Compliance Guide
Tennessee Wholesaling Compliance
A practical overview of the laws, disclosures, and best practices that govern real estate wholesaling in Tennessee — including SB 909, bold-font disclosure requirements, and the two-year statute of limitations for violations.
Not legal advice. Flat Rate Wholesale is not a law firm and does not provide legal services. This content is for informational purposes only and should not be relied upon as legal advice. Laws and regulations change frequently. Consult a licensed real estate attorney in your state and contact your local regulatory agency for guidance specific to your transactions.
Is Wholesaling Legal in Tennessee?
Yes. Tennessee permits real estate wholesaling — the practice of entering into a purchase contract and then assigning that contract to an end buyer for a fee. What changed in 2025 is how much transparency the state now requires in these transactions.
Senate Bill 909, signed into law on March 25, 2025, and effective immediately, added specific disclosure requirements for buyers engaged in wholesaling real property. The bill was introduced in response to concerns that sellers were entering contracts without understanding their buyer intended to assign the deal, and that end buyers sometimes did not know they were purchasing contract rights rather than buying directly from the property owner.
SB 909 did not ban wholesaling. It codified disclosure obligations that protect both sellers and end buyers. Wholesalers who were already operating transparently may have needed only minor adjustments. Those who were not disclosing their intent to assign now face a clear legal requirement to do so.
What Is SB 909?
Senate Bill 909 (Public Chapter 72) was passed by the 114th Tennessee General Assembly and signed into law on March 25, 2025, taking effect immediately. The bill amends TCA Title 47 (trade and commerce) and Title 66 (real property) to require written disclosures from buyers engaged in wholesaling real property.
The law defines wholesaling as entering into a contract to purchase real property with the intent to assign that contract or sell the equitable interest to a subsequent purchaser. It requires two distinct disclosures: one to the original seller and one to the end buyer. Both must appear in the written agreement in bold, large-font print.
Key Provisions
Disclosure to the seller before contract execution. The wholesaler must disclose to the seller, before signing the purchase contract, their intent to market or assign their interest in the property. The seller must know before they sign that the buyer may not intend to close personally.
Assignment date notification. If the contract is assigned, the wholesaler must notify the seller of the effective date of the assignment at least three business days in advance. This gives the seller time to prepare for a different party stepping into the contract.
Disclosure to the end buyer. The wholesaler must disclose to the subsequent purchaser (end buyer) the nature of their equitable interest in the property. The end buyer must understand that the wholesaler holds contract rights, not title.
Bold, large-font requirement. All required disclosures must be in bold, large-font print within the written agreement. This is not a suggestion — it is a statutory format requirement. Burying disclosure language in standard-size contract text does not satisfy the law.
Private cause of action with two-year statute of limitations. If a wholesaler fails to provide the required disclosures and someone is harmed, the injured party can bring a civil lawsuit. The statute of limitations is two years from the date of the original purchase contract.
Read the bill: The full text of SB 909 is available at wapp.capitol.tn.gov. It is relatively short and straightforward. Every Tennessee wholesaler should read it.
Disclosure Requirements in Detail
SB 909 creates two separate disclosure obligations — one to the seller and one to the end buyer. Both are mandatory, both must be in writing, and both must appear in bold, large-font print. Here is what each requires.
Disclosure to the Seller
Before signing the purchase contract, the wholesaler must disclose their intent to market or assign their interest in the property. The seller must understand before contract execution that the buyer may not be the party who ultimately closes on the property.
Additionally, if the contract is assigned, the wholesaler must notify the seller of the effective date of the assignment at least three business days before it takes effect. This advance notice gives the seller time to prepare for a different buyer stepping into the transaction.
The disclosure must appear in the written agreement in bold, large-font print. It cannot be satisfied verbally or buried in standard contract text.
Disclosure to the End Buyer
The wholesaler must disclose to the subsequent purchaser (end buyer) the nature of their equitable interest in the property. In plain terms: the end buyer must know that the wholesaler holds a contract to purchase the property and does not own it.
