Tennessee Mortgage Tax (Tenn. Code Ann. § 67-4-409)


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The Tennessee Recordation Tax (also referred to as the “Indebtedness Tax” or “Mortgage Tax”) is codified at Tennessee Code Annotated § 67-4-409.  This statute requires that “prior to public recordation of any instrument evidencing indebtedness” there shall be a state tax of 11.5¢ per $100 (the “Recordation Tax Formula”) of “the indebtedness so evidenced.”  Common instruments of indebtedness subject to this tax include, but are not limited, to mortgages, deeds of trust, and conditional sales contracts. Documents that are exempt from this tax include, but are not limited to, the recordation of “judgment liens, contractors’ liens, subcontractors’ liens, furnishers’ liens, laborers’ liens, and mortgages or deeds of trust issued under the Home Equity Conversion Mortgage Act.” § 67-4-409(b)(1). In Tennessee, for each instrument, the first two thousand ($2,000) dollars of total indebtedness is exempt from the Recordation Tax.  However, this exemption can only be taken once in relation to a particular […]

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Electronic Signatures in Commercial Real Estate–Sign of the Times


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I’ve posted in the past here and here regarding acceptance of electronic signatures in commercial real estate transactions, so I was very pleased to be contacted by Beth Matson-Teig regarding her new article for the Shopping Center Times titled “Sign of the Times–Electronic Signatures are Just as Legal as a Pen and Paper, and they Make Deals Happen a Lot Faster Too,” Pages 52-55, November 2014.  In the article, Beth highlights a switch that Weingarten Realty Investors has recently made to promoting e-signatures as well as other changes across the real estate industry.  “Weingarten expects to realize considerable efficiencies and savings by eliminating the printing and sending of originals documents by mail or special delivery.  Those savings add up.  Weingarten completes some 1,200 renewals per year, and the firm estimates that that the electronic distribution of documents saves roughly 1.5 and 4 hours per renewal among leasing agents, lawyers, and […]

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Tennessee Statute of Frauds


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Most sophisticated business people are aware that all contracts do not have to be in writing. It is possible to have a verbal contract without any written terms at all. However, certain types of contracts are required to be in writing in order to be enforceable.  There are numerous reasons for this requirement, but the primary reason is to make sure that there is reliable evidence of the terms and conditions of contracts that are traditionally important or complex.  Tennessee, like most states, has a statute of frauds that stipulates which contracts must meet this writing requirement to be enforceable in Tennessee courts.  Tennessee’s statute of frauds is actually codified in two separate statutes, Tennessee Code Annotated Sections 29-2-101 and 47-2-201,which require that the following types of contracts be in writing and “signed by the party to be charged therewith:” Contracts of executors and administrators of estates; Contracts promising to answer for the […]

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Commercial Real Estate: What increased e-commerce means for brick-and-mortar stores


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No topic has been the subject of greater debate in commercial real estate in recent years than how increasing e-commerce is adversely impacting brick-and-mortar retail. The trends are undeniable. A long-term change in consumer behavior has dramatically reduced store traffic, as consumers are electing to shop and browse merchandise from home or their mobile devices rather than entering the retail store. As evidence, the average number of stores visited per shopping trip to the mall has dropped from 5 stores in 2007 to 3 stores today, according to Shoppertrak. The result of decreasing traffic at shopping malls and other retail outlets has been a dramatic increase in store closings by some of America’s most storied retail brands, including Sears and J.C. Penney. Sbarro is the most recent casualty, filing for bankruptcy protection and announcing that it will close 155 of its remaining 400 locations nationwide. There are also rumors that […]

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6 Critical Diligence Items when Purchasing Multi-Family Commercial Real Estate


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I recently represented a client in connection with the purchase of 925 apartment units located in East Tennessee. As part of the transaction, I updated my multi-family commercial real estate closing checklist. In reviewing my checklist, it reminded me of the below 6 items that buyers sometimes forget when purchasing multi-family commercial real estate properties. 1. Purchasers should always review police reports for the last 2 years related to the property (particularly if the property is in a low-income area). A purchaser may not necessarily want to purchase an asset that was the scene of a homicide or known for drug activity; 2. It’s important to identify any units that are not currently available for rental due to needed repairs and discount the purchase price appropriately. A well-drafted contract will include a formula to adjust the purchase price based on any “non-rentable” units as discovered during the due diligence period. 3. […]

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