Tennessee Condo Due Diligence Checklist

Where Tennessee due diligence deserves the most attention

Legal Framework

Condominiums (created on/after Jan 1, 2009): Governed by the Tennessee Condominium Act of 2008, T.C.A. §66-27-201 et seq. (Title 66, Chapter 27, Parts 2–6). It is derived from the Uniform Common Interest Ownership Act (UCIOA). Per §66-27-201 it is the short title; §66-27-202 sets applicability. The Act is consumer-protective: many provisions cannot be varied or waived by the declaration. It differentiates residential vs.

Reserve Studies and Reserve Funding

Who is covered: A board of directors of a unit owners' association that oversees common elements with an aggregate replacement cost exceeding $10,000 (i.e., effectively all but the smallest condos). Applies under the 2008 Act and reaches pre-2009 condos prospectively.; Trigger / deadline: If the board had a reserve study done on/after Jan 1, 2020, it must update that study within 5 years of the original and at least every 5 years thereafter.

Structural Inspections and Building Safety

Tennessee has no statewide milestone/structural inspection mandate for condos (no equivalent of Florida SB-4D, NYC Local Law 11, or California SB-326). The state's Surfside response was financial (reserve studies, Section 4), not a physical-inspection regime.

Insurance Requirements and Insurance-Market Risk

The Horizontal Property Act (pre-2009 condos) historically required common-element insurance as well, though its provisions are less detailed; many older condos are also reached by the 2008 Act's insurance framework for post-2009 events. HOAs: No statutory insurance mandate — coverage is whatever the CC&Rs require. Note §66-27-413 does not independently mandate flood, wind/hail, earthquake, fidelity, or D&O coverage — those depend on the policy/declaration.

Resale Disclosures and Buyer Cancellation Rights

Declarant/association/condominium name and address; recorded master deed/declaration, bylaws, charter/articles, all amendments and exhibits; current rules and regulations.; Most recent balance sheet, income statement, and approved (or projected) budget, which must state the reserve amount (or that there is none), whether a reserve study was done and where it is available, any other reserves, projected aggregate and per-unit assessments, and any debt or leases affecting common elements/amenities.; Minutes of all member and board meetings for the prior 24…

Assessments, Special Assessments, and Borrowing

Regular assessments (condos, §66-27-414): The board levies common-expense assessments based on the periodic budget adopted under the Act; allocation follows the declaration's percentages. Late charges, fines, interest, and other §66-27-402-authorized charges are enforceable as assessments (and lienable — Section 9).; Budget adoption: The 2008 Act follows the UCIOA-style model where the board adopts a budget; owner ratification/veto mechanics depend on the declaration and the Act's budget provisions.