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Tennessee

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Tennessee — Contract for Deed / Installment Land Contract

Legal information, not legal advice. Verify against the cited primary sources before acting. Statutes in this area are frequently amended. Last verified: 2026-06-08.

Tennessee is a common-law forfeiture state with no dedicated installment-land-contract statute. Unlike Texas (texas) or Minnesota (minnesota), the Legislature has not enacted a contract-for-deed cancellation/cure code: a 2021 bill (SB 317 / HB 437) that would have regulated installment land contracts under Title 66 died in committee, and the Pew/NCLC national survey of state land-contract statutes does not list Tennessee at all. The governing law is therefore (1) general contract and equity principles — most importantly Tennessee’s strong public policy against forfeitures and penalties (bachour-v-mason-2013); (2) the common-law vendor’s-lien and its statutory enforcement machinery (Tenn. Code Ann. §§ 66-10-101 to -105); (3) the recording statutes (§§ 66-24-101, 66-26-101, 66-26-103); and (4) the Residential Property Disclosure Act (§§ 66-5-201 to -213), which expressly reaches “installment land sales contract[s]” for 1–4-unit homes. The net effect: a Tennessee seller may contract for and enforce forfeiture of a defaulting buyer’s interest (recent confirmation in buhler-v-davis-2025), but that forfeiture is subject to equitable scrutiny, and a buyer with substantial equity can invoke the anti-forfeiture/penalty doctrine to push the dispute toward a vendor’s-lien foreclosure or a redemption-style accounting.

0. Identity & Terminology

  • In-state name(s): “contract for deed,” “installment land contract,” “installment sales agreement/contract,” “land sale contract,” “installment deed.” There is no statutory umbrella term; the Residential Property Disclosure Act uses the phrase “installment land sales contract.” Tenn. Code Ann. § 66-5-201, https://law.justia.com/codes/tennessee/title-66/chapter-5/part-2/section-66-5-201/.
  • Recognition: Common law, supplemented by general statutes (recording, vendor’s lien, residential disclosure). No comprehensive CFD-specific statute exists.
  • Statutory home: No single home. The relevant statutes are scattered: Title 66, Ch. 5, Pt. 2 (Residential Property Disclosures, §§ 66-5-201 to -213); Title 66, Ch. 10 (Vendor’s Liens, §§ 66-10-101 to -105); Title 66, Ch. 24 & 26 (Registration / Effect of Registration); and Title 47, Ch. 14 (Interest Rates). https://law.justia.com/codes/tennessee/title-66/chapter-10/.
  • Remedy regime: hybrid. Contractual/common-law forfeiture is available and was recently enforced (buhler-v-davis-2025), but Tennessee’s public policy against forfeitures (bachour-v-mason-2013) subjects forfeiture and “retain-all-payments” clauses to penalty scrutiny, and equity courts may relieve against forfeiture or require a vendor’s-lien foreclosure/accounting where the buyer has built substantial equity. There is no statutory cancellation/cure regime. See forfeiture-vs-foreclosure.

