Tennessee — Tax & Mortgage Foreclosure

Legal information, not legal advice. Verify against the cited primary sources before acting. Last verified: 2026-06-01.

Tennessee enforces delinquent property tax liens through a judicial proceeding in rem in chancery court, ending in a tax sale of the land itself (a tax deed), not a lien certificate. The right to redeem and the right to claim surplus (“excess sale proceeds”) are both post-confirmation, statutory rights administered by the same chancery court. Mortgage foreclosure is overwhelmingly non-judicial (power-of-sale under a deed of trust). See right-of-redemption, surplus-funds, tyler-v-hennepin-county.

0. Identity & Classification

• Recording unit: county (95 counties)
• Tax sale type: tax deed (the parcel is sold, subject to a statutory post-sale right of redemption — functionally a redeemable deed). The whole proceeding “from the assessment to sale for delinquency, shall be a proceeding in rem.” Tenn. Code Ann. § 67-5-2103 (per CTAS/tncourts delinquent-tax materials, source below).
• Tax foreclosure process: judicial — the delinquent-tax attorney files suit in chancery court (Tenn. Code Ann. § 67-5-2405; prosecuted per chancery rules, § 67-5-2414), the court orders the property sold, and the court enters an order confirming the sale.
• Mortgage foreclosure process: non-judicial (power of sale, Tenn. Code Ann. tit. 35, ch. 5) is the norm; judicial foreclosure is available but rare.
• Selling authority: clerk & master / chancery court under court decree (the county trustee is the tax collector; the sale is judicial). For mortgages, the trustee under the deed of trust.
• Statutory home: Tenn. Code Ann. Title 67, Chapter 5 — Property Taxes (delinquency Part 24 §§ 67-5-2401 et seq.; tax-lien sale Part 25 §§ 67-5-2501 et seq.; redemption & excess proceeds Part 27 §§ 67-5-2701–2703). https://law.justia.com/codes/tennessee/title-67/chapter-5/
• Tyler v. Hennepin compliance: compliant — Tennessee already statutorily returns surplus to the former owner/junior interests via the § 67-5-2702 excess- proceeds motion, with any residue going to unclaimed property (held for the owner), not retained by the taxing county. A 2024 Court of Appeals decision applied § 67-5-2702 to distribute surplus to a lienholder, with the residual waterfall ending at the former owner (§ 67-5-2702(c)(4)) — see tyler-v-hennepin-county, module 8.

1. Tax Sale Mechanics

• What is sold: the land (tax deed), sold “for cash, subject to the equity of redemption.” The clerk bids the amount owed if no third party bids higher. (CTAS, The Tax Sale; tncourts delinquent-tax materials, sources below.)
• Bidding method: highest-bid (premium) auction — public sale; if the bid exceeds taxes/penalty/interest/costs, the difference becomes excess sale proceeds subject to § 67-5-2702.
• Interest / penalty: statutory delinquency interest and penalty on the tax debt accrue under Title 67, Ch. 5; on redemption, the redeemer additionally pays interest at 12% per annum on the purchaser’s entire purchase price from payment to the filing of the motion to redeem. Tenn. Code Ann. § 67-5-2701(b). (Statutory text confirmed via CTAS Redemption + statute search, sources below.)
• Minimum bid composition: delinquent taxes + penalty + interest + court costs + delinquent-tax attorney fees (proceeds are applied first to attorney fees, then suit costs, then to the state/county/municipality per the decree). (CTAS Tax Sale.)
• Sale frequency / typical month: suits filed after Feb. 1 and not later than Apr. 1 (§ 67-5-2405); sales occur on the chancery court’s calendar (varies by county — see county pages). needs_verification: a single statewide “typical month.”
• Venue: in person at the courthouse historically; some counties now use online decree-sale platforms (county-specific — verify on county pages).
• Platform vendors: county-specific (e.g., GovEase, RealAuction in some counties). needs_verification: per-county vendor list belongs on county pages.
• Registration / deposit: county-specific terms; bidders who have a “moral or legal obligation to pay the taxes” on the parcel and fiduciaries of the taxpayer are disqualified from bidding. (CTAS Tax Sale.)
• Subsequent taxes (“subs”): the tax-sale purchaser who pays post-sale ad valorem taxes may recover them from a redeemer as a “lawful charge” (§ 67-5-2701(e)).

2. Right of Redemption → see right-of-redemption

• Pre-sale right: the taxpayer may stop the sale at any time before it by paying taxes, interest, penalties, and costs (“equity of redemption”). (CTAS Tax Sale.)
• Post-sale period — variable, set by length of delinquency (Tenn. Code Ann. § 67-5-2701(a)), measured from entry of the order confirming the sale:
  • delinquency ≤ 5 years → 1 year;
  • > 5 but < 8 years → 180 days;
  • ≥ 8 years → 90 days;
  • vacant/abandoned property → 30 days (purchaser must prove abandonment via 3 periodic inspections over a 2-month period at different times of day, § 67-5-2701(a)(2)–(3)).
• Runs from: date of entry of the order confirming the sale; “in no event … more than one (1) year from that date.” § 67-5-2701(a)(1)(A).
• Who may redeem: a right to redeem vests in all interested persons upon confirmation. § 67-5-2701(a)(1). “Interested person” = a person owning an interest in the parcel, a lienholder, or a lienholder’s assignee. § 67-5-2502(c). The right is transferable (treated as an interest in land), and anyone may furnish the funds for a redeemer. (CTAS/tncourts materials + case law, module 8.)
• Amount formula: before filing the motion to redeem, pay the clerk the total delinquent taxes + penalty + interest + court costs plus 12% per annum on the purchaser’s entire purchase price; the purchaser may then move for “lawful charges” within 30 days of the mailing of the notice of redemption. § 67-5-2701(b),(d).
• Lawful charges (six items, § 67-5-2701(e)): (1) additional ad valorem taxes paid; (2) insurance and reasonable improvements; (3) costs to avoid permissive waste; (4) costs of compliance with code/administrative orders; (5) HOA dues; (6) additional interest. A recording fee is not a lawful charge.
• Procedure: redeemer files a motion to redeem (describing parcel, sale and confirmation dates, and the basis to redeem) after paying the clerk; purchaser may waive, protest (motion to protest within 30 days of notice of redemption), or seek lawful charges. § 67-5-2701(c)–(e).
• Extinguishment / effect of redemption: on an order declaring redemption complete, title is divested out of the purchaser, the clerk refunds the purchase money and pays sums due, and “the interests of the interested persons are restored to that state which existed as of the date of entry of the order confirming sale”; a lienholder who redeems may thereafter foreclose. § 67-5-2701(n).
• Special tolling: general bankruptcy/bankruptcy-automatic-stay and scra-protections protections apply; Tennessee’s chapter does not extend the period for minors/incompetents beyond the statutory scale. needs_verification: any disability-based tolling specific to § 67-5-2701.

