Nashville Fire Damage Rules: The Permit and the Charter

What the Permit Is

Short term rental property in Nashville is governed by the Metropolitan Code, with ordinance BL2020-187 as the current law. A permit is a use permit obtained from the zoning administrator as an accessory use to the primary residential use under section 17.16.250.E, and the permitting requirements sit at section 6.28.030.

There are two classes. Owner-occupied requires the owner to permanently reside at the property and to be a natural person or persons; limited liability companies, corporations, trusts, partnerships, joint ventures and other entities are ineligible. Not owner-occupied covers everything else and is where the constraints bite.

Only one permit is issued per lot in single-family and two-family zoning districts, and the ownership of a two-family unit cannot be divided.

Is a Permit Attached to the Property or the Person?

The person, and this is the point everything else follows from. The code provides that a permit shall not be transferred or assigned to another individual, person, entity or address, and that it does not authorise anyone other than the person named in it to operate. A buyer inherits the building and not the licence.

The Renewal, and Why a Fire Threatens It

A permit is valid for twelve months from approval and may be renewed annually. Renewal is by submission of a $313.00 permit fee, proof of current property insurance, and proof of hotel occupancy tax payment.

Read those three requirements against a property that has just burned. The fee is straightforward. Proof of current insurance can become complicated where a policy has been affected by a claim. Proof of hotel occupancy tax payment concerns a property that has not been taking guests.

What Actually Happens If the Renewal Is Missed?

The permit ends, and whether it can be replaced depends entirely on the zoning. In districts where new not owner-occupied permits are no longer issued, a lapsed permit is not a delay, it is the end of the use. That is why the renewal date matters more than almost anything else on a damaged Nashville rental.

We publish no advice on whether a particular permit can be renewed, extended or reinstated after a fire. Metro Codes administers the scheme and its staff are the correct source. Ask them before the date rather than after it.

Where New Permits Cannot Be Had

The constraint that makes an existing permit valuable. New not owner-occupied permits are not permitted in AR2A, R, RS or RM zoned properties. Existing permit holders in those districts may be eligible to apply for renewals, and the code is explicit that those permits are not transferable if the property is sold or transferred.

Not owner-occupied use remains available with conditions in a range of mixed use, office, commercial and downtown districts. For Specific Plan zoned properties and those within a Planned Unit Development, permits are issued only if the SP or PUD allows it, which is a question for the Planning Commission rather than a matter of general rule.

So an Existing Permit in a Residential Zone Is a Legacy Asset?

In practical terms yes, and one with two separate ways of ending. It ends if it is not renewed, and it ends on sale because it cannot be transferred. An owner who understood only the second of those can still lose it to the first while deciding what to do about the fire.

Other Conditions Worth Knowing

A permit may be revoked upon determination of three violations of any ordinance or law of general application. The maximum stay for any guest is thirty consecutive days, and no compensation may be received for occupancy of less than twenty-four hours. The permit holder is responsible for collecting and remitting room, occupancy and sales taxes, and for the activity of guests. A local responsible party must be posted within the unit and must answer calls twenty-four hours a day, seven days a week.

Short term rental properties must meet all applicable requirements of state and local building and fire safety codes. Appeals from decisions of the zoning administrator go to the Short Term Rental Appeals Board.

Tennessee's Short-Term Rental Unit Act, at sections 13-7-601 to 13-7-606 of the Tennessee Code, sets the framework within which Metro operates.

The Charter, and Why It Matters Here

The Metropolitan Charter was passed on 28 June 1962, consolidating the City of Nashville and Davidson County into the first fully unified city and county government in the United States.

The charter created two service districts to allow a differential in tax levels. The Urban Services District receives the full range of municipal services. The General Services District, the area beyond that boundary, pays a lower rate, and owners there arrange individually for services such as refuse collection, street lighting and sidewalks.

Tennessee assesses residential property at twenty-five per cent of appraised value, and Davidson County reappraises on a four-year cycle, with reappraisals in 2009, 2013 and 2017 among the recent ones. After a reappraisal the certified tax rate mechanism adjusts the rate, and the Council may hold a public hearing and raise it, which has happened five times.

Six Cities Inside the County

Six incorporated communities were allowed to retain their charters when Metro was formed and remain separate today: Belle Meade, Berry Hill, Forest Hills, Oak Hill, Goodlettsville and Ridgetop. A seventh, Lakewood, dissolved its charter following a referendum on 15 March 2011.

These satellite cities keep their own police forces and, importantly here, their own zoning regulations, while remaining part of Metro Nashville and Davidson County for county-level purposes. Their properties pay the General Services District rate plus the satellite city's own rate, if any.

Does That Change the Permit Position?

It can, because zoning is a satellite city function and the short term rental scheme is built on zoning districts. An owner inside one of the six should ask that city rather than assuming the Metro position applies, and should establish which authority governs before commissioning anything.

Your Options, Compared

Repair and keep operating. Preserves the permit if the renewal is met, and on a legacy permit in a residential zone that is frequently the most valuable route available.

Repair and sell afterwards. The permit does not travel, so this recovers the building's value and not the licence's.

Sell as it stands. Same position on the permit, sooner. What you receive depends on whether the buyer can obtain a permit of their own.

Do nothing. The one route that can lose the licence without recovering anything.

Across Nashville and the County

Housing age and permit density vary sharply. The east side is covered under East Nashville, the historic north under Germantown and North Nashville, and the west under The Nations and West Nashville. Further pages deal with South Nashville and Wedgewood-Houston, Antioch, Donelson and southeast Davidson and the satellite cities and outer county.

The full index is on our service area index.

Rules Questions

When Exactly Does My Permit Expire?

Twelve months from approval, and Metro Codes holds the date. It is worth confirming rather than estimating, because the consequence of being wrong runs one way only.

Can a Buyer Take Over My Permit?

No. It is not transferable to another individual, person, entity or address. They must apply in their own name and eligibility depends on the zoning.

I Am in One of the Satellite Cities.

Then ask that city, because zoning is theirs. The Metro position is a guide rather than an answer inside those six.

Primary Sources

Metropolitan Code section 6.28.030 — permit types, renewal, transfer prohibition and revocation
Metropolitan Code sections 17.16.250 and 17.16.070 — zoning treatment of short term rental property
Ordinance BL2020-187 — the current governing law; earlier ordinances BL2016-381 and BL2016-492
Tennessee Code sections 13-7-601 to 13-7-606 — Short-Term Rental Unit Act
Metropolitan Charter and Davidson County Property Assessor — service districts and satellite cities