This disclosure must also be in bold, large-font print within the written agreement. The end buyer should understand before signing any assignment agreement that they are purchasing contract rights from someone who holds an equitable interest, not buying property directly from the owner.
Format and Timing Summary
Both disclosures must be in writing, in bold, large-font print, and included in the written agreement (or an addendum to it). As a best practice, include disclosure language in multiple locations:
- • In the purchase contract itself (assignment clause with bold disclosure)
- • In a separate standalone disclosure document signed by the seller
- • In the assignment agreement provided to the end buyer
- • In marketing materials sent to potential buyers
The three-business-day advance notice of the assignment effective date is a separate, time-sensitive requirement. Build this into your deal timeline and document when the notice was sent and how it was delivered.
Assignment vs Double Close in Tennessee
Both assignment and double closing are valid transaction structures in Tennessee. The key difference is who holds title at the time of the second sale, and that determines which disclosure rules apply.
Assignment
You assign your purchase contract to the end buyer. One closing occurs between the original seller and the end buyer. Your assignment fee is paid from closing proceeds and is visible on the settlement statement.
- + One set of closing costs
- + Faster and simpler to execute
- + No transactional funding required
- → Must comply with SB 909 disclosure requirements
- → Must provide 3-business-day advance notice of assignment date
- → Fee visible to all parties on the closing statement
Double Close
You close on the property first (A-to-B), taking title. You then sell the property to the end buyer in a second closing (B-to-C). You own the property between the two transactions.
- + You own the property at time of second sale
- + Standard sale rules apply to the B-to-C transaction
- − Two sets of closing costs (~3% additional)
- − May require transactional funding
- − Often used to conceal the spread from both parties
Important timing distinction: The compliance advantage of a double close only applies if you market the property after taking title. In a simultaneous close — where you market while still under contract to purchase — you hold equitable interest only, the same legal position as an assignment. Your disclosure obligations at the time of marketing may be identical regardless of your intended closing structure. Oklahoma's SB 1075 (effective November 2025) explicitly includes simultaneous double closings in its wholesaling definition. The trend is toward closing this perceived loophole. Structure your compliance around what you hold at the time you market, not what you plan to hold at closing.
Penalties for Non-Compliance
Failing to comply with SB 909's disclosure requirements exposes wholesalers to legal liability. The law creates specific enforcement mechanisms that make non-compliance a costly mistake.
Private Cause of Action
SB 909 creates a private right of action for anyone harmed by a failure to disclose. If a seller was not informed of the wholesaler's intent to assign, or if an end buyer was not told about the nature of the wholesaler's equitable interest, the injured party can bring a civil lawsuit for damages.
Two-Year Statute of Limitations
The injured party has up to two years from the date of the original purchase contract to file a claim. This means even after a deal closes, you can be sued for up to two years if you failed to provide the required disclosures. Retaining documentation of every disclosure delivered is your protection during this window.
Tennessee Real Estate Commission Oversight
The Tennessee Real Estate Commission (TREC) has regulatory authority over real estate transactions in the state. While SB 909's primary enforcement mechanism is the private cause of action, the Commission may pursue regulatory penalties or fines for deceptive practices. If you hold a real estate license in Tennessee, violations could also result in disciplinary action against your license.
Potential Fraud or Misrepresentation Claims
Beyond SB 909 specifically, failing to disclose material facts about a real estate transaction can expose wholesalers to broader fraud or misrepresentation claims under Tennessee common law. In severe cases involving intentional deception, criminal charges for deceptive business practices are possible. SB 909 makes the disclosure obligation explicit, which means a violation is harder to characterize as an innocent oversight.
The practical takeaway: The disclosure requirements under SB 909 are straightforward. Bold text in a contract and a three-day advance notice of the assignment date. The cost of compliance is minimal. The cost of a lawsuit within the two-year window is not. There is no good reason to skip these disclosures.