3. Surplus / Excess Proceeds → see surplus-funds, third-party-recovery-rules

• Belongs to: a priority waterfall ending with the former owner; never retained by the county (Tyler-compliant). Governed by Tenn. Code Ann. § 67-5-2702 (text quoted verbatim in the verified 2024 Court of Appeals opinion, module 8 source).
• Claim waterfall (§ 67-5-2702(c)), paid to each party that proves its claim:
  1. the tax entity prosecuting the sale, for remaining/subsequent taxes that are a lien on the property;
  2. any lienholder (public or private) holding a claim at the time of the tax sale, per applicable lien priorities;
  3. any lienholder holding a claim arising after the tax sale, per priority;
  4. the taxpayer, to the extent of its interest at the time of the sale — provided the taxpayer was a defendant in the underlying action or acquired by will or intestate succession the interest of a defendant-taxpayer;
  5. any remaining proceeds are subject to the Uniform Unclaimed Property Act (Title 66, Ch. 29, Part 1).
• Filing venue: motion in the chancery court in which the delinquent-tax proceeding is pending. § 67-5-2702(a).
• Who may file: “any interested person” (owner-interest holder, lienholder, or lienholder’s assignee, § 67-5-2502(c)) after entry of the order confirming sale. A claimant asserting ownership must record the document of ownership or an affidavit of heirship at least 30 days before the hearing or forfeit notice.
• Claim deadline / escheat: a motion may be filed until the funds are actually forwarded to the state under the Unclaimed Property Act. The presumption of abandonment does not arise until the final determination of all redemption/excess- proceeds motions or one (1) year after the redemption period expires, whichever is later. § 67-5-2702(c)(5). After escheat the funds are reclaimable from the state treasurer under the unclaimed-property regime (Title 66, Ch. 29).
• Documentation required: motion; service on all interested persons ≥ 30 days before hearing (Tenn. R. Civ. P. service for non-new-claim motions); recorded deed/ affidavit of heirship for ownership claimants; lien proof for lienholders.
• Recovery-in-error remedy: an interested person who, without fault, did not get notice and was underpaid has an exclusive right of action against the over-paid party to recover the erroneous payment, and may move for relief from the disbursement order. § 67-5-2702 (recovery-of-error subsection).
• Notice to former owner required? Yes — the motion must be served on all interested persons; and the tax-sale itself requires diligent statutory notice (module 6).
• Third-party (surplus-recovery agent) rules:
  • fee_cap_pct: needs_verification — Tennessee’s delinquent-tax chapter does not set a percentage cap on private surplus-recovery / “finder” fees; whether a separate consumer-protection finder-fee cap applies is unverified against a retrieved primary source.
  • licensing_required: needs_verification — no licensing requirement located in a retrieved primary source.
  • assignment_of_claim_allowed: yes (effectively) — the redemption right is a transferable interest in land and a lienholder’s assignee is an “interested person” eligible to claim (§ 67-5-2502(c)); assignment of the excess-proceeds claim specifically is needs_verification.
  • cooling_off_period / contract_disclosure_rules / prohibited_practices: needs_verification — not located in a retrieved primary source.
  • A tax-sale purchaser may NOT claim the excess sale proceeds. (tncourts delinquent-tax materials, source below.)

▸ For Investors / Operators — Tennessee excess sale proceeds run the § 67-5-2702(c) waterfall (remaining/subsequent taxes → pre-sale lienholders by priority → post-sale lienholders → the taxpayer/former owner → unclaimed property), distributed by motion in the chancery court that conducted the sale — and a tax-sale purchaser may not claim the surplus. Before committing capital, weigh the variable redemption risk (§2/2b — 1 year / 180 days / 90 days / 30 days by length of delinquency, running from the order confirming sale, plus the § 67-5-2701(b)(2) speculation-and-profiteering bar on buying the redemption right cheaply), the path to marketable/insurable title (§5b — quiet title in chancery, the § 67-5-2504 1-to-3-year challenge window, and the § 67-5-2504(d)(4) standing to quiet title even after the SOL), and which liens survive (§7b — a federal tax lien if the U.S. was not § 7425-noticed, the IRS 120-day redemption, and the § 66-27-415 condominium six-month super-priority).

▸ For Former Owners — When a Tennessee tax sale brings more than the taxes, penalty, interest, and costs, the residual excess proceeds reach the taxpayer last in the § 67-5-2702(c) waterfall, and any remainder is held as unclaimed property for the owner rather than kept by the county. The claim is made by motion in the chancery court where the delinquent-tax proceeding is pending; an ownership claimant must record a deed or an affidavit of heirship at least 30 days before the hearing (heirs by will or intestacy may claim directly). A motion may be filed until the funds are actually forwarded to the state, and abandonment is not presumed until at least one year after the redemption period expires (§ 67-5-2702(c)(5)). Redemption (§2) restores the property by paying taxes/penalty/interest/costs plus 12%/yr on the purchase price within the applicable window.

4. Mortgage Foreclosure

• Process: non-judicial power-of-sale under a deed of trust is standard, governed by Tenn. Code Ann. Title 35, Chapter 5 (advertisement/notice of sale). Judicial foreclosure exists but is uncommon. (Secondary sources; primary statute cite below — exact section text needs_verification.)
• Timeline: notice of sale must be published and mailed to the borrower; the customary requirement is publication and ≥ ~30 days’ notice. Tenn. Code Ann. § 35-5-101 et seq. needs_verification: exact publication count/days against the retrieved statute text.
• Reinstatement / pre-sale cure: governed by the deed-of-trust contract; Tennessee has no general statutory reinstatement mandate. needs_verification.
• Redemption after sale: Tennessee provides a statutory 2-year redemption after a foreclosure sale (Tenn. Code Ann. § 66-8-101 et seq.), but it is routinely waived in the deed of trust and so rarely available in practice. needs_verification: exact § 66-8-101 text and waiver mechanics.
• Deficiency judgment: allowed; Tennessee recognizes a fair-value / materially- less-than-fair-market-value defense limiting the deficiency (Tenn. Code Ann. § 35-5-118). needs_verification: exact statutory standard.
• Surplus distribution: foreclosure surplus goes to junior lienholders then the borrower (common-law “first in time, first in right”; see Andrews v. Fifth Third Bank, module 8). No § 67-5-2702-style statute governs foreclosure surplus.
• Sale officer: trustee named in the deed of trust (or substitute trustee).

5. Sale Procedure Playbooks

• Chancery (tax) sale — ordered steps → see treasurer-sale:
  1. Trustee certifies delinquents; delinquent-tax attorney files suit in chancery (after Feb. 1, by Apr. 1). § 67-5-2405.
  2. Notice of intent to sue published once weekly for two consecutive weeks in January; notice to owner. §§ 67-5-2401, 67-5-2402, 67-5-2415.
  3. In-rem proceeding; constructive notice to all interested persons on filing. § 67-5-2103.
  4. Default judgment; court orders parcel sold “subject to the equity of redemption.”
  5. Notice of sale mailed to the owner’s address of record and published; diligent search of four offices (module 6). § 67-5-2502.
  6. Public sale; high bidder takes; clerk bids the debt if no higher bid.
  7. Order confirming sale entered → starts the redemption clock and unlocks excess-proceeds and possession rights.
  8. Redemption window runs; then disbursement of excess proceeds (§ 67-5-2702).
• Mortgage trustee’s sale — ordered steps → see sheriff-sale: default → notice of sale (publication + mailing, Title 35 Ch. 5) → public auction by trustee → trustee’s deed → surplus to juniors/borrower. (Non-judicial; no sheriff.)
• Notice requirements: tax suit — published once/week for two consecutive weeks (Jan.); sale notice mailed + published; diligent search of the assessor, trustee, register of deeds, and the office where wills are recorded (§ 67-5-2502(c)(2)).
• Upset bid / confirmation: the court order confirming the sale is the operative confirmation; Tennessee has no North-Carolina-style upset-bid period.
• Payment terms: “for cash” at the sale (county-specific deposit rules).
• Deed issued: a tax deed issues after confirmation; it conveys subject to the redemption right until that right expires, and possession transfers to the purchaser on the confirmation order (§ 67-5-2503). Warranty level: no warranty (tax deed).

6. Due Process & Notice → see due-process-notice

• Standard: Fourteenth Amendment due process — notice “reasonably calculated” to reach interested persons (mullane-v-central-hanover). Tennessee requires a diligent effort to give notice but does not require actual receipt, and the county need only search the four offices listed in § 67-5-2502(c)(2) (assessor, trustee, register of deeds, will-recording office). After a reasonable search, service by publication is effective.
• Required attempts: record search of the four statutory offices; mailing to the address of record; publication if the address cannot be found.
• Consequence of defective notice: an order confirming a sale is voidable (not automatically void) and may be set aside on the merits; a suit to invalidate must be brought within 1 year of the confirmation order (extendable to 1 year after reasonable discovery, absolute outer limit 3 years). § 67-5-2504.
• Leading cases: maccaughelty-v-sherrod (publication effective after statutory search), jones-v-flowers, mennonite-v-adams, mullane-v-central-hanover.

