Real Property

Plain English Breakdown

The official source material does not provide specific details about the financial impact on state and local governments, leaving this as an open question.

Tennessee Private Property Vesting Rights Act

This bill requires Tennessee to provide just compensation to property owners if new land use regulations reduce the value of their property after they bought it.

What This Bill Does

• Gives property owners the right to receive money from the government if a new regulation lowers the value of their property after they purchased it.
• Exempts certain types of regulations, such as those for public health and safety or federal law compliance, from requiring compensation.
• Requires property owners to file a written demand within three years of when the regulation is enacted or affects them.
• Allows property owners to sue in circuit court if they do not receive compensation after 90 days of making their claim.
• Permits public entities to modify, remove, or waive regulations instead of paying compensation.

Who It Names or Affects

• Property owners who face new land use regulations that reduce the value of their property.
• Public entities responsible for enacting and enforcing land use regulations.

Terms To Know

just compensation

Money paid to a property owner when a regulation lowers the value of their property after they bought it.

land use regulation

A rule set by government that controls how land can be used or divided.

Limits and Unknowns

• The bill does not apply to regulations enacted before the owner acquired the property.
• It is unclear what specific financial impact this will have on state and local governments.
• The exact amount of compensation depends on the reduction in fair market value at the time of demand.

Official Summary Text

If the existing rights to use, divide, sell, or possess private real property or any interest in
such property
are reduced by the enactment or applicability of a land use regulation enacted by a public entity after the date the property has been acquired by the owner and such enactment or application has the effect of reducing the fair market value of the propert
y, then
this bill provides that
the property owner is entitled to just compensation from the public entity.
Such "j
ust compensation
"
is equal to
the reduction in the fair market value of the affected property interest resulting from enactment or application of the land use regulation as of the date the owner makes written demand for compensation
as described below. However, these provisions do not apply to
land use regulations
that do any of the following:



Restrict or prohibit activities commonly and historically recognized as public nuisances under common law. This
provision
must be construed narrowly in favor of a finding of compensation under this
bill.


Restrict or prohibit activities for the protection of public health and safety
.


To the extent the land use regulation is required to comply with federal law
.


Restrict or prohibit the use of a property for the purpose of selling pornography or performing nude dancing.


Enacted prior to the date of acquisition of the property by the property owner or a family member of the property owner who owned the subject property prior to acquisition or inheritance by the property owner, whichever occurred first.

This bill clarifies that the
public entity that enacted the land use regulation has the burden of demonstrating that the land use regulation
meets such an exemption.

STATUTE OF LIMITATIONS
–
WRITTEN DEMAND

This bill requires the
property owner
to
commence an action for just compensation
as described above
within three years of the enactment of the land use regulation or the date the property owner submits a land use application in which the land use regulation is an approval criterion, whichever is later. A written demand for just compensation made by th
e owner of the property pursuant to this
bill
is an exhaustion requirement that tolls the statute of limitations for 90 days or the length of time that it t
akes the public entity that enacted the land use law to deny the written demand, whichever is less.

CAUSE OF ACTION IN CIRCUIT COURT

If a land use regulation continues to apply to the subject property more than 90 days after the property owner has made written demand for compensation under this
bill
and compensation has not been paid, then
this bill provides that
the property owner
also
has a cause of action for compensation in the circuit court for the county in which the real property is located, and the property owner is entitled to reasonable attorney fees, expenses, and costs reasonably incurred to collect the compensation.

This bill clarifies that the
failure of a property owner to file an application for a land use permit with the local government is not grounds for dismissal, abatement, or delay of a compensation claim
under the paragraph above.

IN LIEU OF JUST COMPENSATION

In lieu of payment of just compensation,
this bill authorizes
the public entity responsible for enacting or enforcing the land use regulation
to
modify, remove, or waive the land use regulation to allow the property owner to use the property for a use permitted at the time the property owner acquired the property.
Such a
modification, removal, or waiver runs with the land.

ADDITIONAL REMEDIES

This bill clarifies that the
remedy created by this
bill
is in addition to any other remedy under state law or the Tennessee or United States constitutions and does not modify or replace any other remedy.

