Tennessee HOA Short-Term Rentals

Quick-Reference Table

Last verified: July 17, 2026

Section 1: Overview — Can an HOA restrict short-term rentals in Tennessee?

Yes. A Tennessee condominium association restricts short-term rentals through its recorded declaration under the Tennessee Condominium Act of 2008, and a planned community does so through its recorded covenants, and the state statute that limits local-government prohibitions of short-term rentals does not change that association authority. Condominiums created on or after January 1, 2009 are governed by the Tennessee Condominium Act of 2008 (Tenn. Code § 66-27-201 et seq.),¹ a Uniform-Condominium-Act statute, while condominiums created earlier remain under the Horizontal Property Act (§ 66-27-101 et seq.);⁶ planned communities have no comprehensive statute and run on their recorded covenants, the Nonprofit Corporation Act for corporate formalities, and common law. The Short Term Rental Unit Act (Tenn. Code § 13-7-601 et seq.) limits the ability of local governments to prohibit short-term rentals and grandfathers certain existing uses, but it expressly leaves associations free to restrict short-term rentals through their governing documents.² Tennessee divides its trial courts between Chancery Courts (equity) and Circuit Courts (law); a covenant-enforcement or injunction action commonly proceeds in Chancery Court, and the state contains two of the country's most active short-term-rental markets, metropolitan Nashville and the Great Smoky Mountains cabin market in Sevier County, where Sevierville alone carries over 4,299 current Airbnb listings and Great Smoky Mountains National Park draws more than 12 million visitors annually.¹⁷ Civil appeals run from the Chancery Court or the Circuit Court to the Tennessee Court of Appeals and then, by discretionary review, to the Tennessee Supreme Court.¹⁶ The sections that follow detail the statutory framework, the amendment and grandfathering rules, the layering of the Short Term Rental Unit Act against association authority, and the operational mechanics of enforcement.

Section 2: The legal framework for HOA short-term rental restrictions

2A. The Condominium Act of 2008, the older Horizontal Property Act, and the CC&R-primary planned-community framework

Tennessee treats condominiums and planned communities differently. The Tennessee Condominium Act of 2008 (Tenn. Code § 66-27-201 et seq., enacted as Public Chapter 766, Acts of 2008) governs condominiums created on or after January 1, 2009 and is based on the Uniform Condominium Act.¹ On the vintage question, the Act tracks the 1980 Uniform Condominium Act rather than the 2008 Uniform Common Interest Ownership Act amendments; the short title, the 2008 enactment date, and the enacting chapter (Public Chapter 766) point to the 1980 model.¹⁸ The text does contain a rental-related provision, but not a broad owner-protection rule of the kind associated with later uniform acts: § 66-27-317(d) provides that no declaration amendment may prohibit the leasing of any unit without the consent of all affected unit owners.⁵ That provision protects a condominium owner's ability to lease, but it addresses leasing prohibition through amendment, not a general cap or minimum-term restriction.

Condominiums created before January 1, 2009 remain governed by the older Horizontal Property Act (§ 66-27-101 et seq.), except that a defined list of 2008 Act sections reaches back to pre-2009 condominiums for events occurring after January 1, 2009, without invalidating existing recorded documents (§ 66-27-202).¹⁹ The amendment provision (§ 66-27-317) is not on that retroactive list, so its unanimous-consent-to-prohibit-leasing rule applies to post-2009 condominiums.

Planned communities (non-condominium homeowners associations) are not governed by any comprehensive Tennessee statute. A proposed Tennessee Homeowners Association Act has been introduced repeatedly and has not been enacted as of mid-2026.²⁰ Planned communities therefore run on their recorded covenants, conditions, and restrictions, the Tennessee Nonprofit Corporation Act (§ 48-51-101 et seq.) for corporate governance where the association is incorporated,⁷ and Tennessee common law on restrictive covenants. In both settings, the recorded declaration or covenants are the source of any rental authority; the statute either supplies default rules around that document (condominiums) or plays almost no substantive role (planned communities).