7. Title & Marketability

• Deed warranty level: none — tax deed conveys whatever the in-rem proceeding divested; no covenants of warranty.
• Marketable immediately? No — title is encumbered by the redemption right until it expires, and by the § 67-5-2504 challenge window.
• Quiet title required? Commonly advisable; most title insurers will not insure until the redemption period and the § 67-5-2504 limitations periods have run (often resolved by a quiet-title action). needs_verification: insurer practice citation.
• SOL to challenge deed: 1 year from the confirmation order, extendable to 1 year after reasonable discovery, never more than 3 years. § 67-5-2504.
• Title insurance availability: generally after redemption expires and/or quiet title; case-by-case. needs_verification.
• Common defects: defective/!diligent notice; pending redemption; surviving federal tax liens (federal-tax-lien-redemption); heirs-property interests; bankruptcy stay at time of sale.

8. Case Law (real, verified)

All six cases above were located through Tennessee government primary materials (tncourts.gov opinion PDF; CTAS/UT County Technical Assistance Service, an official state body) and/or the U.S. Supreme Court reporter. The Hamilton County opinion was retrieved in full and quotes § 67-5-2702 verbatim. For MacCaughelty, Chattanooga, and Rutherford County, the docket numbers and holdings as summarized by the official CTAS/tncourts delinquent-tax materials are recorded; the full underlying opinions were not individually retrieved (see needs_verification).

9. Edge Cases (state-specific notes)

• bankruptcy-automatic-stay — a tax sale conducted in violation of the automatic stay is void/voidable; § 25-5-105 tolling in bankruptcy noted in Hamilton County (citing Weaver v. Hamrick, 907 S.W.2d 385 (Tenn. 1995)). needs_verification: exact TN bankruptcy-stay tax-sale holding.
• federal-tax-lien-redemption — the IRS retains a 120-day federal right of redemption after a sale that discharges a junior federal tax lien (26 U.S.C. § 7425); applies on top of Tennessee’s process.
• heirs-property — heirs who acquire by will or intestate succession from a defendant-taxpayer may both redeem (§ 67-5-2701) and claim excess proceeds (§ 67-5-2702(c)(4)); recording an affidavit of heirship ≥ 30 days pre-hearing is required to preserve notice/standing for excess proceeds.
• redemption-right-as-transferable-interest — Tennessee treats the redemption right as an estate or interest in land, hence transferable/assignable (per CTAS materials citing State v. Delinquent Taxpayers, 2003 WL 21171858).
• possession-during-redemption — possession and risk of loss transfer to the purchaser on the confirmation order; the purchaser may obtain a writ of possession; redemption restores the owner (§ 67-5-2503; Wright v. Williams, 75 Tenn. 700 (1881)). needs_verification: full Wright text.
• HOA dues are an enumerated lawful charge recoverable from a redeemer (§ 67-5-2701(e)).

10. Operations

• Where records live: county chancery court (clerk & master) for tax-sale files, motions to redeem, and excess-proceeds motions; register of deeds for deeds/liens/ affidavits of heirship; county trustee for delinquency status; assessor for the owner’s address of record.
• Public access / portals:
  • CTAS (UT County Technical Assistance Service) — The Tax Sale: https://www.ctas.tennessee.edu/eli/tax-sale
  • CTAS — Redemption: https://www.ctas.tennessee.edu/eli/redemption
  • CTAS — Confirmation of Sale and Tax Deed: https://www.ctas.tennessee.edu/eli/confirmation-sale-and-tax-deed
  • Tennessee Code Title 67 Ch. 5: https://law.justia.com/codes/tennessee/title-67/chapter-5/
  • Example county practice (Knox County Trustee excess-proceeds form): https://www.knoxcounty.org/trustee/taxsale23/MotionClaimExcessSaleProceedsWithStatute.pdf
• Typical costs: redemption = full taxes/penalty/interest/costs + 12%/yr on purchase price + any proven lawful charges; excess-proceeds claim = motion filing (no percentage cap on private finder fees located).
• Typical timelines: suit by Apr. 1 → sale → confirmation order → redemption (30/90/180 days or 1 yr by delinquency) → excess-proceeds motions until escheat (abandonment presumed no earlier than 1 yr after redemption expires).
• Key agencies: County Chancery Court / Clerk & Master; County Trustee; Register of Deeds; Assessor of Property; Tennessee Dept. of Treasury Unclaimed Property.
• Useful forms: Motion to Claim Excess Sale Proceeds (county clerk & master forms, e.g., Knox County link above); Motion to Redeem; Affidavit of Heirship.

2b. Redemption Advanced

Assignability of the Redemption Right

• Assignable: Yes — Tennessee treats the post-sale right of redemption as an “estate or interest in land” that is freely transferable to third parties. “All interested persons” vest with the right upon the order confirming sale (Tenn. Code Ann. § 67-5-2701(a)(1)), and a transferee may file the motion to redeem.
• Speculation/profiteering restriction: An important check exists. Under § 67-5-2701(b)(2), “the motion to redeem must be denied on the objection or response of the purchaser … if it appears that the transferee is engaged in speculation or profiteering with respect to such right of redemption.” Speculation is presumed if the transfer price for the redemption right was less than the purchaser’s full purchase price minus the amount the original owner would have had to pay to redeem — i.e., the transferee cannot profit by buying the redemption right cheaply and then capturing the post-redemption equity at the owner’s expense. The court may award attorney’s fees to the purchaser if it finds speculation/profiteering. Source: CTAS Redemption page (citing § 67-5-2701(b)(2)), retrieved 2026-06-01; https://www.ctas.tennessee.edu/eli/redemption.
• Purchase mechanism: deed or written assignment of the redemption right; no special court approval required to transfer (but purchaser may object under the speculation bar at the redemption hearing). Tenn. Code Ann. § 67-5-2701(b)(2). needs_verification: exact form/deed language required for assignment in chancery court practice.
• Who may fund a redemption: “the source of the funds, the owner of the checking account, or the identity of the person who delivered the payment … makes no legal difference” — City of Chattanooga v. 2011 Delinquent Taxpayers, No. E2016-00025-COA-R3-CV (Tenn. Ct. App. 2017) (CTAS Redemption, source below).

Equitable Redemption

• Distinct from statutory? Tennessee’s pre-sale right to cure (“equity of redemption”) is conceptually distinct from the post-sale statutory right: the pre-sale right is the traditional common-law equitable redemption (the owner may stop the sale at any time before the gavel by paying the delinquency and costs — CTAS Tax Sale). The post-sale right is entirely statutory under § 67-5-2701. Available pre-sale only: the pre-sale equitable redemption extinguishes at the moment of the public sale; after confirmation the only path is the statutory motion to redeem. Notes: Tennessee courts have not carved out a separate equitable-redemption doctrine that survives the statutory post-sale period.

Installment Redemption

• Permitted: needs_verification — § 67-5-2701 does not expressly authorize installment redemption payments; the redeemer must pay the clerk the full amount before filing the motion. No retrieved primary source confirms partial/installment redemption.

Assignment of Tax Certificate / Deed Mid-Redemption

• Tennessee is a tax-deed state (not a lien-certificate state), so there is no “tax certificate” to assign. The tax deed is issued after confirmation and is transferable like any deed; the purchaser may convey the tax deed to a third party at any time during (or after) the redemption period. The redemption right, however, runs against the parcel, not against any particular purchaser — a redeemer may still redeem even if the deed has been transferred. Tenn. Code Ann. § 67-5-2701 (no restriction on purchaser’s transfer of the deed). needs_verification: specific statute or case confirming deed assignability mid-redemption period by citation to a retrieved primary source beyond the general deed-transfer rule.

