Selling a Chattanooga Short-Term Rental or Fort Wood Student Rental

To sell rental property in Chattanooga, Tennessee, start with one question: what can the buyer legally do with the house after closing? For a short-term rental, the answer sits in the city's short-term vacation rental certificate (STVR) rules. For a long-term rental, it sits in the lease and in Tennessee's landlord-tenant law.

This guide covers both. It walks through the certificate rules as the City Code states them, the 2023 reform, and the taxes you carry until closing. It then covers student rentals beside the UTC campus, problem tenants, and three exits. If you are a tired landlord ready to sell, you can also review your Chattanooga cash buyer options first.

Can a buyer take over your Chattanooga STVR certificate?

A buyer can take over a valid Chattanooga STVR certificate for the same house, but the certificate can never move to a different address. The city's STVR page says a valid certificate "can be transferred to a new owner or applicant for that same property." It "cannot be transferred to a different property or a new address." The city posts a transfer application on the same page.

The City Code draws the same line. Section 38-90(d) says the certificate is "non-transferable to another site, property, or location." A change of ownership is allowed only if the transferring owner and the prior owners have gone at least one year without a revocation.

Three more rules shape what a transfer is worth to the person buying:

• A homestay means the owner lives there. A homestay must be the applicant's primary residence, at least 183 days a year (City Code 38-85). Residency is proved again at every annual renewal (38-89(c)(2)).
• Every STVR needs an agent. The owner names one agent who answers calls 24 hours a day and reaches the house within two hours of a city call (38-92).
• The certificate hangs inside the house. The current certificate must be posted within the rental (38-87). Its number must appear on every ad for the rental (38-90(b)).

A renewal also requires that the information in the original application has not changed during the prior period (38-91(b)(2)). Before you price the house around a transfer, ask the city's Land Development Office at (423) 643-5891 how the transfer affects the next renewal.

Chattanooga short-term vacation rental certificate (STVR) rules at a glance

Chattanooga sorts every STVR into two types, homestay and absentee, and the type decides where a certificate is allowed. Article XVII of the zoning chapter (City Code 38-83 to 38-95) sets the rules, and the city's STVR page restates them.

Three timing rules matter once a sale is in motion. Every application has a 60-day lifespan from submission to issuance, and the city rejects one left incomplete past that window (city STVR page). An owner whose house is rezoned to allow absentee rentals cannot apply for an absentee certificate for 18 months after the change takes effect (38-89(c)(4)(iv)).

Appeals of a denial or revocation go to the Board of Zoning Appeals within 60 days, then to Chancery Court. The city's page is plain about the Board's limits. It cannot grant an STVR "in a zone where the use is not legally allowed," and it cannot waive the 25 percent cap.

What did the 2023 reform change?

The 2023 reform closed residential zones to new absentee rentals and grandfathered the certificates that already existed. The City Council approved the rules on May 16, 2023 (NewsChannel 9, May 2023). The city said current permits could renew each year and "may be transferred between owners." Absentee rentals, the report said, "will not be permitted in a residential zone."

The same reform capped rentals in multi-family buildings at 25 percent of the units. It sent violations to an administrative hearing officer, who can charge up to $500 a day (NewsChannel 9, May 2023; Local 3 News, May 2023).

That history is why two similar houses on one street can sell very differently. One may hold a grandfathered absentee certificate that the code lets pass to a new owner. The house next door, with no certificate, cannot get a new absentee certificate in a residential zone at all (38-86(d)).

Outside city limits, Hamilton County runs its own STVR rules, including a 2024 ban on STVRs on residential lots under one acre that does not apply inside Chattanooga (NewsChannel 9, July 2024).