1. Formation & Mandatory Disclosures

  • Statute of frauds: Writing required. A contract for the sale of land (or any interest in land) is unenforceable absent a writing or memorandum signed by the party to be charged. Tenn. Code Ann. § 29-2-101 (“Upon any contract for the sale of lands … the promise or agreement … or some memorandum or note thereof, shall be in writing, and signed by the party to be charged”), https://law.justia.com/codes/tennessee/title-29/chapter-2/section-29-2-101/.
  • Mandatory disclosures: Yes — the Residential Property Disclosure Act applies to installment land sales contracts, but it is a property-condition disclosure, not a CFD-specific financial-disclosure regime. The Act covers “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.” § 66-5-201. The owner must furnish a residential property condition disclosure (or a permitted “as is” disclaimer) before contract formation, covering the condition of the property/improvements. § 66-5-202, https://law.justia.com/codes/tennessee/title-66/chapter-5/part-2/section-66-5-202/.
    • No mandatory CFD financial disclosures. Tennessee has no statute requiring pre-sale disclosure of tax delinquency, payoff/amortization, liens/encumbrances, or an annual accounting specific to installment land contracts (the Texas §§ 5.069–5.077 model has no Tennessee analog). Confirmed absent.
    • Penalty for omission (condition disclosure): The purchaser’s remedy for a misrepresentation/nondisclosure is actual damages for defects existing at contract date (or termination of the contract prior to closing); any damages action must be brought within one (1) year of the earlier of receipt of the disclosure, closing, or occupancy. § 66-5-208, https://law.justia.com/codes/tennessee/title-66/chapter-5/part-2/section-66-5-208/. Rescission after closing is not a direct statutory remedy; common-law fraud remedies remain.
  • Recording requirement: Permitted, not mandated, with a strong incentive to record. A contract for deed / agreement affecting an interest in real property is eligible for registration. Tenn. Code Ann. § 66-24-101 (writings eligible for registration, including “any instrument that provides for any party to agree to take any action regarding any interest in real property … or otherwise affect the real property”), https://law.justia.com/codes/tennessee/title-66/chapter-24/part-1/section-66-24-101/. An unregistered instrument is valid between the parties (§ 66-26-101) but “null and void as to existing or subsequent creditors of, or bona fide purchasers from, the makers without notice” (§ 66-26-103), https://law.justia.com/codes/tennessee/title-66/chapter-26/section-66-26-103/. No deadline is prescribed; priority runs from registration. Either party may record (the buyer should, to protect against the seller’s later creditors/BFPs).
  • Annual accounting statement: Not required by statute. Tennessee has no installment-land-contract annual-statement mandate. Confirmed absent.
  • Prepayment: No statute restricts prepayment of a seller-financed land contract; prepayment rights and any penalty are contract-governed. (No CFD-specific statute; flagged in needs_verification for any consumer-loan prepayment-penalty overlay.)
  • Usury / interest cap: The general maximum effective rate is 10% per annum for transactions not otherwise covered; written contracts may instead carry the “formula rate” (defined at § 47-14-102 as 4 percentage points above the average prime loan rate published by the Federal Reserve Board of Governors, or 24% per annum, whichever is less). Maximum-effective-rate selection: Tenn. Code Ann. § 47-14-103 (written contracts carry the formula rate; all other transactions 10%), https://law.justia.com/codes/tennessee/title-47/chapter-14/part-1/section-47-14-103/; formula-rate definition: Tenn. Code Ann. § 47-14-102, https://law.justia.com/codes/tennessee/title-47/chapter-14/part-1/section-47-14-102/. These usury limits apply to seller-financed CFD balances like other written credit obligations.

2. Buyer’s Equitable Interest

  • Equitable title / equitable conversion: Tennessee recognizes equitable conversion: under an enforceable land-sale contract the vendee is treated in equity as the owner, holding equitable title, while the vendor retains legal title in trust as security for the unpaid price — functionally akin to a deed-of-trust beneficiary. See equitable-conversion. (Stated by Tennessee secondary/agency sources, e.g. UT-CTAS describing the installment-deed seller as “in a position similar to the beneficiary under a deed of trust”; the specific controlling Tennessee Supreme Court opinion is flagged in needs_verification.)
  • Vendor’s equitable lien: The seller who gives possession retains the equitable equivalent of a vendor’s lien for the unpaid balance, enforceable in chancery — see §§ 66-10-101 to -105 (Vendor’s Liens), https://law.justia.com/codes/tennessee/title-66/chapter-10/.
  • Recordability / insurability: The buyer’s interest is recordable (§ 66-24-101) and should be recorded to defeat the seller’s later creditors/BFPs (§ 66-26-103). Owner’s title insurance on the underlying title is available through Tennessee title insurers.
  • Risk of loss / improvements: Under equitable conversion the risk of loss generally falls on the equitable owner (buyer) absent a contrary contract term; this is contract-governed in practice. (Tennessee-specific risk-of-loss holding flagged in needs_verification.)

