Nationally published author of real estate investing books, textbooks, reference materials and online courses. Former adjunct professor of real estate at the University of Alabama College of Business. Retired litigation attorney (Texas) in real estate and banking law. Member of the Texas Bar College. Owner of Butler Evans Education (Alabama tax sale investing) and Alabama Landlords. Real estate investor, manager, and developer. Currently live and invest in Alabama.
Alabama low income housing boards have been changing their policies, and will no longer accept properties for Section 8 housing if there are outstanding redemption rights. That means lender-foreclosed properties must wait out the six to twelve months of redemption, depending on whether it was homestead exempt or not.
Tax sale properties will need a quiet title order to be sure that all redemption rights have expired.
A faster solution is to get a quitclaim deed from the former owner (or heirs) or a release of their redemption rights.
The reasoning is that the Housing Authority does not want to put a family into a Section 8 home, and then have them disrupted later when they have to move because of redemption. Yes, I know redemptions rarely occur with lender foreclosures, but the risk is still there. In addition to the cost and disruption of the actual move, replacement housing might not be available in the same area, or at all.
Local water authorities cannot make landlord pay former tenant’s past due water bill before turning on water for new tenant. They claim they can, because of their local “rules,” but that doesn’t make it legal. Anybody can make up rules for their handbooks. If you agree, then that’s a contract. Otherwise, it’s just wishful thinking on their part.
Ala Code Section 35-9-15 says, “The provider of goods or services may not require a landlord or real property owner to pay the delinquent bill of a tenant for goods or services provided to the tenant of the landlord if the account for the goods or services is in the name of the tenant. In addition, the provider of goods or services shall not have a lien on the real property for any goods or services provided in the name of the tenant.” Also, Section 35-9-14 says, “Notwithstanding any other provision of law, any bill for sewer service received in the name of a tenant or tenants, shall be the sole responsibility of the tenant or tenants and shall not constitute a lien on the property where the sewer service was received.”
If local water authorities refuse to connect water for a new tenant just because the old one has an outstanding bill, show them a copy of this article. If that does not work, contact the attorney for the water authority. Usually, THAT person knows how to read a statute and understand what it means.
This is a problem in college areas because leases are often signed 9-10 months in advance. Is the renewal lease enforceable if the tenant defaults on his or her current lease?
In other words, what happens if a tenant is a good tenant from August through November of 2018 and then signs a renewal lease for August 2019 through July 2020. Then, in May or June of 2019, the tenant defaults on his first lease. Can the landlord cancel the renewal lease, assuming it wants to do that?
We don’t know. It seems like the landlord SHOULD be able to cancel the renewal lease. On the other hand, I cannot find anything that authorizes that. My advice: Talk to your lawyers. If recommended, maybe write a new clause into your forms so if a current lease is terminated for any reason, then the landlord will also have the right to terminate a renewal lease.
By the way, don’t forget about purchase options. I recommend that landlords who give purchase options in their leases have a clause saying it is null and void if the tenant defaults. Some landlords say any default, even if cured. Some say only uncured defaults. Some don’t even think about this issue. At least think about it!