How to Syndicate an Apartment Deal in Tennessee: A Sponsor Guide
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To syndicate an apartment deal in Tennessee, you form the deal LLC (or register an outside LLC with the Tennessee Secretary of State), raise under Rule 506(b) or 506(c), and file a Form D notice with a $500 fee through NASAA's EFD, with a late fee if it is more than 31 days after the first Tennessee sale. Tennessee also charges an LLC a franchise tax and an excise tax, and its landlord and tenant act applies only in larger counties.
This is the Tennessee version of our general syndication guide. It covers what changes when the building, the investors or both are in Tennessee. It is general information, not legal advice.
What is the Tennessee Rule 506 notice filing?
Tennessee treats Rule 506 interests as federal covered securities and wants a notice. You file the SEC Form D copy and the fee through the NASAA Electronic Filing Depository (EFD) for the Tennessee Securities Division. DoorRaise's state data, from NASAA's fee schedule, lists the fee as $500 and a $1,000 late fee, with more after a year, if the filing comes more than 31 days after the first sale in the state. Most sponsors use the standard 15 day clock across all states rather than track exceptions. EFD shows the exact amount before you pay, and that amount wins. See blue sky notice filings and blue sky fees by state.
How do you form the deal LLC in Tennessee?
A Tennessee LLC is formed by filing Articles of Organization with the Secretary of State. The published fee is $50 per member, with a $300 minimum and a $3,000 maximum, and the annual report and the foreign LLC Certificate of Authority use the same per member scale. For a syndication, "member" matters: the count of members can raise the cost, so ask whether the fee counts the manager and each investor, and confirm on the Secretary of State fee schedule before you file. See forming an LLC for a syndication and foreign qualification in the property state.
What are the Tennessee franchise and excise taxes?
Tennessee has no tax on wages, but it taxes business entities. The excise tax is 6.5% of net earnings from business done in the state, and the franchise tax is 0.25% of net worth with a $100 minimum, after a 2024 law dropped the real and tangible property measure. An LLC, including a deal LLC that owns an apartment building, is generally subject to both, so build them into the operating budget and the investor distribution forecast. The Department of Revenue explains exceptions; ask your CPA whether any apply to your structure.
What Tennessee landlord and tenant rules should a sponsor know?
Tennessee's Uniform Residential Landlord and Tenant Act (T.C.A. 66-28-101 and following) applies only in counties with a population over 75,000, which includes the largest apartment markets; elsewhere, common law and the lease govern. Where URLTA applies, a landlord must return a security deposit within 30 days (66-28-301), a tenant gets a 14 day notice to pay before a landlord can terminate for nonpayment (66-28-505), and a monthly tenancy ends with 30 days' notice. Tennessee also bars local rent control (66-35-102). Confirm the county of your building before you assume URLTA applies. See rent control laws for apartment investors.
How does Tennessee property tax work when an apartment building sells?
Tennessee counties reappraise on a cycle of four to six years set by the State Board of Equalization, and the assessed value of commercial property, which includes apartments, is a percentage of appraised value. A sale does not by itself reset the value, but the assessor can use your purchase price at the next reappraisal. Underwrite taxes off the purchase price and ask the county when its reappraisal falls. See property tax reassessment in apartment underwriting and appealing property tax on an apartment building.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings from their friends and followers under Rule 506(b) or 506(c), with verified accredited investors only. Investors fund by wire into escrow. By default DoorRaise files the property's state notice; on new deals, the first investor from another state pays that state's filing fee by card when they sign, and later investors from that state pay nothing. See pricing or how it works.
FAQ
How much is the Tennessee Rule 506 notice fee?
$500, per NASAA's fee schedule. EFD shows the final amount before you pay.
What is the Tennessee late fee?
DoorRaise's data lists $1,000 if the filing comes more than 31 days after the first sale, and more after a year.
Does Tennessee tax an LLC that owns an apartment building?
Generally yes: an excise tax on net earnings and a franchise tax on net worth. Ask a CPA about exceptions.
Does URLTA apply everywhere in Tennessee?
No. It applies only in counties above a population threshold.
Sources
- Tennessee Department of Commerce and Insurance: Securities Division
- NASAA: Form D fee schedule
- Tennessee Secretary of State: Business Services
- Tennessee Department of Revenue: franchise and excise tax
- Tennessee Code Annotated, Title 66, Chapter 28
This article is general information as of November 2026, not legal, tax or investment advice. State laws and fees change: confirm with the state agency and your own attorney before you file. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.