Alabama · land contract
Alabama land contract, explained.
A plain-English guide to land contract (also called contract for deed) 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 land contract 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 land contract 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 land contract 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.