Tennessee Real Estate Practices

Attorney Involvement

Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.

Attorney involvement is not required for title searches or issuance of policies. However a company issuing a policy must be a title insurance agent licensed by the Tennessee Department of Insurance.

A non attorney can draft closing documents, and documents required to issue a policy. Any other document must be drafted by an attorney.

Any documents not related to the closing must be drafted by an attorney, i.e., easements, rights of way etc.

A non attorney cannot give an opinion.

Cancellation/Commitment Fee

Does your state permit or require a cancellation fee or commitment fee upon cancellation?

A cancellation fee is permitted but the amount for the cancellation fee is not filed.

Certificate of Release (of Mortgage)

If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.

Releases can only be executed by the lawful holder of the indebtedness.


Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.

Customarily, a general warranty deed is used for both residential and commercial transactions. However, quit claim deeds and special warranty deeds can be used, and are used. 

Trustee deeds are normally used in foreclosure situations.

Any type of deed is insurable if it is in a recordable form.

Good Funds Requirements

Is there a good funds requirement in your state?

Yes, Good Funds Law (TCA § 47-32-101)
Section: 47-32-105; Section: 47-32-106; Section: 47-32-107 (9-4-19)

Joinder of Spouses

If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed. 

A non-title holding spouse does not need to join in a general warranty deed. A non-title holding spouse would need to join in any deed of trust with the exception of a purchase money deed of trust.

Civil unions are not recognized in Tennessee.

Mortgage Tax

Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe. 

Yes. Mortgage tax is uniform throughout the state. Mortgage tax is 11.5 cents per $100.00, with the first $2,000.00 exempt.

Payment Customs

Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?

Varies from county to county.

(a) Owner’s policy: Generally, the Seller, but varies from county to county. Need to consult with local underwriting counsel.
(b) Transfer tax and recording fee: Buyer.
(c) Survey charges: Depends on the terms of the sales contract.
(d) Closing/settlement charges: Normally split between the buyer and seller but depends on the terms of the sales contract.

Customarily all transfer and recording fees are paid for by the buyer, but would be based on the terms of the sales contract.

The closing and settlement fees are paid in accordance with the terms contained in the sales contract.

Policy Countersignatures

What kinds of countersignatures, if any, are required to issue the policy? 

The commitment and policy must be signed by a title agent licensed by the Tennessee Department of Insurance.

A non-resident agent licensed by the Tennessee Department of Insurance can sign the commitment and policy.

Real Estate Taxes

Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.

Real estate taxes are collected in arrears. Ad Valorem real estate taxes are due and payable on October 1st of every year. Real estate taxes become delinquent on March 1st, of the following year.

Please consult with a local underwriter for information relating to municipal real estate taxes on the subject property. The due date for municipal taxes varies in each municipality.

Search and Examination Fees

Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.

Separate search and examination fees cannot be charged in Davidson, Hamilton, or Knox Counties. Shelby County has a separate filed search fee. 

In all other counties, a search and examination fee may be charged.

Search Requirements

Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.

There is no state law, title acts or examination standards. The Tennessee Code only requires a “reasonable search”.

Please refer to Tennessee Code Section: T.C.A. 56-35-129

Security Instruments (Deed of Trust vs. Mortgage)

Please describe the customary and permissible form(s) of security instruments used in your state. 

Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?

Tennessee is a deed of trust state. However, a mortgage is enforceable.

The trustee must be a resident of Tennessee or a corporation domiciled in Tennessee. There is a reciprocal agreement in which a trustee can serve in Tennessee if the trustee’s home state allows a Tennessee trustee to serve.

The title agent can be a trustee, and an underwriter domiciled in Tennessee could be a trustee, but it is not customary.

Standard Exceptions and Requirements

Please identify the standard exceptions and requirements that are customarily used in your state.

The basic requirements are: deed, deed of trust, release(s), payment of taxes, release of liens, as well as the following:

Rights or claims of parties in possession not recorded in the Public Records.

Easements or claims of easements not recorded in the Public Records.

Any discrepancies, conflicts or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of the improvements.

Any lien, or right to a lien, for services, labor, material or equipment, heretofore or hereafter furnished, imposed by law and not recorded in the Public Records.

Taxes or assessments which are not recorded as existing liens in the Public Records.

State-specific Policy Variations

If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.

There are no state-specific requirements for issuing ALTA Policies.

Title Insurance Form and Filing Regulations

Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau. 

Tennessee is a file and use rate file state. Forms do not need to be filed.

Transfer Taxes

Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.

The transfer tax is uniform and is .37 cents per $100.00.


Is usury coverage available?

Usury coverage is available in Tennessee and should be based on conflicts of law analysis.

Withholding Taxes

What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?

Tennessee has no withholding requirements for proceeds from a sale.

Witness Requirements

Are witnesses required on a deed or security instrument? If so, please describe.

Witnesses are not required on a deed or deed of trust. Deeds and deeds of trust require a full acknowledgment. A jurat is not acceptable.

Generally, the language required is as follows:

Personally appeared before me, a Notary Public of the state and county aforesaid, duly commissioned and qualified, _________. With whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who acknowledged that they executed the foregoing instrument for the purposes therein contained. 

The language varies for corporations, LLC etc.