporation or association has no corporate seal, omit the words “the seal affixed to the instrument is the corporate seal of the corporation or association and that,” and add at the end of the affidavit clause, the words “and that the corporation (or association) has no corporate seal”). (In all cases add signature and title of officer taking the acknowledgment.)
- (b)
- (1)
The authentication or acknowledgment for record of a deed or other instrument in writing executed by a partnership shall be good and sufficient when made in substantially the following form:
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State of Tennessee )
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Before me, , of the state and county aforementioned, personally appeared , with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged such person to be a partner of , the within named bargainor, a partnership, and that such person, as such partner, executed the foregoing instrument for the purpose therein contained, by signing the name of the partnership by such person as partner.
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Witness my hand and seal, this day of , .
- (2)
The signing of a certificate of acknowledgment for a partnership will not change any requirement of the partnership agreement itself.
§ 66-22-109. Acknowledgment of married person.
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The acknowledgment of a married person, when required by law, may be taken in the same form as if such person were sole and without any examination separate and apart from that person's spouse.
§ 66-22-111. Entry of probate or acknowledgment.
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The clerk shall enter, in a well-bound book, the probate or acknowledgment of every deed or other instrument of writing proved or acknowledged before the clerk, which entry shall state:
- (1)
The date of the presentation of the paper where it is filed with the clerk, but is not proven or acknowledged because the witnesses fail or refuse to attend, or the clerk is not acquainted with the maker of the instrument;
- (2)
The date of the probate or acknowledgment;
- (3)
The names of the maker of the instrument and the person to whom it is made;
- (4)
The number of acres of land or town lots, or parts or portions of tracts of land or town lots, or other property mentioned in the paper; and
- (5)
A county or town in which the property is situated.
§ 66-22-112. Fees of clerk.
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For the clerk's services in this behalf, the clerk shall have the following fees:
- (1)
For issuing a subpoena for each witness required to be summoned to prove the execution of a writing $ .25
- (2)
For filing and entering the date of the presentation of a deed or other instrument, when its authentication is not completed at the time of presentation, in addition to the fees allowed by law for taking probates and acknowledgments of deeds and other instruments, and certifying the same $ .10
§ 66-22-113. Liability of officer for failure to carry out duties.
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If the clerk or other officer who takes the probate or acknowledgment of a deed or other instrument fails or refuses to comply with and discharge the duties required of the clerk or officer, the clerk or officer shall forfeit and pay the sum of one hundred dollars ($100) for the use of the county in which the clerk or officer resides, which may be recovered by action of debt, in the name of the trustee of the county, in the circuit or chancery court; and the clerk or officer shall, moreover, be liable to the party injured for all damages the clerk or officer may sustain by such failure or refusal, together with costs, to be recovered by action on the case in the circuit or chancery court.
§ 66-22-114. Certificate of acknowledgment form.
- (a)
If the acknowledgment is made before any of the officers who are authorized to take such acknowledgment under this chapter or any consular officer of the United States having an official seal, such officer shall write upon or annex to the instrument a certificate of acknowledgment. The following form shall constitute a valid certificate of acknowledgment:
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State of Tennessee )
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County of )
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Personally appeared before me, (name of officer), (official capacity of officer), (name of the natural person executing the instrument), with whom I am personally acquainted, and who acknowledged that such person executed the within instrument for the purposes therein contained (the following to be included only where the natural person is executing as agent), and who further acknowledged that such person is the (identification of the agency position of the natural person executing the instrument, such as “attorney-in-fact” or “president” or “general partner”) of the maker or a constituent of the maker and is authorized by the maker or by its constituent, the constituent being authorized by the maker, to execute this instrument on behalf of the maker.
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Witness my hand, at office, this day of , 20.
- (b)
Any certificate clearly evidencing intent to authenticate, acknowledge or verify a document shall constitute a valid certificate of acknowledgment for purposes of this chapter and for any other purpose for which such certificate may be used under the law. It is the legislative intent that no specific form or wording be required in such certificate and that the ownership of property, or the determination of any other right or obligation, shall not be affected by the inclusion or omission of any specific words.
§ 66-22-115. Recognition of certificate of acknowledgment.
- (a)
The form of a certificate of acknowledgment used by a person whose authority is recognized under §§ 66-22-103 and 66-22-104, shall be accepted in this state if the:
- (1)
Certificate is in a form prescribed by the laws or regulations of this state; or
- (2)
Certificate is in a form prescribed by the laws or regulations applicable in the other state, or territory, or foreign country in which the acknowledgment is taken.
- (b)
A notarial act performed prior to March 29, 1995, is not affected by this section. This section provides an additional method of proving notarial acts. Nothing in this section diminishes or invalidates the recognition accorded to notarial acts by other laws or regulations of this state.
Chapter 23 Authentication of Instruments by Witnesses
§ 66-23-101. Witnesses outside state when maker unavailable.
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If the person executing the instrument is dead, or resides or is beyond the limits of the United States and its territories, the instrument may be proved for registration before any clerk of a court of record in any of the states or territories, or before a commissioner for Tennessee, appointed by the governor, in any such state or territory, or before a notary public of such state or territory, by two (2) subscribing witnesses, or, if one (1) of them is dead, then by the subscribing witness living, and proof of the handwriting of the deceased witness by two (2) persons acquainted with such person's handwriting.
§ 66-23-102. Witnesses within state.
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If the subscribing witnesses reside or are within the state, they shall appear before the clerk or deputy clerk of the county where it is proposed to prove the instrument.
§ 66-23-103. One witness in state.
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If only one (1) of the subscribing witnesses resides within the state, that witness may prove the execution of the instrument, the handwriting of the other witness or witnesses being proved by some other person.
§ 66-23-104. One witness competent.
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If all the subscribing witnesses are dead, insane, blind, or deaf or hard of hearing, except one (1), that witness may prove the execution of the instrument before the clerk or deputy clerk of the county, the handwriting of the other witness being proved by some other person.
§ 66-23-105. Witnesses in another state.
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If the witnesses reside or are in any other state of the union, the proof shall be made before the same officers and tribunals who can take the acknowledgment of the maker of the instrument.
§ 66-23-106. Witnesses outside country.
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If the witnesses, or any of them, reside or are beyond the limits of the United States, the instrument may be proved by two (2) subscribing witnesses before the same officers and tribunals who have authority out of the state to take the acknowledgment of the person who executed the same.
§ 66-23-107. Testimony before foreign court — Proof of handwriting.
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If the witnesses reside without the limits of the state, the party desiring the probate of the instrument may procure their testimony to be entered of record in any court of record having cognizance thereof or may prove the instrument by two (2) persons acquainted with the handwriting of the person who executed the same, before the clerk or deputy clerk of some county in Tennessee.
§ 66-23-108. Subpoena for witnesses.
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When an instrument is presented to a clerk or deputy clerk for probate, and the party presenting it suggests to the clerk that the subscribing witnesses or any of them refuse to appear and give evidence of the execution of the instrument, the clerk shall issue a subpoena to compel the attendance of the recusant witnesses to prove the execution of the instrument.
§ 66-23-109. Form of subpoena.
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The subpoena provided for in § 66-23-108 shall command the officer to summon the witnesses to appear before the clerk at the clerk's office, on a certain day specified in it, to give their evidence touching the execution of the instrument, or other authentication thereof, under a penalty of two hundred dollars ($200), to be recovered, in case of failure to attend, as other forfeitures for disobeying subpoenas.
§ 66-23-110. Witness fees.
- (a)
The witness fees, to be paid by the party summoning them, at the time of their attendance, shall be the following:
- (1)
For each day's attendance, seventy-five cents (75¢); and
- (2)
For every thirty (30) miles traveling to and from the clerk's office, seventy-five cents (75¢); provided, that no mileage shall be allowed a witness who resides within the county where the instrument is to be proved.
- (b)
Should the party fail or refuse to pay the witness fees, the witness may recover the same before a general sessions court.
§ 66-23-111. Execution of subpoena.
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Any sheriff or constable, into whose hands the subpoena may come, shall execute it, without delay, on the witness or witnesses named in it, but not unless the party suing out the subpoena pay or tender to the sheriff or constable a fee of one dollar ($1.00) for summoning each witness.
§ 66-23-114. Proof of handwriting of maker.
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If all the subscribing witnesses are dead, insane, blind, or deaf or hard of hearing, the instrument may be proved before the county clerk or deputy county clerk by any two (2) persons who are acquainted with the handwriting of the maker of the same.
§ 66-23-115. Proof by handwriting of maker or witnesses.
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If the person executing the instrument is dead, or resides or is beyond the limits of the United States and its territories, and the subscribing witnesses are dead, or have become insane or blind, or deaf or hard of hearing, since they became subscribing witnesses, or they cannot be found, then the instrument may be proven for registration before any of the officers mentioned in § 66-23-101, by any two (2) persons acquainted with the handwriting of such maker or such witnesses.
§ 66-23-116. Examination of witnesses.
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When the witness or witnesses appear before the clerk, the clerk shall propound to them such questions as the clerk may find requisite to establish the facts necessary to authenticate the instrument, whether it be the identity of the maker, the maker's handwriting, or the handwriting of a nonresident or deceased witness.
§ 66-23-117. Form of certificate of probate.
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If the subscribing witnesses appear before the clerk or deputy clerk of any county of the state, and prove the facts necessary to authenticate the instrument, the clerk shall write on the back or some other part of the instrument the following certificate:
-
-
State of Tennessee )
-
-
Personally appeared before me, , clerk (or deputy clerk) of the county of aforementioned, and , subscribing witnesses to the within deed, who, being first sworn, deposed and said that they are acquainted with , the bargainor (or as the case may be), and that the bargainor acknowledged the same, in their presence, to be the bargainor's act and deed upon the day it bears date (or stating the time as proved by the witnesses).
-
Witness my hand, at office, this day of , 20.
§ 66-23-119. Annexed papers when proof made in foreign court.
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If the instrument is proved by procuring the testimony of the witnesses to be entered of record in a court of record in one (1) of the United States or of a foreign country, there shall be endorsed upon or annexed to the deed a copy of the probate from the record, certified by the clerk or keeper of the records, under that officer's official seal, if there is one, or if not, under that officer's private seal, and the official character of the clerk or keeper of the records shall be certified by the presiding judge of the court.
Chapter 24 Registration of Instruments
Part 1 General Provisions
§ 66-24-101. Writings eligible for registration — Refusal to register documents not in English — Electronic records.
- (a)
The following writings may be registered:
- (1)
All agreements and bonds for the conveyance of real or personal estate;
- (2)
All powers of attorney authorizing the sale, transfer, or conveyance of real or personal estate, or for any other purpose, or appointing an agent to transact any business whatever;
- (3)
All revocations of powers of attorney;
- (4)
All deeds for absolute conveyance of any lands, tenements or hereditaments, or any estate therein;
- (5)
All instruments of writing for the absolute conveyance of personal property;
- (6)
Copies of deeds of conveyance, with certificate of probate, of lands being in different counties in this state, certified by the register of the county where same has been first registered;
- (7)
Deeds of gifts of any estate, real or personal;
- (8)
All mortgages and deeds of trust of either real or personal property;
- (9)
The acknowledgment of satisfaction and discharge of mortgage, trust, and other liens, by an entry in the margin of the record thereof;
- (10)
All marriage settlements, contracts, or agreements;
- (11)
Deeds and mesne conveyances for the settlement of property, real or personal, in consideration of marriage;
- (12)
All other deeds of every description;
- (13)
Transfers or assignments of plats and certificates of survey or locations of land;
- (14)
All instruments in writing transferring or conveying any right of improvement, occupancy or preemption;
- (15)
Leases for more than three (3) years from the time of making the same, or a summary or abstract of such leases;
- (16)
Wills devising lands in Tennessee, or certified copies thereof, duly admitted to probate in Tennessee or in other states, together with certified copies of related probate orders;
- (17)
Memoranda of judgments, attachments, orders, injunctions, and other writs affecting title, use or possession of real estate;
- (18)
Certified copies of decrees divesting the title of land out of one (1) person and vesting it in another;
- (19)
Memoranda of judgments or decrees, stating the court, date of judgment, names of parties, and amount of judgment, to bind equitable interests in land or personalty;
- (20)
Discharges of soldiers, sailors, marines, and naval and army officers of the United States. County registers are required, upon application of lawful holders thereof, to register such discharges without charge to the person named in the discharge, or to the holder of such discharge. Certified copies of such registered discharges issued by the register shall be legal evidence of such discharge;
- (21)
Certified copies of the petition in bankruptcy, with schedules omitted, of the decree of adjudication and of the order of court approving the bond of the trustee, in any bankruptcy proceeding in any court of bankruptcy of the United States;
- (22)
Receipts evidencing the payment of Tennessee inheritance taxes issued by the commissioner of revenue or the commissioner's authorized representative and nontaxable certificates evidencing that a sworn return for inheritance tax has been filed with the department of revenue by a duly qualified representative of the estate showing that it has been ascertained that the estate was not subject to tax, such nontaxable certificate having been issued by the commissioner or the commissioner's authorized representative;
- (23)
All instruments granting, transferring, pledging or assigning an interest in leases or rents arising from real property;
- (24)
All trust agreements or a summary or abstract of such agreements;
- (25)
All instruments required to be filed pursuant to § 66-19-301;
- (26)
- (A)
Any instrument that provides for any party to agree to take any action regarding any interest in real property, or not to take such action regarding any interest in real property, including, but not limited to, any agreement to or negative agreement to mortgage, pledge, assign, hypothecate, alienate, subdivide, encumber, sell, transfer, or otherwise affect the real property or any part thereof;
- (B)
All agreements described in subdivision (a)(26)(A) that are of record as of June 14, 1999, shall be deemed validly recorded and do not need to be re-recorded to have the benefit of subdivision (a)(26)(A) and shall further be deemed to have been validly recorded upon their initial registration;
- (27)
Affidavits of scrivener's error and other affidavits in furtherance of identification and title to land. The affiant in the case of any affidavit of scrivener's error may attach a document, including a document previously recorded with corrections made by the affiant, with the affidavit; and
- (28)
Reports of sale and notices reflecting tax sale results filed pursuant to any lawsuit for the sale of property for delinquent taxes.
- (b)
- (1)
The county register may refuse to register any writing eligible for registration in accordance with this title, if such writing, in the opinion of the county register, is illegible or cannot be legibly recorded or reproduced unless the person seeking to register the writing attaches to it for recording an affidavit stating that such writing is the best available original and sets forth the following facts regarding the writing:
- (A)
The type of document or instrument;
- (B)
The grantor or grantors and grantee or grantees;
- (C)
The date of execution;
- (D)
The name of the person or persons authenticating or acknowledging the signature of the grantor or grantors, and their title, if any;
- (E)
A description of the real property, if any, being affected by the writing; and
- (F)
All other information or recitals required by law for the registration of the writing that would otherwise be placed on the writing itself.
- (2)
If an affidavit in the form and with the information as required by this subsection (b) is attached to the writing, the county register shall register the writing notwithstanding that it is illegible or cannot be legibly recorded or reproduced.
- (c)
The county register may refuse to register any writing eligible for registration in accordance with this title if this writing is wholly or substantially written in any language other than English unless the person seeking to register the writing attaches an affidavit in which the affiant gives a complete translation of the writing offered for registration into English. The affidavit shall be recorded with the original writing and the original writing and its attached affidavit shall be treated as one instrument for recording purposes.
- (d)
- (1)
The county register may register a copy of an electronic document if the writing is otherwise eligible for registration and the electronic document is certified as a true and correct copy of the original as required in subdivision (d)(3).
- (2)
For purposes of this section, an electronic document is defined as one of the following:
- (A)
A writing created or retained as an electronic record in accordance with the Uniform Electronic Transactions Act (UETA), compiled in title 47, chapter 10, or the Uniform Real Property Electronic Recording Act (URPERA), compiled in part 2 of this chapter, as codified in this state or a substantially similar law of another state as defined in the URPERA, and transmitted to the county register electronically, or a paper copy of such an electronic record; or
- (B)
A writing that is a digitized image of a paper document (electronic copy) that is transmitted to the county register electronically.
- (3)
An electronic document must be certified by either a licensed attorney or the custodian of the original version of the electronic document and the signature of that person must be acknowledged by a notary public. The certification must be transmitted with the electronic document and recorded by the county register as a part of the document being registered. The certification of an electronic document must be in the following form and the text of the certification must be in no less than ten (10) point font:
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-
I, ___________________, do hereby make oath that I am a licensed attorney and/or the custodian of the original version of the electronic document tendered for registration herewith and that this electronic document is a true and exact copy of the original document executed and authenticated according to law on ____________ (date of document).
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_______________________
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Affiant Signature
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_______________________
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Date
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State of _______________
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County of _______________
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Sworn to and subscribed before me this ___ day of ____________, 2____.
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_____________________
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Notary's Signature
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MY COMMISSION EXPIRES: _____________
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Notary's Seal (if on paper)
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- (4)
All electronic documents eligible for registration pursuant to this subsection (d) are validly registered when accepted for recording by the county register. Electronic documents registered by county registers prior to July 1, 2021, shall be considered validly registered with or without the certification provided in subdivision (d)(3).
- (5)
No county register shall be required to accept a document transmitted electronically.
- (e)
Unless an instrument is acknowledged or proved, as provided in chapter 22 of this title, or other applicable law:
- (1)
The county register may refuse to register or note the instrument for registration; and
- (2)
If the instrument conveys any interest in real property, including any lien on the property, no purchaser shall be required to accept delivery of the instrument. If, however, an instrument not so acknowledged or proved is otherwise validly registered, the instrument shall be deemed to be validly registered for the purposes of §§ 66-26-102 and 66-26-103, and in full compliance with all statutory requirements set forth in § 66-22-101, and all interested parties shall be on constructive notice of the contents of the instrument.
- (f)
Subsection (e) shall apply to all instruments of record on or after June 6, 2005. However, if the relative priorities of conflicting claims to real property were established at a time prior to June 6, 2005, the law applicable to such claims at such time shall determine their priority.
§ 66-24-102. Certificates registered.
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With the deed or instrument shall be registered all certificates of probate or acknowledgment, with the certificates for the authentication thereof, any commission to take acknowledgment or examination, and any correction made of the certificates as provided in this chapter.
§ 66-24-103. Conveyances of land.
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If the instrument be a conveyance, or for the conveyance, of land, it shall be registered in the county where the land lies, unless it lies partly in two (2) or more counties, and then it may be registered in either; and where it contains several tracts of land, lying in different counties, it shall be registered in each of the counties where any of the tracts lie.
§ 66-24-104. Conveyances of personal property.
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All deeds, bills of sale, agreements, and other instruments for the conveyance or mortgage of personal property shall be registered in the county where the vendor or person executing the same resides, and, in case of nonresidence of the vendor or the person executing, where the property is.
§ 66-24-105. Marriage settlements.
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Deeds for the settlement of personal property, in consideration of marriage, shall be registered in the county where the grantor or bargainor resides.
§ 66-24-106. Marriage contracts settling property on wife.
- (a)
Marriage contracts or agreements in which the wife's property, before marriage, is settled on her or a trustee for her use, shall be registered in the county where the husband resides at the time of marriage, and in every county in the state to which he may remove with the property; and if the contract or agreement be made without the limits of the state, they shall be registered in every county in the state to which the husband and wife removed with the property.
- (b)
In case of realty, registration shall be also in the county where it lies.
§ 66-24-107. Registration of certified copies from previous registration.
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Where any deed of conveyance, or any power of attorney to convey, in which more than one (1) tract of land is conveyed or to be conveyed, lying in different counties, with the proper probates, has been registered in any county in which one (1), or more, of the tracts lies or where any such judgment or decree has been so recorded, it shall be lawful for any one interested therein, to have registered in the county or counties in which the other tract or tracts are situated, a copy of the deed of conveyance or power of attorney and certificate of probate, or judgment or decree, certified by the register of the county in which the deed of conveyance, power of attorney, judgment or decree may have been thus registered; and such registration shall be valid, and a copy thereof shall be received as evidence as if such registration had been of the original.
§ 66-24-108. Reregistration after destruction of records.
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In all cases where the records of any register's office in any county have been, or may hereafter be, destroyed or mutilated by fire, or otherwise, the holder of any deed or instrument of which the record wherein it was originally registered has been destroyed or mutilated may have the same registered in the register's office of the county.
§ 66-24-109. Fees for reregistration or rerecording.
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The register registering or recording such deeds or other instruments in writing heretofore recorded shall be entitled to demand and receive for such register's services compensation in accordance with the schedule set forth in § 8-21-1001; provided, that nothing in this section shall be construed as authorizing or requiring the payment or collection of any additional transfer or other tax as a condition of such reregistration or rerecording.
§ 66-24-110. Recitals on instrument required for registration.
- (a)
- (1)
No instrument in writing affecting interests in real property, excepting instruments releasing liens on real property, shall be registered unless it contains a recital designating the deed, will, court decree or other source from which the grantor received the equitable interest.
- (2)
If the source of equitable interest is a deed or other instrument recorded in the register's office or a will or court decree of record in the county, the type of instrument, office, book and page number of such instrument shall be recited on the instrument offered for registration.
- (3)
If the source of equitable title is inheritance under the laws of intestate succession, then it shall be recited that the grantor took title by inheritance and the last recorded instrument conveying the equitable interest shall be named with the office, book and page number where such instrument is recorded.
- (4)
If no such preceding instrument has been recorded, the instrument shall so recite.
- (5)
No instrument releasing a lien on real property shall be registered unless it contains a recital designating the type of instrument, office, book and page number of the instrument which created the lien being released.
- (b)
The recital required by this section shall be prepared and entered on each instrument required to be registered by the preparer of such instrument; provided, however, that if the deed or other instrument from which the grantor received the equitable interest is received by the register simultaneously with the instrument upon which the recital is required, then the preparer shall leave blanks in the recital for the book and page number or other appropriate reference and the register of deeds shall enter the appropriate reference after the deed or other instrument has been recorded.
§ 66-24-112. Validity of registration unaffected by noncompliance.
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Nothing in this chapter shall be construed to prohibit the registration of instruments otherwise required by law to be registered, in the absence of a previously registered instrument respecting the property or subject matter embraced in the instrument delivered for registration; provided, that a failure of the record to show a compliance with the requirements of this chapter shall in nowise affect the validity of the registration of any registered instrument.
§ 66-24-113. Metropolitan identification map.
- (a)
Where any metropolitan government, as defined in § 7-1-101, has adopted an official property identification map which assigns to each parcel of property a number or other identifying symbol for property within the area of the metropolitan government, every deed offered for recording shall show on its face the number or other identifying symbol of the parcel or parcels, or portions of parcels, being transferred or conveyed.
- (b)
The county register shall not record any deed without such number or symbol appearing thereon, and, if the property is improved, a notation at the end of the legal description of such property indicating that the property is improved, followed by the house and/or street number and post-office address.
- (c)
An official property identification map for the purpose of this section is defined to be a property map or maps, prepared by or for the local government, which identifies all parcels of land, which assigns a number or other identifying symbol to each parcel, which shows names of streets and public ways, and which by appropriate and specific reference thereto has been adopted by the governing body of the metropolitan government as its official property identification map.
§ 66-24-114. Names and addresses required on deeds.
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No deed of conveyance of real property, except for a deed of trust or mortgage, shall be received for recording by any register of deeds unless there shall be included thereon the name and address of a property owner and the name and address of the person or entity responsible for the payment of the real property taxes.
§ 66-24-115. Name of preparer of instrument.
- (a)
- (1)
No instrument by which the title to real estate or personal property, or any interest therein, or lien thereon, is conveyed, created, encumbered, assigned or otherwise affected, or disposed of, nor any power of attorney, including, but not limited to, any durable power of attorney for health care, shall be received for record, or filing, by the county register unless the name and address of the person or the governmental agency, if any, that prepared such instrument, appears within the instrument, and such name is either printed, typewritten, stamped, or signed in a legible manner.
- (2)
An instrument will be in compliance with this section if it contains a statement in the following form: “This instrument was prepared by (name) (address) ”; provided, that the receiving for record, or filing, of any such instrument by the county register without complying with this section shall not prevent the instrument from becoming notice as now provided by law.
- (b)
This section does not apply to any instrument executed prior to July 1, 1965, nor to any decree, order, judgment, writ of any court, will or death certificate.
- (c)
This section shall not apply to any Uniform Commercial Code instrument, including instruments intended as or that relate to a fixture filing pursuant to § 47-9-502.
§ 66-24-116. Filing and recording restrictions for maps, plats and surveys.
- (a)
It is unlawful for the recorder of deeds of any county or any proper public authority to file on record any map, plat, survey, or other document within the definition of land surveying which does not have impressed thereon, and affixed thereto, the personal signature and seal of a registered land surveyor, licensed to survey by title 62, chapter 18, or a registered engineer by whom the map, plat, survey or other document was prepared; except that any plat, map, survey or other document covered under this chapter and which was prepared prior to May 7, 1969, may be recorded by the recorder of deeds.
- (b)
Instruments shall not be accepted for registration unless, in the opinion of the register to which the instrument is presented for recording, the map, plat or survey distinctly shows all words and figures necessary for clear and accurate determination of all metes, bounds, bearings, calls, easements or other information sought to be shown with sufficient clarity for reduction and/or reproduction in the register's office.
- (c)
However, nothing in this section shall be construed as precluding the transfer of title nor the recording of any instrument evidencing such transfer between a willing buyer and a willing seller without survey nor shall this section preclude the use of an earlier recorded survey.
§ 66-24-117. Master form of mortgage clauses.
- (a)
An instrument containing a form or forms of covenants, conditions, obligations, powers, and other clauses of a mortgage or deed of trust may be recorded in the registry of deeds of any county and the recorder of such county, upon the request of any person, on tender of the lawful fees therefor, shall record the same in the recorder's registry. Every such instrument shall be entitled on the face thereof as a “Master Form recorded by (name of person causing the instrument to be recorded).” Such instrument need not be acknowledged to be entitled to record.
- (b)
When the instrument is recorded, the recorder shall index the instrument under the name of the person causing it to be recorded in the manner provided for miscellaneous instruments relating to real estate.
- (c)
- (1)
After the recording of a master form pursuant to subsection (a) any or all of the provisions thereof may be incorporated by reference in a mortgage or deed of trust of real property situated within this state, provided:
- (A)
The master form has been previously recorded in the same county;
- (B)
The reference includes the date, the book volume, and the page or pages where the master form has been recorded; and
- (C)
A copy of the master form has been furnished to each of the persons executing the mortgage or deed of trust; provided, that if the mortgage or deed of trust contains a recitation or acknowledgment that the copy has been furnished, such recitation or acknowledgment shall be conclusive proof that such copy has been furnished.
- (2)
The recording of any mortgage or deed of trust which has so incorporated therein by reference any of the provisions of such master form shall have like effect as if such provisions had been set forth fully in the mortgage or deed of trust.
- (d)
- (1)
Whenever a mortgage or deed of trust is presented for recording which contains a verbatim copy of one (1) or more provisions of a master form previously recorded in the same county in conformity with subsection (a), the register shall not record such copied provisions, nor charge the recording fees therefor, unless requested to re-record the same by the person offering the instrument for recording, notwithstanding any statute or custom requiring the recording of the entirety of any instrument accepted for recording; provided, that:
- (A)
Such mortgage or deed of trust shall, in the portion designated for recording, contain a proper reference to the date, volume, and page of the recording of the master form which contains the copied provisions; and
- (B)
The copied provisions:
- (i)
Are appropriately physically separated from the other provisions in such a way as to make it feasible to omit the same when the recording is done photographically; and
- (ii)
Are appropriately preceded by a notation direction to the effect of “do not record” or “not to be recorded.”
- (2)
Any register of deeds who follows the above procedures in the performance of these duties shall not be liable for so doing, any other law to the contrary notwithstanding.
§ 66-24-118. Deed endorsements regarding deposit of hazardous wastes — Definitions.
- (a)
The register shall, upon receiving notification from the commissioner of environment and conservation that hazardous wastes have been landfilled on property in the county, enter or endorse on the deed the following:
- (1)
The hazardous wastes which are disposed of on such property;
- (2)
The date of the notification of such disposal by the commissioner;
- (3)
The date of the register's entry or endorsement; and
- (4)
The official signature of the register.
- (b)
The entry or endorsement shall be substantially as follows:
-
The commissioner of environment and conservation has determined that the following types of hazardous wastes have been or will be landfilled on this property and has notified this office of such disposal on (month), (day), (year).
-
This day of , 20, Register.
- (c)
The register shall record in the lien books such notifications received from the commissioner.
- (d)
As used in this section:
- (1)
“Landfilled” includes the disposal of such wastes in any settlement pond or lagoon which is not regulated by the division of water quality control and also includes disposal by open dumping; and
- (2)
“Open dumping” means the depositing of solid wastes into a body or stream of water or onto the surface of the ground without compacting the waste and covering with suitable materials as prescribed in the regulations of the department of environment and conservation.
- (e)
This section is to be administered by the division of solid waste management in the department of environment and conservation.
§ 66-24-119. Judgments and writs affecting real estate.
-
Judgments, attachments, orders, injunctions, and other writs affecting title, use or possession of real estate, issued by any court shall be effective against any person having, or later acquiring, an interest in such property who is not a party to the action wherein such judgment, attachment, order, injunction, or other writ is issued only after an appropriate copy or abstract, or a notice of lis pendens, is recorded in the register's office of the county wherein the property is situated. If an abstract is used, the contents shall be as prescribed in § 25-5-108.
§ 66-24-120. Development and sale of real property for residential or commercial purposes in a manner exempt from municipal or county subdivision regulations — Required recording of boundary survey — Failure to comply.
- (a)
If any person develops real property for residential or commercial purposes in a manner which exempts such development from the subdivision regulations of any county or municipality and then sells, transfers or enters into agreements or contracts for the sale of more than two (2) parcels of real property in such development in any calendar year, then such person must record a boundary survey showing the proposed development of the land within thirty (30) days of the sale of the second such parcel of real property.
- (b)
Prima facie evidence of such development includes, but is not limited to, the construction of buildings, the opening of private driveways or the extension of utility services.
- (c)
There is hereby created a civil cause of action for failure to record a boundary survey showing the proposed development of land as provided in this section for any person who discovers such noncompliance. A prevailing plaintiff shall be entitled to liquidated damages in an amount of one hundred dollars ($100) or the cost of obtaining a survey on such property, whichever is greater, plus reasonable attorneys' fees and costs.
- (d)
This section shall only apply in counties having a population of not less than twenty-one thousand five hundred seventy-five (21,575) nor more than twenty-one thousand six hundred seventy-five (21,675) according to the 1980 federal census or any subsequent federal census.
§ 66-24-121. Name, address and license number of surveyor required on certain instruments for registration — Exceptions — Failure to comply.
- (a)
No deed of conveyance of real property, except for a deed of trust or mortgage, shall be prepared unless there is included at the end of the legal description the name, license number and address of the surveyor who prepared the boundary survey from which the description was prepared. However, if no boundary survey was made at the time of conveyance and the legal description is different from the previous deed of record, the source of the new description shall be indicated. If the legal description is the same as in the previous deed of record, it shall be so stated.
- (b)
A failure to comply with the requirements of this section shall not affect the validity of the registration of any registered instrument.
§ 66-24-122. Parcel identification number or affidavit required on deed.
- (a)
A deed or other instrument transferring ownership of real property, but not including a deed of trust or mortgage, shall indicate the parcel identification number assigned by the county assessor of property or a sworn affidavit that such information was requested from the assessor and was not furnished promptly. The registrar of deeds shall accept no deed or other such instrument for recordation unless such information or affidavit is contained on the deed or other such instrument.
- (b)
Nothing contained within this section shall be construed to affect the validity of the underlying transfer or conveyance. If a deed or other instrument is accepted for recordation which does not contain the required parcel identification number or affidavit as aforementioned, then the deed or instrument shall be recorded, and the absence of such number or statement shall in no way affect the preference, priority or legal validity of such deed or other evidence of transfer or the legal validity of the recording of the deed or instrument.
- (c)
Nothing contained within this section shall be construed to affect the validity of the underlying transfer or conveyance. If, through error of the registrar of deeds, a deed or other evidence is accepted for recordation and does not contain the required parcel identification number or derivation clause, then the deed or instrument shall be recorded, and the absence of such number or clause shall in no way affect the preference, priority or legal validity of such deed or other evidence of transfer.
§ 66-24-123. Security trusts — Residence of trustee.
- (a)
For the purposes of this section, “security trust” includes a deed of trust, mortgage, bond or other instrument, entered into after July 1, 1990, under which the title to real or personal property, or both, wholly situated in this state, is conveyed, transferred, encumbered or pledged to secure the payment of money or the performance of an obligation. This section does not apply to security trusts applying to property partly situated in this state and partly situated outside this state, or to property situated in this state which, together with property situated outside this state, is the security for the performance of an obligation; nor shall such provisions apply to the creation, maintenance or administration of such a trust authorized or required by federal law or regulation relating to the governance, administration or regulation of a financial institution.
- (b)
Except as provided in subsection (e):
- (1)
A person not a resident of this state or whose principal place of employment is not in this state; and
- (2)
Any corporation:
- (A)
Not incorporated under the laws of this state or of the United States; and
- (B)
With its principal place of business not in this state;
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may in either case be named or act, in person or by agent or attorney, as the trustee of a security trust, either individually or as one (1) of several trustees, regardless whether one (1) or more of such other trustees qualify to serve pursuant to this section, when and only to the extent that the state, territory or District of Columbia in which such individual resides or, with respect to a corporation, when and only to the extent that the state or states, territory or territories, or District of Columbia in which such corporation is organized and has its principal place of business, grants equivalent authority to residents of this state, individuals whose principal place of employment is in this state, and corporations incorporated under the laws of this state and whose principal place of business is within this state.
- (c)
- (1)
The county, city or town in this state in which such trustee resides shall be sufficient statement of the residence address of such trustee.
- (2)
Notwithstanding any other provisions of this section, if any security trust is admitted by a register of deeds for registration, it shall be conclusively presumed that such security trust complies with all the requirements of this section.
- (d)
All deeds of trusts, mortgages, bonds or other instruments registered by the register of deeds without the residence address of the trustee or trustees named in the instrument shall be valid for all purposes as if such address had been named in the instrument, if such registration is otherwise valid according to the law then in force.
- (e)
This section shall not apply to any person who is the spouse, parent, child, grandchild, brother or sister of the person conveying, transferring, encumbering or pledging title to real or personal property wholly situated in this state to secure the payment of money or the performance of an obligation.
Chapter 25 Release of Liens Created by Written Instruments
Part 1 In General
§ 66-25-101. Requirements for record of release.
- (a)
When a debt secured by a mortgage, deed of trust, or by lien retained in a deed of conveyance of land or bill of sale, or other instrument, has been fully paid or satisfied, the mortgagee, transferee, or assignee of the mortgagee or the legal holder of the debt secured by deed of trust or lien, who has received payment or satisfaction of the debt, must satisfy the record by a formal deed of release.
- (b)
In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census the record may be satisfied by entry on the margin of the record of the mortgage, deed of trust, deed or other instrument.
§ 66-25-102. Penalty for failure to release.
- (a)
If the holder of any debt secured by real property situated in this state fails to enter a proper release of record after having been fully paid or satisfied within forty-five (45) days from the receipt of a written request from the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument or any closing agent or attorney who has collected and transmitted funds for such payment, the holder of the debt shall forfeit to the party making such request the sum of one hundred dollars ($100).
- (b)
If the indebtedness is not released within the forty-five-day period provided in subsection (a), the party having requested the release shall again request the release, and, if after thirty (30) days from the second request, the indebtedness has not been released, the holder shall forfeit to the party making the request a sum not to exceed one thousand dollars ($1,000).
- (c)
In the event suit is instituted to collect either or both of the forfeitures, the holder shall also be liable to the party instituting suit for all reasonable expenses, attorney fees, and the court costs incurred in the action.
§ 66-25-103. Entry of partial payments.
- (a)
- (1)
The mortgagee, or the assignee or the transferee of a debt secured by such instrument, who has accepted partial payments, on request in writing of a judgment creditor or other creditor of the mortgagor having a lien or claim on the property covered by the lien, or the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument, any closing agent or attorney who has collected and transmitted funds for such payment, shall execute and record an instrument of partial or full release, giving the date and the amount of the payment or payments.
- (2)
In any county having a population of not less than thirty-two thousand six hundred (32,600) nor more than thirty-two thousand seven hundred (32,700), according to the 1980 federal census or any subsequent federal census the mortgagee, or the assignee or the transferee of a debt secured by such instrument, who has accepted partial payments, on request in writing of a judgment creditor or other creditor of the mortgagor having a lien or claim on the property covered by the lien, or the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument, any closing agent or attorney who has collected and transmitted funds for such payment, shall execute and record a statement of partial release in the manner and form provided in part 2 of this chapter for a full release, giving the date and amount of such partial payment or payments.
- (b)
The mortgagee, or the assignee or the transferee of a debt secured by real property who has accepted partial payments pursuant to an agreement to release a portion or portions of the property securing the lien of such instrument on request in writing of the party making such payment, including, but not limited to, the maker, the mortgagor, the purchaser of the property covered by such instrument or any closing agent or attorney who has collected and transmitted funds for such payment shall execute and record a formal partial release deed.
- (c)
- (1)
If for thirty (30) days after receipt of the written request set forth in subsections (a) and (b), the mortgagee, or the assignee or transferee of a debt so secured arbitrarily or unreasonably fails to record the statement or partial deed of release set out in subsections (a) and (b), such person shall forfeit to the party making such request the sum of one hundred dollars ($100). If the indebtedness is not released within the thirty-day period, the party having requested the release shall again request the release, and, if after thirty (30) days from the second request, the indebtedness has not been released, the holder shall forfeit to the party making the request a sum not to exceed one thousand dollars ($1,000).
- (2)
In the event suit is instituted to collect either or both of the forfeitures, the holder shall also be liable to the party instituting suit for all reasonable expenses, attorney fees, and the court costs incurred in the action.
§ 66-25-106. Costs paid by lienor — Fees.
- (a)
All costs of making entry of partial or entire payments upon the record, or for registering a formal release, shall be paid by the holder of the debt secured by the mortgage, deed of trust, or other lien.
- (b)
Notwithstanding the obligation of the holder of the debt to make the payment of costs set forth in subsection (a), the holder may assess and collect fees from the borrower of the debt secured by the mortgage, deed of trust, or other lien for all anticipated or actual costs to make entry of partial or entire payments upon the record, or for registering a formal release.
