USA - ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser and Katie Sinclair, Dentons
ous lakes and shorelines in Alabama remained, as these desirable areas represented more affordable vacation spots compared to pricier alternatives. Significant Deals in 2023 Major companies with existing industrial and dis - tribution hub facilities in Alabama (such as Maz - da Toyota, Mercedes-Benz, Hyundai, and Ama - zon) have grown Alabama operations through increased development. Huntsville, Alabama’s largest and fastest growing city, has been named a “real estate market to watch” by the National Association of Realtors, and continues to grow. With the ongoing midtown developments, and with additional renovation, restoration, and devel- opment to the historic AG Gaston Motel, South - town Court, Frank Nelson Building, Birmingham Building Trades Tower, and The Hardwick, there are many notable Birmingham projects. Luxury multifamily and commercial building opportu - nities are still ongoing, as downtown and met - ropolitan areas of Birmingham, Huntsville and other cities increasingly gain more attention. These types of projects and large, in-progress construction will likely generate additional real estate investment in 2024. 1.3 Proposals for Reform Broker Legislation (National Association of Realtors) In the residential real estate market, the National Association of Realtors came under fire in 2023, with multiple lawsuits being focused on the com - mission paid by the homeowner seller in residen - tial transactions which is divided among brokers for both buyer and seller in such transactions. A settlement in early 2024 could result in elimi - nating such commissions, which commonly fall around 6% of the purchase price. At this point, it is unclear how this legislation and trend toward
eliminating anti-competition of broker fees and commission will affect the commercial real estate industry specifically. The Corporate Transparency Act (CTA) The CTA became effective on 1 January 2024, requiring entities to report information, includ - ing specific beneficial ownership information, to FinCEN (the US Department of Treasury’s Financial Crimes Enforcement Network). Com - munity associations, such as homeowners or condominium associations, are likely required to provide such reporting despite operating as not-for-profit entities. Applicability of the CTA and the specific report - ing requirements should be reviewed to confirm that such community associations are in compli - ance. Challenges to the constitutionality of the CTA are currently ongoing in the first few months of 2024. In March 2024, the US District Court for the Northern District of Alabama declared the CTA unconstitutional, and this ruling is on appeal. The Alabama Property Protection Act (APPA) Effective on 1 August 2023, the APPA prohibits foreign principals (as defined in the APPA) from China (not including Taiwan), Iran, North Korea, and Russia from owning: • agricultural and forest property; or • property within ten miles of a military installa - tion or critical infrastructure facility. See Section 35-1-1.1. A list of what qualifies as a critical infrastructure facility is provided in Section 35-1-1.1(b)(2), and Section 35-1-1.1(d) provides an exception for existing owners.
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