Tennessee Short Term Rental Unit Act

We are happy to report that the Governor has finally signed SB1086, the Short Term Rental Unit Act, into law. While this was not the full outcome that Tennessee homeowners had hoped for, "grandfathering" for legally operating short term rentals in the state of Tennessee is still a huge win. In Nashville, that means that hosts who had permits prior to the passage of BL2017-608 will be able to continue to legally maintain their permits and will no longer be phased out in 2020.

So what does it mean?

  • If you have a permit or receive a permit in the future, you are grandfathered under the law that was in place at the time the permit was issued.

  • If you live in an area that did not require a permit (for example, the satellite city of Berry Hill), you are also grandfathered in as long as you remitted sales tax in accordance with state law for at least 6 months prior to the effective date of this law (May 17, 2018) or the effective date of any local law requiring a permit or application to be approved.

  • There is no phase-out of non-owner occupied properties. The law in place at the time you were issued your permit is the law that applies for as long as you keep the permit.

  • You can lose your grandfathered permit if you receive 3 strikes (violations) of a generally applicable law against the property, if the property transfers ownership, or if you stop renting short term for 30 continuous months.

  • Any false complaint made against an STR property or owner “shall be punished as perjury”.

  • Permits are not transferrable (by sale, change of ownership, or any other means).

  • This does not change the law for any new permits being issued. New non-owner occupied permits are still only being issued in select (non-residential) zones, as outlined in BL2017-608.

Read the full Short Term Rental Unit Act here »

Alece Ronzino