3. Default & Remedies → see forfeiture-vs-foreclosure

  • Primary remedy: Election. Tennessee gives the seller a menu — contractual forfeiture/termination, vendor’s-lien foreclosure (chancery sale), rescission, suit for the price/damages, or specific performance — constrained by equity.
  • Forfeiture available? — Yes, but equity-scrutinized.
    • A seller may contract for and enforce forfeiture of the buyer’s interest on default. In buhler-v-davis-2025 the Court of Appeals (adopting the bankruptcy court’s predicate findings) held that after the buyer’s anticipatory repudiation and failure to pay, “the Contract terminated, and the available remedy of forfeiture was lawful,” and the sellers could “retain the property through forfeiture without any formal legal action,” recovering possession by a General Sessions detainer warrant. https://www.tncourts.gov/sites/default/files/OpinionsPDFVersion/Majority%20Opinion%20-%20M2025-00210-COA-R3-CV.pdf.
    • Substantial-equity bar: Tennessee has no statutory 40%/48-payment bar like Texas. The functional check is equitable: forfeiture and “retain-all-payments” clauses are “subject to close scrutiny because of the public policy against forfeitures,” and a sum bearing no reasonable relationship to the seller’s actual loss is struck as an unenforceable penalty — bachour-v-mason-2013, https://www.tncourts.gov/sites/default/files/bachourj_opn.pdf. Where a buyer has paid down substantial equity, this doctrine (plus the equity maxim “equity abhors a forfeiture”) is the buyer’s lever to defeat strict forfeiture and force an accounting or vendor’s-lien foreclosure. (A Tennessee opinion squarely ordering foreclosure-in-lieu- of-forfeiture on a substantial-equity CFD is flagged in needs_verification — the rule is derived from the penalty/anti-forfeiture line, not a single CFD holding.)
  • Statutory cancellation: None. Tennessee has no statutory notice-and-cure cancellation regime for land contracts. Any cure right is contractual; in Buhler the buyer’s anticipatory repudiation excused the sellers from giving a contractual cure notice at all. (Confirmed absent by statute.)
  • Judicial foreclosure required when: Not categorically required, but a seller who cannot safely forfeit (e.g., a buyer with substantial equity, or a clause exposed as a penalty) proceeds by enforcing the vendor’s lien through a chancery sale under §§ 66-10-101 to -105 (chancery jurisdiction where the amount due is $50+, § 66-10-102).
  • Acceleration: Conditional / contract-governed. Acceleration of the balance is enforceable where the contract so provides and is not exercised inequitably; no statute bars it. (No CFD-specific statute; treated under general contract law.)
  • Restitution offset on forfeiture: Where forfeiture is allowed to stand, the seller’s retention of payments must survive penalty scrutiny (bachour-v-mason-2013); where it does not, the buyer recovers the excess over the seller’s actual damages. On rescission, the buyer may recover monies paid, subject to offset for the reasonable rental value/benefits received.
  • Seller’s other remedies: vendor’s-lien foreclosure (chancery sale), suit for the unpaid price/damages, rescission, specific performance, and possession via detainer (General Sessions, Tenn. Code Ann. § 29-18-101 et seq.).

▸ For Sellers / Operators — Tennessee is a no-CFD-statute, common-law forfeiture state — which sounds seller-friendly but cuts two ways. (1) You can draft for and enforce forfeiture and recover possession by detainer (buhler-v-davis-2025), and there is no statutory cure period or cancellation form to satisfy. (2) But every forfeiture and “keep-all-payments” clause runs into Tennessee’s public policy against forfeitures: an amount untethered to your actual loss is struck as a penalty (bachour-v-mason-2013), and a court in equity can relieve a buyer with substantial equity. Practical playbook: give a clear contractual written default-and-cure notice; record the contract (§ 66-24-101) to beat your buyer’s later creditors and BFPs (§ 66-26-103); deliver the § 66-5-202 condition disclosure on 1–4-unit homes; size any liquidated-damages/retention clause to a defensible relationship to actual loss; and for a high-equity default, expect to run a vendor’s-lien foreclosure (§§ 66-10-101 to -105) rather than a bare forfeiture. Know your federal threshold exposure (§4).

▸ For Buyers — You hold equitable title (§2); you are an owner, not a mere tenant. Your protections are mostly equitable, not statutory: the anti-forfeiture/penalty doctrine (bachour-v-mason-2013) lets you challenge a forfeiture that pockets far more than the seller’s loss once you have real equity, and you should record your contract to protect against the seller’s creditors. There is no statutory cure period — your cure rights are only what the contract gives you.

