Ala. Code § 8-42-1

Current through the 2024 Regular Session.

Section 8-42-1 - Legislative findings and declarations

The Legislature finds and declares all of the following:

(1) Wholesaling real property occurs when a buyer enters into a contract for purchase and sale of a single-family residential property with the seller of the property thereby creating the buyer's equitable interest in the property, the buyer then finds a subsequent purchaser willing to pay a higher price for the property and then assigns its interest to the subsequent purchaser for a fee.

(2) Certain unfair service agreements provide a real estate company with the right to market, list, or assist in selling a residential property for up to 40 years, binding homeowners and successors in interest through a recorded memorandum and penalizing the homeowner or successor in interest for breach of the agreement.

(3) The practices of wholesaling residential real estate, and recording these unfair service agreements, pose a significant risk to Alabama homeowners if left unregulated.

(4) The lack of any restrictions enables predatory practices against homeowners, especially those who have lived in a home for a long period of time, leading to financial loss and resulting in confusion for unsuspecting subsequent purchasers.

(5) The Legislature concludes the following in the interest of protecting Alabama homeowners and home buyers:

a. Disclosure of the limited interest, marketing, and assignment of the buyer's equitable interest in the homeowner's property should be required of buyers engaging in wholesaling.

b. Unfair service agreements create clouds on the titles of Alabama homes and burden Alabama homeowners with false promises, are against the public interest, and constitute unreasonable restraints on the alienation of real property.

Ala. Code § 8-42-1 (1975)

Added by Act 2023-201,§ 1, eff. 8/1/2023.