3b. Surplus Advanced

Claim Assignability

• Full assignment permitted? Tennessee’s § 67-5-2702 defines the eligible claimant as “any interested person, as defined in this chapter.” Under § 67-5-2502(c), “interested person” includes a lienholder’s assignee, so an assignee of a lienholder’s claim may file. Whether the former owner can assign the excess-proceeds claim outright (as opposed to entering a fee agreement) is not addressed in a retrieved primary source and is needs_verification. The redemption right itself is expressly assignable (§ 67-5-2701), and CTAS materials describe the claim as transferable in the lien context, but a direct statute permitting the owner’s excess-proceeds claim to be assigned to a non-lienholder recovery agent has not been retrieved.
• Fee cap: No percentage cap on private surplus-recovery / finder fees has been located in a retrieved primary source. needs_verification.
• Fee cap applies to assignments: needs_verification (cap not located).

Statute of Limitations on Surplus Claims

• Period: No fixed statute-of-limitations period after which a surplus claim is time-barred. Instead, a motion may be filed in the court in which the proceeding is pending until such time as the funds are actually forwarded to the state pursuant to the Uniform Unclaimed Property Act (Title 66, Ch. 29, Part 1). Tenn. Code Ann. § 67-5-2702(a) (text confirmed via Hamilton County v. 2018 Delinquent Taxpayers (2024) opinion, module 8 source).
• Trigger date for escheat clock: The presumption of abandonment does not arise until the final determination of all filed motions for redemption and excess proceeds or one (1) year following the expiration of the redemption period for that parcel, whichever is later. § 67-5-2702(c)(5). Practical SOL = file before the clerk actually transmits unclaimed funds to state treasury, which cannot happen until at least 1 year after the redemption period expires.
• After escheat: Funds are reclaimable from the Tennessee Department of Treasury under the Uniform Unclaimed Property Act (Title 66, Ch. 29) — no additional deadline found for claiming from the state treasurer. needs_verification: whether the state unclaimed property act imposes its own limitations period after receipt.

Competing Claimant Procedure

• Interpleader used: Yes — the motion practice in chancery court is effectively an interpleader-style proceeding. All interested persons must be served ≥ 30 days before the hearing (Tenn. R. Civ. P. for non-new-claim motions). Tenn. Code Ann. § 67-5-2702(a)–(b).
• Priority rules: Strictly statutory waterfall under § 67-5-2702(c): (1) remaining/subsequent taxes → (2) pre-sale lienholders by applicable lien priority → (3) post-sale lienholders → (4) the taxpayer/former owner → (5) unclaimed property.
• Filing race: Not a pure first-to-file system — the court holds a hearing and orders distribution according to the priority waterfall, not the order claims were filed. Hamilton County v. 2018 Delinquent Taxpayers (2024) confirmed this: a lienholder with a valid lien at time of tax sale prevails even if its judgment-lien duration later lapsed under a different statute. Source: tncourts.gov opinion PDF, retrieved 2026-06-01.
• Recovery of erroneous payment: An interested person who, without fault, did not receive notice and was underpaid has a right of action against the over-paid party (§ 67-5-2702, error-recovery subsection, confirmed in the Hamilton County opinion).

Deceased Owner Procedure

• Probate required first? Not always. § 67-5-2702(c)(4) expressly permits the taxpayer (i.e., former owner’s interest) to claim excess proceeds if the taxpayer was a defendant in the underlying action or acquired the interest by will or intestate succession from a defendant-taxpayer. This means heirs by will or intestacy may claim directly without a separate probate judgment, provided they record a deed or an affidavit of heirship at least 30 days before the hearing (§ 67-5-2702(b)). An affidavit of heirship is the operative document in the register of deeds for informal succession proof. CTAS Tax Sale materials confirmed this practice.
• Personal representative standing: A personal representative of the estate has standing as the estate’s representative (general standing under Tennessee probate law; no separate § 67-5-2702 provision expressly required).
• Direct heir claim permitted: Yes, by affidavit of heirship meeting the 30-day pre-hearing recording requirement.

Fraudulent Conveyance Exposure

• Applicable statute: Tennessee follows the Uniform Fraudulent Transfer Act (UFTA), Tenn. Code Ann. §§ 66-3-301 through 66-3-313 (not yet updated to UVTA). Source: voidabletransactions.com (citing Tenn. Code § 66-3-301), retrieved 2026-06-02; https://voidabletransactions.com/index.php?n=Site.TennesseeVoidableTransactionUVTAFraudulentTransferUFTA.
• Assignment voidable by creditors? Yes — if a former owner assigns the surplus claim while insolvent and for less than reasonably equivalent value, the assignment is voidable by creditors under § 66-3-305 (transfers fraudulent as to present and future creditors) or § 66-3-306 (transfers fraudulent as to present creditors — includes preferential insider transfers while insolvent). Look-back period: 4 years generally; 1 year for actual-intent claims after discovery. § 66-3-310.
• Good-faith transferee protection: A transferee who takes in good faith and for reasonably equivalent value is protected from avoidance (§ 66-3-309). A recovery agent paying fair consideration is likely protected; one paying a nominal sum for the right may not be.
• Notes: The UFTA applies to assignments of any “asset” including a claim to proceeds. Recovery agents acquiring surplus claims for below-market consideration from insolvent former owners face voidability risk under § 66-3-305.

Surplus Claimant Notice

• Court must notify lienholders? Under § 67-5-2702(b), the movant (the claimant who files) must serve a copy of the motion on all interested persons no later than 30 days before the hearing, in the manner provided by Tenn. R. Civ. P. for non-new-claim motions. The court does not independently notify — the burden is on the movant. Additionally, an ownership claimant must record their deed or affidavit of heirship ≥ 30 days before the hearing. Citation: § 67-5-2702(a)–(b), confirmed via Hamilton County opinion text.

5b. Title Advanced

Quiet Title

• When required: Not legally mandatory, but practically essential for obtaining title insurance in Tennessee. Historically, “an action to quiet title through the court system has been the only way to obtain title insurance for tax sale properties in Tennessee.” Tax Title Services (secondary source, retrieved 2026-06-02; https://www.taxtitleservices.com/quiet-title-action-tennessee). Additionally, under Tenn. Code Ann. § 67-5-2504(d)(4), a tax-sale purchaser may “file suit to quiet title, notwithstanding the deadline for tax sale challenges” — statutory authorization for quiet title post-sale even after the § 67-5-2504 SOL periods have run.
• Action type: Judicial — filed in Chancery Court.
• Court with jurisdiction: Chancery Court in the county where the property is located. Tenn. Code Ann. §§ 29-1-101 et seq. (quieting title generally); Otten Law (retrieved 2026-06-02; https://www.ottenfirm.com/education/what-does-quiet-title-mean-in-tennessee).
• Typical timeline: 6–12 months for uncontested cases; longer if contested. Multiple secondary sources confirm this range (Tax Title Services; Otten Law), both retrieved 2026-06-02.
• Typical cost range: $2,000–$5,000 for uncontested quiet title; higher if disputed. Tax Title Services secondary source retrieved 2026-06-02.
• Cures all pre-sale defects? A quiet-title order entered after the § 67-5-2504 limitations periods can provide strong marketable title, but the court’s authority is limited by due process — a lienholder entitled to notice but not notified may challenge even after a quiet-title order unless they are properly served. needs_verification: exact scope of the quiet-title judgment against unknown claimants in Tennessee chancery court.
• Citation: Tenn. Code Ann. § 67-5-2504(d)(4) (quiet-title authorization); CTAS Setting Aside a Tax Sale (retrieved 2026-06-02; https://www.ctas.tennessee.edu/eli/setting-aside-tax-sale).

Deed Seasoning

• Insurers require seasoning: Yes — most title insurers in Tennessee require the redemption period to expire before insuring a tax deed, and many require the § 67-5-2504 challenge window (1–3 years from confirmation) to run or a quiet-title action to be completed. Tax Title Services secondary source retrieved 2026-06-02.
• Typical years: The statutory redemption period ranges from 30 days to 1 year (depending on delinquency length). The § 67-5-2504 limitations period is 1 year (extendable to 3 years). Insurers commonly require the 1-year challenge period plus quiet-title before writing. needs_verification: specific insurer underwriting guidelines for TN tax deeds.
• Rationale: The redemption right encumbers title; the § 67-5-2504 window allows challenges for defective notice; a quiet-title suit resolves both concerns for the underwriter.