2B. Restricting rentals, amendments, and grandfathering

An association usually adopts or strengthens a short-term-rental restriction by amending the governing documents. For condominiums, § 66-27-317(a) sets the default amendment threshold at the vote or agreement of unit owners holding at least 67 percent of the association's votes, or any larger majority the declaration specifies.⁹ The limit in § 66-27-317(d) matters here: an amendment that would prohibit leasing altogether requires the consent of all affected unit owners, so a condominium generally cannot convert to a no-rental regime over the objection of an owner who wants to lease.⁵ A minimum-lease-term restriction (for example, a 30-day floor aimed at short-term use) is analyzed as a use restriction rather than an outright leasing prohibition, and its enforceability turns on the declaration's language and Tennessee's strict-construction rule for restrictive covenants. For planned communities, the amendment threshold and procedure come entirely from the covenants themselves; there is no statutory percentage.

Grandfathering of an owner who bought before a restriction was adopted turns on the applicable framework and Tennessee common law, not on any Florida-style or California-style statutory shield, which should not be imported. For condominiums, § 66-27-317(d) supplies a specific protection against amendments that prohibit leasing. More generally, the Tennessee Supreme Court in Pandharipande v. FSD Corp., 679 S.W.3d 610 (Tenn. 2023), held that a restrictive covenant limiting property to "residential purposes" was ambiguous and did not by itself bar short-term rentals, but that a later covenant amendment imposing a 30-day minimum lease term validly prohibited them; the Court stated that "[a]lthough the 1984 covenants do not prohibit that use, the 2018 amendments to those covenants do," and it rejected the owner's arguments that the amendment could not add restrictions and that a grandfather clause saved his use.¹⁰ That decision confirms that in Tennessee a properly adopted amendment can reach existing owners, subject to the document's own terms and reasonableness limits.

Separately, Tennessee does not otherwise limit an association's authority to restrict rentals through a single statutory provision the way California (Civil Code § 4741) and Arizona (A.R.S. § 33-1806.01) do. The Short Term Rental Unit Act constrains local governments, not associations, and its grandfathering mechanism concerns local prohibitions, not association restrictions. The association question and the local-government question stay separate.

2C. The Short Term Rental Unit Act, the layering, tax, and the local layer

The Short Term Rental Unit Act (Tenn. Code § 13-7-601 et seq., enacted as Public Chapter 972 of 2018, effective May 17, 2018) limits how local governments regulate short-term rentals.³ Its legacy clause (§ 13-7-603) provides that a local ordinance prohibiting or regulating short-term rental use does not apply to property already used as a short-term rental before the ordinance, subject to loss of that status on sale, transfer, a 30-month cessation, or three or more violations of generally applicable local laws (§ 13-7-604).⁴ A narrow exception applies only to Brentwood (§ 13-7-603(b)). Local governments may still impose a reasonable permitting or application process (§ 13-7-604).

The critical point is the layering. Section 13-7-605 states expressly that a condominium, cooperative, homeowners association, or similar entity may prohibit or restrict an owner's use of property as a short-term rental as provided in the entity's governing documents, and that lessors and property owners may do the same through leases and restrictive covenants.² The Act constrains local-government power; it does not override a private association's recorded restriction. An owner can be protected against a city ban under § 13-7-603 and still be bound by a recorded declaration or covenant that forbids the same use, because the association's recorded restriction controls as between the association and the owner.

The tax and local layers reinforce that separation. Tennessee subjects short-term rentals (residential dwellings rented for less than 30 continuous days) to the 7 percent state sales tax, local sales tax, and local occupancy taxes, and short-term rental marketplaces must collect and remit the sales tax and, under Public Chapter 787 (2020) effective January 1, 2021, the local occupancy tax on facilitated bookings.¹³²¹ Nashville regulates extensively through Metro Codes short-term rental permits distinguishing owner-occupied from non-owner-occupied units,¹¹ and Sevier County (Gatlinburg, Pigeon Forge, and Sevierville) anchors one of the largest cabin-rental markets in the country.¹² An owner who holds a valid local permit and pays every applicable tax may still violate a recorded declaration or covenant, and an owner whose association permits rentals may still need a local permit and must still pay the tax. The layers operate independently.

