Real Property

Plain English Breakdown

The bill summary and official text do not provide specific details about multi-phase development timelines beyond the initial three-year period.

Changes to Property Development Rights

This act changes when property development rights are established and how long they last in Tennessee.

What This Bill Does

• Establishes a vested property right upon the submission of a preliminary or final development plan, instead of waiting for approval.
• Requires that plans or permits substantially comply with local regulations to establish a vested property right.
• Changes the start date of the vesting period from when a permit is approved to when it is submitted.
• Sets a three-year vesting period for applications submitted without preliminary development plans.

Who It Names or Affects

• Property developers and local governments in Tennessee.

Terms To Know

Vested Property Right

A legal right that protects property owners' development plans even if local regulations change later.

Development Plan

A detailed plan for the construction or improvement of a piece of land.

Limits and Unknowns

• The exact fiscal impact on cities and counties cannot be determined.
• It does not specify how local governments will define substantial compliance with regulations.

Official Summary Text

VESTED PROPERTY RIGHTS

Present law requires a
vested property right
to
be established with respect to any
property upon the approval, by the local government in which the property
is situated, of any of the following:



A preliminary development plan.



A final development plan where no preliminary development plan is required by ordinance or regulation.



A building permit allowing construction of a building where there was no need for prior approval of a preliminary development plan for the property on which that building will be constructed.

This bill revises this provision so that a vested property right is established upon the submission of the above plans or permit, as opposed
to the time of their approval. This bill also adds that a vested property right is not established unless the plan or permit substantially complies with the requirements of local development ordinances and regulations as described below, under
the
"local
authority"
heading.

Present law provides, during the vesting periods, the locally adopted development standards that are in effect on the date of approval of a preliminary development plan or the date of approval of a building permit must remain the dev
elopment standards applicable to that property or building during the vesting periods. This bill revises this provision so that the locally adopted development standards that are in effect on the date of the submission of the preliminary development plan

or the date of

approval of a
building permit remain the standards applicable to the property during the vesting period
.

VESTING PERIODS

Approved Construction Projects

Unless an extension is granted by the local government, present law requires the vesting period applicable to an approved construction project for which a building permit has been issued to begin on the date of issuance of the building permit by the local

government and
to
remain in effect for the time period authorized by the approved building permit, including any approved renewal obtained by the applicant prior to the expiration or termination of the permit to be renewed. However, the applicant must pur
sue site preparation, if applicable, and construction with reasonable diligence.

This bill adds that the vesting period applicable to a submitted application for a building permit for a preliminary development plan, or a final development plan where no p
reliminary development plan is required, is three years starting on the date of submission of the plan to the local government.

Development Plans

Present law provides that the vesting period applicable to a development plan must be a period of three ye
ars, beginning on the date of the local government's approval of the preliminary development plan. However, the applicant must (i) obtain local government approval of a final development plan, (ii) secure any necessary permits, and (iii) start site prepa
r
ation within the vesting period. If the applicant accomplishes such tasks within the vesting period, then the vesting period must be extended by an additional two years to start construction from the date of the expiration of the three-year period. Duri
n
g the two-year period, the applicant must start construction and maintain any necessary permits to remain vested. This bill changes when the vesting period starts; instead of the date of approval, it is the date of submission.

If construction starts dur
ing the vesting period, present law requires that the development standards applicable during the vesting period remain in effect until the local government has certified final completion of the development or project. However, the total vesting period f
o
r the project must not exceed 10 years from the date of the approval of the preliminary development plan, excluding any vesting period provided for an energy siting agreement, unless the local government grants an extension in an ordinance or resolution.

The applicant must also maintain any necessary permits during the 10-year period. This bill revises the provision that requires the vesting period to not exceed 10 years by changing the start date of the 10-year period to the date of submission of the pr
e
liminary plan, as opposed to the date of approval of the plan.

In the case of developments
that
proceed in two or more phases as described in the development plan, this bill requires a separate vesting period applicable to each phase. The development st
andards
that
are in effect on the date of approval of the preliminary development plan for the first phase of the development must remain the development standards applicable to all subsequent phases. However, the total vesting period for all phases must
not exceed 15 years from the date of the approval of the preliminary development plan for the first phase, excluding any vesting period provided for an energy siting agreement, unless the local government grants an extension in an ordinance or resolution.