Title Insurance

• Immediate availability: No — not in the ordinary course during the redemption period or the § 67-5-2504 challenge window.
• Conditions for immediate: Tax Title Services offers a certification alternative accepted by some underwriters after its due-diligence process (30–40 day turnaround), but this is a secondary-market workaround, not a legal entitlement to immediate coverage.
• Insurers known to write: needs_verification — specific underwriter names not confirmed in a retrieved primary source.
• Quitclaim/special warranty only: Tax deeds convey with no warranty; post-quiet-title, the court issues a decree establishing title, which title insurers may then underwrite.

Marketable Title Act

• Exists: needs_verification — Search results indicate Tennessee has a 30-year lookback standard referenced in title-search guidance, but a formal “Marketable Title Act” statute comparable to Michigan’s or Florida’s was not confirmed in a retrieved primary source. Tennessee Code Title 66 (Property) does not appear to have a chapter titled “Marketable Title Act.” Reviewers should check for any provision in Tenn. Code Ann. Title 66 directly.
• Lookback years: needs_verification (referenced as 30 years in secondary sources but not confirmed against primary statute).
• Statute: needs_verification.

Judicial Confirmation

• Required before deed issues? Yes — Tennessee’s tax sale process requires the chancery court to enter an Order Confirming Sale before any deed can issue. The deed itself issues after confirmation; it conveys subject to the redemption right. Tenn. Code Ann. § 67-5-2503; CTAS Confirmation of Sale and Tax Deed (https://www.ctas.tennessee.edu/eli/confirmation-sale-and-tax-deed, retrieved 2026-06-01).
• Tribunal: Chancery Court (same court that ordered the sale).
• Timeline: Typically entered shortly after the public sale (no statutory waiting period for confirmation itself, but the court must be satisfied the sale was proper). needs_verification: average days from sale to confirmation in practice.
• Citation: Tenn. Code Ann. § 67-5-2503.

Chain of Title Cure

• Depth: The in-rem judicial proceeding, if notice was properly given to all interested persons (§ 67-5-2502), extinguishes all junior liens and interests. The § 67-5-2504 framework limits post-confirmation challenges. A quiet-title action fills any notice gaps.
• Notes: Federal tax liens require separate IRS notice under 26 U.S.C. § 7425 and survive if notice was defective (see Module 7b). CERCLA liens may survive regardless of the tax sale (see Module 7b).

5c. TRO & Injunctive Relief

Recognized Grounds

Tennessee courts have recognized the following as potential grounds to obtain a TRO or temporary injunction to halt a tax or mortgage foreclosure sale:

1. Payment dispute — taxpayer alleges taxes were paid or not legally owed before the sale (§ 67-5-2504(b)(1)–(2): “taxes were paid before the sale” or “land was not liable to sale”).
2. Substantial noncompliance with mandatory statutory provisions — defective notice, failure to follow the delinquency-suit procedure (§ 67-5-2504(b)(3)).
3. Constitutional / due-process violation — Fourteenth Amendment notice defects (Jones v. Flowers; Mennonite; Mullane).
4. SCRA (Servicemembers Civil Relief Act) — active-duty status of the taxpayer.
5. Bankruptcy automatic stay — a pending bankruptcy petition automatically stays a tax sale (11 U.S.C. § 362); sale in violation is void/voidable.
6. Mortgage foreclosure specific — notice defects in the deed-of-trust power-of-sale procedure (Tenn. Code Ann. Title 35, Ch. 5); fraud, collusion, or irregularity in sale conduct (§ 35-5-118 fair-value context).

Legal Standard

Tennessee Rule of Civil Procedure 65.04 governs temporary injunctions (which subsume TROs in chancery practice). The movant must clearly show by verified complaint, affidavit, or other evidence that:

1. The movant’s rights are being or will be violated by an adverse party; and
2. The movant will suffer immediate and irreparable injury, loss or damage pending final judgment; or the acts of the adverse party will render final judgment ineffectual. This is Tennessee’s version of the standard four-factor preliminary-injunction test (likelihood of success, irreparable harm, balance of equities, public interest), applied in chancery courts where foreclosures are heard. Source: Tenn. R. Civ. P. 65.04 (retrieved 2026-06-02; https://www.tncourts.gov/courts/rules-civil-procedure/rules/rules-civil-procedure-rules/rule-6504-temporary-injunction).

Court with Jurisdiction

• Tax sale (judicial): Chancery Court — the same court conducting the delinquent-tax proceeding. Because the tax sale is part of a pending chancery action, the motion is filed in that case.
• Mortgage foreclosure (non-judicial): Chancery Court in the county where the property is located (general equity jurisdiction under Tenn. Code Ann. Title 21). A separate equity action must be filed if the foreclosure is non-judicial, since there is no pending court case to intervene in.

Bond Required

Yes — Tennessee Rule of Civil Procedure 65.05 requires that “no restraining order or temporary injunction shall be granted except upon the giving of a bond by the applicant … in such sum as the court deems proper.” Exception: parties proceeding on a pauper’s oath are exempt from the bond requirement. Bond amount is entirely court-discretionary; no statutory minimum or maximum. Source: Tenn. R. Civ. P. 65.05 (retrieved 2026-06-02; https://www.tncourts.gov/courts/rules-civil-procedure/rules/rules-civil-procedure-rules/rule-6505-injunction-bond).

Emergency Timeline

24–72 hours if properly filed with a verified complaint and supporting affidavits. Chancery courts in Tennessee have authority to act ex parte on a verified complaint when notice to the adverse party is not practicable (Tenn. R. Civ. P. 65.03 TRO without notice, available where immediate injury shown). The temporary injunction (with notice, Rule 65.04) requires notice to the adverse party first, adding hearing-scheduling time. In practice, emergency motions filed in the morning before a scheduled sale may be heard same-day or the next business day.

Effect on a Completed Sale

• Pre-sale TRO: If granted before the sale, the sale is stayed and does not proceed. If the TRO is later dissolved, the sale may be rescheduled.
• Post-gavel challenge: A sale completed before a TRO is obtained is not automatically void. Under § 67-5-2504(b), a tax-sale confirmation order is voidable (not void), requiring a court order to set it aside. If the confirmation order has already been entered, setting it aside requires meeting the § 67-5-2504 grounds within the limitations period. Under § 67-5-2504(f), the successful challenger must compensate the purchaser for the increase in property value including improvements made between confirmation and invalidation, or all purchaser expenditures if that exceeds value increase; the purchaser has a lien on the parcel for that amount.
• Mortgage foreclosure (non-judicial): Once the trustee’s sale is completed and the trustee’s deed is delivered, obtaining reversal is extremely difficult — the courts have no automatic power to undo a completed non-judicial sale absent fraud, collusion, or statutory irregularity.

Non-Judicial Foreclosure Notes

For mortgage/deed-of-trust foreclosures (the dominant Tennessee process), the borrower must file an independent equity action in chancery court to obtain a TRO. The notice period for a temporary injunction (with notice, Rule 65.04) may not provide enough lead time before a sale — counsel should seek an ex parte TRO under Rule 65.03 showing immediate irreparable injury, to buy time for a full hearing. The non-judicial nature means there is no pending court case; a new case must be filed, which slows emergency relief relative to judicial foreclosure states.

Leading Cases

maccaughelty-v-sherrod (notice sufficiency); jones-v-flowers; mullane-v-central-hanover. needs_verification: specific Tennessee Court of Appeals decisions on TRO standards in tax sale context.

