Many Counties and Municipalities in Tennessee have opted out of the Building Codes. This means that those areas do not require you to obtain a Building Permit to build a home. You are still required to obtain an Electrical and Septic Permit from the State unless local jurisdictions have their own Building Inspections and Permitting. Health Departments without their own Permitting or regulations require you to seek State Approval for Septic or waste disposal through the TN Department of Environment.
If you are planning to Convert a Shed to a House in the State Of Tennessee, where local jurisdictions do not prohibit it, refer to the below link for the State law governing this. If you are planning to go “Off Grid” without the need for electrical or septic this applies to permitting. Tennessee does allow the use of Composting Toilets as long as they are certified and you have potable running water.
If you would like to review regulations for another state, click here