new developments in alabama real estate law€¦ · 23/08/2016 · commercial real estate law...

Developments in Alabama

Commercial Real Estate Law

Survey of New Alabama Case

Law and Statutory Developments

August 18, 2016

Duane A. Graham

Contact Information

T: 251.405.1300

E: [email protected]

mailto:[email protected]

Duane A. Graham

Partner, Armbrecht Jackson LLPMr. Graham's practice areas include oil and gas law, real estate, and trusts and estates. In the oil and

gas area, Mr. Graham has represented numerous oil and gas producing companies in matters ranging

from title evaluation, regulation by the State Oil and Gas Board, and litigation, especially litigation

concerning royalty disputes and coalbed methane issues. He has particular expertise concerning

severance taxes due on the production of oil and gas and has litigated numerous assessment and

refund claims in this area. In the real estate area, Mr. Graham has significant experience in title

evaluation, commercial leasing, and eminent domain proceedings. In the trusts and estates area, Mr.

Graham advises clients on estate and tax planning issues, including the drafting of wills, trusts, and

powers of attorney. He also represents clients in connection with the administration of trusts,

decedent's estates, and conservatorships, including probate court litigation. Mr. Graham currently

serves as a temporary judge of probate for the Probate Court of Mobile County.

Thomas P. Oldweiler

Contact Information

T: 251.405.1300

E: [email protected]

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mailto:[email protected]

Thomas P. Oldweiler

Partner, Armbrecht Jackson LLPProfessional Bio: Thomas P. Oldweiler has a transactional, regulatory and general business practice. He handles sales and acquisitions of businesses of all sizes from small firms to publicly traded companies. His transactional practice includes a diverse array of real estate, licensing, buy/sell, leasing, franchising, purchase, marketing, employment, option, confidentiality and sales contracts. He also handles the financing issues associated with those transactions and the other capital needs of businesses, whether through loans, venture capital, equity or hybrid instruments and for buyers, sellers and financial intermediaries. For financial institutions, he has a regional practice in regulatory, lending, syndication, commercial, compliance and acquisition matters. In recent years, his work for banks has included significant collection and restructuring matters involving foreclosures, bankruptcy, and workouts. For his business clients, he is often in the general business areas of formation of business entities, raising capital, agency regulation, recapitalizations, employment, director oversight and duties, succession planning and non-competition covenants.

In connection with his real estate practice, Mr. Oldweiler serves as an Adjunct Professor of Real Estate at the University of South Alabama's Mitchell College of Business.

For several years, he has been listed in the Best Lawyers in America in the areas of:

> Banking and Finance Law (Closely-Held Businesses, Finance, Mergers & Acquisitions, New Bank Formations, Regulatory, Securities and Transactions)

> Financial Services Regulation Law

> Litigation - Banking & Finance

When Mr. Oldweiler achieved the top peer rating level in Martindale-Hubbell Law Directory in 1996, he was believed to be the youngest lawyer in Alabama rated at the highest level.

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Disclaimers• I’m not your lawyer

• You’re not a lawyer just because you attended this class

• All examples are hypothetical

• Opinions expressed are solely those of the presenters and not USA, MCOB, the Real Estate Center, or Armbrecht Jackson LLP

• All concepts are purely academic - this is not legal advice; All rights reserved to later express contrary opinions

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SOURCES OF ALABAMA REAL

ESTATE LAW

• English Common Law

• Alabama Case Law

• Alabama Statutory Law

• Federal Law

CASE LAW DEVELOPMENTS

• DISTINGUISH BETWEEN FEE AND EASEMENT INTERESTS IN CONVEYANCING

• Practical Point – Be aware that there is a significant distinction between easements and fee interests and the desired interest depends heavily on the deed language used.

CONSENTS TO LEASE

ASSIGNMENTS

• Practical Points:

• A lessor can retain the right to consent to lease assignments by the lessee.

• In the absence of specific language in the lease, a lessee may assign the lease freely.

• If the lease provides that the lessor has the right to consent to lease assignments without addressing the standard that is applicable, the lessor must evaluate a proposed assignment based on the standard of commercial reasonableness, and consent may not be unreasonably withheld.

• Dissatisfaction with the lease terms is not sufficient grounds to refuse consent to a lease assignment.