7b. Lien Survival & Purchaser Exposure

IRS 120-Day Redemption (26 U.S.C. § 7425)

• Applies: Yes — the federal 120-day redemption right under 26 U.S.C. § 7425(d)(1) applies to Tennessee tax sales when the IRS holds a recorded federal tax lien on the property. The IRS (Secretary of the Treasury) may redeem within 120 days from the date of the sale, or the period allowable for redemption under local law, whichever is longer.
• Notice requirement: Before the sale can extinguish a federal tax lien, the selling authority must give the IRS written notice at least 25 days before the sale (registered or certified mail, or personal service) under 26 U.S.C. § 7425(b). If proper notice is not given, the sale “shall be made subject to and without disturbing such lien” — the IRS lien survives. Source: 26 U.S.C. § 7425 (retrieved via law.cornell.edu 2026-06-02; https://www.law.cornell.edu/uscode/text/26/7425).
• Procedure: The IRS redeems by paying the amount for which the property was sold plus interest. Chancery clerk handles the mechanics consistent with § 7425(d).
• Practical impact: Tax-sale purchasers in Tennessee who buy a property with a recorded federal tax lien must account for the IRS’s 120-day redemption window on top of Tennessee’s state redemption period. The longer of the two controls.

HOA Super-Priority

• Super-priority exists for condominiums: Yes, limited — under Tenn. Code Ann. § 66-27-415(b)(2)(A) (Tennessee Condominium Act of 2008), a condominium association holds a super-priority lien equal to 6 months of regular assessments (capped at 1% of the maximum principal of the first mortgage/deed of trust) that primes the first mortgage/deed of trust in foreclosure proceedings. Source: § 66-27-415 (retrieved via search results citing 2024 Tennessee Code on Justia 2026-06-02); law firm analysis at https://www.drmlawmemphis.com/tennessee-condominiums-lender-foreclosures-and-the-six-month-reachback/ (retrieved 2026-06-02).
• Priority structure: The HOA/COA lien is junior to: (a) liens recorded before the declaration; (b) the first mortgage/deed of trust on the unit; and (c) ad valorem taxes and governmental assessments. Tenn. Code Ann. § 66-27-415(b)(1)(C). This means property tax liens are senior to HOA liens — the HOA has no super-priority over the tax lien itself.
• Survives tax sale? The HOA assessment lien is extinguished by a properly conducted tax sale (the tax lien is senior), subject to the surplus waterfall in § 67-5-2702 (HOA dues are a permitted lawful charge a purchaser may collect from a redeemer under § 67-5-2701(e)). needs_verification: specific Tennessee case or AG opinion confirming HOA lien extinguishment at tax sale vs. survival.
• Survives mortgage foreclosure? The 6-month super-priority survives a first-mortgage foreclosure to the extent of the super-priority cap (6 months regular assessments, ≤1% of principal). Beyond that cap, the balance of any HOA lien is extinguished in the foreclosure. Tenn. Code Ann. § 66-27-415(b)(2)(A).
• Note: Homeowners association (non-condominium HOA) super-priority lien status under separate Tennessee HOA statutes is needs_verification — the confirmed 6-month super-priority is specific to the Condominium Act of 2008.

Environmental / CERCLA Liens

• CERCLA lien survives tax sale: Yes (federal law) — CERCLA (42 U.S.C. § 9607(l)) creates a federal lien on contaminated property that is subordinate to liens perfected under state law prior to IRS notice of the CERCLA lien, but survives a state tax sale to the extent it was perfected before the sale. Because CERCLA is federal law, Tennessee’s in-rem tax proceeding does not extinguish a properly recorded CERCLA lien absent compliance with 28 U.S.C. § 2410 (United States as party). needs_verification: Tennessee-specific case confirming CERCLA survival in a Tennessee tax sale context.
• Tennessee state superfund super-lien: No super-lien identified in primary sources. Tenn. Code Ann. § 68-212-209 (Hazardous Waste Management Act of 1983) gives the commissioner a lien on property for hazardous waste cleanup costs upon filing a Notice of Lien with the register of deeds. This lien is a statutory lien perfected by recording — it does not appear to have express super-priority over prior recorded interests, and its survival through a tax sale depends on recording priority. Source: Tennessee Code § 68-212-209 (retrieved via search result citing 2019 Justia text 2026-06-02). needs_verification: whether § 68-212-209 lien survives a properly noticed tax sale.
• Purchaser due diligence note: Tennessee counties are expressly authorized to decline to bid on property posing “environmental risk” at tax sales (CTAS Tax Sale). Purchasers should conduct Phase I ESA on any industrial or commercial property.

Municipal Code / Blight Liens

• Survive tax sale? needs_verification — No Tennessee primary source retrieved confirms whether municipal code-enforcement or blight liens survive a properly conducted judicial tax sale. General in-rem doctrine would extinguish junior liens with proper notice, but municipalities/code-enforcement liens may be senior or survive depending on the specific statutory authorization. CTAS materials note the county may decline to bid on property with environmental risk; no parallel rule on code liens located. Purchasers should search municipal code-lien records.
• Statute: needs_verification.

Mechanic Liens

• Survive tax sale if noticed? needs_verification — The general in-rem rule is that properly noticed junior lien holders (including mechanics’ lienholders) are extinguished. However, a mechanics’ lien that was recorded before the tax delinquency suit or that attached before service of the in-rem notice may have priority claims. Tenn. Code Ann. § 67-5-2502 governs the required notice to interested persons; a lienholder who received proper notice and did not act is likely extinguished. needs_verification against a retrieved primary source.

Junior Mortgage Sale Exposure

• Purchaser takes subject to senior: At a tax sale, the purchaser takes free and clear of junior interests (mortgages, judgment liens, HOA liens junior to the tax lien) once the in-rem confirmation is final and all proper notices were given. However, if a senior mortgage existed (e.g., a deed of trust recorded before the tax lien), the situation is more complex: Tennessee’s delinquent-tax proceeding is in rem against the entire parcel, and the senior mortgage holder should be named as a defendant; if properly served, the mortgage is extinguished. If not properly served, the mortgage may survive. needs_verification: specific Tennessee case on senior-mortgage survival after tax sale with proper vs. defective notice.
• Common mistake: Purchasers sometimes assume all mortgages are automatically wiped at tax sale without verifying that every lienholder received statutory notice under § 67-5-2502.

Due Diligence Required Before Bidding

1. IRS lien search (PACER/FDIC federal lien index) — 25-day pre-sale IRS notice required to extinguish federal tax lien; IRS retains 120-day redemption.
2. State & local tax lien search (assessor + trustee).
3. UCC search (Secretary of State) for fixture filings.
4. Environmental records search — TDEC database; Phase I ESA for industrial/commercial parcels.
5. HOA/COA assessment status (for condominiums — 6-month super-priority exposure).
6. Municipal code-lien and blight-lien search at city/county code enforcement office.
7. Mechanics’ lien search (register of deeds).
8. Bankruptcy search (PACER) — automatic stay voids sale if pending petition.
9. SCRA check — active-duty servicemembers have protections.
10. Title chain review for notice defects (was every lienholder served under § 67-5-2502?).

10b. Purchaser Obligations During Redemption

Must Pay Subsequent Taxes

• Required? The statute does not require the purchaser to pay subsequent taxes, but if the purchaser does pay them, those amounts become recoverable as “lawful charges” from a redeemer: “Additional ad valorem taxes, penalty, interest and court costs paid by the purchaser, secured by a lien against the parcel, plus interest thereon at the [12%] rate … are claimable from the date of payment … until the date of payment by the proposed redeemer.” Tenn. Code Ann. § 67-5-2701(e)(1) (confirmed via search result quoting § 67-5-2701(e), 2026-06-02).
• Consequence of failure: No statutory penalty for not paying subsequent taxes, but non-payment leaves the parcel exposed to a new delinquency suit or creates a cloud on title. Additionally, a purchaser who does not pay subsequent taxes cannot claim them from the redeemer.
• Taxing-entity purchaser exception: A taxing entity that purchased the parcel under § 67-5-2501 “shall have no obligation to preserve the value of the parcel” during the redemption period (§ 67-5-2701, per search result quoting the provision, retrieved 2026-06-02).