§ 66-25-107. Release or modification of lien by holder of indebtedness.
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Notwithstanding any other provision of this code, any mortgage, deed of trust, deed, or other instrument securing a debt, may be released or modified by the legal holder of the debt secured thereby without the necessity of execution of the release instrument, marginal release, or modification instrument or joinder therein by the trustee under a deed of trust or by other party holding legal title similar to that of the trustee under a deed of trust.
Part 2 Marginal Release of Liens
§ 66-25-201. Marginal release authorized.
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The release on satisfaction of any debt, contract or obligation, secured by mortgage or deed of trust, liens retained upon the face of any deed or conveyance, or any other lien, evidenced by written instrument, probated and registered according to law, and the discharge of any such mortgage, deed of trust, or other lien, may be acknowledged by the payee, creditor, obligee, or holder of such debt, contract, or obligation, or by such person's true and lawful assignee, or by the personal representative of such holder, or the assignee of such representative, by an entry, subscribed in the presence of the register of the county where any such instrument is lawfully registered, on the margin of the record thereof, or by execution in like manner of a statement of release in substantially the form prescribed in § 66-25-202 that may be recorded as a written release to allow for effecting the equivalent of a marginal release where microfilming or photocopy or other permanent recording processes are used, and where so done, the statement of release shall be filed and recorded by the register; provided, that the register is personally acquainted with such holder or person making such release, and shall subscribe the same as a witness, in authentication thereof, which the register's official signature shall conclusively imply. Any such entry, when made in accordance with §§ 66-25-201 — 66-25-203, shall have the same effect as a deed of release or quitclaim, duly executed by the person making the release, authenticated and registered.
§ 66-25-202. Form of marginal release.
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The release may be in substantially the following form:
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I (or we), , declare that I am (or we are) the true and lawful holder (or holders) of the claim (or part of the claim, and specifying what part) secured by the instrument within recorded, and hereby acknowledge the satisfaction thereof and discharge of the lien to secure the same in full (or if one (1) part, or partial amount, state what part). This day of A.D. Attest as to A.B.; C.D., Register.
§ 66-25-203. Execution of marginal release — Fee.
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The entry, except the signature of the person making the release and the attesting signature of the register or the register's deputy, shall be either in the handwriting of the register or the register's deputy or by stamp or both; provided, that the register may charge and collect for the register's services in making the entry, and officially authenticating the same, the sum of three dollars ($3.00).
§ 66-25-204. Marginal release as part of record — Certified copies.
- (a)
Such marginal entry shall, from the time it is made, constitute a part of the record pertaining to such instrument, and shall constitute a part of any transcript of the same thereafter made and certified. Any person having lawful custody of the original instrument, with its certificate of registration, or of a certified transcript made before the release was recorded, may apply to the register who shall on payment of a fee of one dollar ($1.00) certify a true copy thereof upon the original instrument or certified copy previously made.
- (b)
The release, duly certified in any of the methods mentioned in this section, shall be received in evidence in any court in any matter or litigation wherein the same may be material.
§ 66-25-205. Production of instrument evidencing indebtedness before entry of marginal release.
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Any person appearing before the register for the purpose of making a release or partial release of any lien, on the margin opposite any such instrument of record in any book in the registry, shall produce and exhibit to the register, at the time of applying for such release, the original note or other instrument evidencing the indebtedness secured by the lien, or file an affidavit excusing the production thereof upon the ground that same has been lost, destroyed or mislaid, unintentionally.
§ 66-25-206. Endorsement as to marginal release on face of instrument.
- (a)
It is the duty of the register, or the register's deputy, in case such original instrument is produced, to write or stamp, or both, across its face, and to sign officially, a certificate, properly dated, showing that the same has been released, wholly or partially, as the case may be, and specifying the book and page where the release appears.
- (b)
The certificate may be, substantially, in the following form:
-
-
The lien securing this instrument was duly released (in whole or in part, specifying the extent), as appears of record in Deed Book (or Trust Book) , page , in the office of the undersigned.
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This day of , 20.
-
County Register
§ 66-25-207. Affidavit in lieu of production of instrument.
- (a)
In case the lawful owner or holder of the instrument secured, as provided in this part, shall be unable to produce same at the time of making application for such release, on account of same having been lost, destroyed or mislaid, the lawful owner or holder of the instrument secured shall subscribe and swear to an affidavit, before the register or deputy, hereby duly authorized to administer such oaths, stating that such person is the true and lawful owner or holder of the instrument thereby secured, and stating briefly the facts which account for the inability of the owner or holder to produce such instrument.
- (b)
The affidavit, excusing production, shall be substantially in the following form:
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-
State of Tennessee
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County of
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I, , do hereby solemnly swear (or affirm) that I am the true and lawful owner or holder of the note (or other instrument) secured by a lien created by an instrument which is of record in Deed (or Trust) Book , page , of the register's office of County, Tennessee; that I desire to make a marginal release of the lien securing the instrument (in whole or in part, as the case may be — specifying the extent); that the same has been fully paid (wholly or in part, as the case may be — specifying the extent) to me as such lawful owner and holder, and that I am unable to produce the original note (or other instrument) for the following reasons: (Here state briefly the facts showing why the secured instrument cannot be produced for cancellation, and that its loss, etc., was unintentional).
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Owner or Holder of Note
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Sworn to and subscribed before me, this the day of , 20.
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Register or Deputy
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- (c)
Any person who shall willfully swear falsely in the affidavit is guilty of perjury, and liable to the penalty for perjury upon conviction.
- (d)
The affidavit shall be filed with the register, and shall be recorded by the register in a well-bound book to be kept by the register in the register's office, and the original affidavit shall be filed and preserved as a record of the register's office.
- (e)
In case the affidavit is made, the register shall charge a fee of one dollar ($1.00) for filing and recording the same, in addition to the register's fee for attesting the marginal release, these fees to be paid by the party making the release.
- (f)
Upon the making of the affidavit, the register or the register's deputy shall permit a party to make the marginal release upon the record, where the original secured instrument is not produced, this release to be duly attested by the register or the register's deputy.
§ 66-25-208. Procurement of release by forgery or fabrication — Penalties.
- (a)
Any person who produces a fabricated or forged note or other evidence of indebtedness secured by a lien, and procures thereby a release under §§ 66-25-201 — 66-25-206, is guilty of forgery and punishable accordingly.
- (b)
If the true note, or other such evidence of indebtedness be produced, after its fraudulent or felonious obtainment, and the lien thereby procured to be so released, such person is guilty of a felony, with penalty as in case of forgery.
§ 66-25-209. Liability of register for improper release.
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Should the register attest a marginal release without seeing to the compliance with the requirements of this chapter, the register and the sureties on the register's official bond shall be liable to any person injured in consequence thereof.
Chapter 26 Effect of Authentication and Registration
§ 66-26-101. Effect of instruments with or without registration.
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All of the instruments mentioned in § 66-24-101 shall have effect between the parties to the same, and their heirs and representatives, without registration; but as to other persons, not having actual notice of them, only from the noting thereof for registration on the books of the register, unless otherwise expressly provided.
§ 66-26-104. Rights as between transferee of decedent and purchaser from heir or devisee.
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Any such instrument entitled to registration which is not duly registered prior to the expiration of sixty (60) days following the death of the maker of any such instrument shall be null and void as to innocent purchasers for a present valuable consideration from such person or persons as would, but for the execution of the instrument by the decedent, succeed to the rights of the decedent to such property in respect to which such unrecorded instrument was executed; provided, that the holder or any person entitled to the benefit of any such unrecorded instrument shall have a right of action against any such transferors for the reasonable value of any such property transferred, to the extent of the interest of the holder in the property, if brought within one (1) year of the recording of the instrument made by such transferors, if the instrument by which the transfer is made is required to be recorded for the protection of the purchaser under the laws of this state, otherwise the action shall be brought within one (1) year from the consummation of such sale or transfer.
§ 66-26-105. Priority of registered instruments.
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Any instruments first registered or noted for registration shall have preference over one of earlier date, but noted for registration afterwards; unless it is proved in a court of equity, according to the rules of the court, that the party claiming under the subsequent instrument had full notice of the previous instrument.
§ 66-26-106. Presumption as to validity of registration after twenty years.
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Whenever a deed has been registered twenty (20) years or more, the same shall be presumed to have been properly acknowledged or proved, though the certificate of acknowledgement or probate has not been transferred to the registers book, and without regard to the form of the certificate; provided, that an acknowledgment to an instrument which has been of record in the register's office for a period of seven (7) years shall be presumed valid so as to comply with the form of acknowledgments set out in §§ 66-22-107 and 66-22-108.
§ 66-26-107. Presumption as to subscription by grantor after thirty years.
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Where a deed has been registered more than thirty (30) years, but the register has failed to register the name of the grantor or bargainor, it shall be presumed that the name of the grantor or bargainor was subscribed to the deed, and the registration shall be good; and in proving the time when a deed has been registered, the date upon the books may be referred to; or the register may certify the fact as it appears upon the register's books; or the time of registration may be established by parol testimony.
§ 66-26-108. Presumption as to deeds by attorneys after twenty years' registration.
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In all cases where a deed or deeds conveying real estate have been executed by any person or persons purporting to act as attorney or attorneys in fact, which deed or deeds have been registered, whether with or without proper probate or acknowledgment, or any probate or acknowledgment at all, twenty (20) years or more in the register's office of the county where the real estate is situated, or, if the land lay within the Indian territory at the time of the conveyance, if registered in the register's office of any county in the state, it shall be presumed, unless and until the contrary is shown, as it may be, that the conveyance was properly made by the attorney or attorneys in fact, and such deed or deeds, or certified copies from the register's books, shall be deemed valid to pass the legal title to real estate in the same manner as if the same had been executed by the principal or principals; provided, that nothing contained in this section shall affect the rights of creditors or purchasers for valuable consideration without notice.
§ 66-26-109. Presumption as to powers of attorney after twenty years.
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When a power or powers of attorney authorizing the sale or conveyance of real estate have been registered, whether with or without proper probate or acknowledgment, or any probate or acknowledgment at all, twenty (20) years or more in the register's office of the county where the real estate is situated, or, if the land lay within the Indian territory, then if registered in the register's office of any county in the state, such power or powers of attorney shall be deemed good and valid in law to pass the estate conveyed by the attorney or attorneys in fact; provided, that nothing contained in this section shall affect the rights of creditors or purchasers for valuable consideration, without notice.
§ 66-26-110. Registered instruments as evidence — Presumptions and burden of proof regarding signatures on instruments.
- (a)
Any instruments so proved or acknowledged, certified and registered, shall be received as evidence in any of the courts, judicial and administrative tribunals of the state, subject, nevertheless, to be impeached and proved to be a forgery, or to be otherwise inoperative, if the fact be so.
- (b)
In an action with respect to an instrument, the authenticity of and authority to make each signature on the instrument is admitted, unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, and if the instrument is not registered or is not properly acknowledged or proved, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized, unless:
- (1)
The signer is dead or incompetent at the time of trial on the issue of validity of the signature; and
- (2)
The instrument is unregistered or has been registered for fewer than twenty (20) years.
- (c)
Under the presumption set forth in subsection (b), the trier of fact must find that the signature is authentic and authorized, unless evidence to the contrary is introduced.
§ 66-26-111. Proof of instruments registered before 1839.
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Every instrument authorized by law to be registered and proved or acknowledged, and registered prior to October 16, 1839, may be read in evidence:
- (1)
Although the certificate only states that the deed was duly proved, without naming the subscribing witnesses by whom it was so proved; and in such case, the court shall presume that it was duly proved by all the subscribing witnesses, and the probate and registration shall be good, leaving it to the adverse party to disprove the fact;
- (2)
Although the certificate is not and does not purport to be a transcript from the court minutes, if the certificate states enough to authorize the instrument to be registered; and in this case it shall be presumed that the entry on the minutes authorized the certificate by the clerk, unless the contrary be shown;
- (3)
Although the certificate does not mention the term or style of the court at or in which the instrument was proved or acknowledged; and in this case, it shall be presumed that the instrument was proved or acknowledged in the court of which the person giving the certificate was clerk, and the certificate and registration shall be good, unless the contrary be shown;
- (4)
Although the clerk, in the clerk's entry on the minutes and in the clerk's certificate on the document, has omitted to describe or mention the property; and in such case, the probate or acknowledgment and the registration shall be good;
- (5)
Although the certificate only states that the deed was duly acknowledged, but not by whom; in which case, the instrument shall be presumed to have been acknowledged by the maker, and the acknowledgment and registration shall be good; and
- (6)
No such probate or acknowledgment shall be void for want of sufficient certainty therein, if enough is contained on the face of it to identify the instrument to which it applies.
§ 66-26-112. Erroneous recital as to county where land located.
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When a grant from the state for lands recites that the lands so granted are situated in one (1) county when they are in a different county, the grant shall be as valid as if the locality thereof were truly recited in the grant; and any subsequent conveyances of the lands in which they are stated to be situate in a different county from that in which they lie, may be registered in the county in which the lands lie, and such registration shall be valid as if the deeds of conveyance had correctly set forth the locality of the lands; provided, that nothing in this section and §§ 66-26-108 and 66-26-109 shall affect the rights of creditors or purchasers without notice.
§ 66-26-113. Omission of words from certificate.
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The unintentional omission by the clerk or other officer of any words in a certificate of an acknowledgment, or probate of any deed or other instrument, shall in nowise vitiate the validity of the deed, or other instrument or the acknowledgement or probate thereof, but the same shall be good and valid to all intents and purposes, if the substance of the authentication required by law is in the certificate.
§ 66-26-114. Correction of omission.
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If the omission is a matter of substance, the clerk or other officer, on application of either party interested, may correct such mistake or omission of words in such certificate on any such deed or other instrument.
§ 66-26-115. Registration of correction.
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The register shall record the correction in the proper book of the register's office, and make a reference to the same on the margin opposite the original registry of the certificate.
§ 66-26-116. Instruments granting, transferring, pledging or assigning lessors' interests in real property.
- (a)
Upon registration, in the county where the real property lies, of any instrument granting, transferring, pledging or assigning the lessor's interest in leases or rents arising from real property, the interest of the grantee, transferee, pledgee or assignee shall be fully perfected as to the grantor, transferor, pledgor or assignor and all third parties without the necessity of furnishing notice to the assignor or lessee, obtaining possession of the real property, impounding the rents, securing the appointment of a receiver, or taking any other affirmative action, and shall have the priority provided for in this chapter.
- (b)
The lessee is authorized to pay the assignor until the lessee receives notification that rents due or to become due have been assigned and that payment is to be made to the assignee. A notification that does not reasonably identify the rents assigned is ineffective. If requested by the lessee, the assignee must seasonably furnish reasonable proof that the assignment has been made and unless the assignee does so the lessee may pay the assignor.
- (c)
Any registered instrument granting, transferring, pledging or assigning an interest in leases or rents arising from real property shall, upon satisfaction, be released as provided in chapter 25 of this title and shall be subject to the penalties provided in such chapter.
Chapter 27 Multiple Ownership of Property
Part 1 Horizontal Property
§ 66-27-102. Part definitions.
- (a)
As used in this part, unless the context otherwise requires:
- (1)
- (A)
“Apartment” means a part of the property subject to this part intended for any type of independent use, including:
- (i)
- (a)
One (1) or more cubicles of air at one (1) or more levels of space; or
- (b)
One (1) or more rooms or enclosed spaces located on one (1) or more floors, or parts thereof, in a building; or
- (c)
A separate free-standing building of one (1) or more floors; and
- (d)
Any part of open space upon the property clearly delineated for independent use adjacent to and in connection with the use of any of the spaces provided for in subdivisions (a)(1)(A)(i)(a)-(c);
- (ii)
All of which shall have a direct exit to a public street or highway or to a common area or limited common area leading to such street or highway;
- (B)
Where private elements are involved, “apartment” includes the private element;
- (2)
“Condominium” means the ownership of single units in a multiple unit structure or structures with common elements;
- (3)
“Condominium project” means a real estate condominium project; a plan or project whereby two (2) or more apartments, rooms, office spaces, or other units in existing or proposed building or buildings or structure or structures are offered or proposed to be offered for sale;
- (4)
“Co-owner” means a person, firm, corporation, partnership, association, trust or other legal entity, or any combination thereof, which owns an apartment or apartments within the building;
- (5)
“Council of co-owners” means all the co-owners as defined in subdivision (a)(4);
- (6)
“Developer” means a person who undertakes to develop a real estate condominium project;
- (7)
“General common elements” means and includes:
- (A)
The land, whether leased or in fee simple, on which the building stands;
- (B)
The foundations, main walls, roofs, halls, lobbies, stairways, and entrances and exits or communication ways;
- (C)
The basements, flat roofs, yards, and gardens, except as otherwise provided or stipulated;
- (D)
The premises for the lodging of janitors or persons in charge of the building, except as otherwise provided or stipulated;
- (E)
The compartments or installations of central services, such as power, light, gas, cold and hot water, refrigeration, reservoirs, water tanks and pumps, and the like;
- (F)
The elevators, garbage incinerators and, in general, all devices or installations existing for common use; and
- (G)
All other elements of the building rationally of common use or necessary to its existence, upkeep and safety; but where private elements are created, private elements shall not be considered to be general common elements, notwithstanding anything in this section to the contrary;
- (8)
“Limited common elements” means and includes those common elements which are agreed upon by all of the co-owners to be reserved for the use of a certain number of apartments to the exclusion of the other apartments, such as special corridors, stairways and elevators, sanitary services common to the apartments of a particular floor, and the like;
- (9)
“Majority of co-owners” means more than fifty percent (50%) of the co-owners;
- (10)
“Master deed” or “master lease” means the deed or lease recording the property of the horizontal property regime. A declaration will be recorded in the case where private elements are involved; the declaration shall include the covenants, conditions, restrictions and bylaws of the townhouse corporation;
- (11)
“Person” means an individual, firm, corporation, partnership, association, trust or other legal entity, or any combination of these;
- (12)
“Private elements” means and includes the lot area upon which an apartment is located and the improvements located thereon, as described in the declaration, and for which fee simple ownership and exclusive use is reserved to that apartment only. Private elements shall exist only where each apartment in the project has a ground floor and there are no apartments located above or below the private element except the one (1) apartment located thereon. Limited common elements located upon private elements shall be deemed to be private elements;
- (13)
“Property” means and includes the land whether leasehold or in fee simple and the building, all improvements and structures thereon and all easements, rights and appurtenances belonging to such land;
- (14)
“To record” means to record pursuant to the laws of the state of Tennessee relating to the recordation of deeds and other instruments conveying or affecting title to property; and
- (15)
“Townhouse corporation” means a not-for-profit corporation to be organized under the Tennessee Nonprofit Corporation Act, compiled in title 48, chapters 51-68, of which all co-owners shall be members where private elements are involved.
- (b)
All pronouns used in this section include the male, female and neuter genders and include the singular or plural numbers, as the case may be.
§ 66-27-103. Horizontal property regime — Planned unit development — Establishment.
- (a)
Whenever a developer, the sole owner, or the co-owners of a building expressly declare, through the recordation of a master deed or lease, or by plat, which shall set forth the particulars enumerated by § 66-27-107, their desire to submit their property to the regime established by this part, there shall be thereby established a horizontal property regime.
- (b)
If there is substantial compliance with this part as pertaining to private elements, and if an appropriate legal opinion is obtained from an attorney licensed to practice law in this state to the effect that all legal documents required in this part for the creation of a planned unit development are attached and therefore a planned unit development is created under this part, then a planned unit development shall be deemed to have been properly organized and constituted under state law. All planned unit developments shall require a declaration, bylaws, a plat showing private and common elements, a townhouse corporation, charter and an attorney's opinion.
§ 66-27-104. Ownership — Building code compliance.
- (a)
Once the property is submitted to the horizontal property regime, an apartment in the building may be individually conveyed and encumbered and may be the subject of ownership, possession or sale and of all types of juridic acts intervivos or mortis causa, as if it were sole and entirely independent of the other apartments in the building of which they form a part, and the corresponding individual titles and interest shall be recordable.
- (b)
If private elements are created, the original construction of all apartments must substantially comply with local building codes for planned unit developments, established by the appropriate local authorities for planned unit developments. If no appropriate local authority exists, then compliance must be pursuant to the international building code. A certificate from a professional engineer or architect licensed to practice engineering or architecture in this state, to the effect that construction of the apartments is in substantial compliance with such code, shall be sufficient for the attorney to rely upon in giving an opinion.
§ 66-27-105. Joint ownership.
-
Any apartment may be held and owned by more than one (1) person, as tenants in common, as tenants by the entirety, or in any other real estate tenancy relationship recognized under the laws of the state.
§ 66-27-106. Owner's rights — Exclusive and common.
- (a)
An apartment owner shall have an exclusive ownership to the apartment and shall have a common right to share, with other co-owners, in the common elements of the property. Each co-owner may use the elements held in common in accordance with the purpose for which they are intended.
- (b)
If a condominium owner is in compliance with the master deed and by-laws, the charter, and any rules and regulations of the horizontal property regime, then the council of co-owners may not deny that condominium owner use and enjoyment of the general common elements of the property.
§ 66-27-107. Recordation and contents of master deed, lease or declaration.
- (a)
A master deed, or lease or declaration shall be recorded in the same manner and subject to the same law as are deeds. Plats may likewise be recorded as in the case of recordation of plats as provided by law.
- (b)
A master deed, or lease or declaration or the plat, or any combination of them, to which § 66-27-103 refers shall express the following particulars:
- (1)
The description of the land, whether leased or in fee simple, and the building, expressing their respective areas;
- (2)
The general description and number of each apartment, expressing its area, location and any other data necessary for its identification;
- (3)
The description of the general common elements of the building, and the limited common elements of the building, and the private elements of the property; and
- (4)
Bylaws for the administration of the building as in §§ 66-27-111 and 66-27-112 provided.
- (c)
The common elements, both general and limited, shall remain undivided and shall not be the object of an action for partition or division of co-ownership.
- (d)
The declaration shall provide that each owner of a private element shall own a pro rata share of the total membership in the townhouse corporation.
§ 66-27-108. Recordation and conveyance of apartments.
- (a)
The deed of each individual apartment shall be recorded in the same manner and subject to the same law as are deeds. Likewise shall mortgages of each individual apartment be recorded subject to the law applicable to the recording of mortgages. Likewise shall other instruments conveying or affecting title to individual apartments be recorded as in the case of recording of such instruments affecting title to real property.
- (b)
Any conveyance of an individual apartment shall be deemed to also convey the undivided interest of the owner in the common elements, both general and limited, appertaining to that apartment without specifically or particularly referring to the same. In the case of private elements, a conveyance shall be deemed to convey the undivided membership of the private element owner in the townhouse corporation.
§ 66-27-109. Merger of filial estates with principal property.
-
All of the co-owners or the sole owner of a building constituted into a horizontal property regime may by deed waive this regime and regroup or merge the records of the filial estates with the principal property; provided, that the filial estates are unencumbered, or if encumbered, that the creditors in whose behalf the encumbrances are recorded accept as security the undivided portions of the property owned by the debtors.
§ 66-27-111. Administrative bylaws recorded.
-
The administration of every building constituted into horizontal property shall be governed by bylaws which shall be inserted in or appended to and recorded with the master deed or declaration, as the case may be.
§ 66-27-112. Contents of bylaws — Modification.
- (a)
The bylaws must necessarily provide for at least the following:
- (1)
Form of administration, indicating whether this shall be in charge of an administrator or of a board of administration, or otherwise, and specifying the powers, manner of removal, and, where proper, the compensation of such administrator, board of administration, or otherwise;
- (2)
Method of calling or summoning the co-owners to assembly; that a majority of co-owners is required to adopt decisions; who is to preside over the meeting and who will keep the minute book wherein the resolutions shall be recorded;
- (3)
Care, upkeep and surveillance of the building and its general or limited common elements and services;
- (4)
Manner of collecting from the co-owners for the payment of the common expenses; and
- (5)
Designation and dismissal of the personnel necessary for the works and the general or limited common services of the building.
- (b)
The sole owner of the building, or if there is more than one (1), the co-owners representing two-thirds (⅔) of the total apartments of the building, may at any time modify the system of administration, but each one (1) of the particulars set forth in this section shall always be embodied in the bylaws. No such modification may be operative until it is embodied in a recorded instrument which shall be recorded in the same office and in the same manner as was the master deed or lease or plat and original bylaws of the horizontal property regime involved.
§ 66-27-113. Administrator's books — Examination by co-owners.
- (a)
The administrator, or the board of administration, or other form of administration specified in the bylaws, shall keep a book with a detailed account, in chronological order, of the receipts and expenditures affecting the building and its administration and specifying the maintenance and repair expenses of the common elements and any other expenses incurred.
- (b)
Both the book and the vouchers accrediting the entries made thereupon shall be available for examination by all the co-owners at convenient hours on working days that shall be set and announced for general knowledge.
§ 66-27-114. Expenses prorated — No exemptions.
- (a)
The co-owners of the apartments are bound to contribute pro rata toward the expenses of administration and of maintenance and repair of the general common elements, and, in the proper case, of the limited common elements, of the building, and toward any other expense lawfully agreed upon.
- (b)
No co-owner may be exempted from contributing toward the expenses in subsection (a) by waiver of the use or enjoyment of the common elements or by abandonment of the apartment belonging to that co-owner or by any other means.
§ 66-27-115. Homestead provisions applicable.
-
The provisions of Constitution of Tennessee, Article XI, § 11 relating to homestead and exemptions and the acts of the general assembly pertaining to or implementing the constitutional provisions shall be applicable to individual apartments which shall have the benefit of such exemptions in those cases the same as in ownership of any other property, and shall inure to the benefit of the owners of such apartments, that is to say, that individual apartments in a horizontal property regime are declared to be homesteads within the purview of Constitution of Tennessee, Article XI, § 11.
§ 66-27-116. Prorated expenses and taxes — Lien.
-
The sale or conveyance of an apartment shall in all cases be subject to all unpaid assessments against the owner thereof for such owner's pro rata share in the expenses to which § 66-27-114 refers and, if the same are not paid by the owner thereof prior to sale or conveyance, shall be a lien against the apartment and shall be paid by the new owner of the apartment. Likewise shall taxes and other levies and assessments by governmental taxing bodies be a lien against individual apartments.
§ 66-27-117. Building insurance.
-
The co-owners may, upon resolution of a majority, insure the building against risks, without prejudice to the right of each co-owner to insure such co-owner's apartment on such co-owner's own account and for co-owner's own benefit.
§ 66-27-118. Reconstruction of damaged building.
- (a)
In case of fire or any other disaster, the insurance indemnity shall, except as provided in subsection (b), be applied to reconstruct the building.
- (b)
Reconstruction shall not be compulsory where it comprises the whole or more than two-thirds (⅔) of the building. In such case, and unless otherwise unanimously agreed upon by the co-owners, the indemnity shall be delivered pro rata to the co-owners entitled to it in accordance with provision made in the bylaws or in accordance with a decision of three-fourths (¾) of the co-owners if there are no bylaw provisions.
- (c)
Should it be proper to proceed with the reconstruction, the provisions for such eventuality made in the bylaws shall be observed, or in lieu thereof, the decision of the council of co-owners shall prevail.
§ 66-27-119. Costs of reconstruction.
- (a)
Where the building is not insured or where the insurance indemnity is insufficient to cover the cost of reconstruction, the new building costs shall be paid by all the co-owners directly affected by the damage, in proportion to the value of their respective apartments, or as may be provided by the bylaws; and if any one (1) or more of those composing the minority shall refuse to make such payments, the majority may proceed with the reconstruction at the expense of all the co-owners benefited thereby, upon proper resolution setting forth the circumstances of the case and the cost of the works, with the intervention of the council of co-owners.
- (b)
This section may be changed by unanimous resolution of the parties concerned, adopted subsequent to the date on which the fire or other disaster occurred.
§ 66-27-120. Identification of estates for taxation, residential ground rent purposes.
- (a)
Taxes, assessments and other charges of any taxing unit of this state, or of any political subdivision, or any other taxing or assessing authority shall be assessed against and collected on each individual apartment, each of which shall be carried on the tax books as a separate and distinct entity for that purpose, and not on the building or property as a whole. The valuation of the general and limited common elements shall be assessed proportionately among the co-owners of the apartment. The valuation of private elements shall be assessed against the individual owner of the private elements. No forfeiture or sale of the building or property as a whole for delinquent taxes, assessments or charges shall ever divest or in anywise affect the title to an individual apartment so long as taxes, assessments and charges to that individual apartment are currently paid.
- (b)
When any ground lease affects the underlying land upon which a condominium project is located or is to be located, and if the ground lease so provides, then each apartment and its respective share of the common elements shall be deemed to be and shall be treated as a separate leasehold estate responsible for such taxes, assessments or other charges, as well as such apartment's share of ground rent which might be charged under such ground lease. Such taxes, assessments and charges, as well as such pro rata share of ground rent, shall be the obligation of the respective apartment owner during such owner's tenure as owner and shall be subject to the lien provided in § 66-27-116.
- (c)
If a ground lessor and a developer have entered into a ground lease of underlying land whereon the developer intends to develop a condominium project, and if the ground lease is one in which a “residential ground rent” is created under chapter 30 of this title, individual apartments and their respective pro rata or otherwise allocated share of general common elements shall be deemed to be separate leasehold estates, and the ground lessor shall agree in all such ground leases that the owners of the individual apartments shall be separate and independent obligors under such ground lease and that the default of one (1) apartment owner shall not be deemed to be a default of all apartment owners in the condominium project. Only those individual apartment owners who default on their allocated share of obligations to the ground lessor, as the same are determined in the master deed, master lease or such ground lease, shall be deemed to be in default with the ground lessor. The ground lessor's remedies are limited to suit and satisfaction of such default from the defaulting apartment owner, the defaulting owner's apartment, and the defaulting owner's allocated interest in the general common elements. The only positive covenant obligations which any apartment owner shall have to the ground lessor shall be:
- (1)
Payment of pro rata or allocated share of ground rent; and
- (2)
Payment of pro rata or allocated share of real estate taxes and assessments on the underlying land. The terms and conditions of this subsection (c) shall apply only to agreements creating residential ground rents, where the land is intended by the developer to be developed into condominiums. Any other positive covenant obligations of the obligor, as defined in § 66-30-102, that arises under the ground lease shall be deemed to have been satisfied during the period of construction and development prior to the time that the ground lease allows the closing of the sale of the first apartment. If there are any negative covenant obligations under such ground lease, then they shall be enforceable only against the individual apartment owner in violation thereof and only to the extent that such obligations are reasonably the obligation of an individual apartment owner.
§ 66-27-121. Supplemental rules and regulations.
-
Whenever they deem it proper, the planning and zoning commission of any county or municipality may adopt supplemental rules and regulations governing a horizontal property regime established under this part in order to implement this program.
§ 66-27-122. Construction with other laws.
-
This part shall be in addition to and supplemental to all other laws of the state; provided, that wherever the application of this part conflicts with the application of such other laws, this part shall prevail.
§ 66-27-123. Notice to tenant of intent to convert rental units to units for sale.
- (a)
All owners or lessors of buildings, apartments, rooms, office spaces, or other units, all of which terms in this section shall be referred to as units or unit, which are presently being occupied by one (1) or more persons under a lease or other rental agreement, shall give each tenant at least two (2) months' actual notice of such owner's or lessor's intent to convert such tenant's unit from a rental unit to a condominium, condominium project or other unit which is offered or proposed to be offered for sale. The notice shall specify that the tenant has the right to continue renting such unit at the same rental rate until the expiration of the two-month notice period required by this section.
- (b)
No sale of a unit which was converted from a rental unit to a unit offered for sale to a person other than the tenant last renting such unit shall be valid unless such tenant has received two (2) months' actual notice of the owner's or lessor's intent to convert such unit. This provision shall apply regardless of whether the tenant's lease or other rental agreement expires prior to the end of the two-month notice period.
- (c)
If an owner or lessor converts a rental unit to a unit offered for sale without giving the tenant of such unit at least two (2) months' actual notice of the conversion, such tenant may elect to remain, with or without a lease, in the unit at the same rental rate until the expiration of a two-month period from the date the tenant received such actual notice or the tenant may vacate the unit immediately upon receiving such actual notice and the owner or lessor shall pay such tenant all reasonable expenses incurred in moving to another location. If a tenant is in a position to make the election provided by this subsection (c) and does not vacate the premises immediately, the owner or lessor shall not be obligated to pay the tenant's moving expenses. The election provided by this subsection (c) shall apply regardless of whether the tenant's lease or other rental agreement has or would have expired prior to the end of the two-month notice period.
- (d)
If it is necessary for a tenant to institute a court action to enforce this section and the tenant is the prevailing party, the court shall require the owner or lessor to reimburse the tenant for all reasonable costs incurred in bringing such action, including attorney fees, and shall tax all court costs against the owner or lessor.
- (e)
This section shall apply to all units which are converted from rental units to units offered for sale on or after December 1, 1979; provided, that this section shall apply only to Class 1 and Class 2 counties as established by § 8-24-101.
Part 2 Tennessee Condominium Act of 2008 — General Provisions
§ 66-27-201. Short title.
-
This part and parts 3-5 of this chapter shall be known and may be cited as the “Tennessee Condominium Act of 2008.”
§ 66-27-202. Applicability.
- (a)
This part and parts 3-5 of this chapter apply to all condominiums created within this state after January 1, 2009. Sections 66-27-205 — 66-27-207; 66-27-303; 66-27-304; 66-27-402(a)(1)-(6) and (11)-(16); 66-27-411; 66-27-414(g); 66-27-415; 66-27-417; part 5 of this chapter; and § 66-27-203, to the extent necessary in construing any of the sections listed in this subsection (a), apply to all condominiums created in this state before January 1, 2009; but those sections apply only with respect to events and circumstances occurring after January 1, 2009, and, with the exception of § 66-27-414(g), do not invalidate or supersede existing provisions of the master deed, master lease, declaration, bylaws or plats of those condominiums existing on January 1, 2009.
- (b)
Part 1 of this chapter does not apply to condominiums created after January 1, 2009, and does not invalidate any amendment adopted after January 1, 2009, to the master deed, bylaws, or plats of any condominium created before January 1, 2009, if the amendment would be permitted by this part and parts 3-5 of this chapter. The amendment must be adopted in conformity with the procedures and requirements specified by those instruments and by part 1 of this chapter. If the amendment grants to any person any rights, powers, or privileges permitted by this part and parts 3-5 of this chapter, all correlative obligations, liabilities, and restrictions in this part and parts 3-5 of this chapter also apply to that person.
- (c)
Condominiums existing before January 1, 2009, may elect to be governed by this part and parts 3-5 of this chapter in their entirety by amending and restating their then existing master deed, bylaws, and plat or plats in a manner that satisfies the requirements of subsection (b) and any additional requirements applicable to a condominium created under this part and parts 3-5 of this chapter. Condominiums created before January 1, 2009, may elect to be governed by this part and parts 3-5 of this chapter by specifically electing to do so in their master deed, master lease, or declaration and by satisfying all requirements applicable to a condominium created under this part and parts 3-5 of this chapter.
- (d)
This part and parts 3-5 of this chapter do not apply to condominiums or units located outside this state.
§ 66-27-203. Definitions for parts 2–5. [Effective on January 1, 2024. See the version effective until January 1, 2024.]
