Horizontal Property Regime in Tennessee: A Guide for Real Estate Investors & Developers

In Tennessee’s real estate development scene, the term Horizontal Property Regime (HPR) has become a buzzword—especially in booming markets like Nashville.

A Horizontal Property Regime in Tennessee is a legal framework that allows a single piece of property to be divided into multiple individually owned units without formally subdividing the land.

Real estate investors and developers often use HPRs to maximize a property’s value by building and selling multiple homes on one lot, bypassing the lengthy public hearings and red tape of traditional subdivision.

What Is a Horizontal Property Regime (HPR) in Tennessee?

Under Tennessee law (the Horizontal Property Act, T.C.A. § 66-27-101 et seq.), an HPR is a legal mechanism that lets property owners or developers create multiple saleable units on a single parcel without subdividing the land.

Essentially, the owner records a master deed (or similar declaration) expressing the intent to submit the property to a horizontal property regime, which legally establishes separate units on that one tract.

Each home or unit in an HPR has its own deed and can be bought or sold independently, even though all units share the original lot.

In practice, HPRs often take the form of two to four houses (attached townhomes or detached “tall-skinny” homes) built on a lot that originally had a single house.

The land itself isn’t split into new lots; instead, the unit owners co-own the land in common while enjoying exclusive ownership of their individual homes. HPRs are essentially Tennessee’s spin on condominium law, but unlike a high-rise condo, they allow side-by-side or detached homes on one lot to be deeded separately (hence the term “horizontal” property regime).

Why Do Investors and Developers Use HPRs?

Investors and developers in Tennessee real estate leverage HPRs to increase housing density and value on desirable properties. By using a horizontal property regime, a developer can build (for example) two modern homes on a lot zoned for a duplex, without going through a full subdivision process that might require rezoning or public hearings.

Further, HPRs avoid the costly and time-consuming subdivision regulations – there’s no need to carve a lot into separate parcels or face lengthy approval meetings. For a real estate investor, this means a faster project turnaround and the ability to sell multiple units individually, often at a great profit.

Key Documents Required to Establish an HPR

Establishing a Horizontal Property Regime in Tennessee involves preparing and recording several important documents. The primary documents include:

• Master Deed (Declaration): The master deed (or declaration) is the foundational document that formally declares the property as an HPR. It provides a legal description of the land and building(s), the number of units, and detailed identification of each unit (e.g. unit size, location, number). The master deed also defines the common elements (areas shared by all units) and limited common elements (areas shared by some, like individual yards) as well as the private elements that belong exclusively to each unit. This document is drafted by an attorney and recorded with the county register to officially create the HPR.

  
  

• Plat or Site Plan: A surveyed plat (site plan) must be recorded alongside the master deed. This plan clearly maps out the HPR property, showing the boundaries of each unit, the lot as a whole, and all common or limited common areas.

  
  

• HOA Charter (Townhouse Corporation): Because HPR owners co-own common property, Tennessee law requires creating a homeowners’ association (often a nonprofit corporation) to manage the property. An HOA charter (sometimes called a townhouse corporation charter) is filed with the Tennessee Secretary of State to formally establish this association. Each unit owner becomes a member of the HOA (with a proportional membership share tied to their unit).

  
  

• Bylaws of the HOA: The bylaws are the rules governing how the HOA operates and how co-owners share responsibilities. Tennessee’s HPR law specifies certain provisions that the bylaws should include, such as the method of administration, how meetings and votes are conducted, maintenance of common elements, assessment of common expenses, etc.

  
  

• Attorney’s Certification: Tennessee’s Horizontal Property Act uniquely requires an attorney’s opinion/certification confirming that all the legal documents needed to create the HPR have been properly prepared and are included.

  
  

All of these HPR documents must be recorded in the county Register’s Office where the property is located to officially establish the horizontal property regime. Once recorded, the property is legally divided into the declared units, and those units can be sold or transferred just like any other real estate.

Our Firm’s HPR Services – Drafting, Filing, and Recording

Navigating the Horizontal Property Regime process can be complex, but our firm has the experience to handle HPRs from start to finish. We assist investors and developers by drafting the master deed and declaration, preparing the required plat in coordination with surveyors, forming the HOA (including the charter and bylaws), and obtaining the necessary attorney certifications.

We will file and record all HPR documents with the appropriate authorities, ensuring your horizontal property regime is properly established under Tennessee law. We can also advise on compliance with local zoning and guide you through any HPR-related nuances (like HOA management or lender concerns).

Call to Action – Get Help with Your HPR Project

If you’re considering an HPR for your next Tennessee real estate project, give us a call at (615) 852 - 7221 or book a free consultation online today. Our team can evaluate your property, explain the Horizontal Property Regime process in plain language, and handle all the legal paperwork to set up your HPR quickly and correctly. Don’t let the legal complexities intimidate you – with professional guidance, HPRs are a powerful tool to maximize your development’s potential. Contact us now to learn how we can help make your HPR project a success.

Disclaimer: This post is for general informational purposes and does not constitute legal advice. Consult a licensed attorney for advice on your specific situation.