How to sell rental property in Chattanooga when the guest income may not transfer

To sell rental property in Chattanooga that runs as an STVR, price it as a house first and treat the certificate as a bonus that only some buyers can use. Run each type of buyer through the rules and the pool narrows:

• A buyer who will live there: can apply for a homestay where homestays are allowed, and must prove residency every year.
• A buyer who will not live there, in a residential zone: cannot get a new absentee certificate. A current grandfathered certificate on the house, moved through the transfer application, is the only path.
• A buyer in a zone that allows a hotel: can apply for an absentee certificate. The Fire Marshal and a city building inspector must inspect first (38-89(c)(3)).
• A buyer of a unit in a multi-unit building: runs into the 25 percent cap, which no appeal can lift.

Your booking history therefore proves little to many buyers. A lender values the house on comparable sales and condition. For citywide price and pace figures, see the Chattanooga housing market in 2026.

Older houses add one more layer. In the city's four local historic districts, new construction, additions, and demolition go to the Chattanooga Historic Zoning Commission, though a sale itself needs no review. Our guide to selling a house in a Chattanooga historic district covers that process.

The taxes and renewals you carry until closing

Until closing, you owe state sales tax and local hotel-motel tax on every short stay, plus the annual renewal if the certificate must stay alive. City Code 38-88(h) makes the certificate holder responsible for collecting and remitting room, occupancy, and sales taxes.

The tax lines

The Tennessee Department of Revenue says renting a room or lodging for a charge is subject to sales tax, and that includes houses (Short-Term Rentals tax manual, May 2023). The rate is the 7 percent state tax plus the local rate. Rooms rented to the same person for 90 or more continuous days are exempt (Tenn. Code Ann. § 67-6-205).

The Hamilton County Trustee oversees the hotel-motel occupancy taxes for the county and the City of Chattanooga. The Trustee's monthly return form lists a 4 percent county rate and a 4 percent city rate. Returns are due by the 20th of the month after collection, even in a month with no tax due. Confirm the current rates with the Trustee before you file the last return.

The certificate clock

The certificate is its own deadline. Renewal applications open 30 days before expiration, and a certificate more than 30 days past expiration cannot be renewed (38-91(f)). For an absentee certificate in a residential zone, a new application cannot replace a lapsed one. If a listing could run past the renewal date, budget the $250 or $500 renewal and file it on time.

The agent and the violation count

Your agent stays on call around the clock until the sale closes (38-92). Three documented violations tied to the rental can lead to revocation after a public hearing (38-90(e)). A revoked certificate bars a new one on that house for a year, and a revocation in the year before a sale also blocks a transfer (38-90(d)).

Selling a Fort Wood student rental with tenants in place

You can sell a Fort Wood student rental with tenants in place, and the leases and deposits pass to the buyer. The Fort Wood design guidelines place the district "on a sloping hillside next to the University of Tennessee-Chattanooga campus" (City of Chattanooga, 2014). The same guidelines note off-street lots for fraternity houses and apartment complexes. Student leases often follow the school calendar, so many turn over each summer.

The law that applies in Hamilton County

Tennessee's Uniform Residential Landlord and Tenant Act applies in counties with more than 75,000 people by the 2010 census (Tenn. Code Ann. § 66-28-102). Hamilton County is far above that line. A sale does not cancel a lease, so the buyer takes the house subject to each existing lease and its rent.

The Act also gives the seller a clean exit. A landlord who sells a rented house in good faith is relieved of liability for later events once two things happen (Tenn. Code Ann. § 66-28-305). The tenant gets written notice of the sale, and the security deposit transfers to the buyer.

Deposits and paperwork

Deposits must sit in an account used only for deposits, and tenants must be told where that account is (Tenn. Code Ann. § 66-28-301). A landlord who skipped that account and the required damage listing cannot keep any part of a deposit. At closing, hand the buyer each lease, each deposit amount, and the account record.

The summer turnover lets you sell occupied or sell during the empty gap. A buyer who takes tenants in place removes the need to time it.

What if a tenant stops paying before you sell?

