Transfer of Title and Settlement
Deeds and their covenants
A general warranty deed contains six covenants: seisin, right to convey, against encumbrances, quiet enjoyment, warranty, and further assurance. A special warranty deed limits the guarantee to defects arising during the grantor's ownership, a bargain and sale deed implies no warranties, and a quitclaim deed conveys only whatever interest the grantor may hold. A valid deed requires a grantor, a grantee, words of conveyance, a legal description, the grantor's signature, and delivery and acceptance. Consideration is customary but not essential; notarization is needed for recording.
Title evidence and closing
Evidence of title comes from a title search of the public record, an abstract of title, or title insurance. An owner's policy protects the buyer and a lender's policy protects the lender. An ALTA survey reveals encroachments and easements. At settlement, debits and credits are balanced and items such as taxes, rent, and interest are prorated. Alabama is an attorney-closing state, and licensees may prepare closing statements but may not give legal advice.
Alabama recording details
Deeds are recorded in the probate office of the county where the property lies. Alabama imposes a deed tax measured by consideration rather than a percentage transfer tax. Other transfer mechanisms include wills and intestate succession, adverse possession, dedication, eminent domain, escheat, and foreclosure.
Traps and worked example
Proration direction is the classic trap: the seller credits the buyer for taxes already paid covering post-closing days, while the buyer credits the seller for accrued interest and rent received. Worked example: annual taxes of 2,400 dollars are paid in advance and the closing is July 1; the seller has used six months and the buyer is credited 1,200 dollars.