The applicant must also maintain any necessary permits during the 15-year period. This bill requires the development standards in effect at the date of submission of the plan for the first phase to remain in effect for all phases of the plan, as opposed

to the standards that are in effect at the time of approval. This bill also requires the 15-year timeline to start on the date of submission of the plan for the first phase, as opposed to at the date of approval.

Preliminary Development Plans and Perm
its

During the vesting periods described above for approved construction projects and development plans, present law requires that the locally adopted development standards
that
are in effect on the date of approval of a preliminary development plan or the issuance of a building permit, whichever applies, remain the development standards applicable to the property described in such preliminary development plan or permit, except
s
uch rights terminate upon a written determination by the local government under certain circumstances, including violating terms or fraud. This bill requires the locally adopted development standards that are in effect on the date of submission of the pl
a
n or the permit to remain the standards for the duration of the project.

Local Authority

Present law authorizes a local government to, by ordinance or resolution, specifically identify the type or types of development plans within the local government
's jurisdiction that will cause property rights to vest. However, regardless of nomenclature used in the ordinance or resolution to describe a development plan, a plan
that
contains certain characteristics must be considered a development plan that will c
ause property rights to vest. Any such ordinance or resolution must also specify what constitutes approval of a development plan within its jurisdiction. If a local government has not adopted such an ordinance or resolution specifying what constitutes a

development plan that would trigger a vested property right, then rights must vest upon the approval of any plan, plat, drawing, or sketch, however denominated, that is substantially similar to any plan, plat, drawing, or sketch described as a development

plan. This bill removes from the above that an ordinance or resolution must specify what constitutes approval of a development plan within its jurisdiction, and, instead, requires that ordinance or resolution to specify what constitutes substantial compl
i
ance with the requirements of local development ordinances and regulations for the submission of a development plan within its jurisdiction. This bill provides that if the local government does not provide which requirements must be met to constitute sub
s
tantial compliance for submission, then the property rights will vest upon submission of the plan
.

All of the above listed changes are made to present law for both regional planning regulations and municipal planning regulations.

COUNTY AND MUNICIPAL B
OARDS OF ZONING APPEALS

Present law provides that t
he county
and municipal
board
s
of zoning appeals

ha
ve

certain powers, including the power to
hear and decide, in accordance with the provisions of any such ordinance, requests for special exceptions or for interpretation of the
zoning
map or for decisions upon other special questions upon which such board is authorized by any such ordinance to pass.
This bill removes such specific power.

This bill authorizes a
local government
to
, by ordinance, delegate initial jurisdiction over
(i)
specified special exceptions,
(ii)
for interpretation of the map, or
(iii)
for decisions upon other special questions upon which
either
board of appeals is authorized by such ordinance to pass, to the local building commissioner or other administrative official.

For
such
delegated
matters, this bill provides the following:



Each
board's jurisdiction is appellate only
.



The local building official or other administrative official
must
make the initial ruling based on the criteria set forth in the ordinance
.



The delegation ordinance must specify which special exceptions have been delegated to the local building commissioner or other administrative official.

This bill further requires t
he ordinance
to
include specific and objective standards by which special exceptions are evaluated.

A request for a special exception must not be denied on the basis of health, safety, or general welfare, unless those bases are defined in the ordinance. For any request for a special exception, or request for interpretation of the map, the local building commissioner or other administrative official to whom jurisdiction has been delegated must render a decision within 120 days of submission of a complete application, and the
applicable
board must render a decision within
1
20 days of the filing of an appeal. An applicant may consent to an extension or waive these deadlines. An application is deemed to be approved if the local building commissioner, other administrative official, or board fails to approve, deny, or extend with consent the application within the required time period.