How We Handle It
How Flat Rate Wholesale Handles Tennessee Compliance
Compliance is built into our disposition process. When you submit a Tennessee deal, here is what we work to include as part of every transaction.
SB 909 Bold-Font Disclosures Included
Our process includes the required SB 909 disclosures in Tennessee deal packages. Disclosure language appears in bold, large-font print in the assignment agreement and in a standalone disclosure document, satisfying the statutory format requirement without you needing to draft it yourself.
Three-Business-Day Assignment Notice
When a deal is assigned, we work to deliver written notice of the assignment effective date to the seller at least three business days in advance, as required by SB 909. We track delivery of this notice and document when it was sent and how it was received.
Compliant Marketing Language
Our marketing materials for assignment deals clearly state that we are selling contract rights, not the property itself. Email blasts, deal pages, and buyer communications include the appropriate language identifying the transaction as an assignment of contract.
Disclosure Delivery Tracking
We track when disclosures are delivered to both the seller and the buyer, creating a paper trail that protects everyone involved. Given the two-year statute of limitations under SB 909, this documentation is essential for your protection long after the deal closes.
Double Close Coordination When Needed
For deals where a double close makes more sense — whether due to contract restrictions or deal structure — we coordinate both closings with full transparency to the deal source. You see both sides of the transaction, both closing statements, and every dollar that changes hands.
Why this matters for deal sources: When you work with a disposition partner that handles compliance correctly, you are protected. If disclosures are missed or the bold-font requirement is not met, the liability can flow to everyone involved in the transaction. By working with us, you are not just getting better pricing and transparency — you are getting a process that protects you from legal exposure during that two-year window.
Common Questions
Tennessee Wholesaling Compliance FAQ
Do I need a real estate license to wholesale in Tennessee?
Tennessee does not require a real estate license to assign your own purchase contract. You are acting as a principal in the transaction, not as a broker. However, SB 909 requires specific written disclosures regardless of licensure status. If your marketing consistently advertises properties rather than contract positions, you risk being characterized as conducting unlicensed brokerage activity. The Tennessee Real Estate Commission oversees licensing requirements, and operating transparently within the disclosure framework is the safest approach.
What does the bold, large-font requirement mean in practice?
SB 909 requires that disclosure language be presented in bold, large-font print within the written agreement. The statute does not define a specific point size, but the intent is clear: the disclosures cannot be buried in fine print or obscured by surrounding contract language. As a practical matter, use at least 12-point bold type for disclosure paragraphs, and consider placing them on a separate page or in a clearly delineated section of the contract. The goal is that any reasonable person reading the agreement would notice and understand the disclosure without having to search for it.
Does SB 909 apply to double closings?
SB 909 targets the assignment or marketing of equitable interest in a purchase contract. In a double close, you take title to the property at the first closing and sell property you own at the second closing. Because you hold title at the time of the second sale, you are not assigning contract rights. However, if you market the property before taking title, you are still in the same legal position as an assignor at the time of marketing. The disclosure obligations apply based on what you hold when you market, not what you plan to hold at closing.
What is the statute of limitations for a disclosure violation?
SB 909 establishes a two-year statute of limitations for any cause of action arising from a failure to provide the required disclosures. The clock starts from the date of the original purchase contract. This means a seller or end buyer who was not properly informed has up to two years to bring a civil lawsuit. Given this window, maintaining complete documentation of every disclosure delivered is essential for your protection.
What happens if the seller refuses to acknowledge the disclosure?
SB 909 requires that you provide the disclosures, but it does not condition the transaction on the seller signing an acknowledgment. That said, having a signed acknowledgment is the strongest evidence that you fulfilled your obligation. If a seller refuses to sign, document the delivery method (email with read receipt, certified mail, hand delivery with witness) and retain proof. The requirement is disclosure, not consent. But without documentation of delivery, a he-said-she-said dispute is much harder to win.
Have a Tennessee Deal? We Handle the Compliance.
Submit your deal and let us handle the disclosures, bold-font formatting, assignment notices, and documentation. You focus on finding deals — we make sure everything is done right.