-
In the declaration and bylaws, unless specifically provided otherwise or the context otherwise requires, and in this part and parts 3-5 of this chapter:
- (1)
- (A)
“Affiliate of a declarant” means any person who controls, is controlled by, or is under common control with a declarant;
- (B)
A person “controls” a declarant if the person:
- (i)
Is a general partner, officer, director, manager or managing member, or employer of the declarant;
- (ii)
Directly or indirectly or acting in concert with one (1) or more other persons, or through one (1) or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent (20%) of the voting interest in the declarant; or
- (iii)
Controls in any manner the election of a majority of the directors, managers, or managing members of the declarant;
- (C)
A person “is controlled by” a declarant if the declarant:
- (i)
Is a general partner, officer, director, manager, managing member or employer of the person;
- (ii)
Directly or indirectly or acting in concert with one (1) or more other persons, or through one (1) or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent (20%) of the voting interest in the person; or
- (iii)
Controls in any manner the election of a majority of the directors, managers, or managing members of the person;
- (D)
Control does not exist if the powers described in this subdivision (1) are held solely as security for an obligation and are not exercised;
- (2)
“Allocated interests” means the undivided interest in the common elements, the common expense liability, and votes in the association allocated to each unit;
- (3)
“Association” means the unit owners' association organized under § 66-27-401;
- (4)
“Board of directors” means the body, regardless of name, designated in the declaration to act on behalf of the association;
- (5)
“Common elements” means all portions of a condominium other than the units;
- (6)
“Common expense liability” means the liability for common expenses allocated to each unit pursuant to § 66-27-307;
- (7)
“Common expenses” means actual or anticipated expenditures made by or financial liabilities of the association, together with any allocations to reserves;
- (8)
“Condominium” means real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those portions by the recording of a declaration pursuant to the terms of this part and parts 3-5 of this chapter. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners pursuant to a declaration recorded under this part and parts 3-5 of this chapter or prior law applicable to the declaration;
- (9)
“Conversion building” means a building that at any time before creation of the condominium was occupied wholly or partially by persons other than purchasers;
- (10)
“Declarant” means any person or group of persons acting in concert who:
- (A)
As part of a common promotional plan, offers to dispose of the person's or group’s interest in a unit not previously disposed of, and files a declaration pursuant to this part and parts 3-5 of this chapter; or
- (B)
Reserves or succeeds to any special declarant or development right;
- (11)
“Declaration” means any instruments, however denominated, that create a condominium, and any amendments to those instruments;
- (12)
“Development rights” means any right or combination of rights reserved by a declarant in the declaration:
- (A)
To add real estate to a condominium;
- (B)
To create units, common elements, or limited common elements within a condominium;
- (C)
To allocate limited common elements, other than those described in §§ 66-27-302 and 66-27-304, to specific units;
- (D)
To grant licenses for parties who are not unit owners to use portions of the common elements or limited common elements, subject to an obligation to pay an equitable share of the common expenses attributable to the licensed common elements or limited common elements;
- (E)
To the extent not otherwise permitted as a right held by unit owners as provided in § 66-27-313(a), to subdivide units or convert units into common elements; or
- (F)
To withdraw real estate from a condominium;
- (13)
“Dispose” or “disposition” means a voluntary transfer to a purchaser of any legal or equitable interest in a unit, but does not include the transfer or release of a security interest;
- (14)
“Identifying number” means a symbol, name, or address that identifies only one (1) unit in a condominium;
- (15)
“Leasehold condominium” means a condominium in which all or a portion of the real estate is subject to a lease, the expiration or termination of which will terminate the condominium or reduce its size;
- (16)
“Limited common element” means a portion of the common elements allocated by the declaration or by operation of § 66-27-302(2) or (4) for the exclusive use of one (1) or more, but fewer than all, of the units;
- (17)
“Master association” means an organization described in § 66-27-321, whether or not it is also an association described in § 66-27-401;
- (18)
“Person” means a natural person, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision or agency, or other legal or commercial entity;
- (19)
“Purchaser” means any person, other than a declarant, who by means of a contract or voluntary transfer acquires a legal or equitable interest in a unit other than:
- (A)
A leasehold interest, including renewal options, of less than twenty (20) years; or
- (B)
As security for an obligation, or in connection with the enforcement of an obligation;
- (20)
“Real estate” means any leasehold or other estate or interest in, over, or under land, including structures, fixtures, and other improvements and interests that by custom, usage, or law pass with a conveyance of land, though not described in the contract of sale or instrument of conveyance. “Real estate” includes parcels with or without upper or lower boundaries, and spaces that may be filled with air or water;
- (21)
“Reserve study” means an analysis, prepared in conformity with the latest edition of the Reserve Study Standards published by the Community Associations Institute, or similar standards by another nationally recognized organization, by a reserve specialist who is credentialed through the Community Associations Institute or a similarly recognized organization, or a licensed engineer or architect, performed or updated within the last five (5) years, of the remaining useful life and the estimated cost to replace each separate system and component of the common elements, the purpose of which is to inform association members and the association's board of the amount that should be maintained from year to year in a fully funded repair and replacement reserve to minimize the need for special assessments;
- (22)
“Residential purposes” means use for dwelling or non-commercial recreational purposes, or both;
- (23)
“Special declarant rights” means rights, reserved for the benefit of a declarant:
- (A)
To complete improvements indicated on plats and plans filed with the declaration pursuant to § 66-27-309;
- (B)
To exercise any development right pursuant to § 66-27-310;
- (C)
To maintain sales offices, management offices, signs advertising the condominium, and models pursuant to § 66-27-315;
- (D)
To use easements through the common elements for the purpose of making improvements within the condominium or within real estate that may be added to the condominium pursuant to § 66-27-316;
- (E)
To make the condominium part of a larger condominium or a planned community pursuant to § 66-27-323;
- (F)
To make the condominium subject to a master association pursuant to § 66-27-321;
- (G)
To appoint or remove any officer of the association or any master association or any member of the board of directors during any period of declarant control pursuant to § 66-27-403(c); or
- (H)
To exercise any other rights reserved to the declarant in the declaration;
- (24)
“Unit” means a physical portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described pursuant to § 66-27-305(a)(4); and
- (25)
“Unit owner” means a declarant or other person who owns a unit, or a lessee of a unit in a leasehold condominium whose lease expires simultaneously with any lease, the expiration or termination of which will remove the unit from the condominium, but does not include a person having an interest in a unit solely as security for an obligation.
§ 66-27-203. Definitions for parts 2–5. [Effective until January 1, 2024. See the version effective on January 1, 2024.]
-
In the declaration and bylaws, unless specifically provided otherwise or the context otherwise requires, and in this part and parts 3-5 of this chapter:
- (1)
- (A)
“Affiliate of a declarant” means any person who controls, is controlled by, or is under common control with a declarant;
- (B)
A person “controls” a declarant if the person:
- (i)
Is a general partner, officer, director, manager or managing member, or employer of the declarant;
- (ii)
Directly or indirectly or acting in concert with one (1) or more other persons, or through one (1) or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent (20%) of the voting interest in the declarant; or
- (iii)
Controls in any manner the election of a majority of the directors, managers, or managing members of the declarant;
- (C)
A person “is controlled by” a declarant if the declarant:
- (i)
Is a general partner, officer, director, manager, managing member or employer of the person;
- (ii)
Directly or indirectly or acting in concert with one (1) or more other persons, or through one (1) or more subsidiaries, owns, controls, holds with power to vote, or holds proxies representing, more than twenty percent (20%) of the voting interest in the person; or
- (iii)
Controls in any manner the election of a majority of the directors, managers, or managing members of the person;
- (D)
Control does not exist if the powers described in this subdivision (1) are held solely as security for an obligation and are not exercised;
- (2)
“Allocated interests” means the undivided interest in the common elements, the common expense liability, and votes in the association allocated to each unit;
- (3)
“Association” means the unit owners' association organized under § 66-27-401;
- (4)
“Board of directors” means the body, regardless of name, designated in the declaration to act on behalf of the association;
- (5)
“Common elements” means all portions of a condominium other than the units;
- (6)
“Common expense liability” means the liability for common expenses allocated to each unit pursuant to § 66-27-307;
- (7)
“Common expenses” means actual or anticipated expenditures made by or financial liabilities of the association, together with any allocations to reserves;
- (8)
“Condominium” means real estate, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those portions by the recording of a declaration pursuant to the terms of this part and parts 3-5 of this chapter. Real estate is not a condominium unless the undivided interests in the common elements are vested in the unit owners pursuant to a declaration recorded under this part and parts 3-5 of this chapter or prior law applicable to the declaration;
- (9)
“Conversion building” means a building that at any time before creation of the condominium was occupied wholly or partially by persons other than purchasers;
- (10)
“Declarant” means any person or group of persons acting in concert who:
- (A)
As part of a common promotional plan, offers to dispose of the person's or group’s interest in a unit not previously disposed of, and files a declaration pursuant to this part and parts 3-5 of this chapter; or
- (B)
Reserves or succeeds to any special declarant or development right;
- (11)
“Declaration” means any instruments, however denominated, that create a condominium, and any amendments to those instruments;
- (12)
“Development rights” means any right or combination of rights reserved by a declarant in the declaration:
- (A)
To add real estate to a condominium;
- (B)
To create units, common elements, or limited common elements within a condominium;
- (C)
To allocate limited common elements, other than those described in §§ 66-27-302 and 66-27-304, to specific units;
- (D)
To grant licenses for parties who are not unit owners to use portions of the common elements or limited common elements, subject to an obligation to pay an equitable share of the common expenses attributable to the licensed common elements or limited common elements;
- (E)
To the extent not otherwise permitted as a right held by unit owners as provided in § 66-27-313(a), to subdivide units or convert units into common elements; or
- (F)
To withdraw real estate from a condominium;
- (13)
“Dispose” or “disposition” means a voluntary transfer to a purchaser of any legal or equitable interest in a unit, but does not include the transfer or release of a security interest;
- (14)
“Identifying number” means a symbol, name, or address that identifies only one (1) unit in a condominium;
- (15)
“Leasehold condominium” means a condominium in which all or a portion of the real estate is subject to a lease, the expiration or termination of which will terminate the condominium or reduce its size;
- (16)
“Limited common element” means a portion of the common elements allocated by the declaration or by operation of § 66-27-302(2) or (4) for the exclusive use of one (1) or more, but fewer than all, of the units;
- (17)
“Master association” means an organization described in § 66-27-321, whether or not it is also an association described in § 66-27-401;
- (18)
“Person” means a natural person, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision or agency, or other legal or commercial entity;
- (19)
“Purchaser” means any person, other than a declarant, who by means of a contract or voluntary transfer acquires a legal or equitable interest in a unit other than:
- (A)
A leasehold interest, including renewal options, of less than twenty (20) years; or
- (B)
As security for an obligation, or in connection with the enforcement of an obligation;
- (20)
“Real estate” means any leasehold or other estate or interest in, over, or under land, including structures, fixtures, and other improvements and interests that by custom, usage, or law pass with a conveyance of land, though not described in the contract of sale or instrument of conveyance. “Real estate” includes parcels with or without upper or lower boundaries, and spaces that may be filled with air or water;
- (21)
“Residential purposes” means use for dwelling or non-commercial recreational purposes, or both;
- (22)
“Special declarant rights” means rights, reserved for the benefit of a declarant:
- (A)
To complete improvements indicated on plats and plans filed with the declaration pursuant to § 66-27-309;
- (B)
To exercise any development right pursuant to § 66-27-310;
- (C)
To maintain sales offices, management offices, signs advertising the condominium, and models pursuant to § 66-27-315;
- (D)
To use easements through the common elements for the purpose of making improvements within the condominium or within real estate that may be added to the condominium pursuant to § 66-27-316;
- (E)
To make the condominium part of a larger condominium or a planned community pursuant to § 66-27-323;
- (F)
To make the condominium subject to a master association pursuant to § 66-27-321;
- (G)
To appoint or remove any officer of the association or any master association or any member of the board of directors during any period of declarant control pursuant to § 66-27-403(c); or
- (H)
To exercise any other rights reserved to the declarant in the declaration;
- (23)
“Unit” means a physical portion of the condominium designated for separate ownership or occupancy, the boundaries of which are described pursuant to § 66-27-305(a)(4); and
- (24)
“Unit owner” means a declarant or other person who owns a unit, or a lessee of a unit in a leasehold condominium whose lease expires simultaneously with any lease, the expiration or termination of which will remove the unit from the condominium, but does not include a person having an interest in a unit solely as security for an obligation.
§ 66-27-204. Variation by agreement.
-
Except as expressly provided in this part and parts 3-5 of this chapter, this part and parts 3-5 of this chapter may not be varied by agreement, and rights conferred by this part and parts 3-5 of this chapter may not be waived. A declarant may not act under a power of attorney, or use any other device, to evade the limitations or prohibitions of this part and parts 3-5 of this chapter or the declaration.
§ 66-27-205. Separate titles and taxation.
- (a)
If there is any unit owner other than a declarant, each unit that has been created, together with its interest in the common elements, constitutes for all purposes a separate parcel of real estate.
- (b)
If there is any unit owner other than a declarant, each unit must be separately taxed and assessed, and no separate tax or assessment may be rendered against any common elements.
- (c)
If there is no unit owner other than a declarant, the real estate comprising the condominium may be taxed and assessed in any manner provided by law.
§ 66-27-206. Applicability of local ordinances, regulations, and building codes.
-
A zoning, subdivision, building code, or other real estate use law, ordinance, or regulation may not prohibit the condominium form of ownership or impose any requirement upon a condominium that it would not impose upon a physically identical development under a different form of ownership. Otherwise, no provision of this part and parts 3-5 of this chapter invalidates or modifies any zoning, subdivision, building code, or other real estate use law, ordinance, or regulation.
§ 66-27-207. Eminent domain.
- (a)
If a unit is acquired by eminent domain, or if part of a unit is acquired by eminent domain leaving the unit owner with a remnant that may not practically or lawfully be used for all purposes permitted by the declaration, the award must compensate the unit owner for the unit owner's unit and its interest in the common elements, whether or not any common elements are acquired. Upon acquisition, unless the decree otherwise provides, that unit's allocated interests are automatically reallocated to the remaining units in proportion to the respective allocated interests of those units before the taking, and the association shall promptly prepare, execute, and record an amendment to the declaration reflecting the reallocations. Any remnant of a unit remaining after part of a unit is taken under this subsection (a) is thereafter a common element.
- (b)
Except as provided in subsection (a), if part of a unit is acquired by eminent domain, the award must compensate the unit owner for the reduction in value of the unit and its interest in the common elements, whether or not any common elements are acquired. Upon acquisition, unless the decree otherwise provides that a unit's allocated interests are reduced in proportion to the reduction in the size of the unit, or on any other basis specified in the declaration, the portion of the allocated interests divested from the partially acquired unit are automatically reallocated to that unit and the remaining units in proportion to the respective allocated interests of those units before the taking, with the partially acquired unit participating in the reallocation on the basis of its reduced allocated interests.
- (c)
If part of the common elements is acquired by eminent domain, the portion of the award attributable to the common elements taken must be paid to the association. Unless the declaration provides otherwise, any portion of the award attributable to the acquisition of a limited common element must be equally divided among the owners of the units to which that limited common element was allocated at the time of acquisition.
- (d)
The court decree shall be recorded in every county in which any portion of the condominium is located.
§ 66-27-208. Supplemental general principles of law applicable.
-
The principles of law and equity, including the law of corporations and unincorporated associations and limited liability companies, the law of real property and the law relative to capacity to contract, principal and agent, eminent domain, estoppel, fraud, misrepresentation, duress, coercion, mistake, receivership, substantial performance, or other validating or invalidating cause supplement this part and parts 3-5 of this chapter, except to the extent inconsistent with this part and parts 3-5 of this chapter.
§ 66-27-209. Construction against implicit repeal.
-
This part and parts 3-5, being general parts intended as a unified coverage of their subject matter, no part of them shall be construed to be implicitly repealed by subsequent legislation if that construction can reasonably be avoided.
§ 66-27-210. Severability.
-
If any provision of this part and parts 3-5 of this chapter or the application of any provision to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this part and parts 3-5 of this chapter that can be given effect without the invalid provisions or applications, and to this end the provisions of this part and parts 3-5 of this chapter are severable.
§ 66-27-211. Enforcement.
-
In addition to any other remedy provided by the declaration, any right or obligation declared by this part and parts 3-5 of this chapter is enforceable by judicial proceeding. If any person subject to this part and parts 3-5 of this chapter fails to comply with this part and parts 3-5 of this chapter or any provision of the declaration or bylaws, any person or class of persons adversely affected by the failure to comply has a claim for appropriate relief. The court, in an appropriate case involving willful failure to comply with this part and parts 3-5 of this chapter, or any provision of the declaration or bylaws, may award reasonable attorney's fees.
Part 3 Tennessee Condominium Act of 2008 — Units and Allocation of Common and Limited Elements
§ 66-27-301. Creation of condominium.
- (a)
A condominium may be created pursuant to part 2, this part and parts 4 and 5 of this chapter only by recording a declaration executed in the same manner as a deed. The declaration shall be recorded in every county in which any portion of the condominium is located, and shall be indexed in the grantee's index in the name of the condominium and the association and in the grantor's index in the name of each person executing the declaration. The name and address of the preparer shall appear as required by § 66-24-115.
- (b)
A residential unit that shares a horizontal boundary with another unit, other than a unit that is subject to retained development rights, may not be conveyed to a purchaser until all structural components and mechanical systems of all buildings containing or comprising the unit are substantially completed.
§ 66-27-302. Unit boundaries.
-
Except as provided by the declaration:
- (1)
If walls, floors or ceilings are designated as boundaries of a unit, all lath, furring, wallboard, plasterboard, plaster, paneling, tiles, wallpaper, paint, finished flooring, and any other materials constituting any part of the finished surfaces of the walls, floor or ceilings are a part of the unit, and all other portions of the walls, floors, or ceilings are a part of the common elements;
- (2)
If any chute, flue, duct, wire, conduit, bearing wall, bearing column, or any other fixture lies partially within and partially outside the designated boundaries of a unit, any portion of the chute, flue, duct, wire, conduit, bearing wall, bearing column, or other fixture serving only that unit is a limited common element allocated solely to that unit, and any portion of the chute, flue, duct, wire, conduit, bearing wall, bearing column, or other fixture serving more than one (1) unit or any portion of the common elements is a part of the common elements;
- (3)
Subject to subdivision (2), all spaces, interior partitions, and other fixtures and improvements within the boundaries of a unit are a part of the unit; and
- (4)
Any shutters, awnings, window boxes, doorsteps, stoops, porches, balconies, patios, and all exterior doors and windows or other fixtures designed to serve a single unit, but located outside the unit's boundaries, are limited common elements allocated exclusively to that unit.
§ 66-27-303. Construction and validity of declaration and bylaws.
- (a)
All provisions of the declaration and bylaws are severable.
- (b)
The rule against perpetuities may not be applied to defeat any provision of the declaration, or the bylaws, rules, or regulations adopted pursuant to § 66-27-402(a)(1).
- (c)
In the event of a conflict between the declaration and the bylaws, the declaration prevails except to the extent the declaration is inconsistent with part 2, this part and parts 4 and 5 of this chapter.
- (d)
Title to a unit and common elements is not rendered unmarketable or otherwise affected by reason of an insubstantial failure of the declaration to comply with part 2, this part and parts 4 and 5 of this chapter. Whether a substantial failure impairs marketability is not affected by part 2, this part and parts 4 and 5 of this chapter.
§ 66-27-304. Description of units.
-
A description of a unit that sets forth the name of the condominium, the recording data for the declaration, the county in which the condominium is located, and the identifying number of the unit, is a sufficient legal description of that unit and all rights, obligations, and interests appurtenant to that unit that were created by the declaration or bylaws.
§ 66-27-305. Contents of declaration.
- (a)
The declaration for a condominium must contain:
- (1)
The name of the condominium, which must include the word “condominium” or be followed by the words “a condominium”, and the association;
- (2)
The name of every county in which any part of the condominium is situated;
- (3)
A legally sufficient description of the real estate included in the condominium, including a recital pursuant to § 66-24-110;
- (4)
A description of the boundaries of each unit created by the declaration, including the unit's identifying number;
- (5)
A description of any limited common elements, other than those specified in § 66-27-302(2) and (4), as provided in § 66-27-309(b)(10);
- (6)
A description of any real estate, except real estate subject to development rights, that may be allocated subsequently as limited common elements, other than limited common elements specified in § 66-27-302(2) and (4), together with a statement that they may be so allocated;
- (7)
A description of any development rights and other special declarant rights as defined by § 66-27-203, reserved by the declarant; provided, that, prior to the exercise of any such rights, no consent or joinder by the holder of the right to the termination of the condominium shall be required;
- (8)
If any development right may be exercised with respect to different parcels of real estate, a statement to that effect, together with a statement fixing the boundaries of those portions and regulating the order in which those portions may be subjected to the exercise of each development right; provided, that, if the declaration does not provide that the right must be exercised at a specific time, in a particular order, or with respect to all of the real estate, then the right may be exercised at any time, in any order, or with respect to any portion of the real estate;
- (9)
Any conditions or limitations under which the rights described in subdivision (a)(7) may be exercised or will lapse;
- (10)
An allocation to each unit of the allocated interests in the manner described in § 66-27-307;
- (11)
Any restrictions on use, occupancy, and alienation of the units; and
- (12)
All matters required by §§ 66-27-306, 66-27-307, 66-27-308, 66-27-309, 66-27-315, 66-27-316, and 66-27-403(c).
- (b)
The declaration may contain any other matters the declarant deems appropriate.
§ 66-27-306. Leasehold condominiums.
- (a)
Any lease, the expiration or termination of which may terminate the condominium or reduce its size, shall be recorded. The declaration for the condominium shall state:
- (1)
The recording data;
- (2)
The date on which the lease is scheduled to expire;
- (3)
A legally sufficient description of the real estate subject to the lease;
- (4)
Any right of the unit owners to acquire the fee simple estate and the manner whereby those rights may be exercised, or a statement that they do not have those rights;
- (5)
Any right of the unit owners to remove any improvements within a reasonable time after the expiration or termination of the lease, or a statement that they do not have those rights; and
- (6)
Any rights of the unit owners to renew the lease and the conditions of any renewal, or a statement that they do not have those rights.
- (b)
After the declaration for a leasehold condominium is recorded, neither the lessor nor the lessor's successor in interest may terminate the leasehold interest of a unit owner who makes timely payment of the unit owner’s share of the rent and otherwise complies with all covenants that, if violated, would entitle the lessor to terminate the lease. A unit owner's leasehold interest is not affected by failure of any other person to pay rent or fulfill any other covenant; provided, that, this subsection (b) shall not prohibit the lessor from acquiring the interest of the defaulting owner, subject to the declaration.
- (c)
Acquisition of the leasehold interest of any unit owner by the owner of the reversion or remainder does not merge the leasehold and fee simple interests, unless the leasehold interests of all unit owners subject to that reversion or remainder are acquired.
- (d)
If the expiration or termination of a lease decreases the number of units in a condominium, the allocated interests shall be reallocated in accordance with § 66-27-207(a) as though those units had been taken by eminent domain. Reallocations shall be confirmed by an amendment to the declaration prepared, executed, and recorded by the association.
- (e)
Unless the lease described in subsection (a) includes covenants for the benefit of unit owners as set forth in subsections (b) and (c), the lessor under the lease must sign the declaration for the limited purpose of affirming that the lease is subject to those covenants.
§ 66-27-307. Allocation of common element interests, votes, and common expense liabilities.
- (a)
The declaration shall allocate a fraction or percentage of undivided interests in the common elements and in the common expenses of the association, and a portion of the votes in the association, to each unit and state the formulas or methods used to establish those allocations. Those allocations may not discriminate in favor of units owned by the declarant.
- (b)
If units may be added to or withdrawn from the condominium, the declaration must state the formulas or methods to be used to reallocate the allocated interests among all units included in the condominium after the addition or withdrawal.
- (c)
- (1)
The declaration may provide:
- (A)
That different allocations of votes shall be made to the units on particular matters specified in the declaration;
- (B)
For cumulative voting only for the purpose of electing members of the board of directors; and
- (C)
For class voting on specified issues affecting the class if necessary to protect valid interests of the class.
- (2)
A declarant may not utilize cumulative or class voting for the purpose of evading any limitation imposed on declarants by part 2, this part and parts 4 and 5 of this chapter, nor may units constitute a class because they are owned by a declarant.
- (d)
Except for minor variations due to rounding, the sum of the undivided interests in the common elements and common expense liabilities allocated at any time to all the units must each equal one (1) if stated as fractions or one hundred percent (100%) if stated as percentages. In the event of discrepancy between an allocated interest and the result derived from application of the pertinent formula or method, the allocated interest prevails.
- (e)
The common elements are not subject to partition, and any purported conveyance, encumbrance, judicial sale, or other voluntary or involuntary transfer of an undivided interest in the common elements made without the unit to which that interest is allocated, is void.
- (f)
Any common elements that may be licensed by the declarant pursuant to § 66-27-203(12)(D) shall be described in the declaration. The declaration shall also provide a method of equitably allocating the common expenses attributable to the common elements to the declarant, and assessing the expenses to the declarant or the holder of such rights. The association shall have a lien on the rights to secure payment of the expenses in accordance with § 66-27-415.
§ 66-27-308. Allocation of limited common elements.
- (a)
- (1)
Except for the limited common elements described in § 66-27-302(2) and (4), the declaration shall specify either:
- (A)
To which unit or units each limited common element is allocated; or
- (B)
Which common elements or limited common elements may be allocated or licensed by conveyance from the declarant.
- (2)
The allocation may not be altered without the consent of the unit owners whose units are affected.
- (b)
Except as the declaration otherwise provides, and subject to approval by the association, a limited common element may be reallocated by an instrument executed by the unit owners between or among whose units the reallocation is made, and by the association. The instrument shall be prepared and recorded by the association at the expense of the reallocating unit owners. The instrument shall be recorded in the names of the parties and the condominium.
- (c)
A common element not previously allocated as a limited common element may not be so allocated except pursuant to provisions in the declaration made in accordance with § 66-27-305(a)(6). The allocations shall be made by amendments to the declaration.
- (d)
Any limited common elements that may be licensed by the declarant pursuant to § 66-27-203(12)(D) shall be described in the declaration. The declaration shall also provide a method of equitably allocating the common expenses attributable to the limited common elements to the declarant, and assessing the expenses to the declarant or the holder of such rights. The association shall have a lien on the rights to secure payment of the expenses in accordance with § 66-27-415.
§ 66-27-309. Plats and plans.
- (a)
Plats and plans are a part of the declaration. Separate plats and plans are not required by part 2, this part and parts 4 and 5 of this chapter if all the information required by this section is contained in either a plat or plan. Each plat and plan must be clear and legible and must contain all information required by this section. The plat or plan, or both, can be attached to the declaration and incorporated in the declaration, or it or they may be referenced in the declaration and recorded in a plat book at the appropriate register's office. In either event, the plat or plats, plan or plans, or both, shall be deemed acceptable for recording without further action if it or they comply with this section. Each plat or plan must be clear and legible and contain a certification that the plat or plan contains all information required by this section.
- (b)
Each plat must show:
- (1)
The name and a survey or general schematic map of the entire condominium;
- (2)
The location and dimensions of all real estate not subject to development rights, or subject only to the development right to withdraw, and the location of all existing improvements within that real estate;
- (3)
A legally sufficient description of any real estate subject to development rights, labeled to identify the rights applicable to each parcel;
- (4)
The extent of any encroachments by or upon any portion of the condominium;
- (5)
To the extent feasible, a legally sufficient description of all easements serving or burdening any portion of the condominium;
- (6)
The location and dimensions of any vertical unit boundaries not shown or projected on plans recorded pursuant to subsection (d) and that unit's identifying number;
- (7)
The location, with reference to an established datum, floor number, elevation, or other appropriate means of designation of any horizontal unit boundaries not shown or projected on plans recorded pursuant to subsection (d) and that unit's identifying number;
- (8)
A legally sufficient description of any real estate in which the unit owners will own only an estate for years, labeled as “leasehold real estate”;
- (9)
The distance between noncontiguous parcels of real estate comprising the condominium; and
- (10)
Limited common elements, consisting of porches, balconies and patios.
- (c)
A plat may also show the intended location and dimensions of any contemplated improvement to be constructed anywhere within the condominium. Any contemplated improvement shown must be built or labeled “NEED NOT BE BUILT”.
- (d)
To the extent not shown or projected on the plats or disclosed in the declaration, plans of the units must show or project:
- (1)
The location and dimensions of the vertical boundaries of each unit, and that unit's identifying number;
- (2)
Any horizontal unit boundaries, either by floor number, elevation, or other appropriate means of designation, and that unit's identifying number; and
- (3)
To the extent not disclosed in the declaration, any units in which the declarant has reserved the right to create additional units or common elements pursuant to § 66-27-310(c), identified appropriately.
- (e)
Unless the declaration provides otherwise, the horizontal boundaries of part of a unit located outside of a building have the same elevation as the horizontal boundaries of the inside part, and need not be depicted on the plats and plans.
- (f)
Upon exercising any development right, the declarant shall record either new plats and plans necessary to conform to the requirements of subsections (a), (b) and (d), or new certifications of plats and plans previously recorded if those plats and plans otherwise conform to the requirements of subsections (a), (b) and (d).
- (g)
Any certification of a plat or plan required by this section must be made and signed in original by an independent, registered surveyor, architect or engineer, or combination of independent, registered surveyor, architect and engineer.
§ 66-27-310. Exercise of development rights.
- (a)
To exercise any development right reserved under § 66-27-305(a)(7), the declarant shall prepare, execute, and record an amendment to the declaration pursuant to § 66-27-317 and comply with § 66-27-309. The declarant is the unit owner of any units thereby created. The amendment to the declaration must assign an identifying number to each new unit created, and, except in the case of subdivision or conversion of units described in subsection (b), reallocate the allocated interests among all units. The amendment must describe any common elements and any limited common elements thereby created and, in the case of limited common elements, designate the unit to which each is allocated to the extent required by § 66-27-308.
- (b)
Development rights may be reserved within any real estate added to the condominium if the amendment adding that real estate includes all matters required by § 66-27-305 or § 66-27-306, as the case may be, and the plats and plans include all matters required by § 66-27-309. This subsection (b) does not extend any time limit on the exercise of development rights imposed by the declaration.
- (c)
Whenever a declarant exercises a development right to subdivide or convert a unit previously created into additional units or common elements, or both:
- (1)
If the declarant converts the unit entirely to common elements, the amendment to the declaration must reallocate all the allocated interests of that unit among the other units as if that unit had been taken by eminent domain pursuant to § 66-27-207;
- (2)
If the declarant subdivides the unit into two (2) or more units, whether or not any part of the unit is converted into common elements, the amendment to the declaration must reallocate all the allocated interests of the unit among the units created by the subdivision in any reasonable manner prescribed by the declarant.
- (d)
If the declaration provides, pursuant to § 66-27-305(a)(7), that all or a portion of the real estate is subject to the development right of withdrawal:
- (1)
If all the real estate is subject to withdrawal, and the declaration does not describe separate portions of real estate subject to that right, none of the real estate may be withdrawn after a unit has been conveyed to a purchaser; and
- (2)
If a portion or portions are subject to withdrawal, no portion may be withdrawn after a unit in that portion has been conveyed to a purchaser.
§ 66-27-311. Alterations of units.
-
Subject to the declaration and other law, a unit owner:
- (1)
May make any improvements or alterations to the unit owner's unit that do not impair the structural integrity or mechanical systems or lessen the support of any portion of the condominium;
- (2)
May not change the appearance of the common elements, or the exterior appearance of a unit or any other portion of the condominium, without permission of the association; and
- (3)
After acquiring an adjoining unit or an adjoining part of an adjoining unit, may remove or alter any intervening partition or create apertures in the intervening partition, even if the partition, in whole or in part, is a common element, if those acts do not impair the structural integrity or mechanical systems or lessen the support of any portion of the condominium. Removal of partitions or creation of apertures under this subdivision (3) is not an alteration of boundaries. The owner of any adjoining unit affected by the removal of partitions or creation of apertures shall have the right to restore the removed partitions to their original condition or to close any apertures created.
§ 66-27-312. Relocation of boundaries between adjoining units.
- (a)
Subject to the declaration and other law, the boundaries between adjoining units may be relocated by an amendment to the declaration upon application to the association by the owners of those units. If the owners of the adjoining units have specified a reallocation between their units of their allocated interests, the application must state the proposed reallocations. Unless the board of directors determines within thirty (30) days that the reallocations are unreasonable, the association shall prepare an amendment, at the expense of the affected unit owners, that identifies the units involved, states the reallocations, is executed by those unit owners and the association, to evidence compliance with this subsection (a), contains words of conveyance between the affected unit owners, and upon recordation, is indexed in the name of the grantor and the grantee.
- (b)
The association shall prepare and record plats or plans necessary to show the altered boundaries between adjoining units, and their dimensions and identifying numbers, at the expense of the applicant owners.
§ 66-27-313. Subdivision of units.
- (a)
In addition to any development rights relating to the subdivision of units that may be reserved to the declarant, if the declaration expressly so permits, a unit owner may subdivide a unit into two (2) or more units. Subject to the declaration and other law, upon application of a unit owner to subdivide a unit, the association shall prepare, execute, and record an amendment to the declaration, including the plats and plans, subdividing that unit, at the expense of the owner of the unit to be subdivided.
- (b)
The amendment to the declaration must be executed by the owner of the unit to be subdivided, assign an identifying number to each unit created, and reallocate the allocated interests formerly allocated to the subdivided unit to the new units in any reasonable manner prescribed by the owner of the subdivided unit.
§ 66-27-314. Monuments as boundaries.
-
The existing physical boundaries of a unit or the physical boundaries of a unit reconstructed in substantial accordance with the original plats and plans of the unit become its boundaries rather than the metes and bounds expressed in the deed or plat or plan, regardless of settling or lateral movement of the building, or minor variance between boundaries shown on the plats or plans or in the deed and those of the building. This section does not relieve a unit owner of liability in case of the owner's willful misconduct nor relieve a declarant or any other person of liability for failure to adhere to the plats and plans.
§ 66-27-315. Use for sales purposes.
-
A declarant may maintain sales offices, management offices, and models in units owned by the declarant. The declarant may maintain sales offices on common elements in the condominium only if the declaration so provides and specifies the rights of a declarant with regard to the sales offices. Any sales office, management office, or model not designated a unit by the declaration is a common element, and if a declarant ceases to be a unit owner or holder of a development right to create additional units, the declarant ceases to have any rights with regard to the units or in any personal property owned by the declarant and used in connection with the units, unless it is removed from the condominium after notice from the association specifying a reasonable period for the removal. Subject to any limitations in the declaration, a declarant may maintain signs on the common elements advertising the condominium. Any rights reserved to the declarant under this section may be exercised by an agent of the declarant. This section is subject to other state law and local ordinances.
§ 66-27-316. Easement rights.
-
Subject to the declaration, a declarant has an easement through the common elements as may be reasonably necessary for the purpose of discharging the declarant's obligations or exercising special declarant rights, whether arising under part 1, this part and parts 4 and 5 of this chapter or reserved in the declaration.
§ 66-27-317. Amendment of declaration.
- (a)
Except in cases of amendments that may be executed by a declarant under § 66-27-309(f) or § 66-27-310, the association under § 66-27-207, § 66-27-306(d), § 66-27-308(c), § 66-27-312(a), or § 66-27-313, or certain unit owners under § 66-27-308(b), § 66-27-312(a), § 66-27-313(b), or § 66-27-318(b), and except as limited by subsections (d) or (e) of this section, the declaration, including the plats and plans, may be amended only by vote or agreement of unit owners of units to which at least sixty-seven percent (67%) of the votes in the association are allocated, or any larger majority the declaration specifies. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential use.
- (b)
No action to challenge the validity of an amendment adopted by the association pursuant to this section may be brought more than one (1) year after the amendment is recorded.
- (c)
Every amendment to the declaration must be recorded in every county in which any portion of the condominium is located, and is effective only upon recordation. An amendment shall be indexed in the grantee's index in the name of the condominium and the association and in the grantor's index in the name of the parties executing the amendment.
- (d)
Except to the extent expressly permitted or required by part 1, this part and parts 4 and 5 of this chapter, no amendment may change the boundaries of any unit, or the allocated interests of a unit, or prohibit the leasing of any unit, in the absence of the consent of all affected unit owners.
- (e)
Except to the extent expressly permitted or required by part 1, this part and parts 4 and 5 of this chapter, no amendment may increase special declarant rights without the consent of sixty-seven percent (67%) of the votes of the association other than the declarant.
- (f)
Amendments to the declaration required by part 1, this part and parts 4 and 5 of this chapter to be recorded by the association shall be prepared, executed, recorded, and certified on behalf of the association by any officer of the association designated for that purpose or, in the absence of designation, by the president of the association.
§ 66-27-318. Termination of condominium.
- (a)
Except in the case of a taking of all the units by eminent domain pursuant to § 66-27-207, a condominium may be terminated only by agreement of unit owners of units to which at least eighty percent (80%) of the votes in the association are allocated, and eighty percent (80%) of those lenders having first mortgage liens on any unit or units to which eighty percent (80%) of the votes in the association are allocated. The declaration may specify a larger percentage in either instance, and may specify that a lender is deemed to approve the termination if notice is sent to the last address of that lender on file with the association, or if none, as specified in the lender's first mortgage lien of record, and no objection is received within thirty (30) days thereafter. The declaration may specify a smaller percentage only if all of the units in the condominium are restricted exclusively to nonresidential uses.
- (b)
An agreement to terminate must be evidenced by the execution of a termination agreement, or ratifications of a termination agreement, in the same manner as a deed, by the requisite number of unit owners. The termination agreement may specify a date after which the agreement will be void unless it is recorded before that date. A termination agreement and all ratifications of the termination agreement must be recorded in every county in which a portion of the condominium is situated, and is effective only upon recordation.
- (c)
In the case of a condominium containing only units having horizontal boundaries described in the declaration, a termination agreement may provide that all the common elements and units of the condominium shall be sold following termination. If, pursuant to the agreement, any real estate in the condominium is to be sold following termination, the termination agreement must set forth the minimum terms of the sale.
- (d)
In the case of a condominium containing any units that include title to the underlying land as provided in the declaration, a termination agreement may provide for sale of the common elements, but may not require that the units be sold following termination, unless the declaration as originally recorded provided otherwise or unless all owners of units to be sold consent to the sale.
- (e)
The association, on behalf of the unit owners, may contract for the sale of real estate in the condominium, but the contract is not binding on the unit owners until approved pursuant to subsections (a) and (b). If any real estate in the condominium is to be sold following termination, title to that real estate, upon termination, vests in the association as trustee for the holders of all interests in the units. Thereafter, the association has all powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds thereof distributed, the association continues in existence with all powers it had before termination. Proceeds of the sale must be distributed to unit owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided in subsection (h). Unless otherwise specified in the termination agreement, as long as the association holds title to the real estate, each unit owner and each unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted each unit owner’s unit. During the period of that occupancy, each unit owner and each unit owner’s successors in interest remain liable for all assessments and other obligations imposed on unit owners by part 1, this part and parts 4 and 5 of this chapter or the declaration.
- (f)
If the real estate constituting the condominium is not to be sold following termination, title to the common elements and, in a condominium containing only units not including title to the underlying land as described in the declaration, title to all the real estate in the condominium vests in the unit owners upon termination as tenants in common in proportion to their respective interests as provided in subsection (h), and liens on the units shift accordingly. While the tenancy in common exists, each unit owner and each unit owner's successors in interest have an exclusive right to occupancy of the portion of the real estate that formerly constituted each unit owner’s unit.
- (g)
Following termination of the condominium, the proceeds of any sale of real estate, together with the assets of the association, are held by the association as trustee for unit owners and holders of liens on the units as their interests may appear. Following termination, creditors of the association holding liens on the units that were recorded before termination may enforce those liens in the same manner as any lienholder. All other creditors of the association are to be treated as if they had perfected liens on the units immediately before termination.
- (h)
The respective interests of unit owners referred to in subsections (e), (f) and (g) are as follows:
- (1)
Except as provided in subdivision (h)(2), the respective interests of unit owners are the fair market values of their units, limited common elements, and common element interests immediately before the termination, as determined by one (1) or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved within thirty (30) days after distribution by unit owners of units to which at least twenty-five percent (25%) of the votes in the association are allocated. The proportion of any unit owner's interest to that of all unit owners is determined by dividing the fair market value of that unit owner's unit and common element interest by the total fair market values of all the units and common elements; and
- (2)
If any unit or any limited common element is destroyed to the extent that an appraisal of the fair market value of the unit or any limited common element before destruction cannot be made, the interests of all unit owners are their respective common element interests immediately before the termination.
- (i)
- (1)
If a lien or encumbrance against all or any portion of the real estate comprising the condominium has priority over the declaration, and the lien or encumbrance has been released with respect to any unit, then the lien or encumbrance shall be deemed subordinate to the declaration.
- (2)
Notwithstanding subdivision (i)(1), foreclosure or enforcement of a lien or encumbrance against withdrawable real estate does not of itself withdraw that real estate from the condominium, but the person taking title to the real estate has the right to require from the association an amendment excluding the real estate from the condominium, upon request and payment of the expense of the amendment.
§ 66-27-319. Rights of secured lenders.
