USA - ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser and Katie Sinclair, Dentons
• review of relevant zoning, permitting, or plat - ting requirements. It may also include an examination of the prop - erty’s environmental condition. Lawyers are typically assigned review and/or cure of title and survey matters, and are often involved in addressing permitting and platting requirements as well as the resolution of envi - ronmental matters, if applicable. The allocation of attorney versus client responsibility continues to vary considerably based on the client’s size and needs. 2.5 Typical Representations and Warranties Purchase and sale agreements (PSAs) may vary from those providing for the sale of property in its “as is, where is” condition, with no represen - tations to PSAs containing significant represen - tations and warranties, such as the following: • the seller’s ownership of title; • the seller’s authority to sell the property; • that no violations of law are present on the property; • that the property has no tenants in posses - sion (except as noted); • the seller’s warranty to satisfy mechanics’ liens; • environmental matters; • zoning and permitting status; and • the absence of pending litigation and con - demnation. Alabama law provides for an implied warranty of fitness and habitability for the sale of new resi - dential property; however, the doctrine of caveat emptor generally applies – see Sims v Lewis, 374 So 2d 298, 303 (Alabama 1979).
A buyer’s customary remedies for a seller’s misrepresentation are based on the contract’s terms. The seller’s liability for such a breach can be negotiated and is often capped at a specific dollar amount, which varies. 2.6 Important Areas of Law for Investors Foreign companies are not required to register with the state unless they are considered to be transacting business in Alabama (Section 10A-1- 7.01). Foreign companies must, however, com - ply with all federal laws relating to the transfer of property to a foreign investor, including FIRPTA, etc. Additionally, foreign investors should con - sider the tax implications of such a transaction when purchasing real estate (see 8. Tax ). Recent changes to CFIUS regulations have had some impact in Alabama. 2.7 Soil Pollution or Environmental Contamination Alabama’s laws generally conform to federal environmental laws. Because environmental statutes often hold the current owner strictly lia - ble for the costs of remediation, commercial real estate buyers and sellers may contractually allo - cate environmental liability. Buyers and sellers will negotiate the terms of any “as is” language, indemnification for environmental matters, and any release of environmental claims between the parties. Negotiated terms vary between contracts, with sellers favoring caps on their liability and buy - ers preferring a complete indemnification from sellers. Additionally, many buyers wish to limit their liability by satisfying the requirements for the “innocent landowner defense” against CER - CLA liability (discussed further in 3.8 Lender’s Liability Under Environmental Laws ).
1119 CHAMBERS.COM
Powered by FlippingBook