If a tenant stops paying, Tennessee law lets you give a 14-day notice, and you can also sell the house with that tenant still in it. Under Tenn. Code Ann. § 66-28-505(a)(2), the lease can end if unpaid rent is not paid within 14 days after the tenant receives notice. If the same breach recurs within six months, the landlord may end the lease on at least 7 days' written notice.

A lease can also include a tenant's waiver of that notice, printed in 12-point bold type or larger (§ 66-28-505(b)). If the tenant stays after the lease ends, the landlord files a detainer warrant. General sessions and circuit courts hear these cases (Tenn. Code Ann. § 66-28-105).

The docket is busy. Legal Aid of East Tennessee attorneys reported 403 eviction cases filed in July 2024, and WDEF reported the local eviction rate at its highest in eight years (WDEF, December 2024).

Problem tenants do not have to be solved before a sale. Propcash buys with tenants in place, so no eviction is needed before you sell. Disclose any case already on file so the contract can account for it.

Three exits compared: keep operating, list, or sell direct

The three exits differ mostly in what you carry and who sets the date.

The Redfin figure is a citywide median for all sales, a year after the same measure sat at 58 days (Redfin, three months ending August 2026). For illustration only, a house that costs $2,500 a month to hold costs about $3,400 over 41 days. Use your own numbers.

Bookings need a plan either way. A stay booked after closing needs a valid certificate holder behind it. Unless the buyer has a transfer approved, stop taking reservations past a set date and close after the last guest checks out.

Listing can still net more when the house shows well, the certificate is current, and you can wait. A direct sale trades some price for a known date and no repairs. Propcash is a direct cash homebuyer that makes one cash offer based on local market data and shows how it got to the number. You sell as-is, pay no fees or commissions, and pick the closing date.

If listing fits your house better, Propcash will say so. We buy houses across Tennessee. When you are ready, you can get a cash offer on your Chattanooga rental with no obligation.

Frequently Asked Questions

Can I transfer my Chattanooga STVR certificate to the buyer?

Yes, a valid Chattanooga STVR certificate can transfer to a new owner for the same address, through the transfer application on the city's STVR page. City Code section 38-90(d) bars any move to another site. It allows a change of ownership only if no revocation occurred in the year before the transfer. A homestay certificate also requires the new owner to live in the house at least 183 days a year.

Can a buyer get a new absentee STVR certificate for a house in a Chattanooga residential zone?

No, a new absentee certificate is allowed only in mixed-use and commercial zones that allow a hotel, under City Code section 38-86(d). The Board of Zoning Appeals cannot grant an STVR in a zone where the use is not allowed. A buyer of a residential-zone house without a current certificate is buying a house to live in or to lease long term.

What happens if my STVR certificate expires while the house is listed?

You have a short window to fix it. Renewal applications open 30 days before expiration, and a certificate more than 30 days past expiration cannot be renewed (City Code section 38-91(f)). For an absentee certificate in a residential zone, a new application is not an option. A lapse there removes the short-term rental use from the house.

Do I owe hotel taxes on stays booked before I close?

Yes, the certificate holder is responsible for the taxes on every stay before closing (City Code section 38-88(h)). Stays shorter than 90 continuous days carry Tennessee's 7 percent state sales tax plus the local rate. The Hamilton County Trustee oversees the city and county hotel-motel taxes, with returns due by the 20th of the month after collection.

Can I sell a Fort Wood rental with student tenants still living there?

Yes, you can sell with the students in place. Tennessee's landlord-tenant act applies in Hamilton County, and the buyer takes the house subject to the existing leases. Once tenants get written notice of the sale and the deposits transfer to the buyer, the seller is relieved of liability for later events (Tenn. Code Ann. section 66-28-305). Propcash buys with tenants in place, so no eviction is needed before you sell.

How fast can I sell a Chattanooga rental for cash?

A direct cash sale can close in as few as 7 days through a title company or closing attorney. By comparison, Chattanooga houses sold after a median 41 days on the market in the three months ending August 2026, before closing time is added (Redfin). You can also set the closing after your last booked stay or the end of a lease.