Alabama · contract for deed
Alabama contract for deed, explained.
A plain-English guide to contract for deed (also called land contract) in Alabama — statute, recording, default remedies, interest caps, and where deals actually happen.
Ala. Code § 35-4-50 et seq. (recording); common law; no specific CFD statute
Recording with the county Probate Judge permitted under Ala. Code § 35-4-50 et seq.; not statutorily mandatory but unrecorded contracts are void against bona fide purchasers without notice. Mortgage tax may apply (Ala. Code § 40-22-2).
Forfeiture commonly available per contract; however, Alabama courts apply equitable principles and may treat CFD as equitable mortgage requiring foreclosure where buyer has substantial equity. Statutory right of redemption (Ala. Code § 6-5-247) applies if foreclosure pursued.
Is contract for deed legal in Alabama?
Alabama recognizes contracts for deed / 'bond for title' under common law as a form of seller financing.
How do you record a contract for deed agreement in Alabama?
Recording with the county Probate Judge permitted under Ala. Code § 35-4-50 et seq.; not statutorily mandatory but unrecorded contracts are void against bona fide purchasers without notice. Mortgage tax may apply (Ala. Code § 40-22-2).
What happens if the buyer defaults?
Forfeiture commonly available per contract; however, Alabama courts apply equitable principles and may treat CFD as equitable mortgage requiring foreclosure where buyer has substantial equity. Statutory right of redemption (Ala. Code § 6-5-247) applies if foreclosure pursued.
What is the maximum interest rate?
6% if no written agreement; up to 8% by agreement under Ala. Code § 8-8-1; higher rates allowed for loans over $2,000 and for various exempt categories.
What disclosures are required?
Alabama is a caveat emptor state; no general residential property condition disclosure statute (limited duty for known defects affecting health/safety); lead-based paint (federal).
Who's protected — buyer vs. seller
Buyer protections
Equitable mortgage doctrine where applicable; statutory redemption (1 year) if foreclosure used; otherwise limited.
Seller protections
Contractual forfeiture often enforceable; ejectment; ability to retain payments; quick remedy compared to foreclosure.
Where in the state do these deals happen?
Rural North Alabama and Black Belt land transactions; mobile home/land packages; small-town residential.
Notable case law
Madison v. Lambert, 399 So. 2d 840 (Ala. 1981); Stallworth v. First Nat'l Bank, 432 So. 2d 1257 (Ala. 1983).
Looking at a Alabama deal?
Send the parcel and the terms — we'll walk through whether contract for deed fits, how to record it, and what the cure period looks like if things go sideways.
Talk to WyattEducational content only. Statute citations are public-record research, not legal advice. Alabama contracts and remedies are fact-specific — consult a licensed Alabama real-estate attorney before signing anything.