3b. Remedies — Advanced

  • Election of remedies: Tennessee applies general election-of-remedies principles; a seller who rescinds cannot also enforce the contract, and a seller who forfeits and retains the property generally may not also recover the unpaid price as a money judgment. The Buhler court framed the seller’s post-repudiation options as rescind / treat as immediate breach / await performance.
  • Deficiency after forfeiture or foreclosure: No statute authorizes a post-forfeiture deficiency (forfeiture recovers the land, not a money judgment). A vendor’s-lien chancery foreclosure follows ordinary deficiency/accounting rules. (Tennessee-specific deficiency authority flagged in needs_verification.)
  • Anti-forfeiture equity relief: Courts grant it. Tennessee equity disfavors forfeitures and penalties; “any doubt … will generally be resolved” against finding an enforceable forfeiture/liquidated-damages sum (bachour-v-mason-2013). This is the doctrinal substitute for a statutory substantial-equity bar.
  • Ejectment vs. eviction path: Mixed. Buhler shows a seller recovering possession by General Sessions detainer (eviction) after a clear termination/repudiation. But where the buyer’s equitable title and equity are genuinely contested, the dispute is a title matter better resolved in chancery (vendor’s-lien foreclosure / declaratory relief), and a buyer holding equitable title can resist summary eviction. (The line between detainer-appropriate and chancery-required CFD defaults is flagged in open_questions.)
  • Quiet title after cancellation: A recorded buyer’s interest is a cloud on title; the seller clears it by recording a termination, by the chancery decree in a vendor’s-lien foreclosure, or by a quiet-title/declaratory action. (Court/timeline specifics flagged in needs_verification.)
  • Forfeited payments: Treated as liquidated damages only if reasonable; otherwise an unenforceable penalty (bachour-v-mason-2013).
  • Intervening seller-lien risk to buyer: Because the seller holds legal title, the seller’s judgment creditors and BFPs can reach the property unless the buyer has recorded (§ 66-26-103). Recording is the buyer’s principal protection.

4. Federal Overlay (as applied in-state) → see dodd-frank-seller-financing, safe-act-mlo

  • Dodd-Frank exposure: A Tennessee residential CFD is seller financing / “credit” under TILA and the CFPB Loan-Originator Rule. The federal ≤1-property (no balloon, no ATR) and ≤3-property (with ATR) seller-financer exclusions from the loan-originator definition apply in Tennessee as nationally — see dodd-frank-seller-financing for the 12 C.F.R. § 1026.36(a) thresholds. Note: Buhler’s contract carried a balloon payment, which can disqualify the most generous (≤1-property) exclusion. High-volume owner-financers lose the exclusion and must use a licensed originator and meet ATR.
  • SAFE Act / MLO licensing: Tennessee licenses residential mortgage loan originators through the Tennessee Department of Financial Institutions (TDFI) under the Tennessee Residential Lending, Brokerage and Servicing Act (Tenn. Code Ann. Title 45, Ch. 13). Seller-financers above the federal/state de-minimis thresholds may need an MLO license. See safe-act-mlo. (Exact Title 45 Ch. 13 seller-financer exemption section flagged in needs_verification.)
  • State consumer-protection overlay: No CFD-specific consumer-protection statute. The general backstops are the Tennessee Consumer Protection Act (Tenn. Code Ann. Title 47, Ch. 18) and common-law fraud, plus the § 66-5-208 condition-disclosure remedy. (TCPA applicability to a CFD-disclosure failure flagged in needs_verification.)
  • CFPB enforcement notes: Tennessee was within the 2016+ wave of scrutiny of bulk contract-for-deed operators (e.g., Harbour Portfolio’s multistate footprint); the absence of a state CFD-protection statute makes the federal overlay and the equity doctrine the principal constraints.