-
The declaration may require that all or a specified number or percentage of the mortgagees or beneficiaries of deeds of trust encumbering the units approve specified actions of the unit owners or the association as a condition to the effectiveness of those actions, but no requirement for approval may operate to deny or delegate control over the general administrative affairs of the association by the unit owners or the board of directors, or prevent the association or the board of directors from commencing, intervening in, or settling any litigation or proceeding, or receiving and distributing any insurance proceeds except pursuant to § 66-27-413.
§ 66-27-321. Master associations.
- (a)
If the declaration for a condominium provides that any of the powers described in § 66-27-402 are to be exercised by or may be delegated to a profit or nonprofit corporation, or unincorporated association, that exercises those or other powers on behalf of one (1) or more condominiums or for the benefit of the unit owners of one (1) or more condominiums, all provisions of part 1, this part and parts 4 and 5 of this chapter applicable to unit owners' associations apply to any such corporation, or unincorporated association, except as modified by this section.
- (b)
Unless a master association is acting in the capacity of an association described in § 66-27-401, it may exercise the powers set forth in § 66-27-402(a)(2) only to the extent expressly permitted in the declarations of condominiums that are part of the master association or expressly described in the delegations of power from those condominiums to the master association.
- (c)
If the declaration of any condominium provides that the board of directors may delegate certain powers to a master association, the members of the board of directors have no liability for the acts or omissions of the master association with respect to those powers following delegation.
- (d)
The rights and responsibilities of unit owners with respect to the unit owners' association set forth in §§ 66-27-403, 66-27-408 — 66-27-410 and 66-27-412 apply in the conduct of the affairs of a master association only to those persons who elect the board of a master association, whether or not those persons are otherwise unit owners within the meaning of part 1, this part, and parts 4 and 5 of this chapter.
- (e)
Notwithstanding § 66-27-403(f) with respect to the election of the board of directors of an association, by all unit owners after the period of declarant control ends, and even if a master association is also an association described in § 66-27-401, the certificate of incorporation or other instrument creating the master association and the declaration of each condominium, the powers of which are assigned by the declaration or delegated to the master association, may provide that the board of directors of the master association must be elected after the period of declarant control in any of the following ways:
- (1)
All unit owners of all condominiums subject to the master association may elect all members of that board of directors;
- (2)
All members of the board of directors of all condominiums subject to the master association may elect all members of that board of directors;
- (3)
All unit owners of each condominium subject to the master association may elect specified members of that board of directors; or
- (4)
All members of the board of directors of each condominium subject to the master association may elect specified members of that board of directors.
§ 66-27-322. Submission of a unit to an additional declaration.
- (a)
A unit may be submitted to an additional declaration creating a new condominium if the submittal is permitted by the declaration creating the unit.
- (b)
The submission of a unit to an additional declaration shall not be deemed a subdivision of a unit under § 66-27-313.
- (c)
Upon the submittal of a unit to an additional declaration, the following shall apply:
- (1)
The appurtenant interest of the unit in the common elements shall be allocated to the units created under the additional declaration pursuant to the terms of the additional declaration;
- (2)
The association under the additional declaration shall pay all assessments due with respect to the unit submitted to an additional declaration and may exercise any of the rights that may be exercised by the owner of the unit;
- (3)
The lien for assessments in favor of the association created under the original declaration shall not attach to any unit created under an additional declaration if the owner of the unit has paid the unit's share of the assessment to either the association created under the original declaration or to the association created under the additional declaration;
- (4)
The units created under an additional declaration shall be subject to the terms and conditions of the original declaration, as it may be supplemented by the additional declaration; and
- (5)
Members of the board of directors of the association created under the original declaration may be elected in any of the following ways specified in the original declaration:
- (A)
All unit owners of units created under the original declaration shall elect all members of the board of directors and the vote of any unit subject to an additional declaration shall be cast by a representative of the association created under the additional declaration;
- (B)
The board of directors of any association created under an additional declaration may elect specified members of the board of directors under the original declaration;
- (C)
Specified members of the board of directors or specified officers of the association created by the additional declaration may be deemed elected as specified members of the board of directors under the original declaration; or
- (D)
Any other manner provided in the original declaration permitted under the laws applicable to nonprofit corporations.
- (d)
Any unit created by submitting a unit to an additional declaration may be further submitted to an additional declaration subject to this section if permitted pursuant to all declarations applicable to the unit.
§ 66-27-323. Merger or consolidation of condominiums.
- (a)
Any two (2) or more condominiums, by agreement of the unit owners as provided in subsection (b), may be merged or consolidated into a single condominium. In the event of a merger or consolidation, unless the agreement otherwise provides, the resultant condominium is, for all purposes, the legal successor of all of the preexisting condominiums and the operations and activities of all associations of the preexisting condominiums shall be merged or consolidated into a single association, which shall hold all powers, rights, obligations, assets and liabilities of all preexisting associations.
- (b)
An agreement of two (2) or more condominiums to merge or consolidate pursuant to subsection (a) must be evidenced by an agreement prepared, executed, recorded and certified by the president of the association of each of the preexisting condominiums following approval by owners of units to which are allocated the percentage of votes in each condominium required to terminate that condominium, or such other percentage of votes as may be required by the declarations of each of the merging condominiums. Any such agreement must be recorded in every county in which a portion of the condominium is located and is not effective until recorded.
- (c)
Every merger or consolidation agreement must provide for the reallocation of the allocated interests in the new association among the units of the resultant condominium, either by stating the reallocations or the formulas upon which they are based or by stating the percentage of overall allocated interests of the new condominium that are allocated to all of the units comprising each of the preexisting condominiums, and providing that the portion of the percentages allocated to each unit formerly comprising a part of the preexisting condominium must be equal to the percentages of allocated interests allocated to that unit by the declaration of the preexisting condominium.
Part 4 Tennessee Condominium Act of 2008 — Unit Owners' Association
§ 66-27-401. Organization of unit owners' association.
-
A unit owners' association must be organized no later than the date the first unit in the condominium is conveyed. The membership of the association at all times shall consist exclusively of all the unit owners or, following termination of the condominium, of all former unit owners entitled to distributions of proceeds under § 66-27-318, or their heirs, successors, or assigns. The association shall be organized as a profit or nonprofit corporation or limited liability company or, in the case of a condominium with four (4) or fewer units that is not a master association, the association may be organized as an unincorporated association.
§ 66-27-402. Powers of unit owners' association.
- (a)
Except as provided in subsection (b), and subject to the declaration, the association, even if unincorporated, or if incorporated or a limited liability company even if subsequently dissolved administratively, may:
- (1)
Adopt and amend bylaws, and rules and regulations;
- (2)
Adopt and amend budgets for revenues, expenditures, and reserves and collect assessments for common expenses from unit owners;
- (3)
Hire and discharge managing agents and other employees, agents, and independent contractors;
- (4)
Institute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two (2) or more unit owners on matters affecting the condominium;
- (5)
Make contracts and incur liabilities;
- (6)
Regulate the use, maintenance, repair, replacement, and modification of common elements;
- (7)
Cause additional improvements to be made as a part of the common elements;
- (8)
Acquire, hold, encumber, and convey in its own name any right, title, or interest to real or personal property, but common elements may be conveyed or subjected to a security interest only pursuant to § 66-27-412;
- (9)
Grant easements, leases, licenses, and concessions through or over the common elements;
- (10)
Impose and receive any payments, fees, or charges for the use, rental, or operation of the common elements, other than limited common elements described in § 66-27-302(2) and (4), and for services provided to unit owners;
- (11)
Impose charges for late payment of assessments and, after notice and an opportunity to be heard, levy reasonable fines for violations of the declaration, bylaws, and rules and regulations of the association;
- (12)
Impose reasonable charges for the preparation and recordation of amendments to the declaration or the provision of information required by § 66-27-502;
- (13)
Impose reasonable charges for services rendered in connection with the transfer of a unit;
- (14)
Provide for the indemnification of its officers and members of its board of directors and maintain directors' and officers' liability insurance;
- (15)
Assign its right to future income, including the right to receive common expense assessments, but, except for assignments of income to finance common expenses of the association, only to the extent the declaration expressly so provides;
- (16)
Exercise any other powers conferred by the declaration or bylaws;
- (17)
Exercise all other powers that may be exercised in this state by legal entities of the same type as the association; and
- (18)
Exercise any other powers necessary and proper for the governance and operation of the association.
- (b)
The declaration may not impose limitations on the power of the association to deal with the declarant, its agents or contractors, that are more restrictive than the limitations imposed on the power of the association to deal with other persons.
§ 66-27-403. Board of directors and officers. [Effective on January 1, 2024. See the version effective until January 1, 2024.]
- (a)
Except as provided in the declaration, the bylaws, in subsection (b), or other provisions of part 2, part 3, this part and part 5 of this chapter, the board of directors may act in all instances on behalf of the association. In the performance of their duties, the officers and members of the board of directors are required to exercise:
- (1)
If appointed by the declarant, the care required of fiduciaries of the unit owners; or
- (2)
If elected by the unit owners, ordinary and reasonable care.
- (b)
The board of directors may not act on behalf of the association to amend the declaration pursuant to § 66-27-317, to terminate the condominium pursuant to § 66-27-318, or to elect members of the board of directors or determine the qualifications, powers and duties, or terms of office of members of the board of directors pursuant to subsection (f), but the board of directors may fill vacancies in its membership for the unexpired portion of any term, and may elect members of the board of directors of a master association as provided in the declaration.
- (c)
- (1)
Subject to subsection (d), the declaration may provide for a period of declarant control of the association, during which period a declarant, or persons designated by the declarant, may appoint and remove the officers and members of the board of directors. Regardless of the period provided in the declaration, a period of declarant control terminates no later than the earlier of:
- (A)
One hundred twenty (120) days after conveyance of seventy-five percent (75%) of the units that may be created to unit owners other than a declarant; or
- (B)
Five (5) years after the conveyance of the first unit to a purchaser other than the declarant or, if more than one hundred (100) units may be created in the condominium, then seven (7) years after the first conveyance.
- (2)
A declarant may voluntarily surrender the right to appoint and remove officers and members of the board of directors before termination of that period, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or board of directors, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.
- (d)
Not later than one hundred twenty (120) days after conveyance of twenty-five percent (25%) of the units that may be created to unit owners other than a declarant, at least one (1) member of the board must be elected by unit owners other than the declarant.
- (e)
Not later than the termination of any period of declarant control, the unit owners shall elect a board of directors of at least three (3) members, at least a majority of whom must be unit owners. The board of directors shall elect the officers. The board of directors and officers shall take office upon election.
- (f)
Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a two-thirds (⅔) vote of all persons present and entitled to vote at any meeting of the unit owners at which a quorum is present, may remove any member of the board of directors with or without cause, other than a member appointed by the declarant.
- (g)
- (1)
If the board of directors oversees common elements with an aggregate replacement cost exceeding ten thousand dollars ($10,000) and has had a reserve study conducted on or after January 1, 2020, then the board shall have an updated reserve study conducted within five (5) years after the date the reserve study was conducted, and at least every five (5) years thereafter, for purposes of assessing the condition of and planning for repair and maintenance of the common elements.
- (2)
If the board of directors oversees common elements with an aggregate replacement cost exceeding ten thousand dollars ($10,000) and has not had a reserve study conducted on or after January 1, 2020, then the board shall require that a reserve study be conducted on or before January 1, 2025, and shall update the study every five (5) years for purposes of assessing the condition of and planning for repair and maintenance of the common elements.
- (3)
The board shall make a copy of the reserve study available to all common interest owners through electronic mail or by posting it on the community website.
- (4)
This subsection (g) does not apply to a:
- (A)
Board of directors controlled by a declarant;
- (B)
Condominium titled to a single owner; or
- (C)
Husband and wife who own such condominium as a tenancy by the entirety.
- (5)
The board shall review the reserve funding annually for adequacy.
§ 66-27-403. Board of directors and officers. [Effective until January 1, 2024. See the version effective on January 1, 2024.]
- (a)
Except as provided in the declaration, the bylaws, in subsection (b), or other provisions of part 2, part 3, this part and part 5 of this chapter, the board of directors may act in all instances on behalf of the association. In the performance of their duties, the officers and members of the board of directors are required to exercise:
- (1)
If appointed by the declarant, the care required of fiduciaries of the unit owners; or
- (2)
If elected by the unit owners, ordinary and reasonable care.
- (b)
The board of directors may not act on behalf of the association to amend the declaration pursuant to § 66-27-317, to terminate the condominium pursuant to § 66-27-318, or to elect members of the board of directors or determine the qualifications, powers and duties, or terms of office of members of the board of directors pursuant to subsection (f), but the board of directors may fill vacancies in its membership for the unexpired portion of any term, and may elect members of the board of directors of a master association as provided in the declaration.
- (c)
- (1)
Subject to subsection (d), the declaration may provide for a period of declarant control of the association, during which period a declarant, or persons designated by the declarant, may appoint and remove the officers and members of the board of directors. Regardless of the period provided in the declaration, a period of declarant control terminates no later than the earlier of:
- (A)
One hundred twenty (120) days after conveyance of seventy-five percent (75%) of the units that may be created to unit owners other than a declarant; or
- (B)
Five (5) years after the conveyance of the first unit to a purchaser other than the declarant or, if more than one hundred (100) units may be created in the condominium, then seven (7) years after the first conveyance.
- (2)
A declarant may voluntarily surrender the right to appoint and remove officers and members of the board of directors before termination of that period, but in that event the declarant may require, for the duration of the period of declarant control, that specified actions of the association or board of directors, as described in a recorded instrument executed by the declarant, be approved by the declarant before they become effective.
- (d)
Not later than one hundred twenty (120) days after conveyance of twenty-five percent (25%) of the units that may be created to unit owners other than a declarant, at least one (1) member of the board must be elected by unit owners other than the declarant.
- (e)
Not later than the termination of any period of declarant control, the unit owners shall elect a board of directors of at least three (3) members, at least a majority of whom must be unit owners. The board of directors shall elect the officers. The board of directors and officers shall take office upon election.
- (f)
Notwithstanding any provision of the declaration or bylaws to the contrary, the unit owners, by a two-thirds (⅔) vote of all persons present and entitled to vote at any meeting of the unit owners at which a quorum is present, may remove any member of the board of directors with or without cause, other than a member appointed by the declarant.
§ 66-27-404. Transfer of special declarant rights.
- (a)
No special declarant right, created or reserved under part 2, part 3, this part and part 5 of this chapter may be transferred except by an instrument evidencing the transfer recorded in the register's office in every county in which any portion of the condominium is located. The instrument is not effective unless executed by the transferee.
- (b)
Upon transfer of any special declarant right, the liability of a transferor declarant is as follows:
- (1)
A transferor is not relieved of any obligation or liability arising before the transfer. Lack of privity does not deprive the association or any unit owner of standing to maintain an action to enforce any obligation of the transferor;
- (2)
If a successor to any special declarant right is an affiliate of a declarant as defined by § 66-27-203, the transferor is jointly and severally liable with the successor for any obligations or liabilities of the successor relating to the condominium;
- (3)
If a transferor retains any special declarant right, but transfers other special declarant rights to a successor who is not an affiliate of the declarant, the transferor is liable for any obligations or liabilities imposed on a declarant by part 2, part 3, this part and part 5 of this chapter or by the declaration relating to the retained special declarant rights and arising after the transfer;
- (4)
A transferor has no liability for any act or omission or any breach of a contractual obligation arising from the exercise of a special declarant right by a successor declarant who is not an affiliate of the transferor.
- (c)
Unless otherwise provided in a mortgage instrument or deed of trust, in case of foreclosure of a mortgage, tax sale, judicial sale, sale by a trustee under a deed of trust, or sale under the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), receivership proceedings, or sale by the association pursuant to its declaration, of any units owned by a declarant or other real estate in a condominium subject to development rights, a person acquiring title to all the real estate being foreclosed or sold succeeds to all special declarant rights related to that real estate held by that declarant, unless the person acquiring title records an instrument within one hundred twenty (120) days following the foreclosure, in the register's office of every county in which any portion of the condominium lies, disclaiming any or all of such rights.
- (d)
Upon foreclosure, tax sale, judicial sale, sale by a trustee under a deed of trust, or sale under the United States Bankruptcy Code, receivership proceedings, or sale by the association pursuant to its declaration, of all units and other real estate in a condominium owned by a declarant:
- (1)
The declarant ceases to have any special declarant rights; and
- (2)
All special declarant rights continue in favor of the purchaser unless disclaimed by a recorded instrument within one hundred twenty (120) days following the foreclosure or sale as provided in subsection (c).
- (e)
The liabilities and obligations of a person who succeeds to special declarant rights are as follows:
- (1)
A successor to any special declarant right who is an affiliate of a declarant is subject to all obligations and liabilities imposed on the transferor by part 2, part 3, this part and part 5 of this chapter or by the declaration;
- (2)
A successor to any special declarant right, other than a successor described in subdivision (e)(3) or (e)(4), who is not an affiliate of a declarant, is subject to all obligations and liabilities imposed by part 2, part 3, this part and part 5 of this chapter or the declaration:
- (A)
On a declarant who relates to the declarant's exercise or non-exercise of special declarant rights; or
- (B)
On the declarant's transferor, other than:
- (i)
Misrepresentations by any previous declarant;
- (ii)
Warranty obligations on improvements made by any previous declarant, or made before the condominium was created;
- (iii)
Breach of any fiduciary obligation by any previous declarant or the previous declarant's appointees to the board of directors; or
- (iv)
Any liability or obligation imposed on the transferor as a result of the transferor's acts or omissions after the transfer;
- (3)
A successor to only a right reserved in the declaration to maintain models, sales offices, and signs pursuant to § 66-27-315, if the successor is not an affiliate of a declarant, may not exercise any other special declarant right, and is not subject to any liability or obligation as a declarant, except the obligation to provide the information required by part 5 of this chapter, and any liability arising as a result of the obligation; and
- (4)
A successor to all special declarant rights held by the successor's transferor who is not an affiliate of that declarant and who succeeded to those rights pursuant to a deed in lieu of foreclosure or a judgment or instrument conveying title to units under subsection (c), may declare the successor’s intention within one hundred twenty (120) days after acquiring title, in an instrument recorded in every county in which any portion of the condominium lies, to hold those rights solely for transfer to another person. Thereafter, until transferring all special declarant rights to any person acquiring title to any unit owned by the successor, or unit recording an instrument permitting exercise of all those rights, that successor may not exercise any of those rights other than any right held by the successor’s transferor to control the board of directors in accordance with § 66-27-403(d) for the duration of any period of declarant control, and any attempted exercise of those rights is void. So long as a successor declarant has not or may not exercise special declarant rights under this subsection (e), the successor declarant is not subject to any liability or obligation as a declarant other than liability for the successor declarant’s acts and omissions under § 66-27-403(d).
- (f)
Nothing in this section subjects any successor to a special declarant right to any claims against or other obligations of a transferor declarant, other than claims and obligations arising under part 2, part 3, this part and part 5 of this chapter or the declaration.
§ 66-27-405. Termination of contracts and leases of declarant.
-
If entered into before the board of directors elected by the unit owners pursuant to § 66-27-403(e) takes office, any contract or lease between the association and a declarant or an affiliate of a declarant, unless the contract or lease exercises a development right or a special declarant right, or any other contract or lease that was not disclosed in the declaration or otherwise in writing prior to the first conveyance of a unit to a party other than the declarant, and at the time entered into was unconscionable to the unit owners under the circumstances then prevailing, may be terminated without penalty by the association at any time after the board of directors elected by the unit owners pursuant to § 66-27-403(e) takes office, upon not less than ninety (90) days notice to the other party. This section does not apply to any lease, the termination of which would terminate the condominium or reduce its size, unless the real estate subject to that lease was included in the condominium for the purpose of avoiding the right of the association to terminate a lease under this section. This section applies only to condominiums containing units restricted to residential purposes.
§ 66-27-406. Bylaws.
- (a)
The bylaws of the association must provide for:
- (1)
The number of members of the board of directors and the titles of the officers of the association;
- (2)
Election by the board of directors of a president, secretary, and any other officers of the association the bylaws specify;
- (3)
The qualifications, powers and duties, terms of office, and manner of electing and removing members of the board of directors and officers and filling vacancies;
- (4)
Which, if any, of its powers the board of directors or officers may delegate to other persons or to a managing agent;
- (5)
Which of its officers may prepare, execute, certify, and record amendments to the declaration on behalf of the association; and
- (6)
The method of amending the bylaws.
- (b)
Subject to the declaration, the bylaws may provide for any other matters the association deems necessary and appropriate.
§ 66-27-407. Upkeep of condominium.
- (a)
Except to the extent provided by the declaration, subsection (b), or § 66-27-413(h), the association is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of the unit owner's unit. Each unit owner shall afford to the association and the other unit owners, and to their agents or employees, access to and through the unit owner’s unit that is reasonably necessary for those purposes. If damage is inflicted on the common elements, or on any unit through which access is taken, the unit owner responsible for the damage, or the association if it is responsible, is liable for the cost of the prompt repair thereof, to the extent the cost of repair is not covered by property insurance required to be maintained by the declaration.
- (b)
In addition to the liability that a declarant as a unit owner has under part 2, part 3, this part and part 5 of this chapter, the declarant alone is liable for all expenses in connection with real estate subject to development rights, to the extent the expenses exceed the benefit derived by the association or the other unit owners from the benefit. No other unit owner and no other portion of the condominium is subject to a claim for payment of those expenses. Unless the declaration provides otherwise, any income or proceeds from real estate subject to development rights inures to the declarant.
§ 66-27-408. Meetings.
-
A meeting of the association must be held at least once each year. Special meetings of the association may be called by the president, a majority of the board of directors or by unit owners having twenty percent (20%), or any lower percentage specified in the bylaws, of the votes in the association. Not less than ten (10) nor more than sixty (60) days in advance of any meeting, the secretary or other officer specified in the bylaws shall cause notice to be hand-delivered, sent prepaid by United States mail, by facsimile, electronically, or by other means expressly authorized by the declaration, to the address of each unit or to any other physical or electronic address designated in writing or by electronic means by the unit owner. The notice of any meeting must state the time, place, and method of attendance of or at the meeting and the items on the agenda, including the general nature of any proposed amendment to the declaration or bylaws, any budget changes, and any proposal to remove a director or officer. Notice may be waived in writing signed by all unit owners.
§ 66-27-409. Quorums.
- (a)
Unless the bylaws provide otherwise, a quorum is present throughout any meeting of the association if persons entitled to cast twenty percent (20%) of the votes that may be cast for election of the board of directors are present in person or by proxy at the beginning of the meeting.
- (b)
Unless the bylaws specify a larger percentage, a quorum is deemed present throughout any meeting of the board of directors if persons entitled to cast fifty percent (50%) of the votes on that board are present at the beginning of the meeting.
- (c)
Attendance at a meeting may be in person, by telephone, or by any other means specified in the bylaws. Attendance at a meeting of the association may also be by proxy.
§ 66-27-410. Voting — Proxies.
- (a)
If only one (1) of the multiple owners of a unit is present at a meeting of the association, that owner is entitled to cast all the votes allocated to that unit. If more than one (1) of the multiple owners are present, the votes allocated to that unit may be cast only in accordance with the agreement of a majority in interest of the multiple owners, unless the declaration expressly provides otherwise. There is majority agreement if any one (1) of the multiple owners casts the votes allocated to that unit without protest being made promptly to the person presiding over the meeting by any of the other owners of the unit.
- (b)
Votes allocated to a unit may be cast pursuant to proxy duly executed by a unit owner. If a unit is owned by more than one (1) person, each owner of the unit may vote or register protest to the casting of votes by the other owners of the unit through a duly executed proxy. A unit owner may not revoke a proxy given pursuant to this section, except by actual notice of revocation to the person presiding over a meeting of the association. A proxy is void if it is not dated or purports to be revocable without notice. The duration of a proxy is governed by the Tennessee Nonprofit Corporation Act, compiled in title 48, chapters 51-68, including, without limitation, § 48-57-205.
- (c)
If the declaration requires that votes on specified matters affecting the condominium be cast by lessees rather than unit owners of leased units:
- (1)
Subsections (a) and (b) apply to lessees as if they were unit owners;
- (2)
Unit owners who have leased their units to other persons may not cast votes on those specified matters; and
- (3)
Lessees are entitled to notice of meetings, access to records, and other rights respecting those matters as if they were unit owners. Unit owners must also be given notice, in the manner provided in § 66-27-408, of all meetings at which lessees may be entitled to vote.
- (d)
No votes allocated to a unit owned by the association may be cast.
§ 66-27-411. Tort and contract liability.
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Any action alleging a wrong done by the association must be brought against the association and not against any unit owner. A unit owner is not precluded from bringing an action contemplated by this section because the unit owner is a unit owner or a member or officer of the association.
§ 66-27-412. Conveyance or encumbrance of common elements.
- (a)
Portions of the common elements may be conveyed or subjected to a security interest by the association if persons entitled to cast at least eighty percent (80%) of the votes in the association, including, during any period of declarant control, eighty percent (80%) of the votes allocated to units not owned by a declarant, or any larger percentage the declaration specifies, agree to that action; and a like percentage vote by the owners of any units to which any limited common element is allocated must agree in order to convey that limited common element or subject it to a security interest. The declaration may specify a smaller percentage only if all of the units are restricted exclusively to nonresidential uses. Proceeds of the sale are an asset of the association; provided, that proceeds of a sale of a limited common element shall be reserved for the benefit of the unit or units to which the limited common element is allocated.
- (b)
An agreement to convey common elements or subject them to a security interest must be evidenced by the execution of an agreement, or ratifications of the agreement, in the same manner as a deed, by the requisite number of unit owners. The agreement may specify a date after which the agreement will be void unless recorded before that date. The agreement and all ratifications of the agreement must be recorded in every county in which a portion of the condominium is situated, and is effective only upon recordation.
- (c)
The association, on behalf of the unit owners, may contract to convey common elements, or subject them to a security interest, but the contract is not enforceable against the association until approved pursuant to subsections (a) and (b). Thereafter, the association has all powers necessary and appropriate to effect the conveyance or encumbrance, including the power to execute deeds or other instruments.
- (d)
Any purported conveyance, encumbrance, judicial sale or other voluntary transfer of common elements, unless made pursuant to this section, is voidable; provided, that no action challenging the validity of a conveyance or encumbrance made by the association pursuant to this section may be brought more than one (1) year following the conveyance or encumbrance.
- (e)
A conveyance or encumbrance of common elements pursuant to this section does not deprive any unit of its rights of access to and support of the unit and the remaining common elements and essential services.
- (f)
A conveyance or encumbrance of common elements pursuant to this section does not affect the priority or validity of preexisting encumbrances.
§ 66-27-413. Insurance.
- (a)
Commencing no later than the time of the first conveyance of a unit to a person other than a declarant, the association shall maintain, to the extent reasonably available:
- (1)
Property insurance on the common elements insuring against risks of direct physical loss commonly insured against for similar properties. The total amount of insurance after application of any deductibles shall be no less than eighty percent (80%) of the total replacement cost of the insured property at the time the insurance is purchased and at each renewal date, exclusive of land, excavations, foundations and other items normally excluded from property policies; and
- (2)
Liability insurance, including medical payments insurance, in an amount determined by the board of directors, but no less than any amount specified in the declaration, covering all occurrences commonly insured against for death, bodily injury, and property damage arising out of or in connection with the use, ownership, or maintenance of the common elements.
- (b)
In the case of a building containing units having horizontal boundaries described in the declaration, the insurance maintained under subdivision (a)(1), to the extent reasonably available, shall include the units, but need not include improvements and betterments installed by unit owners.
- (c)
If the insurance described in subsections (a) and (b) is not reasonably available, the association shall promptly cause notice of that fact to be hand-delivered or sent prepaid by United States mail to all unit owners. The declaration may require the association to carry any other insurance, and the association, in any event, may carry any other insurance it deems appropriate to protect the association or the unit owners.
- (d)
Insurance policies carried pursuant to subsection (a) must provide that:
- (1)
Each unit owner is an insured person under the policy with respect to liability arising out of the unit owner's interest in the common elements or membership in the association;
- (2)
The insurer waives its right to subrogation under the policy against any unit owner, lessee, or member of the owner's or lessee's household, unless it can be shown that the act with intent to cause the loss of the unit owner, lessee, or member of the owner's or lessee's household was the cause of the loss;
- (3)
No act or omission by any unit owner, unless acting in the capacity of a governing board member of the association, will void the policy or be a condition to recovery under the policy; and
- (4)
If, at the time of a loss under the policy, there is other insurance in the name of a unit owner covering the same risk covered by the policy, the association's policy provides primary insurance.
- (e)
Any loss covered by the property policy under subdivision (a)(1) and subsection (b) must be adjusted with the association, but the insurance proceeds for that loss are payable to any insurance trustee designated for that purpose, or otherwise to the association, and not to any mortgagee or beneficiary under a deed of trust. The insurance trustee or the association shall hold any insurance proceeds in trust for unit owners and lienholders as their interests may appear. Subject to subsection (h), the proceeds must be disbursed first for the repair or restoration of the damaged property, and unit owners and lienholders are not entitled to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the property has been completely repaired or restored, or the condominium is terminated.
- (f)
An insurance policy issued to the association does not prevent a unit owner from obtaining insurance for the unit owner's own benefit.
- (g)
An insurer that has issued an insurance policy under this section shall issue certificates or memoranda of insurance to the association and, upon written request, to any unit owner, mortgagee, or beneficiary under a deed of trust. The insurer issuing the policy may not cancel or refuse to renew it until after notice of the proposed cancellation or nonrenewal has been mailed to the association and to each and any additional insured under the policy at their respective last known addresses, in accordance with the Cancellation of Commercial Risk Insurance Act, compiled in title 56, chapter 7, part 18, or, if the policy is a policy of personal risk insurance, as defined in § 56-5-102, then in accordance with the law governing such insurance.
- (h)
- (1)
Any portion of the condominium for which insurance is required under this section that is damaged or destroyed shall be repaired or replaced promptly by the association unless:
- (A)
The condominium is terminated;
- (B)
Repair or replacement would be illegal under any state or local health or safety statute or ordinance; or
- (C)
Eighty percent (80%) of the unit owners, together with eighty percent (80%) of owners of units that are assigned limited common elements that will not be rebuilt, vote not to rebuild.
- (2)
The cost of repair or replacement in excess of insurance proceeds and reserves is a common expense. If the entire condominium is not repaired or replaced:
- (A)
The insurance proceeds attributable to the damaged common elements must be used to restore the damaged area to a condition compatible with the remainder of the condominium;
- (B)
The insurance proceeds attributable to units and limited common elements that are not rebuilt must be distributed to the owners of those units and the owners of the units to which those limited common elements were allocated, or to lienholders, as their interests may appear; and
- (C)
The remainder of the proceeds must be distributed to all the unit owners or lienholders, as their interests may appear, in proportion to the common element interests of all the units.
- (3)
If the unit owners vote not to rebuild any unit, that unit's allocated interests are automatically reallocated upon the vote as if the unit had been condemned under § 66-27-207(a), and the association promptly shall prepare, execute, and record an amendment to the declaration reflecting the reallocations. Notwithstanding this subsection (h), § 66-27-318 governs the distribution of insurance proceeds if the condominium is terminated. This section may be varied or waived in the case of a condominium all of whose units are restricted to nonresidential use.
§ 66-27-414. Assessments for common expenses.
- (a)
Until the board of directors makes a common expense assessment, the declarant shall pay all common expenses. After any assessment has been made by the board of directors, assessments must be made at least annually, based on a budget adopted at least annually by the board of directors.
- (b)
Except for assessments under subsections (c)-(e), all common expenses must be assessed against all the units in accordance with the allocations set forth in the declaration pursuant to § 66-27-307(a). Any past due common expense assessment or installment of the common expense assessment bears interest at the rate established by the association not exceeding the maximum effective annual rate of interest as determined by the department of financial institutions.
- (c)
To the extent permitted by the declaration:
- (1)
Any common expense associated with the maintenance, repair, or replacement of a limited common element may be assessed against the units to which that limited common element is assigned, equally, or in any other proportion that the declaration provides;
- (2)
Any common expense or portion of the common expense benefiting fewer than all of the units may be assessed exclusively against the units benefited; and
- (3)
The costs of insurance may be assessed in proportion to risk and the costs of utilities must be assessed in proportion to usage.
- (d)
Assessments to pay a judgment against the association pursuant to § 66-27-416(a) may be made only against the units in the condominium at the time the judgment was entered, in proportion to their common expense liabilities.
- (e)
If any common expense is caused by the misconduct of any unit owner, the association may assess that expense exclusively against the owner's unit.
- (f)
If common expense liabilities are reallocated, common expense assessments and any installment of the common expense assessments not yet due shall be recalculated in accordance with the reallocated common expense liabilities.
- (g)
With respect to residential units only, notwithstanding any provision to the contrary set forth in the declaration, the board of directors shall have the power at any time to levy assessments to preserve the physical integrity of the condominium or to comply with governmental requirements applicable to the condominium. The assessments may be in the form of a single assessment or an assessment for reserves to be paid in such installments as shall be determined by the board of directors.
§ 66-27-415. Lien for assessments.
- (a)
- (1)
The association has a lien on a unit for any assessment levied against that unit or fines imposed against its unit owner from the time the assessment or fine becomes due, which lien may be foreclosed by judicial action.
- (2)
Notwithstanding subdivision (a)(1), the declaration may provide that the association's lien may be foreclosed in like manner as a deed of trust with power of sale under title 35, chapter 5; provided, that the association shall give notice of its action to the unit owner and to all lienholders of record prior to the first publication of notice as required under title 35, chapter 5.
- (3)
Notice shall be deemed sufficient if sent by United States mail, postage prepaid:
- (A)
If to the unit owner, at the unit, or, if different, the last address for the unit owner on file with the association; or
- (B)
If to a lienholder, other interested party, or the nominee of record, at the address set forth in the instrument of record, or, if different, at such other address as the lienholder, the other interested party, or the nominee may have on file with the association.
- (4)
Notice shall be deemed received three (3) days after deposit in the United States mail, postage prepaid. Unless the declaration otherwise provides, fees, charges, late charges, fines, and interest charged pursuant to § 66-27-402(a)(10), (11), and (12) are enforceable as assessments under this section. If an assessment is payable in installments, the full amount of the assessment is a lien from the time the first installment of the assessment becomes due.
- (b)
- (1)
A lien under this section is prior to all other liens and encumbrances on a unit, except:
- (A)
Liens and encumbrances recorded before the recordation of the declaration;
- (B)
A first or other contemporaneous mortgage or deed of trust on the unit recorded before the date on which the assessment sought to be enforced became delinquent; and
- (C)
Liens for real estate taxes and other governmental assessments or charges against the unit.
- (2)
Upon a foreclosure action initiated by a lien holder or the association under title 35, chapter 5, the association shall be entitled to a priority in the proceeds from the foreclosure sale to satisfy the lien under subsection (a) up to the extent of the common expense assessments based on the periodic budget adopted by the association pursuant to § 66-27-414, which would have become due in the absence of acceleration during the six (6) months immediately preceding institution of an action to enforce the lien, but not exceeding one percent (1%) of the maximum principal indebtedness of a lien secured by the first mortgage or deed of trust; provided, that, notwithstanding this subsection (b) or any law to the contrary:
- (A)
Any foreclosure by the association of its lien for assessments shall be subject to any prior mortgage or deed of trust encumbering the property and shall not extinguish the lien of such mortgage or deed of trust;
- (B)
Upon any foreclosure by the holder of a mortgage or deed of trust, the sale and foreclosure will be subject to the association lien up to the payment priority amount set forth in this subdivision (b)(2); and
- (C)
Any right of foreclosure or priority of the association shall not be transferable and shall be extinguished if assigned or transferred to a third party.
- (3)
This subsection (b) does not affect the priority of mechanics or materialmen's liens. The lien under this section is not subject to the statutory or other right of redemption, homestead, or any other exemption, unless specifically reserved in the declaration.
- (c)
Unless the first recorded declaration otherwise provides, if two (2) or more associations have liens for assessments created at any time on the same real estate, those liens have priority based upon the priority of recording of the declarations creating the liens.
- (d)
- (1)
Recording of the declaration constitutes record notice of the lien. A lien for any delinquent assessment under this section up to the priority in payment provided in subdivision (b)(2) is perfected without recording. Any other delinquent amount above the priority of payment provided in subdivision (b)(2) is perfected by recording it in the lien book in the register of deeds office in the county where the real property is located, and shall have priority over any subsequently filed liens.
- (2)
The lien shall not have the priority provided for in subdivision (b)(2)(A) over the mortgages and deeds of trust described in subdivision (b)(1)(B) if the owner of the unit or the holder of any mortgage or deed of trust on the unit has notified the association in writing of the holder's name and address and the identity of the unit upon which it holds a first mortgage or deed of trust, and the association has failed, within thirty (30) days of the date that six (6) months of assessments for common expenses due from the unit became delinquent, to give written notice of the delinquency to the holder of the first mortgage or deed of trust at the address provided by the party.
- (e)
A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within six (6) years after the date the lien for the assessment becomes effective.
- (f)
This section does not prohibit actions to recover sums for which subsection (a) creates a lien or prohibits an association from taking a deed in lieu of foreclosure.
- (g)
A judgment or decree in any action brought under this section must include costs and reasonable attorney's fees for the prevailing party.
- (h)
The association, upon written request, shall furnish to a unit owner, or to a holder of any mortgage or deed of trust encumbering the unit, or their respective authorized agents, a written statement setting forth the amount of unpaid assessments against the owner's unit. The statement must be furnished within seven (7) days after receipt of the request and is binding on the association.
§ 66-27-416. Liability for judgments and liens.
- (a)
The liability of a unit owner in an unincorporated association for a judgment against the association shall be limited to the percentage of the judgment equal to the undivided percentage ownership of the unit owner in the common elements.
- (b)
If the association has granted a security interest in the common elements to a creditor of the association pursuant to § 66-27-412, the holder of that security interest shall exercise its right against the common elements only.
- (c)
Whether perfected before or after the creation of the condominium, if a lien other than a deed of trust or mortgage, including a judgment lien or lien attributable to work performed or materials supplied, becomes effective against two (2) or more units, the unit owner of an affected unit may pay to the lienholder the amount of the lien attributable to the owner's unit, and the lienholder, upon receipt of payment, shall promptly deliver a release of the lien covering that unit. The amount of the payment must be proportionate to the ratio that the unit owner's common expense liability bears to the common expense liabilities of all unit owners whose units are subject to the lien. After payment, the association may not assess or have a lien against that unit owner's unit for any portion of the common expenses incurred in connection with that lien.
