SENATE BILL 242
By Oliver
HOUSE BILL 298
By Behn
HB0298
001995
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AN ACT to amend Tennessee Code Annotated, Title 13;
Title 47 and Title 66, relative to housing market
manipulation.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Homes not Hedge Funds Act."
SECTION 2. Tennessee Code Annotated, Title 13, Chapter 3, is amended by adding
the following as a new part:
13-3-701.
The general assembly finds that:
(1) This state has experienced urban growth at levels significantly higher
than many states;
(2) It does not wish to inhibit the ownership of property but recognizes
that it is becoming increasingly common for business entities to purchase
substantial numbers of single-family homes for use as rental properties, both
lowering the supply of, and increasing the costs of, such homes;
(3) Home ownership is recognized as one (1) of the most reliable ways to
build wealth, permitting owners to build equity, which can serve as reserves in
times of need, and in terms of passive income and increases in market value of
owned property; and
(4) It is necessary to balance the interests of building wealth through the
use of business entities acquiring properties for rental purposes against the state,
local, and individual economic benefits that result from having a citizenry broadly
engaged in and accruing the advantages attendant to home ownership.
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13-3-702.
As used in this part:
(1) "Affiliate" means a person, other than an individual, that wholly or
substantially owns, is wholly or substantially owned by, or is under common
ownership with another person;
(2) "Individual" means a natural person;
(3) "Person":
(A) Means a fiduciary, a firm, an association, a partnership, a
limited liability company, a corporation, or other business entity or group
acting as a unit;
(B) Includes an officer or employee of a corporation, a member, a
manager, or an employee of a limited liability company, and a member or
employee of a partnership who, as officer, employee, member, or
manager, acts on behalf of the business entity with whom they are
associated or an affiliate of that business entity; and
(C) Does not include a governmental entity;
(4) "Qualifying county" means a county with a population greater than
one hundred fifty thousand (150,000), according to the 2020 or a subsequent
federal census; and
(5) "Single-family home" means a residential structure that is either a fully
detached or semi-detached building or that is a row or town home that is
separated from the adjacent unit by a ground-to-roof wall; does not share heating
or air-conditioning systems or utilities; and does not have units located above or
below.
13-3-703.
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It is unlawful for a person, including an affiliate of the person, to purchase a
single-family home in a qualifying county for a purpose other than use by the person as
a residence if the person, including an affiliate of the person, owns one hundred (100) or
more single-family homes in qualifying counties that are used primarily for rental
purposes.
13-3-704.
(a) The attorney general and reporter may bring a civil action in a court of
competent jurisdiction against a person or affiliate that violates this part.
(b) An individual aggrieved by a violation of this part may bring a civil action
against a person or affiliate that acquires a single-family home in violation of this part.
(c) In an action brought under this section, a court may impose a civil penalty of
up to one hundred dollars ($100) per day for each single-family home acquired in
violation of this part and may award to the attorney general and reporter or a plaintiff
who prevails in an action brought pursuant to this section one (1) or more of the
following remedies:
(1) Equitable relief;
(2) Compensatory damages;
(3) Costs and fees, including reasonable attorneys' fees; and
(4) Punitive damages in an amount not to exceed fifty thousand dollars
($50,000) or three (3) times the total of compensatory damages, costs, and fees,
whichever is greater.
(d) A court may award to a defendant who prevails in an action brought pursuant
to this section costs and fees, including reasonable attorneys' fees, if the court finds the
action was not well-grounded in fact or law, or if the action was frivolous.
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(e) In an action brought under this section, a court may order the joinder of
parties, if joinder is for the purpose of ensuring a proper accounting regarding the total
number of single-family homes owned by the named defendant and any affiliates of the
defendant, and for the purpose of permitting proper enforcement, remedies, and
damages under this part.
(f) If a party is unable to pay an amount awarded by the court pursuant to this
section, the court may find an interested party joined pursuant to subsection (e) jointly
and severally liable for violations of this part and make the award recoverable against
one (1) or all of the joined interested parties.
(g) This part does not limit rights and remedies available to this state or an
individual under another applicable state law.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it,
and applies to contracts for single-family homes entered into on or after such date.