Must Notify Owner of Expiration

• Required? No — Tennessee’s § 67-5-2701 imposes no obligation on the purchaser to send a certified letter or other notice to the former owner that the redemption period is about to expire. The clerk sends notice upon filing of a motion to redeem (10 days, § 67-5-2701(c)), but that notice runs from the redeemer’s filing — not as an advance warning to the owner. There is no pre-expiration notice duty on the purchaser under retrieved primary sources.
• Form / timing / consequence of failure: N/A — no duty found.
• Citation: Tenn. Code Ann. § 67-5-2701(c) (notice runs from motion filing, not as purchaser pre-expiration duty); CTAS Redemption (retrieved 2026-06-01).

Owner Occupancy Right

• Owner may remain in possession during redemption? The confirmation order transfers the right to possession to the purchaser (Tenn. Code Ann. § 67-5-2503(a)), but the former owner often remains in physical possession until the purchaser obtains a writ of possession. If the owner remains and the purchaser makes no advance demand for rents or profits, the purchaser has no right to rents or profits from the occupying owner for that period. Tenn. Code Ann. § 67-5-2503 (per search result quoting the statute, 2026-06-02).
• Purchaser may enter? Yes — the purchaser has the legal right to possession from the confirmation order and may apply to the court for a writ of possession to enforce it (§ 67-5-2503). No self-help eviction; court process required.
• Citation: Tenn. Code Ann. § 67-5-2503 (writ of possession; rents and profits provision); Wright v. Williams, 75 Tenn. 700 (1881) (possession during redemption — text needs_verification, cited in existing Module 9).

Costs Collectible Upon Redemption (Lawful Charges)

Under Tenn. Code Ann. § 67-5-2701(e), when a redeemer’s motion is granted, the purchaser may seek the following as “lawful charges” within 30 days of mailing of the notice of redemption:

1. Additional ad valorem taxes paid by the purchaser + 12%/yr interest.
2. Insurance premiums paid (for the parcel).
3. Reasonable improvements — costs of improvements (with the caveat that the Rutherford County case (2017) held that elective upgrades like new carpet, drywall, and fixtures are non-reimbursable improvements, not lawful charges — only necessary maintenance-level costs qualify).
4. Costs to prevent permissive waste (e.g., keeping “wind tight and air tight” — Rutherford County).
5. Costs of compliance with code or administrative orders (code-enforcement compliance).
6. HOA dues paid by the purchaser.
7. A recording fee is NOT a lawful charge. (CTAS Redemption, retrieved 2026-06-01.)

• Bid + 12% interest: The redeemer must pay 12% per annum on the entire purchase price from the date of payment to the filing of the motion to redeem (§ 67-5-2701(b)).
• Citation: Tenn. Code Ann. § 67-5-2701(e); Rutherford County v. Delinquent Taxpayers, No. M2016-01254-COA-R3-CV (Tenn. Ct. App. 2017) (CTAS Redemption, retrieved 2026-06-01).

Property Maintenance Obligation

• Required? No general maintenance obligation — the statute expressly states the purchaser “shall have no obligation to purchase insurance on the parcel and shall not be liable to a person redeeming the parcel for damages to the parcel during such redemption period unless such damages are directly caused by intentional acts of the purchaser.” Tenn. Code Ann. § 67-5-2701 (per search result quoting the provision, retrieved 2026-06-02).
• Standard: The purchaser’s duty is limited to avoiding permissive waste — the case standard from Rutherford County (2017) is keeping property “wind tight and air tight,” which is recoverable as a lawful charge. The purchaser is not required to make improvements and cannot charge elective improvements to the redeemer.
• Taxing-entity exemption: A county/municipal purchaser has no obligation to preserve value during the redemption period.
• Citation: Tenn. Code Ann. § 67-5-2701 (liability limitation); Rutherford County v. Delinquent Taxpayers (2017).

11b. Restrictions & Special Rules

Entity Purchase Restrictions

• Natural persons only? No — Tennessee imposes no statutory “natural persons only” restriction on bidders at tax sales. The CTAS Disposition page states “all persons are eligible to offer bids at the auction” (retrieved 2026-06-02; https://www.ctas.tennessee.edu/eli/disposition-property-purchased-county-tax-sale). LLCs and corporations may bid.
• LLC permitted: Yes — no restriction located in a retrieved primary source.
• Foreign entity permitted: needs_verification — no Tennessee statute specifically prohibiting or permitting foreign-entity bidding at tax sales was located. General Tennessee law requires a foreign corporation or LLC to obtain a certificate of authority before “transacting business” in Tennessee (Tenn. Code Ann. § 48-65-101), but purchasing property at a one-time tax auction has not been confirmed (or denied) as “transacting business” requiring registration. Prudent practice: a foreign entity should register with the Tennessee Secretary of State before bidding.
• Notes: A bidder who has a “moral or legal obligation to pay the taxes” on the land being sold is disqualified from bidding (CTAS Tax Sale, retrieved 2026-06-01). Spouses are typically precluded from buying each other’s tax-encumbered property.
• Citation: CTAS Tax Sale (retrieved 2026-06-01); CTAS Disposition (retrieved 2026-06-02). needs_verification: statutory basis for the disqualification rule.

Insider Prohibition

• Who prohibited: Persons under a “moral or legal obligation to pay the taxes on the land being sold” and fiduciaries of the taxpayer are disqualified from bidding. A husband or wife is usually precluded from purchasing the other’s tax-encumbered property at a tax sale. CTAS Tax Sale (retrieved 2026-06-01).
• Scope: Applies to the specific parcel on which the bidder has the disqualifying relationship, not to the auction as a whole.
• Citation: CTAS Tax Sale (citing Tennessee chancery-court practice; primary statute needs_verification — exact Tenn. Code Ann. section not retrieved).

Right of First Refusal

• Municipalities: No general statutory right of first refusal for municipalities at tax sales was located in a retrieved primary source. However, the land bank provision below creates an effective right.
• CDCs / nonprofits: No right of first refusal for CDCs or nonprofits at the bidding stage, but post-acquisition transfer to qualifying nonprofits is authorized by the disposition statute (CTAS Disposition).
• Land banks: Yes — for counties having a population greater than 900,000 by the 2020 or subsequent federal census (currently: Shelby County), a local land bank has a right to preempt (match) any bid within two business days of the close of the tax sale auction. Source: Tennessee legislation (HB 2624 / SB 2550, amending land bank provisions in Title 13, Ch. 30), retrieved via search result citing the act 2026-06-02. This provision “does not alter or modify the redemptive rights of any party.”
• Match window: Two business days after the close of the auction.
• Citation: Tenn. Code Ann. Title 13, Ch. 30 (Tennessee Local Land Bank Pilot Program) as amended by HB 2624/SB 2550; CTAS Disposition (retrieved 2026-06-02). needs_verification: exact effective date of the HB 2624/SB 2550 amendments and current Tenn. Code Ann. section numbers.

Land Bank Program

• Exists: Yes — Tenn. Code Ann. Title 13, Chapter 30 establishes the Tennessee Local Land Bank Pilot Program.
• Name: Tennessee Local Land Bank Pilot Program.
• Statute: Tenn. Code Ann. Title 13, Ch. 30.
• Receives unsold properties? Counties that acquire property at tax sale (bidding the debt when no third party bids higher under § 67-5-2501) may transfer the acquired parcel to a land bank corporation, a governmental entity, or a qualifying nonprofit. CTAS Disposition (retrieved 2026-06-02).
• Operational notes: The land bank right-of-first-refusal at auction applies in the 900,000+ population threshold counties. Smaller counties use post-acquisition transfer. Active land bank programs have been noted in Knox County and Shelby County (Memphis); others may exist. needs_verification: current list of counties with active land bank programs and whether the “Pilot” label has been made permanent.