Current Bill Text

SENATE BILL 1313
By Johnson

HOUSE BILL 1326
By Lamberth

HB1326
000919
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 13,
relative to planning.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 13-3-413(b), is amended by deleting
the subsection and substituting instead:
(b)
(1) A vested property right is established, with respect to any property,
upon the submission to the local government in which the property is situated of:
(A) A preliminary development plan;
(B) A final development plan where no preliminary development
plan is required by ordinance or regulation; or
(C) A building permit allowing construction of a building where
there is no requirement for prior approval of a preliminary development
plan for the property on which that building will be constructed.
(2) Notwithstanding subdivision (b)(1), a vested property right is not
established unless the plan or building permit substantially complies with the
requirements of local development ordinances and regulations pursuant to
subsection (e).
(3) During the vesting period described in subsections (c) and (d), the
locally adopted development standards that are in effect on the date of
submission of a preliminary development plan or the date of approval of a
building permit, as described by this subsection (b), shall remain the

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development standards applicable to that property or building during the vesting
period.
SECTION 2. Tennessee Code Annotated, Section 13-3-413(c), is amended by deleting
the subsection and substituting instead:
(c) The vesting period applicable to a submitted application for a building permit
for a preliminary development plan or a final development plan where no preliminary
development plan is required by ordinance or regulation is a period of three (3) years,
beginning on the date of submission of the plan to the local government pursuant to
subsection (b). Unless an extension is granted by the local government, the vesting
period applicable to an approved construction project for which a building permit has
been issued begins on the date of issuance of the building permit by the local
government and remains in effect for the time period authorized by the approved
building permit, including any approved renewal obtained by the applicant prior to the
expiration or termination of the permit to be renewed; provided, that the applicant
pursues site preparation with reasonable diligence, if such preparation is necessary, and
construction.
SECTION 3. Tennessee Code Annotated, Section 13-3-413(d)(1), is amended by
deleting the language "the local government’s approval" and substituting "submission".
SECTION 4. Tennessee Code Annotated, Section 13-3-413(d)(2), is amended by
deleting the language "approval" and substituting "submission".
SECTION 5. Tennessee Code Annotated, Section 13-3-413(d)(3), is amended by
deleting the language "approval" wherever it appears and substituting "submission".
SECTION 6. Tennessee Code Annotated, Section 13-3-413(e), is amended by deleting
the last two sentences of the subsection and substituting instead:

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Any such ordinance or resolution shall also specify what constitutes substantial
compliance with the requirements of local development ordinances and
regulations for the submission of a development plan within its jurisdiction. If a
local government has not adopted an ordinance or resolution pursuant to this
section specifying substantial compliance that would trigger a vested property
right, then rights shall vest upon the submission of any plan, plat, drawing, or
sketch, however denominated, that is substantially similar to any plan, plat,
drawing, or sketch described in subdivision (k)(5) or (k)(6).
SECTION 7. Tennessee Code Annotated, Section 13-3-413(f)(1), is amended by
deleting "approval" and substituting "submission".
SECTION 8. Tennessee Code Annotated, Section 13-4-310(b), is amended by deleting
the section and substituting instead:
(b)
(1) A vested property right is established, with respect to any property,
upon the submission to the local government in which the property is situated of:
(A) A preliminary development plan;
(B) A final development plan where no preliminary development
plan is required by ordinance or regulation; or
(C) A building permit allowing construction of a building where
there is no requirement for prior approval of a preliminary development
plan for the property on which that building will be constructed.
(2) Notwithstanding subdivision (b)(1), a vested property right is not
established unless the plan or building permit substantially complies with the
requirements of local development ordinances and regulations pursuant to
subsection (e).

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(3) During the vesting period described in subsections (c) and (d), the
locally adopted development standards that are in effect on the date of
submission of a preliminary development plan or the date of approval of a
building permit, as described by this subsection (b), shall remain the
development standards applicable to that property or building during the vesting
period.
SECTION 9. Tennessee Code Annotated, Section 13-4-310(c), is amended by deleting
the subsection and substituting instead:
(c) The vesting period applicable to a submitted application for a building permit
for a preliminary development plan or a final development plan where no preliminary
development plan is required by ordinance or regulation is a period of three (3) years,
beginning on the date of submission of the plan to the local government pursuant to
subsection (b). Unless an extension is granted by the local government, the vesting
period applicable to an approved construction project for which a building permit has
been issued begins on the date of issuance of the building permit by the local
government and remains in effect for the time period authorized by the approved
building permit, including any approved renewal obtained by the applicant prior to the
expiration or termination of the permit to be renewed; provided, that the applicant
pursues site preparation with reasonable diligence, if such preparation is necessary, and
construction.
SECTION 10. Tennessee Code Annotated, Section 13-4-310(d)(1), is amended by
deleting the language "the local government’s approval" and substituting "submission".
SECTION 11. Tennessee Code Annotated, Section 13-4-310(d)(2), is amended by
deleting the language "approval" and substituting "submission".