5. Title, Recording & Wraps → see garn-st-germain-due-on-sale

  • Memorandum recording: Tennessee permits recording of the contract itself (or an instrument affecting the interest) under § 66-24-101; there is no prescribed memorandum form. Recording converts the buyer’s interest into a record interest with priority over later creditors/BFPs (§ 66-26-103), https://law.justia.com/codes/tennessee/title-66/chapter-26/section-66-26-103/.
  • Garn-St. Germain due-on-sale: A CFD or wrap is a “transfer” that can trigger the underlying lender’s due-on-sale clause under 12 U.S.C. § 1701j-3. The Garn-St. Germain residential exemptions (e.g., transfer into an inter vivos trust where the borrower remains beneficiary) generally do not cover a sale-on-terms to a third-party CFD buyer, so a Tennessee wrap carries acceleration risk. See garn-st-germain-due-on-sale.
  • Underlying mortgage / wraps: Permitted (no Tennessee statutory bar) but risky. Tennessee has no § 5.085-style prohibition on selling subject to a lien; a wrap is a matter of contract. Risks: due-on-sale acceleration; the seller’s failure to pay the underlying note; and the buyer’s lack of statutory cure of the senior default. Disclose the underlying lien as a matter of prudence (and to avoid TCPA/fraud exposure), though no CFD statute mandates it. (Confirmed absent of statutory wrap restriction.)
  • Deed delivery / marketable title at payoff: Typically the warranty deed is held in escrow or delivered at payoff; on full performance the buyer is entitled to conveyance of marketable title and may enforce by specific performance (and a recorded contract is enforceable against the seller’s personal representative — Tenn. Code Ann. § 66-4-102). (General; escrow practice not statutorily prescribed.)
  • Title insurance: Available to the buyer through Tennessee title insurers.
  • Seller death / bankruptcy effect: A recorded buyer’s interest binds the seller’s estate/creditors and a recorded land contract is enforceable against the seller’s personal representative (§ 66-4-102); an unrecorded interest is exposed (§ 66-26-103).

6. Tax Treatment

  • IRC § 453 installment reporting: A Tennessee CFD is an installment sale; the seller reports gain ratably as principal is received, subject to the dealer exception (§ 453(b)(2), (l)). See irc-453-installment-sale.
  • Property tax: Contract-governed; buyer pays in practice. Tennessee has no CFD statute assigning ad valorem taxes; the equitable owner in possession customarily pays. Assessment and lien priority run under Title 67, Ch. 5.
  • Homestead / equitable owner: Tennessee’s homestead exemption (Tenn. Code Ann. § 26-2-301) protects an owner’s interest; a CFD buyer holding equitable title in possession has an interest that may be claimed. (Exact applicability to a CFD equitable owner flagged in needs_verification.)
  • Transfer tax: Tennessee imposes a realty transfer tax (Tenn. Code Ann. § 67-4-409) measured on the consideration, collected by the register on recordation of the instrument evidencing the transfer. Because a CFD passes only equitable title, the tax timing turns on what is recorded and when title passes. (Exact treatment of a recorded contract for deed vs. the payoff deed under § 67-4-409 flagged in needs_verification — primary text not retrieved this run.)
  • Mortgage registration tax: Tennessee imposes a recording tax on instruments evidencing indebtedness secured by realty (Tenn. Code Ann. § 67-4-409(b)). Whether a recorded CFD triggers it depends on characterization. (Flagged in needs_verification.)

7. Bankruptcy & Death / Divorce

  • Buyer bankruptcy: Fact-dependent. In the adversary proceeding underlying buhler-v-davis-2025, the bankruptcy court held the installment sales agreement was not an executory contract assumable under 11 U.S.C. § 365, because it had already terminated on the buyer’s pre-petition breach — so the buyer could not assume/cure it through the plan. A non-terminated, in-performance Tennessee CFD is more contestable and may be treated as a secured debt the buyer can pay through a plan (consistent with the equitable-conversion view of the buyer as owner). National treatment splits — see forfeiture-vs-foreclosure. (A Tennessee CFD treated as secured-debt-in-performance is flagged in needs_verification.)
  • Seller bankruptcy: A recorded buyer’s interest binds the seller’s trustee, who takes subject to it; an unrecorded interest is exposed (§ 66-26-103).
  • Assignability by buyer: Generally permitted subject to contract terms; anti-assignment clauses are common and generally enforceable under ordinary contract law. (Tennessee enforceability authority flagged in needs_verification.)
  • Survivorship / divorce: The equitable interest is marital or separate property characterized like other realty and passes by the buyer’s estate plan or equitable distribution.

