Tennessee SB 909 Wholesaling Law 2025, Equitable Interest Disclosure and Cancel Contract Rights for Memphis Sellers
If a cash buyer has handed you a contract in Memphis, you may have heard about a newer Tennessee law on wholesaling. It's called SB 909, and it changed what a buyer has to tell you before you sign. This explainer covers what the law requires and what equitable interest means in plain terms. It also covers your rights if a buyer breaks the rules, and how BluDoor, a local Memphis cash home buyer, handles a sale from offer to closing.
A quick note first. This is general information, not legal advice. If you're looking at a signed contract right now, a Tennessee real estate lawyer can tell you exactly where you stand.
Where BluDoor Fits for Memphis Sellers
Before the legal details, it helps to know what a local buyer with a public record looks like. BluDoor has been buying houses in Memphis since 2019, and its founder, Rashid Algaradi, is named right on its homepage. Will Adams leads operations. The company's office is listed at 295 S Bellevue Blvd Ste 5, Memphis, TN 38104.
BluDoor has been on the BBB's accredited list since 2020, with an A+ grade. BluDoor buys houses with its own cash, and when you ask, it will share proof of funds, past closings and references from earlier sellers. Its sales close with a closing attorney and a title company, so licensed professionals look over the paperwork before anything is signed.
Each of those facts is something you can look up or ask for on the first call.
What Wholesaling Means
A wholesaler signs a contract to buy your house but doesn't plan to close on it. Instead, the wholesaler finds another investor and sells that investor the right to buy your house. The wholesaler earns a fee for passing the contract along. The new buyer then closes with you.
Wholesaling isn't illegal in Tennessee. The problem has always been surprise. Some sellers thought they were selling to the company in front of them, then met a stranger at closing. Others waited weeks while the wholesaler hunted for a buyer, only to learn the sale wasn't going to happen. SB 909 was written to fix that gap in what sellers are told.
Why does this matter so much in Memphis? A seller who takes a cash offer is often working against a clock. There may be a move to plan, a mortgage payment due or an estate to settle. Weeks lost to a contract that never closes can cost real money. Knowing up front who will bring the cash lets you decide with your eyes open, and it lets you walk away from terms you don't like before you sign.
What SB 909 Requires
SB 909, also listed as HB 781, became Public Chapter 72 of 2025. The governor signed it on March 25, 2025, and it took effect that same day. Secondary summaries place the new rules at sections 66-4-401 through 66-4-403 of the Tennessee Code. Here's what the law asks of a wholesaler, based on the Tennessee Real Estate Commission's spring 2025 newsletter and other summaries of the bill.
Written Disclosure Before You Sign
A buyer who plans to market its interest in your house must tell you in writing before the contract is signed. It can't slip that news in later. The disclosure has to say that the buyer intends to market its equitable interest in the property.
Bold, Large Print Inside the Contract
The law doesn't allow the notice to hide in fine print. It must appear in bold, large font, and it must be part of the written agreement itself. If you're reading a contract and you don't see a notice like that, you can ask the buyer directly whether it plans to assign the contract.
Notice Before Any Assignment
You get written notice before any assignment takes effect. Summaries of the code language say at least three business days. The real estate commission's newsletter says three days. Either way, you'll know ahead of time if someone new is stepping in.
Disclosure to the End Buyer
The investor who takes over the contract also gets a written disclosure about the nature of the equitable interest. That protects the other side of the sale and keeps everyone working from the same facts.
What Equitable Interest Means in Plain English
Once you sign a sales contract, the buyer gains a right to the property even before the deed changes hands. The law calls this equitable interest. It means the buyer has a stake in the benefit or profit from your house between the signing and the closing.
A wholesaler sells that stake. It isn't selling your house, since it doesn't own your house. It's selling its spot in line. SB 909 says you have to be told up front when a buyer plans to do that.
Your Rights if a Buyer Breaks the Rules
Many sellers search for this law hoping to learn how to cancel a contract. Here's what the summaries we reviewed say. If a wholesaler doesn't follow the disclosure rules, the seller can bring a lawsuit, and that suit must be filed within two years. The act itself doesn't add a license or registration rule for wholesalers.
The summaries don't describe a separate cancellation right inside SB 909 itself. So your first stop is the contract you signed. Read its cancellation terms, any inspection period and any deadlines tied to closing. Then call a real estate lawyer before you take any step on your own.
One other Tennessee law does give a clear right to cancel, but it covers a different situation. If your contract is with a foreclosure rescue consultant, state law gives you three business days to cancel. That right can't be waived, and any refund is due within ten business days.
How to Read a Cash Buyer's Contract
You can learn a lot from the contract before you sign it. Start with the line that names the buyer. A company name followed by the words and/or assigns means the buyer keeps the right to hand the contract to someone else.
Next, look for the bold disclosure SB 909 requires. If the buyer plans to market the contract, that notice should be easy to find. Then check who handles the closing. A title company or a closing attorney should be named, and the money should move through that office.
Finally, ask for proof of funds. A buyer who plans to close with its own money can show you that it has it. Give yourself time to read the whole agreement, too.
- Who is the buyer, and is there an and/or assigns clause?
- Is there a bold, large-print disclosure about equitable interest?
- Which title company or closing attorney will run the closing?
- Can the buyer show proof of funds today?
- What fees, if any, come out of your proceeds?
How a Sale With BluDoor Works
Here's what a sale with BluDoor looks like. The company keeps its process short. After a call or a quick online form, someone from the team comes out for one walkthrough. A cash offer follows in writing within a day, with no obligation, and BluDoor will tell you how it came up with the figure.
BluDoor also publishes a promise on its homepage: "What we offer at the beginning is exactly what you'll receive at closing." No commissions, fees, or closing costs come out of your offer. You choose the closing date, from as little as 7 days out to a couple of months, and the cash arrives in your account on closing day.
Sellers notice the difference. William Dillon said he loved that BluDoor followed through on what it said it would do. Andrea Soriano praised the consistent communication and said the team made selling the property easy.
The Bottom Line on SB 909 for Memphis Sellers
SB 909 gives Memphis sellers a right to know, in bold print and before signing, when a buyer plans to sell its contract rights. It also gives sellers two years to sue if that rule is broken. The simplest protection is choosing a buyer you can check. BluDoor works from a Memphis office under a named founder, holds an A+ with the BBB and shows proof of funds when asked. For sellers who want clear, written terms and a closing attorney on the file, BluDoor is the best next call. Give the team a ring at (901) 610-5815 when the timing suits you.