- (d)
A judgment against the association must be indexed in the name of the condominium and the association.
§ 66-27-417. Association records.
-
The association shall keep financial records sufficiently detailed to enable the association to comply with §§ 66-27-502 and 66-27-503. All financial and other records shall be made reasonably available for examination by any unit owner, the holder of any mortgage or deed of trust encumbering a unit, and their respective authorized agents.
§ 66-27-418. Association as trustee.
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With respect to a third person dealing with the association in the association's capacity as a trustee, either under § 66-27-413 for insurance proceeds, or § 66-27-318 following termination, the existence of trust powers and their proper exercise by the association may be assumed without inquiry. A third person is not bound to inquire whether the association has power to act as trustee or is properly exercising trust powers. A third person, without actual knowledge that the association is exceeding or improperly exercising its powers, is fully protected in dealing with the association as if it possessed and properly exercised the powers it purports to exercise. A third person is not bound to assure the proper application of trust assets paid or delivered to the association in its capacity as trustee.
Part 5 Tennessee Condominium Act of 2008 — Units Restricted to Residential Purposes
§ 66-27-502. Responsibility to provide information.
- (a)
The association, upon request from a unit owner, a purchaser or any lender to either a unit owner or a purchaser, or their respective authorized agents, shall provide to the requesting party, within ten (10) business days following the date of the association's receipt of the request, the information specified in § 66-27-503, to the extent applicable. It shall be the responsibility of a unit owner to advise a purchaser or lender, upon request, how the association may be contacted. The association will be entitled to charge a reasonable fee for providing the information that, if not paid, may be assessed against the unit whose owner, lender, or purchaser requested the information.
- (b)
When construction of a condominium is not yet complete, a declarant, prior to the first sale of any interest in a unit to a third-party purchaser, shall upon request, and within ten (10) business days following the date of the declarant's receipt of the request, provide the information specified in § 66-27-503, to the extent applicable and to the extent available, to any purchaser or prospective lender to a purchaser. If any of the information is not available within ten (10) business days following the date of the request, then it shall be provided at least ten (10) business days prior to closing of the sale of the unit.
- (c)
The party requesting the information shall be entitled to rely on the information provided, unless the party has actual knowledge to the contrary.
- (d)
Any request to be made or information to be provided under this part shall be provided in writing or by electronic means, which may include, without limitation, by email or posting to a website and providing a link and access to the website.
§ 66-27-503. Information to be provided — General.
-
The information to be provided pursuant to § 66-27-502 shall include the following:
- (1)
The name and principal address of the declarant, during the period of declarant control only, the association, and the condominium;
- (2)
A copy of the recorded, or if not recorded then in substantially final form to the extent available, master deed or declaration, bylaws, charter or articles of association of the association, and all amendments of and exhibits to the master deed or declaration, bylaws, charter or articles of association of the association;
- (3)
A copy of the current rules and regulations of the association;
- (4)
The most recent balance sheet, income statement, and approved budget for the association, or, if there has never been an approved budget, then the projected budget. The budget must include, without limitation:
- (A)
A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacements, and whether or not any study has been done to determine their adequacy, and if a study has been done, where the study will be made available for review and inspection;
- (B)
A statement of any other reserves;
- (C)
The projected aggregate annual common expense assessment by category of expenditures for the association;
- (D)
The projected monthly common expense assessment, or the method of calculating each unit's share of the assessment, for each type of unit;
- (E)
A description of any indebtedness secured by the common elements or other amenities owned by the association or available for the use of the unit owners; and
- (F)
A description of any lease affecting the common elements or amenities owned by the association or available for the use of the unit owners;
- (5)
Minutes of all meetings of the members and/or the board of directors of the association for the twenty-four-month period ending on the date of the request;
- (6)
The current monthly assessment and any special assessment applicable to the unit in question, and the amount of any delinquencies in any assessments applicable to the unit;
- (7)
Any fees or assessments due as a result of a transfer of the applicable unit;
- (8)
The amount and nature of any additional fees currently imposed for use by members of the common elements or other amenities;
- (9)
A statement of the insurance coverage, which may be provided in the form of an appropriate certificate from the insurer, maintained by the association that includes the types of coverage, limits and deductibles of the insurance;
- (10)
A statement of any unsatisfied judgments and a description of any pending suits against the association;
- (11)
A description of any pending suits filed by the association, other than for the collection of delinquent assessments;
- (12)
The total amount of current monthly, annual, or special assessments for all units in the condominium that are more than sixty (60) days past due as of the most recent available report, but in no event more than ninety (90) days prior to the date of the request; and
- (13)
Whether the board of directors is still under declarant control and, if so, when that period of control ends.
§ 66-27-504. Declarant liability.
-
If the declarant prepared or caused to be prepared all or a part of the information required by this part, the declarant may be held liable for any materially false or misleading statement, or for any material omission of any required information, with respect to that portion of the information that the declarant prepared. The declarant shall not be liable for:
- (1)
Any false or misleading information or for any omission of material fact unless the declarant had actual knowledge of the statement or omission, or, in the exercise of reasonable care, should have known of the statement or omission; or
- (2)
Following the end of the period of declarant control, failure of the association to provide information under § 66-27-503 that was prepared by the declarant.
§ 66-27-505. Remedies for noncompliance.
- (a)
- (1)
If the association or declarant, as applicable, fails to provide the information required by § 66-27-503, within the time provided in this section, then the association or declarant, as applicable, shall be liable for and shall pay a fine or penalty of two hundred fifty dollars ($250) to the party on whose behalf the request is made, following the first request for the information, and a fine or penalty of five hundred dollars ($500) if not supplied within ten (10) business days following the second request for the information, plus all costs, including, without limitation, reasonable attorney's fees incurred in obtaining the information or enforcing the fines or penalties, or both, provided for in this section.
- (2)
In addition, and not in limitation of subdivision (a)(1), neither the purchaser nor any unit owned by the purchaser, shall be liable for any past due assessments that would have been disclosed if the information would have been provided within ten (10) business days following the second request for the information; provided, that the requesting party had no actual knowledge of the past due assessments at the time the unit was acquired by the purchaser.
- (3)
The fine or penalty, or both, shall not be the exclusive remedy of the aggrieved party, but shall be in addition to all other remedies to which the party shall be entitled at law or in equity, including, without limitation, specific performance.
- (b)
If at the time of the request for information the declarant is in control of the association or the condominium, or both, then the declarant must provide the information required within ten (10) business days following receipt of a written request for the information, or, if the information is not available at that time, then within ten (10) business days prior to closing. If the information is not provided within that time, then the prospective buyer shall have the right to rescind the contract upon notice to the declarant, or, in the buyer's sole discretion, the buyer may extend the closing date until a date that is ten (10) business days following the date upon which the information is provided, and may seek specific performance of this obligation in a court of competent jurisdiction, and shall be entitled to recover all costs and expenses incurred in doing so, including, without limitation, reasonable attorney's fees.
§ 66-27-506. Escrow of deposits.
-
Any deposit made in connection with the purchase or reservation of a unit from a declarant shall be placed in escrow and held in this state in an account designated solely for that purpose by a licensed title insurance company or agent of the licensed title insurance company, an attorney, a licensed real estate broker, or an independent bonded escrow company, and shall be deposited in an institution whose accounts are insured by a governmental agency or instrumentality, or any other lawful escrow or trust account, until:
- (1)
Delivered to the declarant at closing;
- (2)
Delivered to the declarant because of purchaser's default under a contract to purchase the unit;
- (3)
Refunded to the purchaser;
- (4)
Interpleaded into a court of appropriate jurisdiction; or
- (5)
Disbursed pursuant to a final order of a court of appropriate jurisdiction.
§ 66-27-507. Conversion buildings.
- (a)
A declarant of a condominium containing conversion buildings, who offers units in the condominium, shall give each of the residential tenants and any residential subtenant in possession of a portion of a conversion building notice of the conversion no later than sixty (60) days before the tenants and any subtenant in possession are required to vacate. The notice must set forth generally the rights of tenants and subtenants under this section and shall be hand-delivered to the unit or mailed by prepaid United States mail to the tenant and subtenant at the address of the unit or any other mailing address provided by a tenant. No tenant or subtenant may be required to vacate upon less than sixty (60) days notice, except by reason of nonpayment of rent, waste, conduct that disturbs other tenants' peaceful enjoyment of the premises, unlawful conduct, or other breach of a written lease, and the terms of the tenancy may not be altered during that period. Failure to give notice as required by this section is a defense to an action for possession.
- (b)
Nothing in this section permits termination of a lease by a declarant in violation of its terms.
Part 6 Display of Flags
§ 66-27-601. Part definitions.
-
As used in this part:
- (1)
“Dedicatory instrument”:
- (A)
Means each document governing the establishment, maintenance, or operation of a residential subdivision, planned unit development, condominium, horizontal property regime, or any similar planned development; and
- (B)
Includes a declaration or similar instrument subjecting real property to:
- (i)
Restrictive covenants, bylaws, or similar instruments governing the administration or operation of a homeowners' association;
- (ii)
Properly adopted rules and regulations of a homeowners' association; or
- (iii)
All lawful amendments to the covenants, bylaws, instruments, rules, or regulations of a homeowners' association;
- (2)
“Homeowners' association” means an incorporated or unincorporated association owned by or whose members consist primarily of the owners of the property covered by the dedicatory instrument and through which the owners, or the board of directors or similar governing body, manage or regulate the residential subdivision, planned unit development, condominium, horizontal property regime, or any similar planned development; and
- (3)
“Restrictive covenant” means any covenant, condition, or restriction contained in a dedicatory instrument, whether mandatory, prohibitive, permissive, or administrative.
§ 66-27-602. Display of flags by property owners — Applicability of section.
- (a)
Except as provided in subsection (b), no homeowners' association shall adopt or enforce a dedicatory instrument provision that prohibits, or has the effect of prohibiting, a property owner from displaying the flag of the United States of America or an official or replica flag of any branch of the United States armed forces, on the property owner's property.
- (b)
A homeowners' association may adopt or enforce reasonable rules and regulations regarding the placement and manner for the display of the flag of the United States of America or an official or replica flag of any branch of the United States armed forces.
- (c)
The property owner must display the flag of the United States of America in accordance with 4 U.S.C. §§ 5-10.
- (d)
This section applies to dedicatory instruments:
- (1)
Created on or after July 1, 2017; or
- (2)
Amended on or after July 1, 2017.
§ 66-27-603. Display of sign to warn of health, safety, or dangerous natural conditions associated with water on property by property owners — Homeowners' association's rules or regulations — Effect on property owner's liability — Applicability of section.
- (a)
A homeowners' association shall not prohibit, by covenant, condition, restriction, or rule, the use of any sign posted to warn the public of health, safety, or dangerous natural conditions associated with water on the property when:
- (1)
The property owner has consulted with local or state authorities regarding a condition on the property that may pose a threat to health and safety to a person on the property and a liability, or potential liability, to the property owner; and
- (2)
The property contains a pond, including a retention or detention pond, or a lake, stream, river, or other natural body of water.
- (b)
A homeowners' association may adopt or enforce reasonable rules and regulations regarding the placement and manner for the display of the signs permitted by this section.
- (c)
This section does not alter, reduce, or eliminate any civil or criminal liability of a property owner for injuries arising from any condition on the owner's property.
- (d)
This section applies to dedicatory instruments entered into before, on, or after July 1, 2021.
Part 7 Homeowners' Association
§ 66-27-701. Part definitions.
-
As used in this part:
- (1)
“Business entity” means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity, whether organized for-profit or not-for-profit;
- (2)
“Declaration” means an instrument, however denominated, that creates a homeowners' association, and amendments to that instrument, including restrictive covenants, bylaws, and similar instruments governing the administration or operation of a homeowners' association;
- (3)
“Effectively prohibit” means to act or fail to act in a manner that prevents an owner of a residential property that is subject to a declaration, and who is in reasonable compliance with rules and regulations, from using the residential property as a long-term rental property;
- (4)
“Family” means the members of a household living, on a full-time or a part-time basis, in one (1) dwelling;
- (5)
“Homeowners' association” means an incorporated or unincorporated association owned by, or whose members consist primarily of, the owners of the residential property covered by the declaration and through which the owners, or the board of directors or similar governing body, manage or regulate the residential subdivision;
- (6)
“Long-term rental property” means a single family residential real property that is leased by the owner to a lessee for a period of one hundred eighty (180), or more, consecutive days;
- (7)
“Prohibit” means to forbid or ban, either permanently or temporarily, an owner of a residential property that is subject to a declaration from using the residential property as a long-term rental property;
- (8)
“Related” means children, parents, grandparents; any degree of great-grandparents, aunts, or uncles; any degree of great-aunts, great-uncles, or stepparent; cousins of the first degree; first cousins once removed; siblings of the whole or half degree; or a spouse of the above listed relatives;
- (9)
“Rules and regulations” means written policies, resolutions, guidelines, restrictions, and procedures of a homeowners' association, however denominated, which are not set forth in the declaration and which govern the conduct of persons or the use or appearance of property;
- (10)
“Single family residential real property”:
- (A)
Means a separate free-standing building intended for use as a dwelling by a single family or individual and that does not have a common or shared roofline with another building intended for use as the dwelling of another; and
- (B)
Does not include a condominium or unit as those terms are defined by § 66-27-203; and
- (11)
“Transfer” means the sale, gift, grant, conveyance, assignment, or other transfer of an interest in real property located in this state. However, “transfer” does not mean:
- (A)
If the owner is an individual, the sale, gift, grant, conveyance, assignment, or other transfer of an interest in real property to:
- (i)
An individual who is related to the owner;
- (ii)
An heir; or
- (iii)
A business entity in which the owner holds an ownership interest; or
- (B)
If the owner is a business entity, the sale, gift, grant, conveyance, assignment, or other transfer of an interest in real property to another business entity, as long as:
- (i)
The transferee business entity is wholly owned and completely controlled by the owner or a business entity that wholly owns and completely controls the owner; and
- (ii)
It is the first sale, gift, grant, conveyance, assignment, or other transfer of an interest in the real property since the owner acquired the interest in the real property.
§ 66-27-702. Provision of voting record upon request.
-
A homeowners' association shall, upon written request from a member, provide a record of the votes cast in a vote to amend a declaration that prohibits or effectively prohibits the use of residential property as long-term rental property. The record must include the following:
- (1)
The language of the ballot questions used;
- (2)
Proof of mailing;
- (3)
The number of members present at a meeting at which the vote is taken;
- (4)
The total number of members of the homeowners' association;
- (5)
The total number of votes that the governing body of the homeowners' association is entitled to cast;
- (6)
The number of members required for a quorum; and
- (7)
The final count of votes cast.
§ 66-27-703. Vested right to lease residential property.
-
The owner of a property subject to a declaration that is amended to prohibit, or effectively prohibit, the use of single family residential real property as long-term rental property during the period of the owner's ownership of the property has a vested right to use the property as long-term rental property until the owner transfers the property.
§ 66-27-704. Notice of change of business entity information.
- (a)
A business entity that owns residential property in this state that is subject to a declaration shall send to the homeowners' association for the property a written notice of the following:
- (1)
A change in contact information for the business entity; or
- (2)
A transfer of the ownership interest in the residential property.
- (b)
The business entity must send the notice required by this section within thirty (30) business days of the occurrence of an event listed in subdivision (a)(1) or (a)(2). The business entity may send the notice by electronic means to the homeowners' association and to a property manager designated by the homeowners' association, as long as the homeowners' association has provided the business entity with contact information for the purpose of electronic communications.
Chapter 29 Abandoned or Unclaimed Property
Part 2 Abandoned Cultural Property Act
§ 66-29-202. Part definitions.
-
As used in this part, unless the context otherwise requires:
- (1)
“Abandoned cultural property” means cultural property meeting the following three (3) conditions:
- (A)
The property shall have been deposited with a museum, historical society, or similar not-for-profit institution for a period of at least twenty (20) years; or the property shall have been deposited with a museum, historical society, or similar not-for-profit institution for a definite term which has been expired for at least twenty (20) years;
- (B)
The museum, historical society, or similar not-for-profit institution has been unable to contact the original depositor by certified mail; and
- (C)
The original depositor or such depositor's heirs or assigns have not contacted the museum, historical society, or similar not-for-profit institution for at least twenty (20) years;
- (2)
“Cultural property” means any work of art, regardless of the medium; any work of decorative art; any craft work; photographs; documents; costumes; weapons; the tools and equipment of the various trades and professions; archaeological and geological specimens; zoological and botanical specimens; historical postage and currency; silverware; objects associated with historical persons or events; and in general, any object which, when exhibited, serves to further the educational goals of the exhibiting institution; and
- (3)
“Museum” means those museums and art galleries owned or operated by the state or any political subdivision of the state, and those museums, historical societies, and art galleries owned and operated by not-for-profit corporations.
§ 66-29-203. Abandonment — Notice — Vesting of title in museum.
- (a)
Any abandoned cultural property held by a museum to which no person has made claim shall be deemed to be abandoned.
- (b)
A museum holding abandoned cultural property shall publish in at least one (1) newspaper of general circulation in the county in which the institution is located at least once a week for two (2) consecutive weeks a notice and listing of the property. The notice shall contain:
- (1)
The name and last known address, if any, of the last known owner of the property;
- (2)
A description of the property; and
- (3)
A statement that if proof of claim is not presented by the owner to the museum and if the owner's right to receive that property is not established to the museum's satisfaction within sixty-five (65) days from the date of the second published notice, the property will be deemed abandoned and shall become the property of the museum.
- (c)
If no claim has been made to the abandoned cultural property within sixty-five (65) days from the date of the second published notice, title to the property shall vest in the museum, free from all claims of the owner and of all persons claiming through or under the owner.
§ 66-29-204. Exclusivity of provisions.
-
This part shall control the procedure and disposition of any property to which it applies in lieu of any other procedure prescribed by law including the Uniform Unclaimed Property Act, compiled in part 1 of this chapter.
Part 3 Derelict or Abandoned Aircraft
§ 66-29-301. Part definitions.
-
As used in this part:
- (1)
“Abandoned aircraft” means:
- (A)
An aircraft left in a wrecked, inoperative, or partially dismantled condition on a public-use airport; and
- (B)
An aircraft that has remained in an idle state on a public-use airport for forty-five (45) consecutive calendar days without a contractual agreement between the owner or operator of the aircraft and the airport authority for use of the airport premises;
- (2)
“Airport authority” means an authority created pursuant to title 42, chapter 3, 4, or 5;
- (3)
“Derelict aircraft” means any aircraft that is not in a flyable condition, does not have a current certificate of air worthiness issued by the federal aviation administration, and is not in the process of actively being repaired; and
- (4)
“Public-use airport” is an airport owned or controlled by an airport authority.
§ 66-29-302. Discovery of derelict or abandoned aircraft at public-use airport — Notification of owner or other interested party.
- (a)
If a derelict or abandoned aircraft is discovered on a public-use airport, whether or not the public-use airport is under a lease or license to a third party, the airport authority shall:
- (1)
Make a record of the date the aircraft was discovered on the public-use airport; and
- (2)
Inquire as to the name and address of any person having an equitable or legal interest in the aircraft, including the owner and any lien holders, by:
- (A)
Contacting the federal aviation administration, aircraft registration branch, and making a diligent search of the appropriate records; or
- (B)
Contacting an aircraft title search company.
- (b)
Within ten (10) business days of receiving the information requested pursuant to subsection (a), the airport authority shall notify the owner and all other interested parties by certified mail, return receipt requested:
- (1)
Of the location of the derelict or abandoned aircraft on the public-use airport;
- (2)
That fees and charges for the use of the airport by the aircraft have accrued and the amount of those fees and charges;
- (3)
That the aircraft is subject to a lien under § 66-29-304 for any unpaid and accrued fees and charges for the use of the airport and for the transportation, storage, and removal of the aircraft;
- (4)
That the lien is subject to enforcement pursuant to this part;
- (5)
That the airport may use, trade, sell, or remove the aircraft as described in § 66-29-303 if, within thirty (30) calendar days after the date of receipt of the notice, the owner or other interested party has not removed the aircraft from the airport and paid in full all accrued fees and charges for the use of the airport and for the transportation, storage, and removal of the aircraft; and
- (6)
That the airport authority may remove the aircraft in less than thirty (30) calendar days if the aircraft poses a danger to the health or safety of users of the public-use airport, as determined by the airport authority.
- (c)
- (1)
If, after the inquiry required by subdivision (a)(2), the owner of the aircraft is unknown or cannot be found, the airport authority shall place a notice upon the aircraft in a conspicuous position containing the information required by subdivisions (b)(2)-(6).
- (2)
The notice under subdivision (c)(1) shall be not less than eight inches (8") by ten inches (10") and shall be laminated or otherwise sufficiently weatherproof to withstand normal exposure to rain, snow, and other conditions.
§ 66-29-303. Retention, trade, sale, or disposal of aircraft by airport authority.
- (a)
If, after thirty (30) calendar days of the owner or other interested party receiving the notice or after thirty (30) calendar days of posting the notice on the aircraft, the owner or other interested party has not removed the aircraft from the airport and paid in full all accrued fees and charges for the use of the airport and for the transportation, storage, and removal of the aircraft, or shown reasonable cause for the failure to do so, the airport authority may:
- (1)
Retain the aircraft for use by the airport, the state, or the unit of local government owning or operating the airport;
- (2)
Trade the aircraft to another unit of local government or a state agency;
- (3)
Sell the property; or
- (4)
Dispose of the property through an appropriate refuse removal company or a company that provides salvage services for aircraft.
- (b)
If the airport authority elects to sell the aircraft in accordance with subdivision (a)(3), the aircraft shall be sold at public auction after giving notice of the time and place of sale, at least ten (10) calendar days prior to the date of sale, in a newspaper of general circulation within the county where the airport is located and after providing written notice of the intended sale to all parties known to have an interest in the aircraft.
- (c)
If the airport authority elects to dispose of the aircraft in accordance with subdivision (a)(4), the airport authority shall be entitled to negotiate with the company for a price to be received from the company in payment for the aircraft, or, if circumstances so warrant, a price to be paid to the company by the airport authority for the costs of disposing of the aircraft. All information and records pertaining to the establishment of the price and the justification for the amount of the price shall be prepared and maintained by the airport authority.
- (d)
If the sale price or the negotiated price is less than the airport authority's then current fees and charges against the aircraft, the owner of the aircraft shall remain liable to the airport authority for the fees and charges that are not offset by the sale price or negotiated price.
- (e)
All costs incurred by the airport authority in the removal, storage, and sale of any aircraft shall be recoverable against the owner of the aircraft.
§ 66-29-304. Lien on derelict or abandoned aircraft.
- (a)
The airport authority shall have a lien on a derelict or abandoned aircraft for all unpaid fees and charges for the use of the airport by the aircraft and for all unpaid costs incurred by the airport authority for the transportation, storage, and removal of the aircraft. As a prerequisite to perfecting a lien under this section, the airport authority shall serve a notice in accordance with § 66-29-302 on the last registered owner and all persons having an equitable or legal interest in the aircraft.
- (b)
- (1)
For the purpose of perfecting its lien under this section, the airport authority shall record a claim of lien that states:
- (A)
The name and address of the airport;
- (B)
The name of the last registered owner of the aircraft and all persons having a legal or equitable interest in the aircraft;
- (C)
The fees and charges incurred by the aircraft for the use of the airport and the costs for the transportation, storage, and removal of the aircraft; and
- (D)
A description of the aircraft sufficient for identification.
- (2)
The claim of lien shall be signed and sworn to or affirmed by the airport authority's director or the director's designee.
- (3)
The claim of lien shall be served on the last registered owner of the aircraft and all persons having an equitable or legal interest in the aircraft. The claim of lien shall be so served before recordation.
- (4)
The claim of lien shall be recorded with the register of the county where the airport is located. The recording of the claim of lien shall be constructive notice to all persons of the contents and effect of such claim. The lien shall attach at the time of recordation and shall take priority as of that time.
§ 66-29-305. Proceeds of sale of aircraft.
- (a)
If the aircraft is sold, the airport authority shall satisfy the airport authority's lien, plus the reasonable expenses of notice, advertisement, and sale, from the proceeds of the sale.
- (b)
The balance of the proceeds of the sale, if any, shall be held by the airport authority, and delivered on demand to the owner of the aircraft.
- (c)
If no person claims the balance within twelve (12) months of the date of sale, the airport authority shall retain the funds and use the funds for airport operations.
§ 66-29-306. Person acquiring legal interest in aircraft — Documents of disposition.
- (a)
Any person acquiring a legal interest in an aircraft under this part shall be the lawful owner of the aircraft and all other legal or equitable interests in that aircraft shall be divested; provided, that the holder of any legal or equitable interest was notified of the intended disposal of the aircraft as required in this part.
- (b)
The airport authority may issue documents of disposition to the purchaser or recipient of an aircraft disposed of under this part.
Chapter 30 Residential Ground Rent Act
§ 66-30-102. Chapter definitions.
-
As used in this chapter, unless the context otherwise requires:
- (1)
“Obligee” means any person or entity to whom a residential ground rent is owed, including its successors and assigns;
- (2)
“Obligor” means one (1) or more individuals who are obligated to pay a residential ground rent, including their successors, sublessees or assigns;
- (3)
“Residential ground rent” means a rent or charge paid for the use of land, whether or not title thereto is transferred to the user, or a lease of land, for residential purposes:
- (A)
Which is assignable by the obligor without the obligee's consent;
- (B)
Which is for a term in excess of fifteen (15) years, including any rights of renewal at the option of the obligor;
- (C)
Where the obligor has a present or future right to terminate such ground rent and to acquire the entire interest of the obligee in the land by the payment of a determined or determinable amount; and
- (D)
Where the obligee's interest in the land is primarily a security interest to protect the obligee's right to be paid the rent or charge; and
- (4)
“Residential purposes” means any use of land wherein the owner and/or the occupant thereof resides, including, but not limited to, the following uses: apartments, multi-family, single-family, duplexes and condominiums.
§ 66-30-103. Form and contents of agreements.
-
In any case where a residential ground rent is created, the agreement therefor shall:
- (1)
Be reduced to writing;
- (2)
Be in recordable form;
- (3)
Disclose the date, the names of the parties, the ground rent and any future adjustments to it, when such rent is payable, the duration of the agreement and the value of the land at the time the agreement is made. If the parties have so agreed, the agreement shall state the amount for which the ground rent may be redeemed. Such agreement shall be included as a part of the deed or other instrument of transfer;
- (4)
Require that either party shall give without additional consideration, written certification to the other or to the holder, trustee or beneficiary of any deed of trust or mortgage upon the interest of the obligor in the real estate, of any current facts and conditions under such agreement between the obligor and the obligee, including, but not limited to, any defaults, claims, counterclaims, setoffs, prepaid rents or charges and whether or not such agreement is in good standing and full force and effect;
- (5)
Require that the obligee not mortgage or encumber the obligee's interest in the real estate during the term of the agreement, and, that at the time the obligor desires to exercise the obligor's right to redeem, the obligee shall be ready, willing and able to deliver a general warranty deed conveying the fee simple title interest to the obligee's interest in the real estate to the obligor, the obligor's heirs, administrators, successors and assigns, free and clear of any title exceptions, other than those set out in such agreement, those created by the obligor and those which do not impair the merchantability of title;
- (6)
Require that such holder, trustee or beneficiary shall be a third party beneficiary, but without any obligations, under such agreement;
- (7)
Require that such holder, trustee or beneficiary may elect in writing at any time after default under or foreclosure of its deed of trust or mortgage to assume the interest of the obligor under the agreement between the obligor and the obligee and the obligee may not declare the agreement terminated because the holder, trustee, or beneficiary has stepped into the shoes of the obligor or has assumed the obligor's position; and such holder, trustee or beneficiary shall thereafter be responsible only for any preexisting declared defaults of the obligor which can be cured by the payment of money, and not otherwise;
- (8)
Require that the obligee give written notice of any declared default under the agreement between the obligor and the obligee to such holder, trustee or beneficiary, and such holder, trustee or beneficiary shall have a ninety-day period of time after receipt of the notice to cure any such default of the obligor which can be cured by the payment of money, or a reasonable period of time to correct the declared default if such default cannot be cured by the payment of money alone. The obligee shall be required to give such notice only to those holders, trustees or beneficiaries who have recorded their interest in the real estate in the register's office for the county in which the real estate is located at the time of sending of the notice. Such holder, trustee or beneficiary shall have the right to cure such default, but shall not be obligated to cure such default or to do any act required of the obligor under the agreement between the obligor and the obligee which creates the residential ground rent;
- (9)
Such agreement between the obligor and the obligee creating the residential ground rent may provide that the obligee shall subordinate such obligee's interest in the real estate unto the rights of a holder of a deed of trust or mortgage on the interest of the obligor in the real estate, including the rights of any trustee or beneficiary thereunder, and such agreement shall set out the terms and conditions of such a subordination, if any. If no such subordination exists, the agreement creating the residential ground rent shall prominently state that no such subordination is involved in the agreement; and
- (10)
Any agreement executed pursuant to the terms of this chapter shall not be valid or enforceable unless the following sentences are prominently displayed on the first page and a signatory page thereof:
-
“This agreement is executed pursuant to the terms and conditions of the Tennessee Residential Ground Rent Act, title 66, chapter 30 (the “act”). The terms and conditions of this agreement are governed by and made subject to the act. The act provides that the obligee's interest in the land is primarily a security interest to protect the obligee's right to be paid the rent or charge paid for the use of land. If the obligor does not exercise the obligor's right to redeem the land, the obligee may retain title to the land and the obligor may lose any interest the obligor might have in the land, including improvements, fixtures and equipment located thereon.”
§ 66-30-104. Lien against real estate.
-
A residential ground rent shall constitute a lien against the real estate from the time it is recorded, in a like manner as would a deed of trust or mortgage. Any deed of trust or mortgage on the interest of the obligor in the real estate may provide that a default in payment of ground rent shall constitute a material default in such deed of trust or mortgage; that the trustee or beneficiary thereunder may satisfy such obligation for rent, and that the money so advanced, with interest thereon, shall be a part of the debt secured, to be repaid as provided by law, and such trustee or beneficiary shall be subrogated to the rights of the obligee in the real estate to the extent of such advancement and interest.
§ 66-30-105. Redemption.
-
The obligor shall have the right to redeem a residential ground rent at any time after three (3) years from the date of the ground rent agreement. The redemption shall be effected for such amount as the obligor and the obligee may have agreed upon; or, in the absence of such an agreement, shall be determined by capitalizing the ground rent in effect at the time of redemption at ten percent (10%). Upon tender of such amount by the obligor, together with any lawfully collectible arrearages of rent and interest thereon, the obligor may redeem the land from, and shall be entitled to a release from, all obligation to pay ground rent and to a warranty deed. Such release and such deed shall be in recordable form and the cost of recording the same, together with any other charges incidental to it, other than the state transfer tax, shall be paid by the obligor. The obligor's right to redeem may be assigned absolutely or as collateral security to the holder of any deed of trust or mortgage on the interest of the obligor in the real estate, and such deed of trust or mortgage may require that the obligor exercise the obligor's right to redeem upon the written demand of the trustee or beneficiary thereunder, and that a failure to exercise such right of redemption, under such circumstances, shall constitute a material default under such deed of trust or mortgage.
§ 66-30-106. Incorporation of agreement in instrument of transfer.
-
A ground rent agreement, made pursuant to this chapter, may be incorporated into the deed, ground lease, or other instrument of transfer in the following form:
-
This deed is subject to annual ground rent or charge as follows:
- 1.
Date of agreement;
- 2.
Parties:
-
Obligor
-
Obligee ;
- 3.
Ground rent and any future adjustments to it;
- 4.
When payable;
- 5.
Duration;
- 6.
Redemption price, if agreed on.
Chapter 31 Self-service Storage Facility Act
§ 66-31-102. Chapter definitions.
-
As used in this chapter, unless the context otherwise requires:
- (1)
“Default” means the failure timely to perform any obligation or duty set forth in this chapter and the rental agreement;
- (2)
“Division” means the wildlife resources agency in the case of motorized watercraft and the department of revenue, taxpayer and vehicle services division in the case of all other vehicles;
- (3)
“Last known address” means for notification purposes the street address, post office box, or electronic mail address provided by the occupant in the latest rental agreement or in a subsequent written notice of a change of address provided by the occupant;
- (4)
“Leased space” means the storage space or spaces at the self-service storage facility that are leased or rented to an occupant pursuant to a rental agreement;
- (5)
“Occupant” means a person, or a sublessee, successor, or assign of such person, entitled to the use of leased space at a self-service storage facility under a rental agreement, to the exclusion of others;
- (6)
“Owner” means the owner, operator, lessor, or sublessor of a self-service storage facility, the agent of such person, or any person authorized by such person to manage the facility or to receive rent from an occupant under a rental agreement. “Owner” shall not be construed to be a warehouse as defined in § 47-7-102; provided, that if an owner shall issue any warehouse receipt, bill of lading or other document of title for the personal property stored, the owner and occupant shall be subject to title 47, chapter 7, and this chapter shall not apply;
- (7)
“Personal property” means movable property not affixed to land and includes, but is not limited to, goods, wares, merchandise, household items, and vehicles;
- (8)
“Rental agreement” means any agreement or lease, written or oral, that establishes or modifies the terms, conditions, rules, or any other provisions concerning the use and occupancy of leased space at a self-service storage facility;
- (9)
“Self-service storage facility” means any real property designed and used for the purpose of renting or leasing storage space to occupants who are to have access to such space for the purpose of storing and removing personal property; provided, however, that “self-service storage facility” does not include any part of the real property used for residential purposes;
- (10)
“Vehicle” means a motor vehicle, a trailer, or a semitrailer as defined in §§ 55-1-103 and 55-1-105 and a vessel as defined in § 69-9-204; and
- (11)
“Verified mail” means any method of mailing that is offered by the United States postal service and that provides evidence of mailing.
§ 66-31-103. Owner access to leased space.
-
Upon the reasonable request of the owner, the occupant shall provide access to the owner to enter the leased space for the purpose of inspection, repair, alteration, improvement, or to supply necessary or agreed services. In case of emergency, the owner may enter the leased space for any of these purposes without notice to or consent from the occupant. For the purposes of this section, “emergency” means any sudden, unexpected occurrence or circumstance which demands immediate action.
§ 66-31-104. Owner's lien on stored property.
- (a)
The owner of a self-service storage facility and the owner's heirs, executors, administrators, successors, and assigns have a lien upon all personal property located at a self-service storage facility for rent, labor, or other charges, present or future, in relation to the personal property and for expenses necessary for its preservation or expenses reasonably incurred in its sale or other disposition pursuant to this chapter. The lien provided for in this section is superior to any other lien or security interest, except those which are perfected and recorded in the state in the name of the occupant during the term of the rental agreement and except any tax lien as otherwise provided by law. The lien attaches when personal property is placed in the leased space.
- (b)
The rental agreement shall contain a statement in bold type notifying the occupant of the existence of the lien and the method of its enforcement. The rental agreement shall also include the late fee, if any, and when it may be imposed. If the rental agreement contains a limit on the value of property stored in the occupant's storage space, the limit shall be deemed to be the maximum value of the property stored in that space.
- (c)
The owner may also impose a reasonable late fee on the occupant for each month the occupant does not pay rent when due. For purposes of this section, a reasonable late fee is not more than the greater of twenty dollars ($20.00) a month or twenty percent (20%) of monthly rent. Any late fee imposed by the owner pursuant to this section is in addition to any other remedy provided by law or contract.
- (d)
The owner shall provide adequate notice to the occupant before a late fee is imposed. Adequate notice is provided if the rental agreement complies with subsection (b) or if a notice is sent to the occupant at the last known address and notifies the occupant that a late fee may be charged for any month in which the occupant does not pay rent when due.
§ 66-31-105. Enforcement of lien.