• If the lease specifically provides that the lessor may withhold consent for any reason in the sole discretion of the lessor, such provision is valid.

WHO CAN FORECLOSE A

MORTGAGE IN DEFAULT

• Practical Points: Standing to foreclose a

mortgage is determined at the time of the

foreclosure sale. Only the holder of the

mortgage and associated debt has

standing to foreclose.

ISSUES CONCERNING

REDEMPTION OF MORTGAGE

FORECLOSURES

• Practical Points: Assertion of a disputed

charge can make it procedurally easier for

the landowner to redeem.

SUBCONTRACTOR LIABILITY

ISSUES

• Practical Points: Subcontractors will

generally not be liable to subsequent

owners of the property on which the

improvements was constructed.

PROPERTY TAX APPEAL

TECHNICALITIES

• Practical Points: Failure to comply

literally and fully with procedural

requirements for appealing from property

tax assessment can be fatal..

LANDLORD LIABILITY ISSUES

• Practical Points: While some exceptions

have been found, a landlord is generally

not liable for actions of tenants.

TIMELINESS OF LIEN

STATEMENTS

• Practical Points: Time requirements for

lien statements must be complied with

literally and should be conservatively

calculated.

TIME FOR MORTGAGE

REDEMPTIONS


-only 180 days to redeem from foreclosure of

homestead property

-must give personal notice in foreclosure of

homestead property

COMMON-LAW MARRIAGE


-abolished prospectively effective January 1,

2017

-prior marriages remain valid

LANDLORD-TENANT ACT

AMENDMENTS

• Practical Points: Residential leases in Alabama are now governed by the Landlord-Tenant Act. Several lease provisions are prohibited under this Act and penalties may attend the inclusion of such provisions in a lease.

• Time limits applicable to issues concerning the security deposit upon lease termination have been modified.

ABANDONED MOBILE HOMES

• Practical Points: There is now a specific

and relatively quick statutory procedure

whereby a property owner on whose land

an abandoned manufactured home not

owned by the property owner can be sold

and removed from the property.

VACATION OF STREETS

• Practical Points: Governmental bodies

having jurisdiction to approve requests for

vacation of streets now have time

limitations within which to process the

request.

LEASING TOPIC: ECOMMERCE

• Applies to percentage rent calculations in

commercial retail

• Seeks to capture sales “made from” the

premises:

– On-premises terminal ordering

– Internet ordering with retail pickup

• Most be tailored to tenant’s other channels

• Sample clause in paper

ALABAMA COMMERCIAL REAL

ESTATE LAW

MISCONCEPTIONS AND TRAPS

Minors cannot convey real property, but can

receive title. Ala. Code § 35-4-1.


ESTATE LAW MISCONCEPTIONS

AND TRAPS

All conveyances are presumed to be in fee

simple unless otherwise indicated. Ala.

Code § 35-4-2.



AND TRAPS

Joint ownership does NOT carry a right of

survivorship unless this intent is expressly

stated in the deed. Ala. Code § 35-4-7.

Absent such an express statement, joint

ownership is as tenants in common.



AND TRAPS

The present title holder is the legal owner

of all deeds and other instruments

pertaining to title to the property in

question. Ala. Code § 35-4-9.



AND TRAPS

Deed or other instrument conveying

homestead property must be signed and

acknowledged by both the title holder(s)

and any spouse. Ala. Code § 6-10-3.



AND TRAPS

It is unnecessary for a deed to recite

consideration. Ala. Code § 35-4-34.

There may be some reasons to do so,

however.



AND TRAPS

With some exceptions, options to

purchase real property cannot last for

longer than 20 years, and if no time limit is

stated they last for 2 years. Ala. Code §

35-4-76.



AND TRAPS

Title to real property passes to the heirs at law or testamentary devisees of a deceased person automatically as of the date of death (even if the will hasn’t been probated yet). However, if the will is not probated within one year the heirs at law are presumed to own for bona fide purchasers.



AND TRAPS

When a mortgage fails to contain information establishing when the debt must be paid, the mortgage will be presumed satisfied after 20 years.

new developments in alabama real estate law€¦ · 23/08/2016 · commercial real estate law...

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