Deficiency Judgment

• Permitted after tax sale? No — Tennessee’s judicial in-rem tax proceeding extinguishes the personal tax debt upon confirmation; the county’s recovery is limited to the sale proceeds. No deficiency judgment may be entered against the former owner for unpaid property taxes after a tax sale. needs_verification: explicit statutory citation to the in-rem extinguishment of personal liability.
• Permitted after mortgage foreclosure? Yes — Tenn. Code Ann. § 35-5-118 expressly permits deficiency judgments after a trustee’s or foreclosure sale. The deficiency “shall be for the total amount of indebtedness prior to the sale plus the costs of the foreclosure and sale, less the fair market value of the property at the time of the sale.” Source: search result quoting § 35-5-118 text, retrieved 2026-06-02.
• Fair value defense: Yes — the creditor has a rebuttable prima facie presumption that the sale price equals fair market value; the borrower may rebut this to reduce the deficiency. § 35-5-118.
• Two-year limitation: Any deficiency action must be brought within 2 years of the trustee’s or foreclosure sale (exclusive of any bankruptcy pendency period), or within the statute of limitations for the underlying indebtedness under §§ 28-1-102 and 28-2-111, whichever is earlier. § 35-5-118.
• Citation: Tenn. Code Ann. § 35-5-118 (retrieved via search result quoting statutory text, 2026-06-02).

Anti-Deficiency Statute

• Exists: No — Tennessee has no general anti-deficiency statute barring deficiency judgments after mortgage foreclosure. The § 35-5-118 fair-market-value offset is a limitation on the deficiency amount, not a prohibition on deficiency judgments. needs_verification: any purchase-money mortgage exception or limited anti-deficiency rule not located in retrieved primary sources.
• Scope: N/A.

One-Action Rule

• Exists: No — Tenn. Code Ann. § 35-5-118 expressly states: “Nothing contained in this section shall be construed as limiting a person entitled to bring such action from electing to sue on an indebtedness in lieu of, prior to, or contemporaneously with enforcement of a deed of trust or mortgage.” This language affirmatively rejects a one-action rule. Creditors may pursue the personal debt and the collateral simultaneously or in either order. Source: search result quoting § 35-5-118, retrieved 2026-06-02.
• Citation: Tenn. Code Ann. § 35-5-118.

Local pages

County deep dives: davidson-tn, hamilton-tn, knox-tn, montgomery-tn, rutherford-tn, shelby-tn, sumner-tn, williamson-tn Unclaimed funds agency: unclaimed-property-tennessee

Who this page is for

▸ For Investors / Operators — Start with §0/§1 (judicial in-rem tax sale in chancery court ending in a court-confirmed tax deed, highest-bid premium auction), §2/2b (the variable post-confirmation redemption window — 1 yr / 180 / 90 / 30 days by delinquency — the transferable redemption right, and the § 67-5-2701(b)(2) speculation-and-profiteering bar), §5b (path to marketable title — quiet title in chancery, the § 67-5-2504 1-to-3-year challenge window, and § 67-5-2504(d)(4) quiet-title standing), §7b (liens that survive — federal tax liens if the U.S. was not § 7425-noticed, the IRS 120-day redemption, and the § 66-27-415 condo six-month super-priority), and §11b (broad entity eligibility, the disqualification of bidders with a duty to pay the taxes, and the population-threshold land bank match right).

▸ For Former Owners — Start with §3 (excess sale proceeds — you reach them last in the § 67-5-2702(c) waterfall, claimed by motion in the chancery court, with any remainder held as unclaimed property for you rather than kept by the county; heirs may claim by affidavit of heirship recorded 30 days before the hearing), §2 (redemption — paying taxes, penalty, interest, costs, plus 12%/yr on the purchase price within the applicable window to recover the property), and §5c (grounds, the Rule 65.05 bond, and procedure for an emergency motion to halt a scheduled sale).

11. Meta

• sources:
  • {type: case_opinion, url: “https://www.tncourts.gov/sites/default/files/OpinionsPDFVersion/Hamilton%20County%20and%20FUB%20of%20the%20State%20of%20TN%20Et%20Al.%20v.%20Tax%20Year%202018%20Delinquent%20Taxpayers%20Et%20Al.%20Opinion.pdf”, retrieved: 2026-06-01} # full text; quotes 67-5-2702 & 67-5-2701, discusses Andrews/Weaver
  • {type: official_gov, url: “https://www.ctas.tennessee.edu/eli/redemption”, retrieved: 2026-06-01}
  • {type: official_gov, url: “https://www.ctas.tennessee.edu/eli/tax-sale”, retrieved: 2026-06-01}
  • {type: official_gov, url: “https://tncourts.gov/sites/default/files/docs/Chancellors%20Luncheon%20-%20Delinquent%20Taxes%20-%20Handout.pdf”, retrieved: 2026-06-01} # full text extracted; statute walk-through + case summaries
  • {type: statute_search, url: “https://law.justia.com/codes/tennessee/title-67/chapter-5/part-27/section-67-5-2701/”, retrieved: 2026-06-01} # 67-5-2701 redemption scale & 12% (fetch 403’d; text via search snippet + CTAS)
  • {type: statute_search, url: “https://law.justia.com/codes/tennessee/title-67/chapter-5/part-27/section-67-5-2702/”, retrieved: 2026-06-01} # 67-5-2702 (verbatim text confirmed in Hamilton County opinion)
  • {type: statute_search, url: “https://law.justia.com/codes/tennessee/title-67/chapter-5/part-25/section-67-5-2504/”, retrieved: 2026-06-01} # SOL to attack tax sale
  • {type: statute_index, url: “https://law.justia.com/codes/tennessee/title-67/chapter-5/”, retrieved: 2026-06-01}
  • {type: secondary, url: “https://www.nolo.com/legal-encyclopedia/summary-tennessees-foreclosure-laws.html”, retrieved: 2026-06-01} # mortgage foreclosure overview (corroborating only)
  • {type: scotus, url: “https://www.law.cornell.edu/supct/cert/22-166”, retrieved: 2026-06-01} # Tyler v. Hennepin
• needs_verification:
  • Exact verbatim § 67-5-2701 text from a directly fetched primary source (Justia/LexisNexis fetch returned HTTP 403; relied on official CTAS summary + statute search snippet).
  • § 67-5-2702 fee/percentage caps, licensing, cooling-off, and contract-disclosure rules for private surplus-recovery agents — none located in a retrieved primary source.
  • Whether the excess-proceeds claim itself (vs. the redemption right) is freely assignable to a recovery agent.
  • Mortgage foreclosure exact statute text: Tenn. Code Ann. § 35-5-101 et seq. (publication count/days), § 66-8-101 (2-yr post-sale redemption + waiver), § 35-5-118 (deficiency / fair-value standard) — relied on secondary sources only.
  • Full underlying opinions for MacCaughelty v. Sherrod (M2020-00403-COA-R3-CV), City of Chattanooga v. 2011 Delinquent Taxpayers (E2016-00025-COA-R3-CV), Rutherford County v. Delinquent Taxpayers (M2016-01254-COA-R3-CV), and Wright v. Williams (75 Tenn. 700) — holdings recorded from official CTAS/tncourts materials, but the individual opinions were not separately retrieved.
  • Statewide “typical sale month” and per-county auction platforms (belong on county pages).
• open_questions:
  • Do any Tennessee counties run online surplus/decree-sale platforms statewide, or is it fully county-by-county?
  • Is there a Tennessee consumer-protection statute (outside Title 67) capping finder/ surplus-recovery fees?
• cross_links: right-of-redemption, surplus-funds, third-party-recovery-rules, tyler-v-hennepin-county, due-process-notice, mullane-v-central-hanover, jones-v-flowers, mennonite-v-adams, bankruptcy-automatic-stay, federal-tax-lien-redemption, heirs-property, unclaimed-property, treasurer-sale, sheriff-sale, hamilton-county-v-2018-delinquent-taxpayers-2024, andrews-v-fifth-third-bank, maccaughelty-v-sherrod, city-of-chattanooga-v-2011-delinquent-taxpayers, rutherford-county-v-delinquent-taxpayers, scra-protections
• changelog:
  • 2026-06-01: Initial population. Tax-sale framework, redemption scale (§ 67-5-2701), excess-proceeds waterfall (§ 67-5-2702), SOL (§ 67-5-2504), notice standard, and 6-case table built primarily from the verified Hamilton County (2024) opinion and official CTAS/tncourts delinquent-tax materials. Mortgage-foreclosure module and recovery-agent fee/licensing rules flagged needs_verification.