-
The enforcement of the owner's lien against an occupant who is in default may be done in accordance with either or both of the following procedures:
- (1)
In the case of short term default, denial of access:
- (A)
Upon the failure of an occupant to pay the rent for the storage space or unit when it becomes due, the owner may, without notice, deny the occupant access to the personal property located in the self-service storage facility or self-contained storage unit, and the owner without notice, not less than five (5) days after the date the rent is due, may enter and remove the personal property from the leased space to other suitable storage space pending its sale or other disposition; and
- (B)
The owner shall notify the occupant of the owner's intent to enforce the owner's lien by written notice delivered by hand delivery, by verified mail, or by electronic mail to the occupant's last known address; or
- (2)
In the case of long term default, which is a continuous fifteen (15) days, the owner may enforce the owner's lien in accordance with the following procedures:
- (A)
The occupant shall be notified in writing;
- (B)
The notice shall be delivered by hand delivery, by verified mail, or by electronic mail to the occupant's last known address;
- (C)
The notice shall include:
- (i)
An itemized statement of the owner's claim showing the sum due at the time of the notice and the date when the sum became due;
- (ii)
A demand for payment of the sum due within a specified time not less than thirty (30) days after the date of the notice and a statement of the approximate additional expenses which may be incurred between the date of the notice and the date of the sale;
- (iii)
A statement that the contents of the occupant's leased space are subject to the owner's lien;
- (iv)
If the owner elects to deny the occupant access to the leased space or elects to enter and/or remove the occupant's personal property from the leased space to other suitable storage space, a statement so advising the occupant shall be included in the notice;
- (v)
The name, street address and telephone number of the owner or designated agent whom the occupant may contact to respond to the notice; and
- (vi)
A conspicuous statement that unless the claim is paid within the time stated, the personal property will be advertised for sale or will be otherwise disposed of at a specified time and place, not sooner than sixty (60) days after default;
- (D)
Any sale or other disposition of the personal property shall conform to the terms of the notification as provided for in this section. If the personal property is advertised for sale and the sale is not consummated, the owner shall give written notice to the occupant of other disposition of the personal property;
- (E)
Any sale or other disposition of the personal property must be held at the self-service storage facility, online, or at the nearest suitable place to where the personal property is held or stored;
- (F)
After expiration of the time stated in the notice and if the personal property has not otherwise been disposed, the owner shall advertise the sale of the personal property in a commercially reasonable manner. The manner of advertisement is deemed commercially reasonable if not less than three (3) potential bidders participate in the sale at the time and place advertised. The advertisement of sale may include, but not be limited to, the publishing one (1) time before the date of the sale of the personal property in a newspaper of general circulation that serves the area where the self-storage facility is located. An advertisement must include:
- (i)
A statement that the contents of the occupant's leased space shall be sold to satisfy the owner's lien;
- (ii)
The address of the self-service storage facility and the number or other description, if any, of the space where the personal property is located and the name of the occupant; and
- (iii)
The time, place, and manner of the sale;
- (G)
Before any sale or other disposition of personal property pursuant to this section, the occupant may pay the amount necessary to satisfy the owner's lien and the reasonable expenses incurred under this section and thereby redeem the personal property. Upon the payment and satisfaction of the amount necessary to satisfy the lien, the owner shall return the personal property and thereafter the owner shall have no liability to any person with respect to such personal property;
- (H)
The owner may buy at any sale of personal property to enforce the owner's lien;
- (I)
A purchaser in good faith of the personal property sold to satisfy the owner's lien takes the property free of any rights of persons against whom the lien was valid, despite noncompliance by the owner with the requirements of this section;
- (J)
In the event of a sale under this section, the owner may satisfy the owner's lien and the expenses of such sale from the proceeds of the sale but shall hold the balance, if any, for delivery on demand to the occupant. If the occupant does not claim the balance of the proceeds within one (1) year of the date of the sale, such balance shall be deemed to be abandoned, and the owner shall pay such balance to the state treasurer who shall receive, hold and dispose of same in accordance with the Uniform Unclaimed Property Act, compiled in chapter 29, part 1 of this title;
- (K)
If the property upon which the lien is claimed is a vehicle and rent and other charges related to the property remain unpaid or unsatisfied for sixty (60) days after the maturity of the obligation to pay rent, the facility owner may utilize either of the following options:
- (i)
The facility owner may have the property towed. If a vehicle is towed as authorized in this subdivision (2)(K)(i), the owner shall not be liable for the vehicle or any damages to the vehicle once the tower takes possession of the property; or
- (ii)
The facility owner shall contact the appropriate division in such manner as the division prescribes for the purposes of determining the existence and identity of any lien holder and the name and address of the owner of the vehicle as shown in the division's records. If the vehicle is a motor vehicle, then the facility owner may also contact the county clerk for the purposes of determining the existence and identity of any lien holder and the name and address of the owner of the motor vehicle as shown in the county clerk's records. Within ten (10) days of receipt of the information concerning any lien holder and the owner of the motor vehicle, as shown in the division's or county clerk's records, the facility owner shall send a written notice to any lien holder and to the motor vehicle owner, if the motor vehicle owner is not the occupant, by verified mail, stating that:
- (a)
Such vehicle is being held by the facility owner;
- (b)
A lien has attached pursuant to this chapter; and
- (c)
Payment shall be made within thirty (30) days after notification to satisfy the lien. The vehicle owner or lien holder may pay the balance owed and take possession of the vehicle. If the owner or lien holder does not satisfy the lien, the facility owner may sell the vehicle in any manner, including but not limited to, public auction;
- (L)
The owner's liability arising from the sale is limited to the net proceeds received from the sale of the personal property;
- (M)
The owner is not liable for identity theft or other harm resulting from the misuse of information contained in a document or electronic storage media:
- (i)
That are part of the occupant's property sold or otherwise disposed; and
- (ii)
Of which the owner did not have actual knowledge; and
- (N)
An owner shall not be entitled to any remedies provided by this chapter, including but not limited to, enforcement of a lien against an occupant, if:
- (i)
The requirements of this section are not satisfied;
- (ii)
The sale of the personal property located in the leased space is not in conformity with subdivision (2)(F); or
- (iii)
There is a willful violation of this chapter.
§ 66-31-106. Rights supplemental — Required contents of rental agreements.
- (a)
Nothing in this chapter shall be construed as in any manner impairing or affecting the right of the parties to create additional rights, duties, and obligations in and by virtue of the rental agreement. The rights provided by this chapter shall be in addition to all other rights allowed by law to a creditor against a debtor.
- (b)
- (1)
The rental agreement shall contain a notice stating that all property stored under the terms of such agreement may be sold or otherwise disposed of if no payment has been received for a continuous fifteen-day period when due.
- (2)
The rental agreement shall contain a provision directing the occupant to disclose to the owner any lienholder with an interest in property that is or may be stored in the self-service storage facility.
§ 66-31-107. Application of chapter.
- (a)
This chapter shall apply to all rental agreements entered into or extended or renewed after July 1, 1980.
- (b)
All rental agreements entered into before July 1, 1980, and not extended or renewed after that date, and the rights and duties and interests flowing from them shall remain valid, and may be enforced or terminated in accordance with their terms or as permitted by any other statute or law of this state.
Chapter 32 Time-Share Programs and Vacation Clubs
Part 1 Time-Share Act of 1981
§ 66-32-102. Part definitions.
-
As used in this part and part 2 of this chapter, unless the context otherwise requires:
- (1)
“Acquisition agent” means a person who by means of telephone, mail, advertisement, inducement, solicitation or otherwise attempts directly to encourage any person to attend a sales presentation for a time-share program;
- (2)
“Advertise” or “advertisement” means any written, printed, verbal or visual offer by an individual or general solicitation;
- (3)
“Commission” means Tennessee real estate commission, which is an agency created under § 62-13-201;
- (4)
“Component site” means a specific geographic site at which certain time-share accommodations and facilities are located. If permitted under applicable law, separate phases that are operated as a single development in a particular geographic location and under common management shall be deemed a single component site;
- (5)
“Developer” means, in the case of any given property, any person or entity which is in the business of creating or which is in the business of selling its own time-share intervals in any time-share program. This definition does not include a person acting solely as a sales agent;
- (6)
“Development,” “project,” or “property” means all of the real property subject to a project instrument, and containing more than one (1) unit;
- (7)
“Exchange agent” means a person who exchanges or offers to exchange time-share intervals in an exchange program with other time-share intervals;
- (8)
“Managing agent” means a person who undertakes the duties, responsibilities, and obligations of the management of a time-sharing program;
- (9)
“Offering” means any offer to sell, solicitation, inducement or advertisement whether by radio, television, newspaper, magazine or by mail, whereby a person is given an opportunity to acquire a time-share interval within a project located either within or outside the state. Any offering of a time-share interval which is not located in this state shall not be an offering if the developer shall submit appropriate documentation satisfactory to the commission that the time-share program is in compliance with the law of the jurisdiction in which the time-share interval is located and such law is as stringent as this part;
- (10)
“Person” means one (1) or more natural persons, corporations, partnerships, associations, trusts, other entities, or any combination thereof;
- (11)
“Project” — See “Development”;
- (12)
“Project instrument” means one (1) or more recordable documents applicable to the whole project by whatever name denominated, containing restrictions or covenants regulating the use, occupancy or disposition of an entire project, including any amendments to the document, but excluding any law, ordinance, or governmental regulation;
- (13)
“Property” — See “Development”;
- (14)
“Public offering statement” means that statement required by § 66-32-112;
- (15)
“Purchaser” means any person other than a developer or lender who acquires an interest in a time-share interval;
- (16)
“Reservation system” means the method, arrangement, or procedure by which the owners of vacation club interests are required to compete with other owners of vacation club interests in the same vacation club in order to reserve the use and occupancy of an accommodation of the vacation club for one or more use periods, regardless of whether such reservation system is operated and maintained by the vacation club managing entity, an exchange company, or any other person. In the event that mandatory use of an exchange program is an owner's principal means of obtaining the right to use and occupy a vacation club's accommodations, such arrangement shall be deemed a reservation system for purposes of this subdivision (16) and part 2 of this chapter;
- (17)
“Sales agent” means a person who sells or offers to sell “time-share intervals” in a “time-share program” to a purchaser. All such sales agents shall be licensed and subject to title 62, chapter 13;
- (18)
“Time-share estate” means an ownership or leasehold estate in property devoted to a time-share fee, tenants in common, time span ownership, interval ownership, and a time-share lease;
- (19)
“Time-share instrument” means any document by whatever name denominated, creating or regulating time-share programs, but excluding any law, ordinance or governmental regulation;
- (20)
“Time-share interval” means a time-share estate or a time-share use;
- (21)
“Time-share program” means any arrangement for time-share intervals in a time-share project whereby use, occupancy or possession of real property has been made subject to either a time-share estate or time-share use whereby such use, occupancy or possession circulates among purchasers of the time-share intervals according to a fixed or floating time schedule on a periodic basis occurring annually over any period of time in excess of one (1) year;
- (22)
“Time-share project” means any real property that is subject to a time-share program;
- (23)
“Time-share resale broker” means any person or entity who undertakes to list, advertise for sale, promote or sell by any means whatsoever more than five (5) time-share intervals per year in one (1) or more time-share projects on behalf of any number of purchasers. A time-share resale broker must be a licensed real estate broker, as defined in § 62-13-102. “Time-share resale broker” does not include:
- (A)
Any person who has acquired any number of time-share intervals in any number of time-share projects for personal use and occupancy;
- (B)
Any resale performed by a time-share resale broker affiliated with a duly registered time-share developer, involving time-share intervals under the control of the time-share developer in its project; provided, that the time-share developer is in compliance with § 66-32-137(d); or
- (C)
A publisher of a newspaper or periodical in general circulation, broadcaster or telecaster in connection with the advertising for resale or other promotion of one (1) or more time-share intervals, so long as the publisher, broadcaster or telecaster is not under common ownership or control with a person required to be licensed by this part or chapter 13 of this title or does not have as its primary purpose the solicitation of resales or other uses of time-share intervals;
- (24)
“Time-share use” means any contractual right of exclusive occupancy which does not fall within the definition of a “time-share estate” including, without limitation, a vacation license, prepaid hotel reservation, club membership, vacation club interest, limited partnership or vacation bond;
- (25)
“Unit” means the real property or real property improvement in a project which is divided into time-share intervals;
- (26)
“Vacation club” means any system or program with respect to which a purchaser obtains, by any means, a recurring right to use and occupy accommodations and facilities, if any, in more than one (1) component site through the mandatory use of a reservation system, whether or not the purchaser's use and occupancy right is coupled with an interest in real property; and
- (27)
“Vacation club documents” means and includes the one (1) or more documents or instruments, by whatever name denominated, creating or governing a vacation club and the disposition of vacation club interests therein. “Vacation club documents” is intended to be broadly construed to incorporate all terms and conditions of the purchase of a vacation club interest, the incorporation of accommodations and facilities located at component sites into the vacation club, the management and operation of the vacation club's component sites, and the management and operation of the reservation system, including, but not limited to, the reservation system's rules and regulations.
§ 66-32-103. Nature of time-share estates — Recordation.
- (a)
A “time-share estate” is an estate in real property and has the character and incidents of an estate in fee simple at common law or estate for years, if a leasehold, except as expressly modified by this part. This shall supersede any contrary rule at common law.
- (b)
Each time-share estate constitutes for purposes of title a separate estate or interest in property except for real property tax purposes.
- (c)
A document transferring or encumbering a time-share estate in real property may not be rejected for recordation because of the nature or duration of that estate or interest.
§ 66-32-105. Time-share units.
-
A time-share program may be created in any unit, unless expressly prohibited by the project instruments or local governing laws.
§ 66-32-106. Instruments for time-share estates.
-
Project instruments and time-share instruments creating time-share estates must contain the following:
- (1)
The name of the county in which the property is situated;
- (2)
The legal description, street address or other description sufficient to identify the property;
- (3)
Identification of time periods by letter, name, number, or combination thereof;
- (4)
Identification of time-share estates and, where applicable, the method whereby additional time-share estates may be created;
- (5)
The formula, fraction or percentage, of the common expenses and any voting rights assigned to each time-share estate and, where applicable, to each unit in a project that is not subject to the time-share program;
- (6)
Any restrictions on the use, occupancy, alteration or alienation of time-share intervals;
- (7)
The ownership interest, if any, in personal property and provisions for the care, maintenance and replacement of the commonly owned capital improvements and the commonly owned personal property belonging to the time-share estates. Specifically, an escrow or reserve account shall be established for the repair, replacement and maintenance of capital improvements and personal property; and
- (8)
Any other matters the developer deems appropriate.
§ 66-32-107. Time-share estate management.
-
The time-share instruments for a time-share estate program shall prescribe reasonable arrangements for management and operation of the time-share program and for the maintenance, repair and furnishing of units, which shall ordinarily include, but need not be limited to, provisions for the following:
- (1)
Creation of an association of time-share estate owners;
- (2)
Adoption of bylaws for organizing and operating the association;
- (3)
Payment of costs and expenses of operating the time-share program and owning and maintaining the units;
- (4)
Employment and termination of employment of the managing agent for the association;
- (5)
Preparation and dissemination to owners of an annual budget and of operating statements and other financial information concerning the time-share program;
- (6)
Adoption of standards and rules of conduct for the use and occupancy of units by owners;
- (7)
- (A)
Collection of assessments from owners to defray the expenses of management of the time-share program and maintenance of the units, which will include the maintenance of reserve and escrow accounts that will adequately provide for the maintenance and replacement of capital improvements to the commonly owned areas of the time-sharing program and for the timely maintenance and replacement of the personal property commonly owned by the time-share estates;
- (B)
The board of directors of the property owners association shall decide when maintenance or replacement of capital improvements shall be accomplished and shall set amounts of reserve. The board of directors of the property owners association and managing agent shall disclose to each interval owner, in a written annual report, the status of the required accounts. The report shall include the total funds deposited, the current balance, the interest earned, the purpose and amount of any payouts since the previous report. The report shall include the name and address of the person or persons in responsible charge of the accounts;
- (8)
Comprehensive general liability insurance for death, bodily injury and property damage arising out of, or in connection with, the use of units by owners, their guests and other users;
- (9)
Methods for providing compensation for use periods or monetary compensation to an owner if a unit cannot be made available for the period to which the owner is entitled by schedule or by confirmed reservation;
- (10)
Procedures for imposing a monetary penalty or suspension of an owner's rights and privileges in the time-share program for failure of the owner to comply with provisions of the time-share instruments or the rules of the association with respect to the use of the units. Under these procedures an owner must be given notice and the opportunity to refute or explain the charges against such owner in person or in writing to the governing body of the association before a decision to impose discipline is rendered;
- (11)
Employment of attorneys, accountants and other professional persons as necessary to assist in the management of the time-share program and the units;
- (12)
The managing agent for the association shall be responsible for the maintenance of an escrow or reserve account, as set by the board of directors, which shall contain the assessments collected for the maintenance and replacement of the capital improvements to the commonly owned areas and for the maintenance and timely replacement of the personal property commonly owned by the time-share estates. Such escrow or reserve accounts shall be maintained in an institution insured by the federal deposit insurance corporation or federally insured agencies;
- (13)
Failure of the managing agent to properly maintain the escrow or reserve accounts, as set by the board of directors, for maintenance and replacement of capital improvements to the common area and the maintenance and timely replacement of the personal property shall constitute a felony and the managing agent shall be subject to the penalties as provided in § 66-32-118; and
- (14)
The managing agent shall be a licensed real estate firm or bonded agent. The principal broker/agent of the firm shall have control of the accounts required in subdivision (12), and shall enter into a tri-party agreement by and between the commission, the managing agent, and the depository institution, providing for the authority of the commission to access and inspect the account records at all times on behalf of the condominium homeowners association.
§ 66-32-108. Developer control.
- (a)
The time-share instruments for a time-share estate program may provide for a “developer control period,” during which the developer or a managing agent selected by the developer may manage the time-share program and the units in the time-share program.
- (b)
If the time-share instruments for a time-share estate program provide for the establishment of a developer control period, they shall ordinarily include provisions for the following:
- (1)
Termination of the developer control period by action of the association;
- (2)
Termination of contracts for goods and services for the time-share program or for units in the time-share program entered into during the developer control period; and
- (3)
A regular accounting by the developer to the association as to all matters that significantly affect the interests of owners in the time-share program.
§ 66-32-109. Instruments for time-share use.
-
Project instruments and time-share instruments creating time-share uses must contain the following:
- (1)
Identification by name of the time-share project and street address where the time-share project is situated;
- (2)
Identification of the time periods, type of units and the units that are in the time-share program and the length of time that the units are committed to the time-share program;
- (3)
In case of a time-share project, identification of which units are in the time-share program and the method whereby any other units may be added, deleted or substituted; and
- (4)
Any other matters that the developer deems appropriate.
§ 66-32-110. Time-share use management.
-
The time-share instruments for a time-share use program shall prescribe reasonable arrangements for management and operation of the time-share program and for the maintenance, repair and furnishing of units which shall ordinarily include, but need not be limited to, provisions for the following:
- (1)
Standards and procedures for upkeep, repair and interior furnishings of units and for providing maid, cleaning, linen and similar services to the units during use periods;
- (2)
Adoption of standards and rules of conduct governing the use and occupancy of units by owners;
- (3)
Payment of the costs and expenses of operating the time-share program and owning and maintaining the units;
- (4)
Selection of a managing agent to act on behalf of the developer;
- (5)
Preparation and dissemination to owners of an annual budget and of operating statements and other financial information concerning the time-share program;
- (6)
Procedures for establishing the rights of owners to the use of units by prearrangement or under a first-reserved first-served priority system;
- (7)
Organization of a management advisory board consisting of time-share use owners including an enumeration of rights and responsibilities of the board;
- (8)
Procedures for imposing and collecting assessments or use fees from time-share use owners as necessary to defray costs of management of the time-share program and in providing materials and services to the units;
- (9)
Comprehensive general liability insurance for death, bodily injury and property damage arising out of, or in connection with, the use of units by time-share use owners, their guests and other users;
- (10)
Methods for providing compensating use periods or monetary compensation to an owner if a unit cannot be made available for the period to which the owner is entitled by schedule or a confirmed reservation;
- (11)
Procedures for imposing a monetary penalty or suspension of an owner's rights and privileges in the time-share program for failure of the owner to comply with the provisions of the time-share instruments or the rules established by the developer with respect to the use of the units. The owners shall be given notice and the opportunity to refute or explain the charges in person or in writing to the management advisory board before a decision to impose discipline is rendered; and
- (12)
Annual dissemination to all time-share use owners by the developer, or by the managing agent, of a list of the name and mailing addresses of all current time-share use owners in the time-share program.
§ 66-32-111. Partition.
-
No action for partition of a unit may be maintained except as permitted by the time-share instrument.
§ 66-32-112. Public offering statement — General provisions.
-
A public offering statement must be provided to each purchaser of a time-share interval and must contain or fully and accurately disclose:
- (1)
The name of the developer and the principal address of the developer and the time-share intervals offered in the statement;
- (2)
A general description of the units including, without limitation, the developer's schedule of commencement and completion of all buildings, units, and amenities or if completed that they have been completed;
- (3)
As to all units offered by the developer in the same time-share project:
- (A)
The types and number of units;
- (B)
Identification of units that are subject to time-share intervals; and
- (C)
The estimated number of units that may become subject to time-share intervals;
- (4)
A brief description of the project;
- (5)
If applicable, any current budget and a projected budget for the time-share intervals for one (1) year after the date of the first transfer to a purchaser. The budget must include, without limitation:
- (A)
A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement;
- (B)
The projected common expense liability, if any, by category of expenditures for the time-share intervals;
- (C)
The projected common expense liability for all time-share intervals; and
- (D)
A statement of any services not reflected in the budget that the developer provides, or expenses that it pays;
- (6)
Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee;
- (7)
A description of any liens, defects, or encumbrances on or affecting the title to the time-share interval;
- (8)
A description of any financing offered by the developer;
- (9)
A statement that within ten (10) days from the date of the signing of the contract made by the purchaser, where the purchaser shall have made an on-site inspection of the time-share project prior to the signing of the contract of purchase, and where the purchaser has not made an on-site inspection of the time-share project prior to the signing of the contract of purchase fifteen (15) days from the date of signing of the contract, the purchaser may cancel any contract for the purchase of a time-share interval from developer;
- (10)
A statement of any pending suits material to the time-share intervals of which a developer has actual knowledge;
- (11)
Any restraints on alienation of any number or portion of any time-share intervals;
- (12)
A description of the insurance coverage, or a statement that there is no insurance coverage, provided for the benefit of time-share interval owners;
- (13)
Any current or expected fees or charges to be paid by time-share interval owners for the use of any facilities related to the property;
- (14)
The extent to which financial arrangements have been provided for completion of all promised improvements; and
- (15)
The extent to which a time-share unit may become subject to a tax or other lien arising out of claims against other owners of the same unit.
§ 66-32-113. Escrow of deposits.
- (a)
- (1)
A developer of a time-share program shall deposit into an escrow account established and held in this state, in an account designated solely for the purpose, by an independent bonded escrow company, or in an institution whose accounts are insured, a governmental agency or instrumentality, one hundred percent (100%) of all funds which are received during the purchaser's cancellation period provided for in this part. The deposit of such funds shall be evidenced by an executed escrow agreement between the escrow agent and the developer, which shall include that:
- (A)
Its purpose is to protect the purchaser's right to a refund if the purchaser cancels the sales agreement for a time-share interval within the cancellation period;
- (B)
Funds may be disbursed to the developer by the escrow agent from the escrow account only after expiration of the purchaser's cancellation period and in accordance with the sales agreement;
- (C)
The escrow agent may release funds to the developer from the escrow account only after receipt of a sworn statement from the developer that no cancellation notice was received before expiration of the cancellation period; and
- (D)
If a buyer properly terminates the contract pursuant to its terms or pursuant to this part, the funds shall be paid to the buyer together with any interest earned, all as provided in § 66-32-114(a).
- (2)
Funds so deposited may be invested by the escrow agent in securities of the United States or any agency thereof or in savings or time deposits in institutions insured by an agency of the United States.
- (b)
If a developer contracts to sell a time-share estate and the construction, furnishings, and landscaping of the property submitted to time-share ownership have not been substantially completed in accordance with the plans and specifications and representations made by the developer in the disclosures required by this part, the developer shall immediately pay into an escrow account established and held in this state, in an account designated solely for the purpose, by an independent bonded escrow company, or in an institution whose accounts are insured, a governmental agency or instrumentality, all payments received by or on behalf of the developer from the buyer on a contract of purchase. The escrow agent may invest the escrow funds in securities of the United States or any agency thereof or in savings or time deposits in institutions insured by an agency of the United States. Funds shall be released from escrow as follows:
- (1)
If a buyer properly terminates the contract pursuant to its terms or pursuant to this part, the funds shall be paid to the buyer, together with any interest earned;
- (2)
If the buyer defaults in the performance of the buyer's obligations under the contract of purchase and sale, the funds shall be paid to the developer, together with any interest earned; or
- (3)
If the funds of a buyer have not been previously disbursed in accordance with this subsection (b), they may be disbursed to the developer by the escrow agent at the closing of the transaction, unless prior to the disbursement the escrow agent received from the buyer written notice of a dispute between the buyer and developer. If the money remains in this account for more than three (3) months and earns interest, the interest shall be paid as provided in this subsection (b).
- (c)
For the purpose of this section, “substantially completed” means that all amenities, furnishings, appliances and structural components and mechanical systems of buildings are completed and provided as represented in the public offering statement and that the premises are ready for occupancy and the proper governmental authority has caused to be issued a certificate of occupancy.
- (d)
- (1)
In lieu of the provisions in subsection (b), a developer may withdraw, after the initial rescission period for cancellation has expired, all payments received by the developer from the buyer toward the sales price, provided:
- (A)
The developer, prior to withdrawal of any funds, posts a surety bond, irrevocable letter of credit or other financial assurances acceptable to the commission in an amount equal to one hundred twenty-five percent (125%) of the cost to complete the time-share project. The developer shall be required to submit such cost and financial data as the commission may reasonably require; or
- (B)
The developer has obtained protection for nondefaulting purchasers in compliance with § 66-32-128, and has obtained a final and binding commitment letter on the construction of the project and a final and binding commitment letter on the financing of the same construction. A bond obtained pursuant to subdivision (d)(1)(A) shall be executed by the seller as principal and by a surety company authorized to do business in this state as surety. The bond shall be conditioned upon the faithful compliance of the seller with this part including substantial completion, as defined in subsection (c), of the project and unit and compliance with the contract of purchase.
- (2)
Payments so withdrawn pursuant to this subsection (d) may be used only to pay for construction costs of the improvements comprising the time-share project.
- (e)
In lieu of any escrows required by this section, the commission shall have the discretion to accept other financial assurances including, but not limited to, a performance bond or an irrevocable letter of credit in an amount at least equal to or in excess of the cost to complete the time-share project.
§ 66-32-114. Mutual rights of cancellation.
- (a)
Before transfer of a time-share interval and no later than the date of any sales contract, the developer shall provide the intended transferee with a copy of the public offering statement and any amendments and supplements thereto. The contract is voidable by the purchaser until the purchaser has received the public offering statement. The contract is also voidable by the purchaser for ten (10) days from the date of the signing of the contract by the purchaser if the purchaser shall have made an on-site inspection of the time-share project or any component site prior to the signing of the contract, and if the purchaser did not make an on-site inspection of the time-share project or any component site prior to signing the contract, for fifteen (15) days thereafter. Cancellation is without penalty, and all payments made by the purchaser before cancellation must be refunded within thirty (30) days after receipt of the notice of cancellation as provided in subsection (c).
- (b)
During the applicable rescission period, the developer may cancel the contract of purchase without penalty to either party. The developer shall return all payments due, the purchaser shall return all material received in good condition, reasonable wear and tear excepted. If such materials are not returned, the developer may deduct the cost of the same and return the balance to the purchaser.
- (c)
If either party elects to cancel a contract pursuant to subsection (a) or (b), then that party may do so by:
- (1)
Hand delivering notice of cancellation to the other party within the designated period for voiding the contract;
- (2)
Mailing notice of cancellation by prepaid United States mail, postmarked anytime within the designated period for voiding the contract, to the other party or to the other party's agent for service of process; or
- (3)
Sending notice of cancellation via electronic mail, time stamped within the designated period for voiding the contract to the other party.
- (d)
The purchaser and the developer shall not waive the rescission rights set forth in subsections (a) and (b).
§ 66-32-115. Exemptions from requirement of public offering statement.
- (a)
The developer shall not be required to prepare and distribute a public offering statement if the developer has registered and there has been issued a public offering statement or similar disclosure document which is provided to purchasers under the following:
- (1)
Securities Act of 1933 (15 U.S.C. § 77a et seq.);
- (2)
Federal Interstate Land Sales Full Disclosure Act (15 U.S.C. § 1701 et seq.) in which the time-share program is made a part of the subdivision that is being registered; and
- (3)
Any federal or Tennessee act which requires a federal or state public offering statement or similar disclosure document to be prepared and provided to purchasers.
- (b)
A public offering statement need not be prepared or delivered in the case of:
- (1)
Any transfer of a time-share interval by any time-share interval owner other than the developer and/or his agent;
- (2)
Any disposition pursuant to court order;
- (3)
A disposition by a government or governmental agency;
- (4)
A disposition by foreclosure or deed in lieu of foreclosure;
- (5)
A disposition of a time-share interval in a time-share project situated wholly outside the state; provided, that all solicitations, negotiations, and contracts took place wholly outside this state and the contract was executed wholly outside this state;
- (6)
A gratuitous transfer of a time-share interval; or
- (7)
Group reservations made for fifteen (15) or more people as a single transaction between a hotel and travel agent or travel groups for hotel accommodations, where deposits are made and held for more than three (3) years in advance.
§ 66-32-116. Material change.
-
The developer shall amend or supplement the public offering statement to report any material change in the information required by § 66-32-112. As to any exchange program, the developer shall use the current written materials that are supplied to it for distribution to the time-share interval owners as it is received.
§ 66-32-117. Liens.
- (a)
Unless the purchaser expressly agrees to take subject to or assume a lien prior to transferring a time-share interval other than by deed in lieu of foreclosure, the developer shall record or furnish to the purchaser releases of all liens affecting that time-share interval, or shall provide a surety bond or insurance against the lien.
- (b)
Unless a time-share interval owner or such owner's predecessor in title agrees otherwise with the lienor, if a lien other than an underlying mortgage or deed of trust becomes effective against more than one (1) time-share interval in a time-share project, any time-share interval owner is entitled to a release of such owner's time-share interval from the lien upon payment of the amount. The payment must be proportionate to the ratio that the time-share interval owner's liability bears to the liabilities of all time-share interval owners whose interests are subject to the lien. Upon receipt of payment, the lienholder shall promptly deliver to the time-share interval owner a release of the lien covering that time-share interval. After payment, the managing entity may not assess or have a lien against that time-share interval for any portion of the expenses incurred in connection with that lien.
§ 66-32-118. Violations — Attorney's fees — Criminal penalties.
- (a)
If a developer or any other person subject to this part violates any provision thereof or any provision of the project instruments, any person or class of persons adversely affected by the violation has a claim for appropriate relief. Punitive damages may be awarded for a willful violation of this part. The court may also award reasonable attorney's fees.
- (b)
Except as provided in subsection (c), any developer or any other person subject to this part who offers or disposes of a time-share interval without having complied with this part or who violates any provision of this part commits a Class C misdemeanor.
- (c)
Any developer or any other person subject to this part who knowingly, willfully and intentionally offers, disposes of, or jeopardizes the interest of the purchaser of a time-share interval in violation of § 66-32-113, § 66-32-122(a) or § 66-32-128 commits a felony punishable by a fine not exceeding five thousand dollars ($5,000) or by imprisonment for not less than one (1) year nor more than three (3) years, or by both such fine and imprisonment.
- (d)
Nothing in this part limits the power of the state to punish any person for any conduct or omission which constitutes a violation under any other provision of this code.
§ 66-32-119. Statute of limitations.
-
A judicial proceeding where the accuracy of the public offering statement or validity of any contract of purchase is in issue and a rescission of the contract or damages is sought must be commenced within four (4) years after the date of the contract of purchase, notwithstanding that the purchaser's terms of payments may extend beyond the period of limitation. However, with respect to the enforcement of provisions in the contract of purchase which require the continued furnishing of services and the reciprocal payments to be made by the purchaser, the period of bringing a judicial proceeding will continue for a period of four (4) years for each breach, but the parties may agree to reduce the period of limitation to not less than two (2) years.
§ 66-32-120. Financial records.
- (a)
The person or entity responsible for making and/or collecting common expenses, assessments or maintenance assessments shall keep detailed financial records.
- (b)
All financial and other records shall be made reasonably available for examination by any time-share interval owner and such owner's authorized agents.
§ 66-32-121. Powers and duties of commission.
- (a)
The commission may adopt, amend, and repeal rules, regulations and issue orders consistent with, and in furtherance of the objectives of this part.
- (b)
The commission may prescribe forms and procedures for submitting information to the commission.
- (c)
The commission may accept grants-in-aid from any governmental source and may contract with agencies charged with similar functions in this or other jurisdictions, in furtherance of the objectives of this part.
- (d)
The commission may cooperate with agencies performing similar functions in this and other jurisdictions to develop uniform filing procedures and forms, uniform disclosure standards, and uniform administrative practices, and may develop information that may be useful in the discharge of the commission's duties.
- (e)
The commission may initiate private investigations within or outside this state.
- (f)
The commission shall have the power to revoke, or suspend the real estate license of a sales agent, or the registration of a time-share project, or to otherwise appropriately discipline the sales agent, or fine the developer pursuant to § 56-1-308, if, after notice and hearing, any of the following conditions exist:
- (1)
Any representation in any document or information filed with the commission is false or misleading; or
- (2)
Any developer or agent of a developer has:
- (A)
Engaged in or is engaging in any unlawful act or practice;
- (B)
Disseminated or caused to be disseminated orally, or in writing, any false or misleading promotional materials in connection with a time-share program;
- (C)
Concealed, diverted, or disposed of any funds or assets of any person in a manner impairing rights of purchasers of time-share intervals in the time-share program;
- (D)
Failed to perform any stipulation or agreement made to induce the commission to issue an order relating to that time-share program;
- (E)
Otherwise violated this part or the commission's rules, regulations, or orders;
- (F)
Makes any willful or negligent misrepresentation, or any willful or negligent omission of material fact about any time-share or time-share project, or exchange program;
- (G)
Makes any false promises of a character likely to influence, persuade or induce;
- (H)
Engages in any other conduct which constitutes improper, fraudulent or dishonest dealing; or
- (I)
Fails to promptly account for any funds held in trust, or who fails to display all records, books and accounts of such funds to the commission upon demand as provided for in this part, and the rules and regulations.
- (g)
The commission may issue a cease and desist order if the developer has not registered the time-share program as required by this part.
- (h)
The commission, after notice and hearing, may issue an order revoking the registration of a time-share program upon determination that a developer or an agent of a developer has failed to comply with a notice of suspension issued by the commission affecting the time-share program.
- (i)
The commission may reject an application for registration if the commission finds that:
- (1)
The developer or any entity or individual which composes the developer, or any officer or director of the developer does not possess a history of honesty, truthfulness, and fair dealing. Factors to be used in making such determination shall include whether the developer or any entity or individual which composes the developer, or any officer or director of the developer has:
- (A)
Been convicted of, or has pleaded nolo contendere to, any crime involving an act of fraud or dishonesty;
- (B)
Consented to or suffered a judgment in any civil or administrative action based upon conduct involving an act of fraud or dishonesty;
- (C)
Consented to or suffered the suspension or revocation of any professional, occupational, or vocational license based upon conduct involving an act of fraud or dishonesty;
- (D)
Knowingly made or caused to be made in any application or report filed with the commission, or in any proceeding before the commission, any written or oral statement which was at the time, and in light of the circumstances under which it was made, false or misleading with respect to material fact;
- (E)
Willfully omitted a material fact with respect to information furnished or requested in connection with an application;
- (F)
Willfully committed any violation of, or has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person, of any provision of state law or rule; or
- (G)
Been involved in unlicensed activity; or
- (2)
The commission may reject an application for registration if the commission finds that the developer or any entity or individual which composes the developer, or any officer or director of the developer does not possess a history of financial integrity. Factors to be used in making such determination shall include whether the developer or any entity or individual which composes the developer, or any officer or director of the developer:
- (A)
Has been placed in receivership or conservatorship during the previous ten (10) years;
- (B)
Has filed for bankruptcy within the previous ten (10) years; or
- (C)
Is liable for amounts of debt which would create excessive risks of default.
§ 66-32-122. Registration — Bond — Statement of exchange agent.
- (a)
Unless exempted by § 66-32-126, a developer may not offer or dispose of a time-share interval unless the time-share program is registered with the commission; provided, that a developer may accept a reservation together with a deposit if the deposit is placed in an escrow account with an institution having trust powers and is refundable at any time at the purchaser's option. In all cases, a reservation must require a subsequent affirmative act by the purchaser via a separate instrument to create a binding obligation. A developer may not dispose of or transfer a time-share interval while an order revoking or suspending the registration of the time-share program is in effect.
- (b)
The acquisition agent shall be required to furnish to the commission its principal office address and telephone number and designate its responsible managing employee and shall furnish such additional information as the commission may require.
- (c)
The sales agent shall, in addition to other requirements of law, be required to furnish to the commission its principal office address and telephone number and designate its responsible managing employee and shall furnish such additional information as the commission may require.
- (d)
The managing agent shall be required to furnish to the commission its principal office address and telephone number and designate its responsible managing employee and shall furnish such additional information as the commission may require. Such additional information shall include criminal convictions.
- (e)
An exchange agent, including the developer if it is also the exchange agent, if offering exchange privileges with other time-share interval owners of time-share interval owners who own time-share estates within this state, shall annually file a statement with the commission which must fully and accurately disclose:
- (1)
The identity of the person operating the exchange program and whether that person is an affiliate of the developer;
- (2)
A general description of the procedures to qualify for and effectuate exchanges, including any stated or practiced priorities and restrictions, and the extent to which changes thereof may be made;
- (3)
The expenses, or ranges of expenses, to the time-share interval owners of membership in the exchange program including the expenses, if any, and the person to whom those expenses are payable;
- (4)
Whether and how any of the expenses specified in subdivision (e)(3) may be altered and, if any of them are to be fixed on a case-by-case basis, the manner in which they are to be fixed in each case;
- (5)
With respect to the owners of time-share intervals in the exchange program at each project during a calendar year ending not more than fifteen (15) months before the statement is filed;
- (6)
The percentage of exchanges properly applied for by members or participants in the exchange program that were fulfilled during a calendar year ending not more than fifteen (15) months before the date the statement is filed with the commission, together with a statement of the criteria used to determine whether an exchange was properly applied for and fulfilled; and
- (7)
The number of persons applying for an exchange program as a whole during the calendar year ending not more than fifteen (15) months before the statement is filed with the commission.
- (f)
The developer must provide a copy of the most recent exchange agent's statement filed with the commission to the purchaser in addition to the public offering statement if it is represented to the purchaser that the purchaser is entitled to or required to become a member of the exchange program. The developer is not responsible to the purchaser for any representation made in the exchange agent's statement which is untrue or incorrect.
§ 66-32-123. Application and fees for registration.
- (a)
An application for registration must contain the public offering statement, a brief description of the property, copies of time-share instruments and any documents referred to therein other than tract maps, plats, plans, and such other information required by the commission's rules and regulations and be accompanied by any reasonable fees required by the commission.
- (b)
Fee for registration of time-share interval plans; expenses for investigation and prosecution:
- (1)
For the registration of all time-share interval plans and the accommodations and facilities affected thereby which are located within the state, there shall be paid to the commission the sum of one hundred dollars ($100), together with an annual renewal fee of fifty dollars ($50.00);
- (2)
For the registration of all time-share interval plans and the accommodations and facilities affected thereby which are located outside the state, there shall be paid to the commission the sum of two hundred fifty dollars ($250), together with an annual renewal fee of one hundred dollars ($100); and
- (3)
Notwithstanding subdivisions (b)(1) and (2), the fees charged and collected shall be sufficient to cover the cost of administering this part.
§ 66-32-124. Commission regulation of public offering statement.
- (a)
The commission at any time may require a developer to alter or supplement the form or substance of a public offering statement to assure adequate and accurate disclosure to prospective purchasers.
- (b)
The public offering statement may not be used for any promotional purposes before registration and afterwards only if it is used in its entirety. No person may advertise or represent that the commission has approved or recommended the time-share program, the disclosure statement, or any of the documents contained in the application for registration.
§ 66-32-125. Effective date of registration — Incomplete or inadequate application.