Section 3: Operational mechanics and enforcement

A. Adopting a valid restriction (the tools)

The most common tool is a minimum-lease-term restriction, typically a floor at or above 30 days, which targets transient use without banning leasing outright. For condominiums, such a restriction lives in the declaration and is adopted or amended under § 66-27-317, at 67 percent of votes or a larger declaration-specified majority; a full leasing prohibition triggers the unanimous affected-owner consent rule of § 66-27-317(d).⁵ For planned communities, the covenants and their amendment clause govern, with no statutory percentage. Rental caps expressed as a percentage of units are not addressed substantively by the Condominium Act and depend on the declaration for condominiums and the covenants for planned communities. Registration, owner-information, and lease-filing requirements are internal association tools: an association may require owners to register rentals, provide tenant information, or file leases if the governing documents authorize it, and these association requirements are distinct from any local permit.

B. Enforcement and the bifurcated trial-court system

For condominiums, § 66-27-402(a)(11) requires notice and an opportunity to be heard before the association levies a reasonable fine for a violation of the declaration, bylaws, or rules.¹⁴ Tennessee sets no fine cap and no statutory day-count for the notice; the governing documents supply the timeline. For planned communities, no statute imposes a notice-and-hearing requirement, so the covenants control, and Tennessee courts enforce those procedural steps as written. Available remedies for condominiums include reasonable fines, injunctive relief, and a lien: § 66-27-415 gives the association a lien on a unit for assessments and for fines, enforceable by judicial foreclosure (or, if the declaration provides, by a deed-of-trust-style power of sale with notice), and the lien is extinguished if not enforced within six years.¹⁵ Planned communities have fines and liens only to the extent their covenants authorize them, though injunctive relief to enforce covenants is generally available.

The forum depends on the relief sought. A contested short-term-rental dispute seeking to stop the use proceeds as an equity action for injunctive relief, commonly in Chancery Court, which historically hears covenant-enforcement and real-property matters; a claim primarily for money damages fits the Circuit Court's law jurisdiction.¹⁶ Civil appeals from either court go to the Tennessee Court of Appeals, then to the Tennessee Supreme Court by discretionary review; the Court of Criminal Appeals is not part of this path. Association enforcement runs in parallel with, and independent of, local-government enforcement of permit and zoning rules within the limits of the Short Term Rental Unit Act, and a challenge to a local prohibition under that Act is itself brought in chancery or circuit court (§ 13-7-604).⁴

Section 4: Recent legislative and judicial activity

A. Recent bills (past 24 months)

No bill enacted in the past 24 months amended the Short Term Rental Unit Act or changed a Tennessee association's authority to restrict rentals. The one enacted measure touching the condominium and homeowners-association framework in Title 66, Chapter 27 concerned fidelity bonds rather than rentals.

B. Recent rulings (past 36 months)

A separate 2025 Court of Appeals decision, City of Hendersonville v. Durham (No. M2025-00293-COA-R3-CV), addressed a city's enforcement of a vacation-rental zoning ordinance, illustrating that local-government short-term-rental disputes proceed through the courts separately from association enforcement.²⁴

C. Active legislative or local debates

A "Homes Not Hedge Funds" bill (HB298/SB242, 114th General Assembly) that would have limited large investors from buying single-family homes for rental in certain counties passed the Senate but died in a House subcommittee in 2026, and Nashville has continued to restrict non-owner-occupied permits, which are "not permitted in AR2A, R, RS, or RM zoned properties" (the bulk of Nashville's residential land) and, for existing holders, are "not transferable if the property is sold or transferred."¹¹²⁵ Neither development changes association authority.

Section 5: National positioning and related coverage

Tennessee occupies a distinct position among the states. It adopted the Uniform Condominium Act for condominiums (the Condominium Act of 2008) but remains CC&R-primary for planned communities, it runs a bifurcated trial-court system in which covenant enforcement and injunctions commonly proceed in Chancery Court, and it limits local prohibitions of short-term rentals through the Short Term Rental Unit Act while expressly leaving association authority intact. That profile differs from states that broadly preempt local rules in favor of owners (Florida, Arizona) and from states that cap HOA rental authority through a single statutory provision (California, Arizona). The Short Term Rental Unit Act, local permitting, and the occupancy tax restrain local governments and owners, not associations; the recorded declaration or covenant remains the controlling instrument between the association and the owner. For a multi-state operator entering Tennessee, the practical implication is that association authority is document-driven, disputes move through a two-track trial-court system, and the state contains very large cabin and urban short-term-rental markets that raise the stakes of getting the documents right.