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SECTION 12. Tennessee Code Annotated, Section 13-4-310(d)(3), is amended by
deleting the language "approval" wherever it appears and substituting "submission".
SECTION 13. Tennessee Code Annotated, Section 13-4-310(e), is amended by
deleting the last two sentences of the subsection and substituting instead:
Any such ordinance or resolution shall also specify what constitutes substantial
compliance with the requirements of local development ordinances and
regulations for the submission of a development plan within its jurisdiction. If a
local government has not adopted an ordinance or resolution pursuant to this
section specifying substantial compliance that would trigger a vested property
right, then rights shall vest upon the submission of any plan, plat, drawing, or
sketch, however denominated, that is substantially similar to any plan, plat,
drawing, or sketch described in subdivision (k)(5) or (k)(6).
SECTION 14. Tennessee Code Annotated, Section 13-4-310(f)(1), is amended by
deleting "approval" and substituting "submission".
SECTION 15. Tennessee Code Annotated, Section 13-7-109, is amended by deleting
subdivision (2).
SECTION 16. Tennessee Code Annotated, Section 13-7-109, is amended by
designating the existing language as subsection (a) and adding the following as a new
subsection (b):
(1) A local government may, by ordinance, delegate initial jurisdiction over
specified special exceptions, for interpretation of the map, or for decisions upon other
special questions upon which the board of appeals is authorized by such ordinance to
pass, to the local building commissioner or other administrative official.
(2) For matters delegated pursuant to subdivision (b)(1):
(A) The board's jurisdiction is appellate only;

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(B) The local building official or other administrative official shall make
the initial ruling based on the criteria set forth in the ordinance; and
(C) The delegation ordinance must specify which special exceptions
have been delegated to the local building commissioner or other administrative
official.
(3) The ordinance must include specific and objective standards by which
special exceptions are evaluated.
(4) A request for a special exception must not be denied on the basis of health,
safety, or general welfare, unless those bases are defined in the ordinance.
(5) For any request for a special exception, or request for interpretation of the
map, the local building commissioner or other administrative official to whom jurisdiction
has been delegated must render a decision within one hundred twenty (120) days of
submission of a complete application, and the board must render a decision within one
hundred twenty (120) days of the filing of an appeal. An applicant may consent to an
extension or waive these deadlines. An application is deemed to be approved if the
local building commissioner, other administrative official, or board fails to approve, deny,
or extend with consent the application within the required time period.
SECTION 17. Tennessee Code Annotated, Section 13-7-207, is amended by deleting
subdivision (2).
SECTION 18. Tennessee Code Annotated, Section 13-7-207, is amended by adding
the following as a new subsection (b):
(b)
(1) A local government may, by ordinance, delegate initial jurisdiction
over specified special exceptions, for interpretation of the map, or for decisions
upon other special questions upon which the board of appeals is authorized by

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such ordinance to pass, to the local building commissioner or other
administrative official.
(2) For matters delegated pursuant to subdivision (b)(1):
(A) The board's jurisdiction is appellate only;
(B) The local building official or other administrative official shall
make the initial ruling based on the criteria set forth in the ordinance; and
(C) The delegation ordinance must specify which special
exceptions have been delegated to the local building commissioner or
other administrative official.
(3) The ordinance must include specific and objective standards by which
special exceptions are evaluated.
(4) A request for a special exception must not be denied on the basis of
health, safety, or general welfare, unless those bases are defined in the
ordinance.
(5) For any request for a special exception, or request for interpretation
of the map, the local building commissioner or other administrative official to
whom jurisdiction has been delegated must render a decision within one hundred
twenty (120) days of submission of a complete application, and the board must
render a decision within one hundred twenty (120) days of the filing of an appeal.
An applicant may consent to an extension or waive these deadlines. An
application is deemed to be approved if the local building commissioner, other
administrative official, or board fails to approve, deny, or extend with consent the
application within the required time period.
SECTION 19. This act takes effect on July 1, 2025, the public welfare requiring it.