USA – ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Bradshaw, Dentons
2.2 Laws Applicable to Transfer of Title A conveyance of real property must generally be written and signed by all parties, with witnesses to the signatures (Section 35-4-20), and must contain a valid property description. Convey - ance instruments must: • provide the instrument preparer’s name and address (Section 35-4-110); • list the grantor’s marital status and conveyed property’s homestead status (Section 35-4- 73); and • provide ad valorem tax notice, typically using Real Estate Sales Validation Form RT-1 (Sec - tion 40-22-1). See also 8.1 VAT and Sales Tax . Residential conveyances require special disclo - sures, but generally there are no special laws regarding the transfer of real property based on use. However, the parties to a transaction or locality rules may require additional provisions to be included in the deed or in a separate docu - ment recorded with the deed at closing. Buyers should still take additional precautions to ensure that the property’s proposed use com - plies with relevant local rules (see 2.8 Permitted Uses of Real Estate Under Zoning and Plan- ning Law ). 2.3 Effecting Lawful and Proper Transfer of Title Transfer of title is generally effectuated by a deed, usually taking the form of a general war - ranty deed, statutory warranty deed (Section 35-4-271) or quitclaim deed. In commercial transactions, the most common form of deed is the statutory warranty deed. Other forms of con - veyancing and/or transfer or occupancy instru - ments include:
• ground leases; • leases; • judicial decrees vesting title to real property; • foreclosure deeds; • tax deeds; • sheriff’s deeds; and • deeds in lieu of foreclosure. Conveyancing instruments must be recorded in the office of the judge of probate for the county in which the property resides (Section 35-4-50). Alabama uses a hybrid “race-notice” system where a purchaser takes priority over all prior purchasers of which they have no notice at the time they record their conveyance – eg, see Nelson v Barnett Recovery Corp, 652 So 2d 279, 281 (Alabama Court of Civil Appeal 1994) regarding Section 35-4-90. 2.4 Real Estate Due Diligence In commercial transactions, due diligence typi - cally involves: • review of title and survey matters; • physical property inspection; • financial and other property records inspec - tion; and • 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.
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