- (a)
Except as otherwise provided in this section, the effective date of the registration, or any amendment thereto, shall be the forty-fifth day after the filing thereof or such earlier date as the commission may determine, having due regard to the public interest and the protection of purchasers. If any amendment to any such registration is filed prior to the effective date, the registration shall be deemed to have been filed when such amendment was filed.
- (b)
If it appears to the commission that the application for registration, or any amendment thereto, is on its face incomplete or inaccurate in any material respect, the commission shall so advise the developer prior to the date the registration would otherwise be effective. Such notification shall serve to suspend the effective date of the filing until the forty-fifth day after the developer files such additional information as the commission shall require. Any developer, upon receipt of such notice of suspension, may request a hearing.
§ 66-32-126. Exceptions from registration requirement.
-
No registration with the commission shall be required in the case of:
- (1)
Any transfer of a time-share interval by any time-share interval owner other than the developer and/or the developer's agent;
- (2)
Any disposition pursuant to court order;
- (3)
A disposition by a government or governmental agency;
- (4)
A disposition by foreclosure or deed in lieu of foreclosure;
- (5)
A disposition of a time-share interval in a time-share project situated wholly outside this state; provided, that all solicitations, negotiations, and contacts took place wholly outside this state and the contract was executed wholly outside this state;
- (6)
A gratuitous transfer of a time-share interval; or
- (7)
Group reservations made for fifteen (15) or more people as a single transaction between a hotel and travel agent or travel groups for hotel accommodations, where deposits are made and held for more than three (3) years in advance.
§ 66-32-127. Financing of time-share programs.
- (a)
In the financing of a time-share program, the developer shall retain financial records of the schedule of payments required to be made and the payments made to any person or entity which is the owner of an underlying blanket mortgage, deed of trust, contract of sale or other lien or encumbrance (lienhold).
- (b)
Any transfer of the developer's interest in the time-share program to any third person shall be subject to the obligations of the developer.
§ 66-32-128. Protection of nondefaulting purchasers.
-
The developer whose project is subject to an underlying blanket lien or encumbrance shall protect nondefaulting purchasers from foreclosure by the lienholder by obtaining from the lienholder a nondisturbance clause, subordination agreement or partial release of the lien as the time-share intervals are sold. In the alternative, the developer may obtain the agreement of the lienholder to take the project, in the event of default by the developer, subject to the rights of the nondefaulting purchasers by posting a bond, equal to fifty percent (50%) of the amount owed to the lienholder, making an assignment of receivables equal to one hundred twenty-five percent (125%) of the principal amounts due to the lienholder, pledging collateral security equal to one hundred percent (100%) of the amount owed to the lienholder or entering into any other financing plan or escrow agreement acceptable to the lienholder.
§ 66-32-129. Protection of lienholder.
-
The lienholder in any time-share program shall have the following rights:
- (1)
A lienholder's lien rights shall be preserved as against any purchaser of time-share interval claiming that the time-share is invalid, void or voidable, thirty (30) days after written notice by certified mail or personal delivery has been given by the developer to the purchaser. Such notice must state the developer has assigned the receivables to the lienholder and that purchaser has thirty (30) days within which to object and specify the invalidity or defect contained within such instrument;
- (2)
Any purchaser who fails to indicate the invalidity, void or voidableness as provided in subdivision (1) waives or is estopped to raise, the same in any subsequent enforcement of the collection of the receivable by the lienholder.
§ 66-32-130. Premiere tourist resort city.
-
Notwithstanding any other provisions of this part, a “premiere tourist resort city” defined as a municipality having a population of three thousand (3,000) or more persons, according to the federal census of 1980 or any subsequent federal census in which at least forty percent (40%) of the assessed valuation, as shown by the tax assessment rolls or books of the municipality, of real estate in the municipality consists of hotels, motels, tourist court accommodations, tourist shops and restaurants, is hereby authorized to adopt by its board of commissioners any ordinance necessary to regulate the sale and use of time-share units within its jurisdiction including the requirement of registration, licenses, transfer and related requirements including any related fees.
§ 66-32-131. Misleading advertising unlawful.
-
It is unlawful for any person with intent directly or indirectly to offer for sale or sell time-share intervals in this state to authorize, use, direct or aid in the publication, distribution or circulation of any advertisement, radio broadcast or telecast concerning the time-share project in which the time-share intervals are offered, which contains any statement, pictorial representation or sketch which is false or misleading. Nothing in this section shall be construed to hold the publisher or employee of any newspaper, or any job printer, or any broadcaster or telecaster, or any magazine publisher, or any of the employees thereof, liable for any publication referred to in this section unless the publisher, employee, or printer has actual knowledge of the falsity thereof or has an interest either as an owner or agent in the time-share intervals so advertised.
§ 66-32-132. Advertising — Specific prohibitions.
-
No advertising for the offer or sale of time-share intervals shall:
- (1)
Contain any representation as to the availability of a resale program or rental program offered by or on behalf of the developer or its affiliate unless the resale program and/or rental program has been made a part of the offering and submitted to the commission;
- (2)
Contain an offer or inducement to purchase which purports to be limited as to quantity or restricted as to time unless the numerical quantity and/or time applicable to the offer or inducement is clearly and conspicuously disclosed;
- (3)
Contain any statement concerning the investment merit or profit potential of the time-share interval unless the commission has determined from evidence submitted on behalf of the developer that the representation is neither false nor misleading;
- (4)
Make a prediction of or imply specific or immediate increases in the price or value of the time-share intervals; nor shall a price increase of a time-share interval be announced more than sixty (60) days prior to the date that the increase will be placed into effect;
- (5)
Contain statements concerning the availability of time-share intervals at a particular minimum price if the number of time-share intervals available at that price comprises less than ten percent (10%) of the unsold inventory of the developer, unless the number of time-share intervals then for sale at the minimum price is set forth in the advertisement;
- (6)
Contain any statement that the time-share interval being offered for sale can be further divided unless a full disclosure is included as to the legal requirements for further division of the time-share interval;
- (7)
Contain any asterisk or other reference symbol as a means of contradicting or changing the ordinary meaning of any previously made statement in the advertisement;
- (8)
Misrepresent the size, nature, extent, qualities, or characteristics of the accommodations or facilities which comprise the time-share project;
- (9)
Misrepresent the nature or extent of any services incident to the time-share project;
- (10)
Misrepresent or imply that a facility or service is available for the exclusive use of purchasers or owners if a public right of access or of use of the facility or service exists;
- (11)
Make any misleading or deceptive representation with respect to the contents of the time-share program, the purchase contract, the purchaser's rights, privileges, benefits or obligations under the purchase contract or this part;
- (12)
Misrepresent the conditions under which a purchaser or owner may participate in an exchange program; or
- (13)
Describe any proposed or uncompleted private facilities over which the developer has no control unless the estimated date of completion is set forth and evidence has been presented to the commission that the completion and operation of the facilities are reasonably assured within the time represented in the advertisement.
§ 66-32-133. Prize or gift promotional offers — Unlawful acts.
-
The following unfair acts or practices undertaken by, or omissions of, any person in the operation of any prize or gift promotional offer, by any means, including, but not limited to, by mail, by telephone, by advertisement or in person, for a time-share project are prohibited:
- (1)
Failing to clearly and conspicuously state the name and street address of the person making the offer;
- (2)
Representing or leading a person to believe that the person is or could be a winner if the person has not won or is not eligible to win;
- (3)
Representing or leading a person to believe that the person has been “selected” or is otherwise part of a select or special group when the person has not been selected or is not part of a select or special group;
- (4)
Representing that a person has won or could win a prize, or will receive a gift, or thing of value or has been selected, or is eligible, to win a prize, or receive a gift, or thing of value if the receipt of the prize, or gift, or thing of value is conditioned upon the person listening to or observing a sales promotional effort, making a purchase, or incurring any monetary obligation unless it is clearly and conspicuously disclosed, at the time of the initial offer, contact, or notification of the prize or gift, or thing of value that an attempt will be made to induce the consumer or person to incur a monetary obligation, including the amount of any monetary obligation;
- (5)
Failing to clearly and conspicuously disclose next to each prize, gift, or thing of value offered or any product offered for sale through the promotional plan the item's approximate verifiable retail value, which means the price at which the person offering the item can substantiate that a substantial number of these items have been sold at retail by another person or, in the event such substantiation is unavailable, nor more than three (3) times the amount actually paid by the sponsor or promoter for the item;
- (6)
Representing that the prize, gift, or thing of value offered or any product offered for sale through the promotional plan possesses particular features or benefits, if it does not, or is of a particular standard, quality, grade, or model, if it is of another;
- (7)
Failing to clearly and conspicuously disclose next to each prize, gift, or thing of value offered, a statement of odds, if applicable, in Arabic numerals, of receiving each item offered, and a statement, if applicable, that those offers are not exclusive to the above-named person and whether all prizes or gifts will be awarded;
- (8)
Making the receipt of an offered prize or gift contingent upon the consent of individual winners or recipients to allow their names to be used for promotional purposes, or failing to obtain the express written or oral consent of individual winners or recipients before their names are used for a promotional purpose in connection with the mailing to a third person;
- (9)
Refusing to disclose or make available, upon request, the names of the recipients of any prizes or gifts within the geographic area wherein the promotional offers were made;
- (10)
- (A)
Failing to clearly and conspicuously disclose in any initial offer, at a minimum, the following:
- (i)
A general description of the types and categories of any restrictions, qualifications, or other conditions, that must be satisfied before the person is entitled to receive or use the prize, gift, or thing of value or product or service offered;
- (ii)
The approximate total of all costs, fees, or other monetary obligations that must be satisfied before the consumer or person is entitled to receive or use the prize, gift, or thing of value or product or service offered; and
- (iii)
That the details and an explanation of all restrictions, qualifications or other conditions of the offer shall be provided prior to the acceptance of the offer; or
- (B)
Failing to clearly and conspicuously state verbally, or upon request, in writing, before an offer can be accepted all restrictions, qualifications, monetary obligations, and other conditions that must be satisfied before the person is entitled to receive or use the prize, gift, or thing of value or product or service offered, including:
- (i)
Any deadline by which the recipient must visit the business, attend or listen to a sales presentation or otherwise respond in order to receive the prize, gift, or thing of value or product or service offered;
- (ii)
The date or dates on or before which the prize, gift or thing of value, product or service offered will terminate or expire and, if applicable, when the prizes will be awarded;
- (iii)
The approximate duration of any mandatory sales presentation or tour, if applicable;
- (iv)
Any other conditions, such as a minimum or maximum age qualification, any financial qualification, or requirement that, if the recipient is married, both spouses must be present or respond in order to receive the prize, gift or thing of value or product or service offered; and
- (v)
All other material rules, terms, restrictions, and conditions of the offer or promotional program including, but not limited to, any promotional service, handling, shipping, delivery, freight, postage or processing fees, charges, or other extra costs for the receipt or use of the prize, gift, or thing of value or product or service offered; provided that the requirements of this subdivision (10)(B)(v) shall not be construed to require that foreign tax rates be included;
- (11)
Misrepresenting in any manner the rules, terms, restrictions, monetary obligation, or conditions of participation in the promotional plan or offer;
- (12)
Failing to award and distribute the prize, gift, or thing of value or product or service offered in accordance with the rules, terms, and conditions of the offer or promotional program as stated or disclosed in accordance with subdivisions (1)-(11); and
- (13)
- (A)
Failing to award and distribute at least one (1) of each prize or gift of the value and type represented in the promotional program by the day and year specified in the promotion. When a promotion promises the award of a prescribed number of each prize, such number of prizes shall be awarded by the date and year specified in the promotion. For purposes of this subdivision (13)(A), distribution of cash shall be equivalent to distribution of a gift or prize, and a qualified recipient shall be allowed to choose either the gift or prize or cash in an amount equal to the cost of the gift or prize only if the gift or prize is not delivered to a qualified recipient within seventy-two (72) hours of the time the recipient would have been entitled to the gift or prize;
- (B)
Such choice shall be disclosed to the recipient at the time of the initial offering.
§ 66-32-136. Advertising material — Engaging time-share resale broker in connection with resale of time-share interval.
- (a)
Any advertising material relating to the solicitation of an agreement engaging the services of a time-share resale broker in connection with the resale of a time-share interval pursuant to § 66-32-137(b) is subject to §§ 66-32-131 — 66-32-135.
- (b)
“Advertising material” includes any oral or written sales pitch, promotional brochure, pamphlet, catalogue, advertisement, sign, billboard or other material to be disseminated to the public by any means relating to the solicitation of an agreement engaging the services of a time-share resale broker in connection with the resale of a time-share interval, pursuant to § 66-32-137(b), including a transcript of any standard oral sales presentation or any radio or television advertisement.
- (c)
No written advertising material relating to the solicitation of an agreement engaging the services of a time-share resale broker in connection with the resale of a time-share interval, pursuant to § 66-32-137(b), may be utilized by a time-share resale broker unless the advertising material includes in conspicuous type the disclosure described in § 66-32-137(b)(1).
- (d)
The commission has authority to enforce this section as provided in §§ 66-32-121 and 62-13-109.
§ 66-32-137. Violations — Required contents of written agreements engaging the services of a resale broker and contracts for purchase and sale.
- (a)
It is a violation of this part for any time-share resale broker to:
- (1)
Enter into any agreement with any person engaging the services of the time-share resale broker in connection with the resale of a time-share interval unless a written agreement complying in all respects with subsection (b) is first executed by the time-share resale broker and the person engaging the services of the time-share resale broker;
- (2)
Accept any moneys or any other thing of value from any person engaging the services of the time-share resale broker in connection with the resale of a time-share interval in advance of the closing of the resale of such time-share interval; or
- (3)
Utilize any form of contract or purchase and sale agreement in connection with the resale of a time-share interval unless the contract or purchase and sale agreement complies in all respects with subsection (d).
- (b)
In addition to all requirements of and obligations under the Tennessee Real Estate Broker License Act of 1973, compiled in title 62, chapter 13, all agreements engaging the services of a time-share resale broker in connection with the resale of a time-share interval shall contain all of the following:
- (1)
The following statement in conspicuous type located immediately prior to the space in the agreement reserved for the signature of the owner:
-
THERE IS NO GUARANTEE THAT YOUR TIME-SHARE INTERVAL CAN BE SOLD AT ANY PARTICULAR PRICE OR WITHIN ANY PARTICULAR PERIOD OF TIME;
- (2)
A complete and clear disclosure of any fees, commissions, and other costs or compensation payable to or received by the time-share resale broker under the agreement, whether directly or indirectly;
- (3)
The term of the agreement, a statement regarding the ability of any party to extend the term of the agreement, and a description of the conditions under which the agreement may be extended and all related costs;
- (4)
A description of the services to be provided by the time-share resale broker under the agreement, and a description of the obligations of each party regarding a resale purchaser, including any costs to be borne and any obligations regarding notification of the managing entity and any exchange company;
- (5)
A statement disclosing whether the agreement grants exclusive rights to the time-share resale broker to locate a purchaser during the term of the agreement, a statement disclosing to whom and when any proceeds from a sale of the time-share interval will be disbursed, and a statement whether any party may terminate the agreement and under what conditions;
- (6)
A statement disclosing whether the agreement permits the time-share resale broker or any other person to make any use whatsoever of the time-share interval in question and a detailed description of any such permitted use rights, including a disclosure of to whom any rents or profits generated from such use of the time-share interval will be paid; and
- (7)
A statement disclosing the existence of any judgments or orders against the time-share resale broker resulting from a violation by the time-share resale broker of this part, the Tennessee Real Estate Broker License Act of 1973, or the Tennessee Consumer Protection Act of 1977, compiled in title 47, chapter 18, part 1, or resulting from consumer fraud on the part of the time-share resale broker.
- (c)
The person engaging the services of the time-share resale broker must receive a fully executed copy of the agreement described in subsection (b) on the day such person signs it.
- (d)
All forms of contract or purchase and sale agreement utilized by a time-share resale broker in connection with the sale of a time-share interval shall contain all of the following:
- (1)
An explanation of the form of time-share ownership being purchased and a legally sufficient description of the time-share interval being purchased;
- (2)
The name and address of the managing entity of the time-share plan;
- (3)
- (A)
The following statement in conspicuous type located immediately prior to the space in the contract reserved for the signature of the purchaser:
-
THE CURRENT YEAR'S ASSESSMENT FOR COMMON EXPENSES ALLOCABLE TO THE TIME-SHARE INTERVAL YOU ARE PURCHASING IS $ . THIS ASSESSMENT, WHICH MAY BE INCREASED FROM TIME TO TIME BY [insert name of entity having authority to increase assessment], IS PAYABLE IN FULL ON OR BEFORE [state payment due date(s)]. THIS ASSESSMENT [INCLUDES/DOES NOT INCLUDE] YEARLY AD VALOREM REAL ESTATE TAXES. [If ad valorem real property taxes are not included in the current year's assessment for common expenses, the following statement must be included: THE MOST RECENT ANNUAL ASSESSMENT FOR AD VALOREM REAL ESTATE TAXES FOR THE TIME-SHARE INTERVAL YOU ARE PURCHASING IS $ ]. FAILURE TO TIMELY PAY THESE ASSESSMENTS MAY RESULT IN RESTRICTION OR LOSS OF YOUR USE AND/OR OWNERSHIP RIGHTS.
- (B)
In making the disclosures required by this subdivision (d)(3), the time-share resale broker may rely upon information provided in writing by the managing entity of the time-share project;
- (4)
A complete and accurate disclosure of the terms and conditions of the purchase and closing, including the obligations of the seller and/or the purchaser for closing costs and title insurance;
- (5)
A statement disclosing the existence of any mandatory exchange program membership included in the time-share project; and
- (6)
In lieu of subdivisions (d)(1)-(5), a time-share resale broker affiliated with a time-share developer may use the public offering statement and sales contract to consummate a resale; provided, that such information includes the substance of all of subdivisions (d)(1)-(5).
- (e)
The commission has authority to enforce this section as provided in §§ 66-32-121 and 62-13-109.
§ 66-32-138. Delivery of required renewal documentation and fees.
-
Notwithstanding any other law to the contrary, all documentation and fees which are a prerequisite to the renewal of a license or registration shall be delivered to the commission no later than sixty (60) days prior to the expiration date of the license or registration.
Part 2 Vacation Club Act of 1995
§ 66-32-202. Legislative intent.
-
The purpose of this part is to recognize that the sale and promotion of vacation clubs is an emerging, dynamic segment of the international tourism industry; that this segment of the tourism industry continues to grow, both in volume of sales and in complexity and variety of product structure; and that a uniform and consistent method of regulation is necessary in order to safeguard the state's consumers and the state's economic well-being. It is the intent of the general assembly that this part be interpreted broadly in order to enhance the quality of vacation clubs offered and sold in this state and to protect consumers who purchase vacation club interests.
§ 66-32-203. Application.
-
This part applies only to sellers of vacation club interests who offer for disposition vacation club interests to the general public in Tennessee. For purposes of this section, an offer shall be considered to be made in this state only if the offer:
- (1)
Originates from this state; or
- (2)
Is directed by the offeror into this state and is received at the place to which it is directed.
§ 66-32-204. Exemptions.
-
This part does not apply to any of the following:
- (1)
An offer or disposition other than in the ordinary course of business by any holder of a purchase money lien, including any assignee thereof, who acquires a vacation club interest as a result of an owner's default with respect to the owner's purchase money financing obligations, whether such vacation club interest is acquired by foreclosure, the acceptance of a deed in lieu thereof, or other legal or equitable means;
- (2)
A gratuitous disposition;
- (3)
A disposition by devise, descent, or distribution or a disposition to an inter vivos trust;
- (4)
An offer or disposition of a vacation club interest by an owner other than a developer, unless such owner makes such offer and disposition in the ordinary course of its business; or
- (5)
An offer or disposition of a vacation club interest that is part of a duly registered vacation club pursuant to the laws of a state with the same or more stringent requirements as this state.
§ 66-32-205. “Vacation club interest” defined.
-
“Vacation club interest” means and includes the following interests in a vacation club:
- (1)
A “specific time-share interest,” which is a right to use a specific accommodation or accommodations, and facilities at one (1) component site of a vacation club, for the remaining term of the vacation club in the event that the reservation system is terminated for any reason prior to the expiration of the term of the vacation club, together with use rights in the other accommodations and facilities of the vacation club created by or acquired through the reservation system; provided, that there is a one-to-one purchaser to accommodation ratio for each time-share interval, which entitles a particular owner who complies fully with the reservation system's rules and regulations to reserve, use and occupy a protected accommodation of the vacation club completely independent of any other owner's failure for reason to reserve, use, or occupy an accommodation of the vacation club; and
- (2)
A “nonspecific time-share interest,” which is a right to use all of the accommodations and facilities of a vacation club created by or acquired through the reservation system, but including no specific right to use any particular accommodations or facilities for the remaining term of the vacation club in the event that the reservation system is terminated for any reason prior to the expiration of the term of the vacation club; provided, that there is a one-to-one purchaser to accommodation ratio for each time-share interval, which entitles a particular owner who complies fully with the reservation system's rules and regulations to reserve, use and occupy a protected accommodation of the vacation club completely independent of any other owner's failure for reason to reserve, use, or occupy an accommodation of the vacation club.
§ 66-32-206. Reservation systems.
- (a)
A vacation club's reservation system shall be subject to the requirements for subordination or other financial assurances set forth in this part. Prior to offering vacation club interests, a developer shall create or provide a reservation system, including all appropriate computer hardware and software which is necessary to satisfy owners' reasonable expectations concerning the use and occupancy of the vacation club's accommodations, based upon the developer's representations and the terms and conditions of the vacation club documents, and establish rules and regulations for its operation. In establishing such rules and regulations, the developer shall take into account the anticipated demand for use and occupancy of the vacation club's accommodations in view of the size and type of each accommodation, each component site location, the time of year, the projected common expenses of the vacation club from year to year, and all other relevant factors, and shall use its good faith and best efforts, based upon all evidence reasonably available to the developer under the circumstances, to maximize the collective opportunities for all of the owners of vacation club interests to use and occupy the vacation club's accommodations.
- (b)
- (1)
The person or persons authorized by the vacation club documents to make additions or substitutions of accommodations to the vacation club, pursuant to this part, shall owe a fiduciary duty to each owner of a vacation club interest to act in the collective best interests of all such owners in connection with any such addition or substitution and to adhere to the demand balancing standard set forth above in ascertaining the desirability of any proposed addition or substitution and the anticipated impact thereof upon the practical ability of owners to reserve, use, and occupy the vacation club's accommodations.
- (2)
Prior to offering any vacation club interest in a vacation club, a developer shall provide to the commission satisfactory evidence of the existence of the vacation club's reservation system and shall certify to the commission that such reservation system is fully operative.
- (3)
Any agreement between a vacation club and a reservation system provider must state that, following a termination of the provider's contract by either party, the reservation system provider will, in the vacation club managing entity's sole discretion, either:
- (A)
Permit the vacation club to utilize the reservation system for a transition period of up to nine (9) months in the same manner and at the same cost as the vacation club utilized the reservation system prior to the termination in order to afford the vacation club managing entity a reasonable opportunity to obtain a new reservation system and arrange for the transfer of all relevant data from the old reservation system to the new reservation system as described in subdivision (b)(3)(B); or
- (B)
Promptly transfer to the vacation club managing entity all relevant data contained in the reservation system, including but not limited to the names, addresses, and reservation status of accommodations at the vacation club's component sites, the names and addresses of all owners, all outstanding confirmed reservations and reservation requests, and such other owner and component site records and information as is sufficient, in the reasonable discretion of the vacation club managing entity, to permit the uninterrupted operation and administration of the vacation club for the collective benefit of owners of vacation club interests therein. All reasonable costs incurred by the reservation system provider in effecting such transfer shall be reimbursed thereto and shall constitute common expenses of the vacation club.
§ 66-32-207. Developers subject to commission — Prerequisites to vacation club offering.
- (a)
A developer of a vacation club interest shall in all respects be subject to the authority of the commission and any rules and regulations promulgated by the commission.
- (b)
Unless specifically exempted, a developer of a vacation club interest may not offer or dispose of a vacation club interest unless it is registered with the commission under § 66-32-123, and pays any fee required by § 66-32-123.
- (c)
Prior to offering any vacation club intervals in a vacation club, a developer shall provide the commission:
- (1)
Satisfactory evidence of the existence of the time-share intervals that are part of the vacation club;
- (2)
The marketing plan for the vacation club;
- (3)
Proof of ownership or a leasehold estate of the time-share intervals that are part of the vacation club; and
- (4)
Satisfactory proof of compliance with this part, including, but not limited to, a public offering statement, escrow of deposits, cancellation rights, advertising and promotional offers.
Part 3 Membership Camping Act
§ 66-32-302. Part definitions.
-
As used in this part, unless the context otherwise requires:
- (1)
“Advertisement” means any written, printed, verbal, or visual offer;
- (2)
“Blanket encumbrance” means any mortgage, deed of trust, option to purchase, vendor's lien or interest under a contract or agreement of sale, or other material financing lien or encumbrance granted by the membership camping operator, which secures or evidences the obligation to pay money or to sell or convey any campgrounds located in this state made available to purchasers by the membership camping operator or any portion thereof and which authorizes, permits, or requires the foreclosure or other disposition of the campground affected;
- (3)
“Campground” means real property owned or operated by a membership camping operator which is available for camping by purchasers of membership camping contracts;
- (4)
“Camping site” means a space designed and promoted for the purpose of locating a trailer, tent, tent trailer, pickup camper, or other similar device used for camping;
- (5)
“Facilities” means the following amenities provided and located on property owned or operated by a membership camping operator: camping sites, rental trailers or cabins, swimming pools, sport courts, recreation buildings, and trading posts or grocery stores;
- (6)
“Holder” includes the seller who acquires a membership camping contract or, if the contract is purchased, a financing agency or other assignee that purchases the contract;
- (7)
“Membership camping contract” means an agreement offered or sold within this state evidencing a purchaser's title to, interest in, right or license to use, for more than thirty (30) days, the campgrounds and facilities of a membership camping operator and includes a membership which provides for this use;
- (8)
“Membership camping operator” means any enterprise, other than one that is tax exempt under § 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. § 501(c)(3)), as amended, that solicits membership camping contracts paid for by a fee or periodic payments and has as one (1) of its purposes camping or outdoor recreation including use of camping sites primarily by purchasers;
- (9)
“Nondisturbance agreement” means an instrument by which the holder of a blanket encumbrance agrees that:
- (A)
Its rights in any campground made available to purchasers by the membership camping operator shall be subordinate to the rights of purchasers from and after the recordation of the instrument;
- (B)
The holder and all successors and assignees, and any person who acquires the campground through foreclosure or by deed in lieu of foreclosure of such blanket encumbrance, shall take the campground subject to the rights of purchasers; and
- (C)
The holder or any successor acquiring the campground through the blanket encumbrance shall not use or cause the campground to be used in a manner which would materially prevent purchasers from using or occupying the campground in a manner contemplated by the purchasers' membership camping contracts; provided, that the holder shall have no obligation or liability to assume the responsibilities or obligations of the membership camping operator under membership camping contracts;
- (10)
“Offer” means any solicitation reasonably designed to result in the entering into of a membership camping contract;
- (11)
“Person” means any individual, corporation, partnership, company, and any other form of multiple organization for carrying on foreign or domestic business, other than a government or a subdivision of a government;
- (12)
“Purchaser” means a person who enters into a membership camping contract and obtains the right to use the camping or outdoor facilities of a membership camping operator;
- (13)
“Reciprocal program” means any arrangement allowing purchasers to use camping sites, facilities, or other properties owned or operated by any person other than the membership camping operator with whom the purchaser has entered into a membership camping contract;
- (14)
“Sale” or “sell” means entering into, or other disposition, of a membership camping contract for value, but the term “value” does not include a fee to offset the reasonable costs of transfer of a membership camping contract; and
- (15)
“Seller” means a membership camping operator.
§ 66-32-303. Disclosures to purchasers.
-
A membership camping operator shall disclose the following information to a purchaser before the purchaser signs a membership camping contract or gives any money or thing of value for the purchase of a membership camping contract. The disclosures shall be delivered to the purchaser prior to the time the contract is signed and may be presented in any format selected by the membership camping operator. The disclosures may be included in or as part of the contract at the option of the membership camping operator and shall clearly communicate all of the following as of a date no more than one (1) year prior to the date of purchase:
- (1)
The name and address of the principal place of business of the membership camping operator and any material affiliate of the membership camping operator;
- (2)
A brief description of the membership camping operator's experience in the membership camping business, including the number of years the membership camping operator has been in the membership camping business;
- (3)
A brief description of the nature of the purchaser's right or license to use the membership camping operator's campground or facilities;
- (4)
- (A)
The location of each of the membership camping operator's campgrounds and a brief description of the significant facilities at each campground then available for use by purchasers and those which are represented to purchasers as being planned, together with a brief description of any facilities that are or will be available to nonpurchasers or nonmembers;
- (B)
“Significant facilities” includes, but is not limited to, each of the following: the number of campsites in each park; the number of campsites in each park with full or partial hookups; swimming pools; tennis courts; recreation buildings; restrooms and showers; laundry rooms; trading posts; or grocery stores; and
- (C)
“Partial hookups” means those hookups with at least one (1) of the following connections: electricity, water, or sewer connections;
- (5)
A brief description of the membership camping operator's ownership of, or other right to use, the campgrounds represented to be available for use by purchasers, together with the duration of any material lease, license, franchise, or reciprocal agreement entitling the membership camping operator to use the campground, and any material provisions of any agreements which restrict a purchaser's use of the campground;
- (6)
A summary or copy of the rules, restrictions, or covenants regulating the purchaser's use of the membership camping operator's campgrounds, including a statement of whether and how the rules, restrictions, or covenants may be changed;
- (7)
A description of any restraints on the transfer of the membership camping contract;
- (8)
A brief description of the policies relating to the availability of camping sites and whether reservations are required;
- (9)
A brief description of any grounds for forfeiture of a purchaser's membership camping contract;
- (10)
A brief description of all payments of a purchaser under a membership camping contract, including initial fees and any further fees, charges, or assessments, together with any provisions for changing the payments;
- (11)
A copy of the membership camping contract signed by the purchaser;
- (12)
A statement of the purchaser's right to cancel the membership camping contract as provided in § 66-32-304;
- (13)
A description of the manner in which the membership camping operator has complied or proposes to comply with § 66-32-307;
- (14)
A description of any liens, defects, or encumbrances on or affecting the title to the membership contracts or to the campgrounds;
- (15)
A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement;
- (16)
The projected common expense liability, if any, by category of expenditures for the members;
- (17)
Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee;
- (18)
A description of the insurance coverage, or a statement that there is no insurance coverage, provided for the benefit of members; and
- (19)
A statement of the means, including all financial arrangements, by which the developer proposes to assure the completion of all promised improvements.
§ 66-32-304. Cancellation of contracts.
- (a)
Any membership camping contract may be cancelled at the option of the purchaser by personally delivering or sending written notice of the cancellation to the membership camping operator at the address shown in the contract. The notice must be posted not later than twelve o'clock midnight (12:00) of the fifteenth calendar day following the day on which the membership camping contract was signed, if the purchaser did not make an on-site inspection of the campground, or the tenth calendar day following the day on which the membership camping contract was signed, if the purchaser did make an on-site inspection of the campground.
- (b)
The purchaser's cancellation right shall be set forth in bold type in the membership camping contract in close proximity to the purchaser's signature line.
- (c)
Within thirty (30) days after the membership camping operator receives a notice of cancellation, and provided that the purchaser's check, if any, has been cleared by the purchaser's bank, the membership camping operator shall refund to the purchaser any deposit, down payment or other payment therefor.
§ 66-32-305. Inducements — Disclosures.
- (a)
It is unlawful for any person by any means, as part of an advertising program, to offer any item of value as an inducement to the recipient to visit a membership camping operator's campground, attend a sales presentation, or contact a salesperson, unless the person clearly discloses in writing in the offer, in readily understandable language, each of the following:
- (1)
The name and street address of the membership camping operator;
- (2)
A general statement that the advertising program is made by a membership camping operator and the purpose of any requested visit, including, but not limited to, the intent to offer a sales presentation, and that an attempt will be made to induce the person to incur a monetary obligation, including the amount of any monetary obligation;
- (3)
A statement of the odds, in Arabic numerals, of receiving each item offered, plus a statement, in Arabic numerals, of the number of offers on which those odds are based, and a statement, if applicable, that those offers are not exclusive to the property within named;
- (4)
The approximate verifiable retail value of each item offered, which means the price at which the person offering the item can substantiate that a substantial number of these items have been sold at retail by another person or, in the event such substantiation is unavailable, no more than three (3) times the amount actually paid by the sponsor or promoter for the item and a statement that the recipient shall be allowed to choose either the item offered or cash in an amount equal to the retail value of the item, as such value is represented within the written offer; and
- (5)
All restrictions, qualifications, and other conditions that must be satisfied before the recipient is entitled to receive the item, including:
- (A)
Any deadline by which the recipient must visit the campground, attend the sales presentation, or respond in order to receive the item;
- (B)
The approximate duration of any normal sales presentation and tour;
- (C)
Any other conditions, such as a minimum age qualification, a financial qualification, or a requirement that if the recipient is married both husband and wife must be present in order to receive the item; and
- (D)
All other materials, rules, terms, and conditions of the offer or program.
- (b)
It is unlawful to make receipt of an offered prize contingent upon consent by the individual winners to allow their names to be used for promotional purposes.
- (c)
It is unlawful to use the names of individual winners for a promotional purpose in connection with a mailing to a third person before obtaining their express written or oral consent to such use.
- (d)
It is unlawful for any person making an offer subject to subsection (a), or any employee or agent of the person, to offer any item if the person knows or has reason to know that the offered item will not be available in a sufficient quantity based on the reasonably anticipated response to the offer.
- (e)
It is unlawful for any person making an offer subject to subsection (a), or any employee or agent of the person, to fail to provide any offered item or to fail to provide cash, if chosen by the recipient, in an amount equal to the retail value of the item, as such value is represented within the written offer, which any recipient who has responded to the offer is entitled to receive. The recipient shall be allowed to choose either the item offered or the cash.
- (f)
- (1)
If the person making an offer subject to subsection (a) is unable to provide an offered item because of limitations of supply, quantity, or quality not reasonably foreseeable or controllable by the person making the offer and the recipient does not choose to accept cash in an amount equal to the retail value of the item, as such value is represented within the written offer, the person making the offer shall inform the recipient of the recipient's right to receive a rain check for the item offered, or shall inform the recipient of the recipient's right to at least one (1) of the following additional options:
- (A)
The person making the offer will provide a like item of equivalent or greater verifiable retail value or a rain check for the item. This option must be offered if the offered item is not reasonably available;
- (B)
The person making the offer will provide a substitute item of equivalent or greater verifiable retail value.
- (2)
If a rain check is provided, the person making an offer subject to subsection (a) shall, within a reasonable time, and in no event more than one hundred twenty (120) days after the raincheck is provided, deliver the agreed item to the recipient's address without additional cost or obligation to the recipient, unless the item for which the rain check is provided remains unavailable because of limitations of supply, quantity, or quality not reasonably foreseeable or controllable by the person making the offer. If the item is unavailable for these reasons, the person shall, not more than thirty (30) days after the expiration of the one-hundred-twenty-day period, deliver a like item of equal or greater value. The recipient has thirty (30) days from receipt of the delivered item to return the item and request cash in an amount equal to the retail value as represented within the written offer or the retail value represented of any substitute item offered, whichever is greater. The person making the offer shall provide payment within ten (10) days from return of the item.
- (g)
On the request of a recipient who has received or claims a right to receive any offered item, the person making an offer subject to subsection (a) shall show the recipient sufficient evidence verifying that the item provided matches the item randomly or otherwise selected for distribution to that recipient.
- (h)
It is unlawful for any person making an offer subject to subsection (a), or any employee or agent of the person, to:
- (1)
Misrepresent the size, quantity, or identity of any prize, gift, money, or other item of value offered;
- (2)
Misrepresent in any material manner the odds of receiving any particular gift, prize, amount of money, or other item of value;
- (3)
Label any offer a “notice of termination” or “notice of cancellation”;
- (4)
Misrepresent, through omission or in any other material manner, the offer or program;
- (5)
Represent or lead a person to believe that the person is or could be a winner if the person had not won or is not eligible to win; or
- (6)
Represent or lead a person to believe that the person has been “selected” or is otherwise part of a select or special group when the person has not been selected or is not part of a select or special group.
§ 66-32-306. Purchasers' remedies.
- (a)
A purchaser's remedy for errors in or omissions from the membership camping contract and related materials delivered to the purchaser at the time of sale or any of the disclosures required in § 66-32-305 is limited to a right of rescission and refund of the purchase price paid by the purchaser. This limitation does not apply to errors or omissions from the contract or disclosures or other requirements of this part which are a part of a scheme to willfully misstate or omit the information required.
- (b)
Reasonable attorney fees shall be awarded to the prevailing party in any action under this part.
§ 66-32-307. Prerequisites to selling membership camping contracts.
-
With respect to any campground in this state acquired and put into operation by a membership camping operator after July 1, 1985, the membership camping operator shall not sell membership camping contracts in this state granting the right to use such campground until one (1) of the following requirements has been satisfied:
- (1)
Each person holding an interest in a blanket encumbrance shall have executed and delivered a nondisturbance agreement and such agreement shall have been recorded in the real estate records of the county in which the campground is located;
- (2)
The financial institution providing the major hypothecation loan to the membership camping operator, the “hypothecation lender”, shall have a lien on, or security interest in, the membership camping operator's interest in the campground, and the hypothecation lender shall have executed and delivered a nondisturbance agreement and recorded such agreement in the real estate records of the county in which the campground is located. In addition, each person holding an interest in a blanket encumbrance superior to the interest held by the hypothecation lender shall have executed, delivered, and recorded an instrument stating that such person shall give the hypothecation lender notice of, and at least thirty (30) days to cure, any default under the blanket encumbrance before such person commences any foreclosure action affecting the campground. For the purposes of this provision, a major hypothecation loan to a membership camping operator is a loan or line of credit secured by substantially all of the contracts receivable arising from the membership camping operator's sale of membership camping contracts;
- (3)
In the event the membership camping operator is selling real estate to purchasers, each person holding an interest in a blanket encumbrance shall have executed and delivered an agreement providing for periodic releases from the blanket encumbrance as real estate sales fees are paid on the debt. However, in such case, the membership camping operator shall have obtained an irrevocable letter of credit or surety bonds in favor of the holder of the blanket encumbrance insuring the completion of the roads and structural amenities which are promised for the project now being developed; or
- (4)
The membership campground operator whose project is subject to an underlying blanket lien or encumbrance may obtain the agreement of the lienholder to take the project, in the event of default by the developer, subject to the rights of the nondefaulting purchasers by posting a bond equal to fifty percent (50%) of the amount owed to the lienholder, making an assignment of receivables equal to one hundred twenty-five percent (125%) of the principal amounts due to the lienholder, pledging collateral security equal to one hundred percent (100%) of the amount owed to the lienholder or entering into any other financing plan or escrow agreement acceptable to the lienholder.
