Tennessee Wholesaling Laws: SB 909 Compliance Guide

Tennessee is a growing wholesaling market, and contract assignments are a recognized real estate practice in the state. Senate Bill 909 (Public Chapter 72), effective March 25, 2025, added formal disclosure requirements for buyers engaged in wholesaling real property. The law amends TCA Title 47 and Title 66, creating specific obligations for wholesalers. If you wholesale in Tennessee, here is exactly what the law requires and how to comply.

This guide is structured as a practical checklist. Each section tells you what to do, when to do it, and what format to use. If you are looking for the broader national picture, see our state-by-state wholesaling legal guide.

What SB 909 Actually Says

SB 909 was signed into law on March 25, 2025, and took effect immediately. It requires buyers engaged in wholesaling real property to disclose certain information related to their equitable interest to both the seller and any subsequent purchaser. The bill defines wholesaling as entering into a purchase contract with the intent to assign that contract or sell the equitable interest to a third party.

The law creates two disclosure obligations:

1. Disclosure to the seller: Before signing the purchase contract, the wholesaler must disclose their intent to market or assign their interest. Additionally, if the contract is assigned, the wholesaler must notify the seller of the assignment's effective date at least three business days in advance.
2. Disclosure to the end buyer: The wholesaler must disclose the nature of their equitable interest to the subsequent purchaser. The end buyer must understand they are purchasing contract rights from someone who does not own the property.

Both disclosures must be in writing and appear in bold, large-font print within the written agreement or an addendum. This format requirement is statutory — burying disclosure language in standard contract text does not comply.

SB 909 does not ban wholesaling or cap assignment fees. It does not require disclosure of the assignment price or terms. What it requires is transparency: both parties must understand the nature of the transaction and who holds what.

The full text of SB 909 is available at wapp.capitol.tn.gov.

Assignment vs Double Close — Which Rules Apply

This is the critical distinction for compliance in Tennessee.

Assignment of contract: You sell your equitable interest — the contractual right to purchase the property. You never take title. One closing occurs between the original seller and your end buyer. Your assignment fee appears on the settlement statement. SB 909 disclosure requirements apply in full. One advantage of assignment is that both parties see the full picture — the transaction is transparent by design, with your fee visible on the closing statement.

Double close (simultaneous close): You purchase the property at one closing, take title, then sell it to the end buyer at a second closing. You own the property at the time of the second sale. Because you are selling property you hold title to, SB 909's assignment-specific disclosure requirements do not apply. However, double closes carry roughly 3% in additional closing costs and require either cash or transactional funding.

Required Disclosures for Assignment Deals

If you are assigning your purchase contract in Tennessee, SB 909 requires written disclosures in bold, large-font print. Here is exactly what each disclosure must communicate and when it must be delivered.

Disclosure to the seller (property owner)

What to disclose: Your intent to market or assign your interest in the property. The seller must know before signing the purchase contract that you may not be the party who ultimately closes.

When to deliver: Before signing the purchase contract. This is a pre-contract requirement.

Assignment date notice: If you assign the contract, you must separately notify the seller of the effective date of the assignment at least three business days before it takes effect. This is a time-sensitive requirement — build it into your deal timeline.

Format: Bold, large-font print within the written agreement or addendum. Standard-size contract text does not satisfy the statute.

Disclosure to the end buyer (assignee)

• What to disclose: The nature of your equitable interest in the property. The end buyer must understand you hold contract rights, not title.
• When to deliver: Before the assignment agreement is executed.
• Format: Bold, large-font print within the written agreement.
• Best practice: Include the disclosure in your deal package materials so the buyer sees it early. Do not save it for the closing table.

Both disclosures must be in writing. Verbal disclosures do not satisfy the statute.

The Bold, Large-Font Requirement

This is unique to Tennessee and worth special attention. SB 909 does not just require disclosures — it mandates a specific visual format.

The statute says: disclosures must appear in bold, large-font print within the written agreement. While the law does not define a specific point size, the legislative intent is clear: the disclosure must be conspicuous. It cannot be hidden in standard-size contract boilerplate.

Practical recommendations:

1. Use at least 12-point bold type for all disclosure language.
2. Consider placing the disclosures in a separate, clearly labeled section of the contract (e.g., "WHOLESALING DISCLOSURE — REQUIRED BY TENNESSEE LAW").
3. Use a standalone disclosure addendum if your purchase contract template does not accommodate bold formatting easily.
4. If using electronic signatures, ensure the bold formatting renders correctly in the final signed document. PDF formatting can sometimes strip bold text — verify before sending.

