The sale of property always includes the preparation of many documents. One of those papers is the Alabama real estate purchase agreement. By filling out this purchase agreement, the buyer makes an offer to the property seller. If the parties succeed in reaching an agreement on the terms, the contract becomes a legal obligation upon signing the document. Although Alabama laws do not insist on this clause, the seller must also provide the buyer with a property disclosure statement. This paper should reflect the structural condition of the house and list its defects if any.
This article will tell you about the basic requirements for a residential and commercial purchase and sale agreement and how seller disclosures apply.
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The document under review is legally defined as a contract for residential property that the seller and the buyer draw up. This printable real estate sales contract is considered valid when it is agreed upon and signed by both parties.
Main Aspects Contained in the Contract
Contracts differ, but the main parts are always the same:
Information about the participants in the transaction. Full names and legal addresses should be stated at the beginning of the contract.
Sale Price. The amount that the buyer pays to the seller of the property. Moreover, the agreement contains the total sale price, the prepayment, and all the financial conditions agreed upon by the parties.
Property Description. This description should be as detailed as possible and include everything from the residential property address, legal description, property size, and the number of rooms to listing any additional structures and easements, rights of way, or appurtenant rights. One should also make a list of what is sold with the property and included in the deal. That refers to furniture, appliances, and so on. Sellers do not always give the house along with all the contents, so it is worth taking this point separately.
Inspection. According to the contract terms, the buyer may be entitled to have the home inspected by licensed inspectors. One can indicate that when unavoidable breakdowns are found in the house, the seller agrees to make certain repairs at their own expense.
Move-in/out Dates. In Alabama, it is customary to set the closing date for property around 30 days. But this is an individual process and depends on your agreements.
Disclosures. Below we will tell you in detail which disclosures must be provided and which are only recommended.
Signatures and dates. Each party must sign and date the agreement, thereby making it legally valid. Before signing, the parties can discuss the agreement, make their changes. Once signed, the contract is valid and enforceable by both parties.
Laws and Requirements
According to Section 6-9-142 of the Code of Alabama, the state has a “Buyer Beware” (also so-called “caveat emptor”). This means that the buyer agrees that the seller does not guarantee the physical condition of the property. The buyer is forced to take on the identification of defects. However, this does not mean that the seller does not have any responsibilities. Below, we will discuss situations in which the seller must provide disclosures.
Alabama Commercial Purchase and Sale Agreement
This document is essentially the same as the agreement on the purchase and sale of real estate, but it concerns commercial real estate. To be recognized as legal, this agreement must also contain:
Seller and Buyer details
Property and legal description address
Terms of purchase—price, earnest money, plan of payments
Provision of a property’s warranty and survey
Any additional terms
Signatures and dates
When buying commercial real estate, buyers often have stricter and less flexible requirements for the conditions and physical condition of the property. Therefore, a clause on additional inspection is often included. It is recommended to prescribe the date and time of inspection in the contract and indicate the specialist who will conduct it. You can also specify actions that will be prescribed based on the results of the inspection. For instance, the seller undertakes to fix specific breakdowns at their own expense.
Do not rush to sign the first edition of the agreement. Remember that once signed, it will be very difficult, if not impossible, to make amends to it. It is better to carefully study the agreement, get legal advice, and only then sign if all the conditions are clear to you and seem fair.
Required Seller Disclosures in Alabama
Although Alabama has a buyer beware rule, this still does not relieve the seller of all responsibilities. In some cases, they are required to provide disclosures. A disclosure is a statement about the physical condition of the home that the seller is required to provide by state law.
According to § 6-5-102 of the Code of Alabama, information must be disclosed if:
Hiding it poses a risk to the health or life of the buyer
A buyer asks directly for specific defects
There is a fiduciary relationship between buyer and seller
Lead-Based Paint Disclosure must be provided if the home was built before 1978 according to 42 US Code § 4852d. This form is designed to protect potential residents from harmful paint that may have been used during construction. Such a document can be requested from the County’s Revenue Office or at the local property assessor’s office.
The Seller’s Property Statement is not required by law but is highly recommended. It is usually a document that provides detailed information about the condition of a house, including environmental issues, house systems’ details, defects with structure or basement, destroying organisms, etc.
Consumer Pamphlet must be provided if the real estate agent is in charge of the transaction. This rule is governed by Section 34-27-82 of the Code of Alabama and Rule 790-X-3-.13. This disclosure informs consumers about the services that real estate agents are entitled to provide. The document is signed for informational purposes and is not a contract.
Real Estate Agents’ disclosure is a special paragraph that must be included in the agreement if a real estate agent (or two of them) is involved in the transaction. The text can be found in Section 34-27-8 of the Code of Alabama.