Alabama special warranty deed

What a special warranty deed does in Alabama

A special warranty deed, also called a limited warranty deed or a covenant deed in some states and a grant deed in California, sits between a quitclaim and a general warranty deed. The grantor promises they did nothing during their own ownership to damage the title, and nothing more. Anything that happened before they bought the property is the buyer's risk. Estates, trustees, banks, and builders commonly use it.

The Alabama law behind this deed

Start with the warranty deed statute, Ala. Code § 35-4-271. A special warranty deed narrows its promise to the time the grantor owned the property. The table below lists the main statutes behind the rules on this page.

When Alabama homeowners use a special warranty deed

• Sell a property you inherited or hold as trustee
• Convey a property you have owned only briefly
• Transfer commercial or investment property
• Give a buyer more protection than a quitclaim without accepting unlimited exposure

What Alabama requires on the deed

These are the execution and formatting rules probate offices enforce. Getting any of them wrong is the usual reason a deed comes back in the mail.

How to complete and record it in Alabama

1. 1Find your current deedYou need the legal description from it, word for word. If you can't find your copy, the Office of the Judge of Probate can provide one, usually for a few dollars.
2. 2Identify everyone by full legal nameNames must match the current deed and government ID exactly, middle names included. A mismatch creates a gap in the chain of title that shows up years later at closing.
3. 3Complete the deedDeedly builds it with the wording, notary certificate, and 3-inch first-page margin used for Alabama deeds.
4. 4Sign in front of a notaryBring photo ID. Wait to sign until you are in front of the notary: you have to appear before the notary anyway, and signing there leaves no question about who signed.
5. 5Record it with the Office of the Judge of ProbateFile in the county where the property is located and pay the recording fee. Many offices in this state also accept e-recording, but usually only from approved submitters such as title companies. Keep the stamped receipt. It fixes your priority date.
6. 6Update insurance and tax recordsA change of ownership can affect your homeowner's policy, your homestead or senior exemption, and in some states the assessed value. Do this within a few weeks.

What it costs in Alabama

Alabama charges a deed tax (recording privilege tax) of $0.50 per $500 of value, or fraction thereof. Alabama has no exemption for gifts, for transfers between spouses or relatives, or for transfers into a living trust: when the property is not sold, the tax is on its actual value (Ala. Code § 40-22-1(c)). When the property is subject to a mortgage on which Alabama mortgage tax was paid, including a purchase-money mortgage recorded with the deed, the tax is due only on the value above the mortgage; give the probate office the mortgage's recording reference. The probate judge collects the tax before recording the deed and certifies the payment on it (§ 40-22-1(a), (e)). The Department of Revenue's recordation tax page does not say whether the grantor or the grantee pays, so settle that between you before the deed is recorded.

Exemptions that commonly apply to a transfer like this: deeds for a nominal consideration made only to perfect (correct or clear) title (Ala. Code § 40-22-1(b)(2)) and re-recording a corrected deed made to perfect title (§ 40-22-1(b)(3)). You have to claim the exemption. The recorder won't apply it for you.

Where to record it in Alabama

Alabama deeds are recorded with the Office of the Judge of Probate in the county where the property sits, not where you live. There are 67 counties in Alabama.

Many Alabama recording offices accept e-recording through vendors such as Simplifile, CSC, or ePN. E-recording is generally open only to approved submitters such as title companies, attorneys, and lenders, so if you prepared the deed yourself, plan to record in person or by mail. Some offices accept filings from the public through those vendors; your county's website will say.

Recording offices we cover in Alabama: Jefferson, Mobile, Madison, Baldwin, Montgomery, Tuscaloosa, Shelby. See all Alabama recording offices.

What a special warranty deed does NOT do

Being honest about the limits is more useful than a sales pitch. Every one of these catches somebody out.

• Defects that predate your ownership are not covered. The buyer bears that risk.
• It does not substitute for a title search or an owner's title insurance policy.
• It transfers ownership immediately and cannot be revoked.
• Some purchase contracts specifically require a general warranty deed; check yours before using this one.

Quirks of Alabama law that catch people out

• Alabama records deeds in the county Probate Office, not a recorder's office. The Judge of Probate is the recording official.
• The probate judge may not record a deed that does not state each individual grantor's marital status (Ala. Code § 35-4-73), or that does not show the name and address of the individual who prepared it (§ 35-4-110).
• Some probate offices add their own requirements. Jefferson and Pickens counties require the name and address of the person who receives the property tax notice (Ala. Code §§ 45-37-84.20, 45-54-82), and Tuscaloosa County requires a Source of Title: the deed book and page where the grantor's own deed is recorded. Deedly prints both on every Alabama deed.
• Alabama requires proof of the purchase price or, if the property is not sold, its actual value with every deed (Ala. Code § 40-22-1(c)). Use the Department of Revenue's Real Estate Sales Validation Form (Form RT-1): the grantor's and grantee's names and mailing addresses, the property address, the date of sale, and the total purchase price, actual value or assessor's market value, signed by the grantor, grantee, owner or agent. It is not needed if the deed itself states all of that. Without it the probate judge computes the tax on the assessor's value (§ 40-22-1(d)), and failing to give proof after the office asks for it carries a penalty of $100 or 25 percent of the tax, whichever is greater (§ 40-22-1(h)).
• Alabama abolished tenancy by the entirety. Married couples who want survivorship use a joint tenancy with express survivorship language.
• Survivorship is never implied. Without the words, co-owners hold as tenants in common.

How to hold title in Alabama

When two or more people take title in Alabama and the deed says nothing more, the law presumes a tenancy in common, which means no automatic survivorship. If you want the survivor to take the whole property, the words have to be on the deed. Forms of co-ownership available in Alabama: joint tenancy with right of survivorship and tenancy in common.