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
buhler-v-davis-20252025forfeiture / detainer / §365On an installment land contract, after the buyer’s repudiation and default, forfeiture is a lawful remedy and the seller may retain the property and recover possession by detainer; the terminated contract was not an executory contract assumable in bankruptcy under § 365.https://www.tncourts.gov/sites/default/files/OpinionsPDFVersion/Majority%20Opinion%20-%20M2025-00210-COA-R3-CV.pdf
bachour-v-mason-20132013forfeiture / penalty doctrineLiquidated-damages/forfeiture clauses get close scrutiny because of Tennessee’s public policy against forfeitures; a retention untethered to actual loss is an unenforceable penalty, and doubts are resolved against forfeiture.https://www.tncourts.gov/sites/default/files/bachourj_opn.pdf
  • Buhler v. Davis (Lefkovitz), No. M2025-00210-COA-R3-CV (Tenn. Ct. App. Dec. 11, 2025). Court of Appeals, Middle Section (Clement, P.J.). Good law; opinion text retrieved and read. Posture note: the appellate caption is Buhler v. Lefkovitz & Lefkovitz, PLLC — a legal-malpractice action arising out of the installment-sales-contract dispute. The forfeiture/§ 365 holding is the bankruptcy court’s finding in the underlying adversary proceeding (Buhler v. Davis), quoted and relied on by the Court of Appeals; cite accordingly.
  • Bachour v. Mason, No. M2012-00092-COA-R3-CV (Tenn. Ct. App. May 30, 2013). Court of Appeals, Middle Section. Good law; opinion text retrieved and read. Applies Kimbrough & Co. v. Schmitt, 939 S.W.2d 105 (Tenn. Ct. App. 1996) (itself a contract-for-deed liquidated-damages case), and Guiliano v. Cleo, Inc., 995 S.W.2d 88 (Tenn. 1999) on the penalty test.

9. Edge Cases (state-specific notes)

  • garn-st-germain-due-on-sale — A Tennessee wrap/CFD over an existing mortgage risks due-on-sale acceleration; unlike Texas, no Tennessee statute restricts subject-to/wrap CFDs, so the constraint is the federal due-on-sale clause and the parties’ contract.
  • No CFD statute / “equity governs” — the single most important Tennessee fact: forfeiture turns on equitable scrutiny and the penalty doctrine (bachour-v-mason-2013), not a statutory cure schedule.
  • Record to beat the seller’s creditors — an unrecorded Tennessee CFD is void as to the seller’s later creditors and BFPs without notice (§ 66-26-103).
  • Detainer is available — after a clear termination/repudiation a Tennessee seller may use a General Sessions detainer to recover possession (buhler-v-davis-2025); a high-equity contested default is better suited to chancery.
  • Manufactured/mobile homes — if titled as personalty, a separate UCC/title regime may apply; (flagged in open_questions).

10. Operations

  • Where records live: County Register of Deeds real-property records (95 counties); recording under §§ 66-24-101, 66-26-101.
  • Public access: Many county Registers offer online indices; statutes via law.justia.com/codes/tennessee and the official Lexis Law Link on tncourts.gov; appellate opinions at tncourts.gov.
  • Who may draft (UPL): Drafting a contract for deed / deed for another for compensation is the practice of law in Tennessee; non-lawyers (including agents/title companies) filling blanks in standard forms is generally tolerated, but tailored drafting risks UPL. (Specific Tennessee UPL authority on conveyancing flagged in needs_verification.)
  • Costs / timelines: Nominal Register recording fees plus the realty transfer tax on recordation (§ 67-4-409). No statutory CFD cure/cancellation clock — timelines are contractual (plus the detainer and chancery-foreclosure dockets).
  • Key agencies: County Registers of Deeds; Tennessee Department of Financial Institutions (mortgage/MLO licensing); Tennessee Attorney General / Division of Consumer Affairs (TCPA); General Sessions and Chancery Courts.
  • Useful forms: Tennessee Residential Property Condition Disclosure (§ 66-5-202); county Register recording cover sheets.

11. Meta

Disclaimer. This page is legal information, not legal advice, and may be out of date. Contract-for-deed statutes are frequently amended and remedies turn on facts. Consult a licensed attorney in this jurisdiction before drafting, enforcing, or signing an installment land contract.

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