Alabama dream property secured? Fantastic!
But hold the celebratory toast – a title search stands between you and closing. Here’s everything you need to know about title property searches in Alabama to avoid costly surprises and ensure you get what you paid for.
Let’s get into it.
How Far Back Do Title Searches Go in Alabama?
A typical Alabama title search goes back 40 to 60 years. Notably, there’s no fixed requirement for how far back a title search needs to go. Instead, established real estate practices, rather than strict laws, determine the search length.
As a result, you might find that your potential property needs a deeper search that goes back further or a more conservative search that only examines the last few decades.
Where Are Title Records Held?
Title records are held in the Probate Office in your property’s county. These records will reveal past owners, any outstanding liens (claims against the property), and other crucial details that could impact your purchase.
Understanding Different Ownership Types
Alabama recognizes different ways people can own property together. Understanding these is important since title searches may reveal past ownership structures that could impact your current purchase.
You’ll want to ensure that any co-ownership has been properly dissolved before proceeding with your purchase.
These are the most common types of joint ownership:
- Joint Tenancy
This form of ownership grants equal rights and responsibilities to all co-owners. For example, if someone co-owns with a friend, each would have the same rights to occupy, use, and sell the property.
- Joint Tenancy with Right of Survivorship
Similar to joint tenancy, but with a key difference. If one co-owner passes away, their ownership interest automatically transfers to the remaining owners. This ensures the property remains within the designated group.
- Tenancy in Common
This offers greater flexibility for co-ownership. Two or more people own the property, but each can have a different ownership percentage. Importantly, unlike joint tenancy, co-owners can independently sell their share without requiring consent from the others.
Spouses and Property Rights in Alabama
Another way to own property is with a spouse. Understanding a few things here could impact your sales. First, Alabama doesn’t recognize Curtsey and Dower laws. These old legal terms gave spouses automatic rights to a portion of the marital property.
The absence of these laws means that automatic entitlements do not apply, which can simplify the title search as there are fewer automatic claims to check against the property.
Second, Alabama is not a Community Property state. This means it doesn’t automatically consider all assets acquired during a marriage as jointly owned by both spouses. Only the name listed on the deed is considered the owner unless clear evidence or agreement suggests joint ownership.
However, Homestead Rights do apply in Alabama. Both spouses must agree to sell or mortgage the family home if you’re married.
This ensures that both spouses’ rights are considered in the transaction, adding an extra layer of protection but potentially complicating the sale if both parties disagree.
Understanding Liens in Alabama Title Searches
A crucial aspect of your Alabama title search involves identifying potential liens attached to the property. Alabama is a title theory state, meaning the title is presumed clear unless a lien is explicitly recorded.
Here’s a breakdown of some typical liens and the Statute of Limitations (the timeframe for enforcing a claim) that apply:
- Mortgages
Generally, after 20 years from the expiration date of a mortgage, the debt secured by that mortgage is presumed to be paid (with some exceptions).
- Estate/Inheritance Taxes
These can be attached as liens to the property and have a 20-year statute of limitations.
- Federal Judgment Liens and Federal tax liens
These have a 20-year statute of limitations, while federal tax liens have a 10-year and 30-day statute of limitations, respectively.
- Other Judgment Liens
These typically have a 10-year statute of limitations, although they can be renewed.
- State Tax Liens
These have a 10-year statute of limitations.
- UCC Financing Statements
These liens, typically used to secure business loans, have a 5-year statute of limitations.
- Mechanics Liens
These liens filed by contractors for unpaid work have a 6-month statute of limitations.
One important exception is the medical lien. In Alabama, medical liens have a super-priority, meaning they can attach to the real property of a deceased debtor and even supersede certain other liens.
If the previous owner passed away with unpaid medical bills, these outstanding bills could become your responsibility if addressed after closing. This could delay the closing process or even impact the final purchase price.
Property Taxes in Alabama
A clean title search should reveal any outstanding property taxes or past tax sales on the property. Here’s how this can impact you as a buyer.
Understanding how property taxes work in Alabama is crucial during a title search. Property taxes are due on October 1st each year. If unpaid by January 1st of the following year, they become delinquent.
Delinquent property taxes are transferred to the Probate Office, advertised for public sale in April, and sold at auction in May.
If there are outstanding property taxes on the property you want to buy, you’ll be responsible for paying them upon purchase. A clear title search allows you to factor this into your closing costs.
And then there’s Redemption Rights. If the property has undergone a tax sale within the past three years, the original owner (or someone with a legal interest) may still have the right to redeem it.
This could cloud your ownership after purchase. A thorough title search will uncover potential redemption rights and allow you to negotiate with the seller or delay closing until the redemption period expires.
Deed Requirements and Marital Status in Alabama
Alabama Code § 35-4-73 requires that any deed, contract, or other document conveying real estate (land or any interest) include the marital status of the individual grantor (seller) on the document.
This requirement applies to all conveyances executed after July 21, 1972. It helps ensure clarity and accuracy in property records by identifying potential spousal rights or interests in the transferred property.
Let’s Talk
Unveiling the hidden history of your Alabama property is crucial for a secure purchase.
Here at Pippin, we understand the complexities of Alabama title searches.
We combine cutting-edge technology with the expertise of local ground searchers, all profoundly familiar with the nuances of Alabama real estate law. Don’t navigate this process alone – let us guide you to a clear title and stress-free closing.