Current Bill Text

SENATE BILL 1908
By Stevens

HOUSE BILL 1837
By Hicks T
HB1837
011848
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 29,
Chapter 16, relative to private property protection.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Tennessee Private Property
Vesting Rights of 2026."
SECTION 2. Tennessee Code Annotated, Title 29, Chapter 16, Part 1, is amended by
adding the following as a new section:
29-16-127.
(a) If the existing rights to use, divide, sell, or possess private real property or
any interest therein are reduced by the enactment or applicability of a land use
regulation enacted by a public entity after the date the property has been acquired by the
owner and such enactment or application has the effect of reducing the fair market value
of the property, then the property owner is entitled to just compensation from the public
entity.
(b) Just compensation is equal to the reduction in the fair market value of the
affected property interest resulting from enactment or application of the land use
regulation as of the date the owner makes written demand for compensation under
subsection (d).
(c)
(1) Subsection (a) does not apply to land use regulations:
(A) Restricting or prohibiting activities commonly and historically
recognized as public nuisances under common law. This subdivision

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(c)(1)(A) must be construed narrowly in favor of a finding of compensation
under this section;
(B) Restricting or prohibiting activities for the protection of public
health and safety, such as fire and building codes, health and sanitation
regulations, solid or hazardous waste regulations, and pollution control
regulations;
(C) To the extent the land use regulation is required to comply
with federal law;
(D) Restricting or prohibiting the use of a property for the purpose
of selling pornography or performing nude dancing. This subdivision
(c)(1)(D) does not affect or alter rights provided by the Tennessee or
United States constitutions with respect to such activities; or
(E) Enacted prior to the date of acquisition of the property by the
property owner or a family member of the property owner who owned the
subject property prior to acquisition or inheritance by the property owner,
whichever occurred first.
(2) The public entity that enacted the land use regulation has the burden
of demonstrating that the land use regulation is exempt pursuant to this
subsection (c).
(d) The property owner must commence an action for just compensation under
subsection (a) within three (3) years of the enactment of the land use regulation or the
date the property owner submits a land use application in which the land use regulation
is an approval criterion, whichever is later. A written demand for just compensation
made by the owner of the property pursuant to this section is an exhaustion requirement
that tolls the statute of limitations for ninety (90) days or the length of time that it takes

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the public entity that enacted the land use law to deny the written demand, whichever is
less.
(e) If a land use regulation continues to apply to the subject property more than
ninety (90) days after the property owner has made written demand for compensation
under this section and compensation has not been paid, then the property owner has a
cause of action for compensation under this section in the circuit court for the county in
which the real property is located, and the property owner is entitled to reasonable
attorney fees, expenses, and costs reasonably incurred to collect the compensation.
(f) The failure of a property owner to file an application for a land use permit with
the local government is not grounds for dismissal, abatement, or delay of a
compensation claim under subsection (e).
(g) In lieu of payment of just compensation, the public entity responsible for
enacting or enforcing the land use regulation may modify, remove, or waive the land use
regulation to allow the property owner to use the property for a use permitted at the time
the property owner acquired the property. A modification, removal, or waiver of a land
use regulation made pursuant to a demand by a property owner pursuant to this section
runs with the land.
(h) As used in this section:
(1) "Family member" includes the spouse, child, stepchild, child-in-law,
parent, stepparent, parent-in-law, sibling, stepsibling, sibling-in-law, aunt, uncle,
niece, nephew, grandparent, or grandchild of the owner of the property, an estate
of any family member, or a legal entity owned by any family member or
combination of family members or the owner of the property;

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(2) "Land use regulation" means a statute, rule, ordinance, resolution, or
law enacted by this state or a political subdivision of this state that regulates the
use or division of land or any interest in land;
(3) "Property owner" means the present owner of the property or an
interest therein; and
(4) "Public entity" means this state, a state agency, a local government, a
local government instrumentality, or any other authority, board, district,
instrumentality, or entity created by this state, a state agency, local government,
a local government instrumentality, or combination thereof.
(i) The remedy created by this section is in addition to any other remedy under
state law or the Tennessee or United States constitutions and does not modify or
replace any other remedy.
SECTION 3. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
SECTION 4. This act takes effect upon becoming a law, the public welfare requiring it.