Penalties for Non-Compliance

SB 909 creates enforcement mechanisms that make non-compliance a real financial risk.

• Private cause of action: SB 909 creates a legal cause of action for anyone harmed by a failure to provide the required disclosures. Both the seller and end buyer can sue the wholesaler 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 you can be sued long after a deal closes. Retain all disclosure documentation for at least two years.
• Tennessee Real Estate Commission oversight: TREC has regulatory authority over real estate transactions. Violations may trigger regulatory penalties, fines, or disciplinary action if you hold a license.
• Fraud and misrepresentation exposure: Beyond SB 909 specifically, failing to disclose material facts about a real estate transaction can expose you to broader common law fraud or misrepresentation claims. SB 909 makes the disclosure obligation explicit, which means a violation is harder to characterize as innocent.

The cost of compliance is minimal — bold text in a contract and a three-day advance notice. The cost of a lawsuit within the two-year window is not minimal.

Practical Compliance Checklist

Use this step-by-step workflow for every Tennessee assignment deal.

1. Before you sign the purchase contract: Prepare your disclosure language in bold, large-font print. Include it in the purchase contract or a separate addendum. The disclosure must state your intent to market or assign your interest in the property.
2. At contract signing: Present the disclosure to the seller alongside the purchase contract. Make sure the bold-font disclosure is visible and acknowledged. Get the seller's signature on the disclosure.
3. Before you market: Review your marketing materials to ensure they accurately describe the transaction as an assignment of contract. Do not market the property as if you own it.
4. Before you assign: Prepare the end buyer disclosure in bold, large-font print. This must state the nature of your equitable interest — that you hold contract rights, not title. Provide it to the end buyer before they sign the assignment agreement.
5. Three business days before assignment takes effect: Send written notice to the seller of the assignment's effective date. Document when and how you sent the notice (email with read receipt, certified mail, etc.).
6. At assignment signing: Have the end buyer acknowledge the equitable interest disclosure in writing. Execute the assignment agreement.
7. File everything: Retain signed copies of all disclosures, the purchase contract, the assignment agreement, and the three-day assignment notice. Store them for at least two years from the contract date. This documentation is your defense if a claim arises.
8. If doing a double close instead: Document both closings separately. Retain copies of both settlement statements. The assignment-specific disclosures under SB 909 do not apply when you hold title at the time of the second sale.

Frequently Asked Questions

Do I need a real estate license to wholesale in Tennessee?

No. Tennessee does not require a license to assign your own purchase contract. You are acting as a principal — a party to the contract — not as a broker. However, SB 909 requires specific written disclosures regardless of licensure status. If your marketing advertises properties rather than contract positions, you risk being characterized as conducting unlicensed brokerage activity. The Tennessee Real Estate Commission oversees licensing requirements.

What does "bold, large-font print" mean exactly?

The statute does not define a specific point size. The intent is conspicuousness — the disclosure must be immediately noticeable to anyone reading the contract. Use at least 12-point bold type, and consider placing disclosures in a separate labeled section. The standard is practical: would a reasonable person notice the disclosure without searching for it?

What if I forget to send the three-day assignment notice?

The three-business-day advance notice of the assignment effective date is a separate requirement from the initial disclosure. Failing to provide it creates exposure under SB 909's private cause of action. If you realize you missed it, consider delaying the assignment's effective date to allow proper notice. Build a timeline checkpoint into your deal workflow to prevent this from happening.

Does SB 909 apply to commercial properties?

SB 909 amends TCA Title 47 (trade and commerce) and Title 66 (real property) broadly. Review the full statutory text and consult a Tennessee real estate attorney for guidance on whether specific property types fall within the scope of the law. The safest approach is to provide disclosures on every wholesale transaction regardless of property type.

What about virtual wholesaling — operating from out of state?

Tennessee law applies to Tennessee properties regardless of where you are physically located. If you are assigning a purchase contract on a Tennessee property, SB 909's disclosure requirements apply. It does not matter if you are sitting in Texas, Florida, or anywhere else. The property is in Tennessee, and the disclosures are required.

Disclaimer

This guide is for informational purposes only and does not constitute legal advice. Laws and regulations change, and the application of any statute depends on the specific facts of your situation. Consult a licensed Tennessee real estate attorney before relying on this information for any particular transaction. Deal Run provides tools and information to help wholesalers operate more effectively — we are not a law firm and do not provide legal services.