HOA Weekly's Tennessee Short-Term Rentals coverage updates quarterly as the General Assembly, the Tennessee Court of Appeals and the Tennessee Supreme Court, and local governments act. Federal frameworks, including the Fair Housing Act, the ADA, the FDCPA, the SCRA, and the FCC's OTARD rule, also apply to Tennessee associations regardless of the state framework.

1. Tenn. Code § 66-27-201 (short title, "Tennessee Condominium Act of 2008"); § 66-27-202 (applicability to condominiums created after January 1, 2009) ↩
2. Tenn. Code § 13-7-605 (a condominium, co-op, homeowners association or similar entity may prohibit or restrict short-term rental use through its governing documents), summarized by University of Tennessee MTAS ↩
3. Tenn. Code § 13-7-601 through § 13-7-606, Short-Term Rental Unit Act (Public Chapter 972, 2018) ↩
4. Tenn. Code § 13-7-603 (legacy clause) and § 13-7-604 (permitting, three-violation prohibition, chancery or circuit court challenge), summarized by University of Tennessee CTAS ↩
5. Tenn. Code § 66-27-317(d) (no amendment may prohibit the leasing of any unit without the consent of all affected unit owners) ↩
6. Tenn. Code § 66-27-101 et seq., Tennessee Horizontal Property Act (condominiums created before January 1, 2009) ↩
7. Tenn. Code § 48-51-101 et seq., Tennessee Nonprofit Corporation Act ↩
8. Tennessee Department of Revenue, Taxation of Short-Term Rental Units (June 2025): a short-term rental unit is a residential dwelling rented for less than 30 continuous days ↩
9. Tenn. Code § 66-27-317(a) (declaration amended by owners holding at least 67% of association votes, or larger majority the declaration specifies) ↩
10. Pandharipande v. FSD Corp., 679 S.W.3d 610 (Tenn. 2023) (majority opinion, Campbell, J.) ↩
11. Metropolitan Nashville, Short Term Rental Property Permit Types (owner-occupied and non-owner-occupied permits; zoning restrictions) ↩
12. Sevier County, Short-Term Rental Unit Permit Program Information (annual operational permit effective January 1, 2024) ↩
13. Tennessee Department of Revenue, SUT-48, Short-Term Rentals – Reporting Requirements (7% state sales tax, local sales tax, local occupancy tax, marketplace collection) ↩
14. Tenn. Code § 66-27-402(a)(11) (after notice and an opportunity to be heard, association may levy reasonable fines for violations) ↩
15. Tenn. Code § 66-27-415 (lien for assessments and fines; judicial foreclosure; notice; six-year enforcement window) ↩
16. Tennessee Administrative Office of the Courts, court structure (Chancery and Circuit trial courts; Court of Appeals; Supreme Court) ↩
17. Sevier County / Great Smoky Mountains market data and Gatlinburg short-term rental regulations overview (Rabbu listing data and Great Smoky Mountains National Park visitation cited by market trackers) ↩
18. Baker Donelson, The Tennessee Condominium Act of 2008 (signed April 21, 2008; based on the Uniform Condominium Act) ↩
19. Public Chapter 766 (2008), Section 1 (list of 2008 Act sections applying to pre-2009 condominiums for events after the effective date, without invalidating existing documents) ↩
20. SB 405 (Tennessee Homeowners Association Act), a proposed but unenacted comprehensive HOA statute ↩
21. Tennessee Department of Revenue, LOT-2, Local Occupancy Tax Overview (marketplaces remit local occupancy tax effective January 1, 2021 under Public Chapter 787 (2020)) ↩
22. HB2338 / SB2326, 114th General Assembly (property owners' association fidelity bonds; enacted as Public Chapter 731) ↩
23. Lone Mountain Shores Owners Ass'n, No. E2024-00569-COA-R3-CV (Tenn. Ct. App.), majority opinion ↩
24. City of Hendersonville v. Durham, No. M2025-00293-COA-R3-CV (Tenn. Ct. App.), majority opinion ↩
25. Community Associations Institute, 2026 Tennessee End of Legislative Session Report (institutional-investor purchase-limit bill status) ↩