§ 66-32-308. Violations — Penalties.
- (a)
Any person who willfully violates this part commits a misdemeanor. It is a misdemeanor for any person in connection with the offer or sale of any camping club contracts willfully to:
- (1)
Make any untrue or misleading statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading;
- (2)
Employ any device, scheme, or artifice to defraud; or
- (3)
Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
- (b)
No indictment or information may be returned under this part more than two (2) years after the alleged violation.
§ 66-32-309. Exemptions.
-
This part shall not apply to:
- (1)
Mobile home parks or camping or recreational trailer parks which are open to the general public and do not solicit purchases of membership camping contracts, but rather contain only camping sites rented for per use fee;
- (2)
Any person who engages in the business of arranging and selling reciprocal programs and who does not own campgrounds and facilities; or
- (3)
Sales of time-share intervals in a time-share project which is registered under the Tennessee Time-Share Act, compiled in part 1 of this chapter.
§ 66-32-310. Violation of Tennessee Consumer Protection Act.
-
A violation of this part shall constitute a violation of the Tennessee Consumer Protection Act, compiled in title 47, chapter 18, part 1. For the purpose of application of the Tennessee Consumer Protection Act, any violation of this part shall be construed to constitute an unfair or deceptive act or practice affecting the conduct of any trade or commerce.
Chapter 33 Real Property Records Integrity Act
§ 66-33-102. Chapter definitions.
-
As used in this chapter:
- (1)
“Person” means a natural person, partnership, association, cooperative, corporation, trust, or other legal entity;
- (2)
“Recording” means presenting a document to a county register in this state for official placement in the public land records;
- (3)
“Residential real estate” means real property located in this state that is used primarily for personal, family, or household purposes and is improved by one (1) to four (4) dwelling units;
- (4)
“Service agreement” means a contract pursuant to which a person agrees to provide services in connection with the sale of residential real estate or the sale of any product or the performance of any personal service on or for the maintenance of residential real estate; and
- (5)
“Service provider” means a person who provides services or products to a consumer.
§ 66-33-103. Service agreements.
- (a)
The general assembly finds and declares that:
- (1)
The public policy of this state favors the transferability of interests in real property free from unreasonable restraints on alienation and covenants or servitudes that do not touch and concern the property; and
- (2)
A recorded service agreement violates this public policy by impairing the marketability of title to the affected real property and constitutes an unreasonable restraint on alienation, regardless of the duration of the contract or the amount of the consideration set forth in the agreement.
- (b)
A recorded service agreement is void and unenforceable under this chapter if the agreement:
- (1)
Purports to run with the land or to be binding on future owners of interests in the real property;
- (2)
Allows for assignment of the right to provide services without notice to and the consent of the owner of residential real estate; or
- (3)
Purports to create a lien, encumbrance, or other real property security interest.
- (c)
This chapter does not impair:
- (1)
The rights granted or applied involving a mechanic's or materialmen's lien under title 66, chapter 11;
- (2)
The furnishing of a loan or other thing of value to be secured by real property as otherwise provided by law;
- (3)
An agreement entered into by a nonprofit, mandatory membership organization comprised of owners of homes, condominiums, cooperatives, or manufactured homes; or
- (4)
Any interest in real property created pursuant to a declaration, covenant, or other applicable law, pertaining to the oversight or management of real property.
§ 66-33-104. Recording prohibited.
- (a)
A service provider shall not record or cause to be recorded a service agreement or notice or memorandum of the agreement in this state.
- (b)
A service provider who records or causes to be recorded a service agreement or notice or memorandum of the agreement in this state in violation of § 66-33-103 is liable to an affected party for ten thousand dollars ($10,000) in statutory damages.
- (c)
Notwithstanding chapter 24 of this title, a register in this state may refuse to accept for recordation a service agreement and is not liable for mistakenly recording an unfair service agreement.
- (d)
If a service agreement is recorded in violation of this chapter, then it does not constitute actual or constructive notice to an otherwise bona fide purchaser or creditor.
§ 66-33-105. Recording of court order.
-
If a service agreement or a notice or memorandum of the agreement is recorded in violation of this chapter, then a person with an interest in the real property that is the subject of the agreement may apply to a court of competent jurisdiction in the county where the recording exists to record a court order declaring the agreement unenforceable.
§ 66-33-106. Rights of recovery — Enforcement.
- (a)
If a service agreement or a notice or memorandum of the agreement is recorded in violation of this chapter, then a person with an interest in the real property that is the subject of the agreement:
- (1)
May recover actual damages, court costs, and attorney's fees in addition to the statutory damages described in § 66-33-104(b); and
- (2)
Has all rights and remedies available to the person under § 47-18-109.
- (b)
This chapter may also be enforced by the attorney general and reporter on behalf of the citizens of this state.
Chapter 34 Prompt Pay Act
Part 1 General Provisions
§ 66-34-102. Chapter definitions.
-
As used in this chapter, unless the context or subject matter indicates another meaning, the words and phrases defined in § 66-11-101 have the same meaning as set out in that section and are incorporated in this chapter by reference.
§ 66-34-103. Withholding of retainage — Violations — Penalties.
- (a)
All construction contracts on any project in this state, both public and private, may provide for the withholding of retainage; provided, however, that the retainage amount may not exceed five percent (5%) of the amount of the contract.
- (b)
The owner, whether public or private, shall release and pay all retainages for work completed pursuant to the terms of any contract to the prime contractor within ninety (90) days after completion of the work or within ninety (90) days after substantial completion of the project for work completed, whichever occurs first. As used in this subsection (b), “work completed” means the completion of the scope of the work and all terms and conditions covered by the contract under which the retainage is being held. The prime contractor shall pay all retainages due any remote contractor within ten (10) days after receipt of the retainages from the owner. Any remote contractor receiving the retainage from the prime contractor shall pay to any lower-tier remote contractor all retainages due the lower-tier remote contractor within ten (10) days after receipt of the retainages.
- (c)
Any default in the making of the payments is subject to those remedies provided in this part.
- (d)
If an owner or prime contractor withholds retainage that is for the use and benefit of the prime contractor or its remote contractors pursuant to § 66-34-104(a) and (b), then neither the prime contractor nor any of its remote contractors are required to deposit additional retained funds into an escrow account in accordance with § 66-34-104(a) and (b).
- (e)
- (1)
It is an offense for a person, firm, or corporation to fail to comply with subsection (a) or (b) or § 66-34-104(a).
- (2)
- (A)
A violation of this subsection (e) is a Class A misdemeanor, subject to a fine only of three thousand dollars ($3,000).
- (B)
Each day a person, firm, or corporation fails to comply with subsection (a) or (b) or § 66-34-104(a) is a separate violation of this subsection (e).
- (C)
Until the violation of this subsection (e) is remediated by compliance, the punishment for each violation is consecutive to all other violations.
- (3)
In addition to the fine imposed pursuant to subdivisions (e)(2)(A) and (B), the court shall order restitution be made to the owner of the retained funds. In determining the appropriate amount of restitution, the formula stated in § 40-35-304 must be used.
- (4)
This subsection (e) does not apply to the state, any department, board, or agency thereof, including the University of Tennessee, all counties and municipalities, and all departments, boards, or agencies thereof, including all school and education boards, and any other subdivision of the state.
§ 66-34-104. Retention of portion of contract price in escrow — Applicability — Mandatory compliance.
- (a)
Whenever, in any contract for the improvement of real property, a certain amount or percentage of the contract price is retained, that retained amount must be deposited in a separate, interest-bearing, escrow account with a third party which must be established upon the withholding of any retainage.
- (b)
As of the time of the withholding of the retained funds, the funds become the sole and separate property of the prime contractor or remote contractor to whom they are owed, subject to the rights of the person withholding the retainage in the event the prime contractor or remote contractor otherwise entitled to the funds defaults on or does not complete its contract.
- (c)
If the party withholding the retained funds fails to deposit the funds into an escrow account as provided in this section, then the party shall pay the owner of the retained funds an additional three hundred dollars ($300) per day as damages, not as a penalty, for each and every day that the retained funds are not deposited into an escrow account. Damages accrue from the date retained funds were first withheld and continue to accrue until placed into a separate, interest-bearing escrow account or otherwise paid.
- (d)
The party with the responsibility for depositing the retained amount in a separate, interest-bearing escrow account with a third party has the affirmative duty to provide written notice that the party has complied with this section to any prime contractor upon withholding the amount of retained funds from each and every application for payment, including:
- (1)
Identification of the name of the financial institution with which the escrow account has been established;
- (2)
Account number; and
- (3)
Amount of retained funds that are deposited in the escrow account with the third party.
- (e)
Upon satisfactory completion of the contract, to be evidenced by a written release by the owner, prime contractor, or remote contractor owing the retainage, all funds accumulated in the escrow account together with all interest on the account must be paid immediately to the prime contractor or remote contractor to whom the funds and interest are owed.
- (f)
If the owner, prime contractor, or remote contractor, as applicable, fails or refuses to execute the release provided for in subsection (e), then the prime contractor or remote contractor, as applicable, may seek equitable relief, including injunctive relief, as provided in § 66-34-602, against the owner, prime contractor, or remote contractor. Relief may not be sought against the person holding the retainage as an escrow agent, and that person bears no liability for the nonpayment of the retainage; however, a court may issue an order to the person holding retainage to pay any sums held in trust pursuant to § 66-34-205. The person paying the sums pursuant to a court order bears no liability to the owner, prime contractor, or remote contractor for the payment. All other claims, demands, disputes, controversies, and differences that may arise between the owner, prime contractor, or prime contractors, and remote contractors may be, upon written agreement of all parties concerned, settled by arbitration conducted pursuant to the Uniform Arbitration Act, compiled in title 29, chapter 5, part 3, or the Federal Arbitration Act (9 U.S.C. § 1 et seq.), as may be applicable.
- (g)
Subsections (c), (d), and (j) do not apply to the state and any department, board, or agency thereof, including the University of Tennessee; counties and municipalities, and all departments, boards, or agencies thereof, including all school and education boards; and any other subdivision of the state.
- (h)
This section applies to all prime contracts and all subcontracts thereunder for the improvement of real property when the contract amount of the prime contract is five hundred thousand dollars ($500,000) or greater, notwithstanding the amount of the subcontracts.
- (i)
Compliance with this section is mandatory, and shall not be waived by contract.
- (j)
Failure to deposit the retained funds into an escrow account as provided in this section, within seven (7) days of receipt of written notice regarding the failure, is a Class A misdemeanor.
Part 2 Owner/Prime Contractor Payment
§ 66-34-202. Application for payment for work — Payment according to schedule for payments — Review of application by owner's agent.
- (a)
If a prime contractor has performed in accordance with the prime contractor's written contract with the owner, then the owner shall pay to the prime contractor the full amount earned by the prime contractor, less only those amounts withheld in accordance with § 66-34-203. The payment must be made in accordance with the schedule for payments established within the contract and within thirty (30) days after application for payment is timely submitted by the prime contractor to the owner, in accordance with the schedule.
- (b)
Failure of an architect, engineer, or other agent employed by the owner to review and approve an application for payment for work which has been performed in accordance with the contract does not excuse the owner from making payment in accordance with this chapter. This section does not require payment for work not performed if an architect, engineer, or other agent has certified that a contractor has not completed performance for a portion of work covered by the application for payment.
§ 66-34-203. Withholding of payment or retainage by owner.
-
This chapter does not prevent the owner from reasonably withholding payment or a portion of a payment to the prime contractor, as long as the withholding is in accordance with the written contract between the owner and the prime contractor. The owner may also withhold a reasonable amount of retainage as specified in the written contract between the owner and the prime contractor, as long as the retainage amount does not exceed five percent (5%) of the amount of the contract.
§ 66-34-204. Payment of retainage by owner.
-
When an owner:
- (1)
Has received a use and/or occupancy permit for an improvement from a governmental agency lawfully issuing such permit;
- (2)
Has received a certificate of substantial completion from an architect or engineer charged with supervision of the construction of an improvement; or
- (3)
Begins to use or could have begun to use an improvement;
-
the owner shall, after any such event and pursuant to the terms of the written contract, pay to the prime contractor all retainage the owner may have withheld pursuant to the written contract, except any sum which the owner may reasonably withhold in accordance with the written contract between the owner and the prime contractor; the retainage must be paid within ninety (90) days after the date of the occurrence of an event included in subdivision (1), (2) or (3).
§ 66-34-205. Sums intended as payment to be held in trust.
- (a)
Any sums allocated by the owner or provided or committed to the owner by a third party that are intended to be used as payment for improvements made to real property by virtue of a written contract between the owner and the prime contractor must be held by the owner or third party in trust for the benefit and use of the prime contractor and its remote contractors, and are subject to all legal and equitable remedies.
- (b)
The presence of an otherwise valid agreement to arbitrate does not prevent a prime contractor or remote contractor from seeking equitable relief, including injunctive relief, as permitted by § 66-34-602 against any owner, prime contractor, or remote contractor.
- (c)
The bankruptcy or insolvency of any party is not a valid defense for the failure of an owner or other third party that controls or holds those sums described in subsection (a), as well as all retainage, to release those sums when they are otherwise due.
- (d)
This section does not apply to the state, including its departments, boards, or commissions, or to any institution of higher education.
Part 3 Prime Contractor/Remote Contractor Payment
§ 66-34-302. Application for payment for work — Payment according to schedule for payments — Interest.
- (a)
If a remote contractor has performed in accordance with the remote contractor's written contract with the prime contractor, then the prime contractor shall pay to the remote contractor the full amount earned by the remote contractor, subject only to any condition precedent for payment clause in the contract, and less only those amounts withheld in accordance with § 66-34-303. The payment must be made in accordance with the schedule for payments established within the contract and within thirty (30) days after application for payment is timely submitted by the remote contractor to the prime contractor, in accordance with the schedule.
- (b)
The prime contractor shall also pay the remote contractor its pro rata share of any interest provided for in § 66-34-601 that has been received by the prime contractor.
§ 66-34-303. Withholding of payment or retainage by prime contractor.
-
This chapter does not prevent the prime contractor from reasonably withholding payment or a portion of payment to the remote contractor, as long as the withheld payment is in accordance with the written contract between the prime contractor and the remote contractor. The prime contractor may also withhold a reasonable amount of retainage as specified in the written contract between the prime contractor and remote contractor; except, that the retainage amount must not exceed five percent (5%) of the amount of the contract.
§ 66-34-304. Payments to be held in trust by prime contractor.
-
Any sums received by the prime contractor as payment for work, services, equipment, and materials supplied by the remote contractor for improvements to real property must be held by the prime contractor in trust for the benefit and use of the remote contractor, and are subject to all legal and equitable remedies.
Part 5 Architect or Engineer Payment
§ 66-34-501. Payment to architect or engineer — Governing provisions.
-
An architect or engineer furnishing design or contract administration services to an owner, prime contractor, or remote contractor for the improvement of real property is entitled to payment in accordance with part 2 of this chapter, if the architect or engineer contracts in writing with the owner; or in accordance with part 3 of this chapter, if the architect or engineer contracts in writing with a prime contractor or remote contractor.
Part 6 Remedies for Delinquent Payment or Nonpayment
§ 66-34-601. Interest.
-
Any payment not made in accordance with this chapter accrues interest, from the date due until the date paid, at the rate of interest for delinquent payments provided in written contract or, if no interest rate is specified in a written contract, then one and one-half percent (1.5%) per month.
§ 66-34-602. Nonpayment — Notice of intent to seek relief under chapter — Remedies — Attorney's fees — Bond.
- (a)
- (1)
A prime contractor who has not received payment from an owner, or a remote contractor who has not received payment from a prime contractor or other remote contractor, in accordance with this chapter, or any prime contractor or remote contractor that intends to seek to recover funds as permitted by § 66-34-205 and this section, shall notify the party failing to make payment of the notifying party's intent to seek relief against that party as provided in this chapter.
- (2)
The notification must be made by registered or certified mail, return receipt requested, or by another commercial delivery service that provides written confirmation of delivery.
- (3)
If the notified party does not, within ten (10) calendar days after receipt of the notice, make payment or provide to the notifying party a response giving adequate legal reasons for failure of the notified party to make payment, then the notifying party may, in addition to all other remedies available at law or in equity, sue for equitable relief, including injunctive relief, for continuing violations of this chapter in the chancery court of the county in which the real property is located.
- (4)
The failure to make the only payment due under the contract may be considered a continuing violation under this chapter.
- (5)
The notification required by this part may be sent separately or as part of any notice of nonpayment or other notice required under the contract and may be in substantially the following form:
-
This letter shall serve as notice pursuant to the Tennessee Prompt Pay Act, Tenn. Code Ann. §§ 66-34-101 et seq., of [prime contractor or remote contractor]'s intent to seek relief under the Prompt Pay Act. [Prime contractor or remote contractor] furnished [description of labor, materials, or services furnished] in furtherance of improvements to real property located at [property description] pursuant to its written contract with [lender, owner, prime contractor, or remote contractor]. [Prime contractor or remote contractor] first furnished labor, materials, or services on [insert first date] and [“is still continuing to perform” or “last furnished labor, materials, or services on (insert date)”]. If [owner, prime contractor, and/or remote contractor] fail(s) to make payment, arrange for payment, or provide a response setting forth adequate legal reasons for the failure to make payment to [prime contractor or remote contractor] within ten (10) days of your receipt of this letter, then [prime contractor or remote contractor] may, in addition to all other remedies at law or in equity, file a lawsuit for equitable relief, including injunctive relief, for continuing violations of this chapter.
- (b)
- (1)
If an owner does not make payment to a prime contractor or furnish a response setting forth adequate legal reasons for the owner's failure to make payment within ten (10) days of receipt of the notice required by subsection (a), then the prime contractor may stop work until payment is received or until the owner provides a response setting forth adequate legal reasons for the owner's failure to make payment, as long as the prime contractor is not otherwise in default of the written contract. If, in accordance with subsection (a), the owner makes payment or provides a response setting forth adequate legal reasons for the failure to pay the prime contractor, then the prime contractor shall not stop work pursuant to this section.
- (2)
If a prime contractor does not make payment to a remote contractor or furnish a response setting forth adequate legal reasons for the prime contractor's failure to make payment within ten (10) days of receipt of the notice required by subsection (a), then the remote contractor may stop work until payment is received or until the prime contractor provides a response setting forth adequate legal reasons for the prime contractor's failure to make payment, as long as the remote contractor is not otherwise in default of the written contract. If, in accordance with subsection (a), the prime contractor makes payment or provides a response setting forth adequate legal reasons for the failure to pay the remote contractor, then the remote contractor shall not stop work pursuant to this section.
- (c)
Any work stoppage by a prime contractor or a remote contractor in accordance with this section entitles the prime contractor or remote contractor to an extension of the contract schedule, if any, equal to the length of the work stoppage.
- (d)
Reasonable attorney's fees may be awarded against the nonprevailing party if the nonprevailing party acted in bad faith.
- (e)
A bond in the amount claimed or ordered to be paid must be filed with good sureties to be approved by the clerk prior to the issuance of any injunctive relief.
§ 66-34-603. Additional rights of prime contractors and remote contractors — Reasonable assurances.
- (a)
In addition to any rights provided for under any contract:
- (1)
Prior to visible commencement of operations, and upon written request by a prime contractor, the owner shall furnish a prime contractor reasonable evidence the owner has procured a loan, which may be secured by a mortgage or other encumbrance, or has otherwise made financial arrangements sufficient to make all payments in accordance with the contract;
- (2)
After visible commencement of operations, a prime contractor or a remote contractor may, upon the owner's failure to make payments as required by the written contract, provide notice in accordance with § 66-34-602(a). Included within the notice, a prime contractor or remote contractor may request that the owner provide reasonable evidence that the owner has made financial arrangements sufficient to fulfill its obligation to make all payments in accordance with the written contract;
- (3)
An owner shall provide a response to a demand for reasonable assurances within ten (10) days of receipt of the request that:
- (A)
Provides reasonable evidence that the owner has made financial arrangements sufficient to fulfill the owner's obligation to make all payments in accordance with the written contract, including the information set forth in § 66-34-104(d); or
- (B)
Provides adequate legal reasons for the owner's failure to make payment of the sums owing to the requesting party;
- (4)
If an owner responds to a demand for adequate assurance with reasonable evidence that the owner has made financial arrangements sufficient to fulfill the owner's obligation to make all payments in accordance with the written contract, then the owner shall not materially vary the owner's financial arrangements from those disclosed under this section without prior notice to the prime contractor or remote contractor; and
- (5)
A demand for reasonable assurances may be sent separately or as part of any notice of nonpayment, notice pursuant to § 66-34-602(a), or other notice required or permitted under the contract, and may be in substantially the following form:
-
[Prime contractor or remote contractor] furnished labor, materials, or services in furtherance of improvements to real property located at [property description] pursuant to its written contract with [owner, prime contractor, or remote contractor]. As of the date of this letter, [owner, prime contractor, or remote contractor] owes [prime contractor or remote contractor] the sum of [amount past due], which is past due or for which [prime contractor or remote contractor] asserts it has not been paid from [owner]. Such amounts were due on or before [insert due date] pursuant to the written contract between the parties. Pursuant to T.C.A. § 66-34-603, [prime contractor or remote contractor] demands [owner] furnish reasonable evidence that [owner] has made financial arrangements sufficient to fulfill its obligation to make all payments in accordance with the written contract or setting forth adequate legal reasons for your failure to make payment, within ten (10) days of your receipt of this letter.
- (b)
This section may not be waived by contract.
- (c)
This section does not apply to the state and any department, board, or agency thereof, including the University of Tennessee; counties and municipalities and all departments, boards, or agencies thereof, including all school and education boards; and any other subdivision of this state.
Part 7 Applicability
§ 66-34-701. Prohibited waiver — Applicability of provisions.
-
As a matter of public policy, except as specifically noted, compliance with §§ 66-11-104, 66-34-205, 66-34-304, 66-34-602, and 66-34-603 may not be waived by contract and these sections are applicable to all private contracts and all construction contracts with this state, any department, board, or agency thereof, including the University of Tennessee, all counties and municipalities and all departments, boards, or agencies thereof, including all school and education boards, and any other subdivision of the state.
§ 66-34-702. Construction or home improvement contracts.
-
This chapter shall not apply to contracts for the construction of, or home improvement to, any land or building, or that portion thereof which is used or designed to be used as a residence or dwelling place for one (1), two (2), three (3) or four (4) single family units.
§ 66-34-703. Applicability of chapter.
- (a)
This chapter does not apply to any bank, savings bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company.
- (b)
Notwithstanding subsection (a), if a bank, savings bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company acts in the capacity of an original owner in the event of building its own structure or assumes a project due to its debtor's default and proceeds with completion of the project, then the entity is subject to this chapter, except for §§ 66-34-104(c) and (j); however, the retained amount may be deposited in an account within the entity's own institution.
- (c)
Notwithstanding subsection (a) or any other provision of this chapter to the contrary:
- (1)
A bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company shall pay any sums held in trust pursuant to § 66-34-205 in accordance with an order of any court issued pursuant to § 66-34-602; and
- (2)
A bank, savings and loan association, industrial loan and thrift company, other regulated financial institution, or insurance company is not liable for damages pursuant to § 66-34-104(c) based on the failure of an owner to place retainage in a separate interest-bearing, escrow account as required by § 66-34-104(a).
§ 66-34-704. Agreement limiting liability of person furnishing labor, materials, or services.
-
Without limiting any existing law or regulation, it is not against the public policy or public interest of this state for a provision in any agreement relating to the design, planning, supervision, observation of construction, repair, or construction of an improvement to real property to limit the liability of the person furnishing the labor, materials, or services to a reasonable monetary amount.
Chapter 35 Rent Control
§ 66-35-101. “Local governmental unit” defined.
-
As used in this chapter, “local governmental unit” means any political subdivision of the state, including, but not limited to, counties or incorporated municipalities, if such political subdivision provides local government services for residents in a geographically limited area of the state as its primary purpose and has the power to act primarily on behalf of that area.
§ 66-35-102. Rent control by local governments prohibited — Zoning provisions — Affordable housing.
- (a)
A local governmental unit shall not enact, maintain or enforce an ordinance or resolution that would have the effect of controlling the amount of rent charged for leasing private residential or commercial property.
- (b)
- (1)
Notwithstanding any provision of law to the contrary, a local government unit, or any subdivision or instrumentality thereof, shall not enact, maintain, or enforce any ordinance, resolution, regulation, rule, or other requirement of any type that:
- (A)
Requires the direct or indirect allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates;
- (B)
Conditions any zoning change, variance, building permit, development entitlements through amendment to the zoning map, or any change in land use restrictions or requirements, on the allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates; or
- (C)
Requires a person to waive the person's constitutionally protected rights related to real property in order that the local government unit can increase the number of existing or newly constructed private residential or commercial rental units that would be available for purchase or lease at below market rates within the jurisdiction of the local government unit.
- (2)
This subsection (b) does not prohibit a local government unit from creating or implementing a purely voluntary incentive-based program designed to increase the construction or rehabilitation of workforce or affordable private residential or commercial rental units, which may include providing local tax incentives, subsidization, real property or infrastructure assistance, or any other incentive that makes construction of affordable housing more economical, so long as no power or authority granted to the local government unit to regulate zoning or land use planning is used to incentivize or leverage a person to develop, build, sell, or rent housing at below market value.
- (3)
Any person who suffers an ascertainable loss of money or property, real, personal, or mixed, or any other article, commodity, or thing of value wherever situated, as a result of the practices prohibited by this section, may bring an action individually to recover actual damages.
Chapter 36 Construction Defects
§ 66-36-101. Chapter definitions.
-
As used in this chapter:
- (1)
“Action” means any civil action or binding dispute resolution proceeding for damages or indemnity asserting a claim for damage to or loss of commercial property caused by an alleged construction defect, but does not include any civil action or arbitration proceeding asserting a claim for alleged personal injuries arising out of an alleged construction defect;
- (2)
“Claimant” means an owner, including a subsequent purchaser, tenant, or association, who asserts a claim against a prime contractor, remote contractor, or design professional concerning a construction defect;
- (3)
“Commercial property” means all property that is not residential property;
- (4)
“Construction defect” means a deficiency in, or a deficiency arising out of, the design, specifications, surveying, planning, supervision, observation of construction, or construction or remodeling of an improvement resulting from:
- (A)
Defective material, products, or components used in the construction or remodeling;
- (B)
A violation of the applicable codes in effect at the time of construction or remodeling;
- (C)
A failure of the design of an improvement to meet the applicable professional standards of care at the time of governmental approval, construction, or remodeling; or
- (D)
A failure to construct or remodel an improvement in accordance with accepted trade standards for good and workmanlike construction at the time of construction or remodeling;
- (5)
“Design professional” means a person licensed in this state as an architect, interior designer, landscape architect, engineer, or surveyor, regardless of whether the person is a prime contractor or remote contractor;
- (6)
“Improvement” has the same meaning as defined in § 66-11-101;
- (7)
“Notice of claim” means a written notice sent by a claimant to the last known address of a prime contractor, remote contractor, or design professional against whom the claimant asserts a construction defect that describes the claim in reasonable detail sufficient to determine the general nature of the defect, including a general description of the type and location of the construction that the claimant alleges to be defective and any damages claimed to have been caused by the defect;
- (8)
“Prime contractor” has the same meaning as defined in § 66-11-101;
- (9)
“Remote contractor” has the same meaning as defined in § 66-11-101;
- (10)
“Residential property” means property upon which a dwelling or improvement is constructed or to be constructed consisting of one (1) dwelling unit intended as a residence of a person or family; and
- (11)
“Service” means personal service or delivery by certified mail to the last known address of the addressee, or as otherwise allowed by contract.
§ 66-36-102. Compliance with requirements.
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If a claimant files an action without first complying with the requirements of this chapter, on motion by a party to the action, the tribunal having jurisdiction shall abate the action, without prejudice, and the action may not proceed until the claimant has complied with such requirements.
§ 66-36-103. Notice of claim after discovery of construction defect — Inspection — Written response — Settlement offer — Toling of statute of limitations.
- (a)
In actions brought against a prime contractor, remote contractor, or design professional related to an alleged construction defect, the claimant shall, before filing an action, serve written notice of claim on the prime contractor, remote contractor, or design professional, as applicable. The claimant shall endeavor to serve the notice of claim within fifteen (15) days after discovery of an alleged defect, or as required by contract. Unless otherwise prohibited by contract, the failure to serve notice of claim within fifteen (15) days does not bar the filing of an action, subject to § 66-36-102.
- (b)
Within ten (10) business days after service of the notice of claim, the prime contractor, remote contractor, or design professional may inspect the structure to assess each alleged construction defect. The claimant shall provide the prime contractor, remote contractor, or design professional and its lower-tier remote contractors or agents reasonable access to the improvement during normal working hours to inspect the improvement, to determine the nature and cause of each alleged construction defect, and the nature and extent of any corrections, repairs, or replacements necessary to remedy each defect. The inspection may include destructive testing. Prior to performing any destructive testing, the person who desires to perform the testing shall notify the claimant in writing of the type of testing to be performed, the anticipated damage to the improvement that will be caused by the testing, and the anticipated corrections or repairs that will be necessary to correct or repair any damage caused by the testing. The person performing the testing shall correct and repair any damage to the improvement caused by the testing.
- (c)
Within ten (10) days after service of the notice of claim, the prime contractor, remote contractor, or design professional must forward a copy of the notice of claim to each prime contractor, remote contractor, or design professional who it reasonably believes is responsible for each defect specified in the notice of claim and shall note the specific defect for which it believes the particular prime contractor, remote contractor, or design professional is responsible. Each such prime contractor, remote contractor, or design professional may inspect the improvement as provided in subsection (b) within ten (10) business days after receiving a copy of the notice.
- (d)
Within ten (10) business days after receiving a copy of the notice of claim, the prime contractor, remote contractor, or design professional must serve a written response to the prime contractor, remote contractor, or design professional who served a copy of the notice of claim. The written response must include a report of the scope of any inspection of the improvement; the findings and results of the inspection; a statement of whether the prime contractor, remote contractor, or design professional is willing to make corrections or repairs to the improvement or whether it disputes the claim; a description of any corrections or repairs it is willing to make to remedy the alleged construction defect; and a timetable for the completion of such corrections or repairs.
- (e)
Within thirty (30) days after receiving the notice of claim, each prime contractor, remote contractor, or design professional must serve a written response to the claimant. The written response must provide:
- (1)
A written offer to remedy the alleged construction defect at no cost to the claimant, including a report of the scope of the inspection, the findings and results of the inspection, a detailed description of the corrections or repairs necessary to remedy the defect, and a timetable for the completion of the repairs;
- (2)
A written offer to compromise and settle the claim by monetary payment to be paid within thirty (30) days after the claimant's acceptance of the offer; or
- (3)
A written statement that the prime contractor, remote contractor, or design professional disputes the claim and will not remedy the defect or compromise and settle the claim.
- (f)
If the prime contractor, remote contractor, or design professional offers to remedy the alleged construction defect or compromise and settle the claim by monetary payment, then the written response must contain a statement that the claimant is deemed to have accepted the offer if, within fifteen (15) days after service to the written response, the claimant does not serve a written rejection of the offer on the prime contractor, remote contractor, or design professional.
- (g)
If the prime contractor, remote contractor, or design professional does not respond to the claimant's notice of claim within the time provided in subsection (e), then the claimant may, without further notice, proceed with an action against the prime contractor, remote contractor, or design professional for the claim described in the notice of claim.
- (h)
A claimant who rejects a settlement offer made by the prime contractor, remote contractor, or design professional must serve written notice of the rejection on the prime contractor, remote contractor, or design professional within fifteen (15) days after service of the settlement offer. The claimant's rejection must contain the settlement offer with the word “rejected” printed on it.
- (i)
If the claimant accepts the offer of a prime contractor, remote contractor, or design professional and the prime contractor, remote contractor, or design professional does not make the payment, correction, or repair the defect within the agreed time and in the agreed manner, then the claimant may, without further notice, proceed with an action against the prime contractor, remote contractor, or design professional. If a claimant accepts a prime contractor, remote contractor, or design professional's offer and the prime contractor, remote contractor, or design professional makes payment, correction, or repairs the defect within the agreed time and in the agreed manner, then the claimant is barred from proceeding with an action against the prime contractor, remote contractor, or design professional for the claim described in the notice of claim.
- (j)
If the claimant accepts the offer of a prime contractor, remote contractor, or design professional to correct or repair an alleged construction defect, then the claimant shall provide the prime contractor, remote contractor, or design professional and their remote contractors or other agents reasonable access to the claimant's improvement during normal working hours to perform the correction or repair by the agreed-upon timetable as stated in the offer.
- (k)
The failure of a claimant or a prime contractor, remote contractor, or design professional to follow the procedures in this section is admissible in an action. However, this section does not prohibit or limit the claimant from making any necessary emergency corrections or repairs to the improvement. In addition, the offer of a prime contractor, remote contractor, or design professional to remedy an alleged construction defect or to compromise and settle the claim by monetary payment does not constitute an admission of liability with respect to the defect.
- (l)
A claimant's written notice of claim under subsection (a) tolls the applicable statute of limitations until the later of:
- (1)
One hundred eighty (180) days after the prime contractor, remote contractor, or design professional receives the notice; or
- (2)
Ninety (90) days after the end of the correction or repair period stated in the offer, if the claimant has accepted the offer. By stipulation of the parties, the period may be extended and the statute of limitations is tolled during the extension.
- (m)
The procedures in this section apply to each alleged construction defect. However, a claimant may include multiple defects in one (1) notice of claim.
- (n)
This chapter does not:
- (1)
Bar, limit, or replace any rights, obligations, or duties under a contract that provides for notice and opportunity to cure any construction defects. Those contractual provisions control, take precedence, and are in lieu of any obligation or right provided by this chapter;
- (2)
Bar or limit any rights, including the right of specific performance to the extent that right would be available in the absence of this chapter, any causes of action, or any theories on which liability may be based, except as specifically provided in this chapter;
- (3)
Bar or limit any defense, or create any new defense, except as specifically provided in this chapter;
- (4)
Create any new rights, causes of action, or theories on which liability may be based; or
- (5)
Extend any existing statute of limitations except as specifically provided in subsection (l).
Chapter 37 Prohibition of Covenants Providing for Transfer Fees Act of 2011
§ 66-37-101. Short title.
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This chapter shall be known and may be cited as the “Prohibition of Covenants Providing for Transfer Fees Act of 2011.”
§ 66-37-102. Chapter definitions.
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As used in this chapter:
- (1)
“Association” means a nonprofit, mandatory membership organization comprised of owners of homes, condominiums, cooperatives, manufactured homes, or any interest in real property, created pursuant to a declaration, covenant, or other applicable law;
- (2)
“Transfer” means the sale, gift, grant, conveyance, assignment, inheritance, or other transfer of an interest in real property located in this state;
- (3)
“Transfer fee” means a fee or charge imposed by a transfer fee covenant, but does not include any tax, assessment, fee or charge imposed by a governmental authority pursuant to applicable laws, ordinances, or regulations; and
- (4)
“Transfer fee covenant” means a provision in a document, whether recorded or not and however denominated, that purports to run with the land or bind current owners or successors in title to specified real property located in this state, and that obligates a transferee or transferor of all or part of the property to pay a fee or charge to a third person upon transfer of an interest in all or part of the property, or in consideration for permitting any such transfer. “Transfer fee covenant” does not include:
- (A)
Any provision of a purchase contract, option, mortgage, security agreement, real property listing agreement, or other agreement that obligates one party to the agreement to pay the other, as full or partial consideration for the agreement or for a waiver of rights under the agreement, an amount determined by the agreement, if that amount:
- (i)
Is payable on a one-time basis only upon the next transfer of an interest in the specified real property and, once paid, shall not bind successors in title to the property;
- (ii)
Constitutes a loan assumption or similar fee charged by a lender holding a lien on the property; or
- (iii)
Constitutes a fee or commission paid to a licensed real estate broker for brokerage services rendered in connection with the transfer of the property for which the fee or commission is paid;
- (iv)
Any fee charged by an association or an agent of an association to a transferor or transferee for a service rendered contemporaneously with the imposition of the fee, provided the fee is not to be passed through to a third party other than an agent of the association;
- (B)
Any provision in a deed, memorandum, or other document recorded for the purpose of providing record notice of an agreement described in subdivision (4)(A);
- (C)
Any provision of a document requiring payment of a fee or charge to an association or its managing agent to be used exclusively for purposes authorized in the document, as long as no portion of the fee is required to be passed through to a third party designated or identifiable by description in the document or another document referenced therein; or
- (D)
Any provision of a document requiring payment of a fee or charge to an organization described in § 501(c)(3) or § 501(c)(4) of the Internal Revenue Code (26 U.S.C. § 501(c)(3), § 501(c)(4)), to be used exclusively to support cultural, educational, charitable, recreational, environmental, conservation, or other similar activities benefiting the real property affected by the provision or the community of which the property is a part.
§ 66-37-103. Legislative findings.
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The general assembly makes the following findings:
- (1)
The public policy of this state favors the transferability of interests in real property free from unreasonable restraints on alienation and covenants or servitudes that do not touch and concern the property; and
- (2)
A transfer fee covenant violates this public policy by impairing the marketability of title to the affected real property and constitutes an unreasonable restraint on alienation, regardless of the duration of the covenant or the amount of the transfer fee set forth in the covenant.
§ 66-37-104. Transfer covenant fees.
- (a)
A transfer fee covenant recorded after June 10, 2011, or any lien to the extent that it purports to secure the payment of a transfer fee, is not binding on or enforceable against the affected real property or any subsequent owner, purchaser, or mortgagee of any interest in the property.
- (b)
Nothing in this chapter shall imply that a transfer fee covenant recorded prior to June 10, 2011 is valid or enforceable.
2024 Tennessee Code Unannotated