A Note From The Legal Helpdesk: A Look at Basic Property Concepts and Issues That Can Arise When Transferring Property in Alabama
August 6, 2018
Have you ever dealt with boundary line disputes or questions on adverse possession, deeds, or easements? The Legal Helpdesk has you covered with this week’s article summarizing these basic property concepts as well as providing some practice tips.
There’s an old saying that possession is 9/10ths of the law, which means that courts tend to favor those who are currently in possession of property. Adverse possession is a legal concept of which REALTORS® should be aware that allows someone other than the property owner to gain legal title to the property at issue. In Alabama, there are three types of adverse possession: Adverse Possession by Prescription[i], Statutory Adverse Possession[ii], and Boundary Line Adverse Possession. Likely the most frequently encountered form of adverse possession is boundary line adverse possession, discussed below.
- Boundary Line Adverse Possession: Adverse possession requires a party seeking legal title to property to have actual, exclusive, open, notorious, and hostile possession of the property for a certain period of time. A hybrid of adverse possession by prescription and statutory adverse possession exists when the property in question involves a boundary line dispute. Alabama law states that in a boundary line dispute, the neighboring landowners “may alter the boundary line between their tracts of land by agreement plus possession for ten years, or by adverse possession for ten years.”[iii]
- Example of a boundary line dispute: John and Mary own neighboring parcels of land, but they have no fence or boundary markers between their yards. John builds a storage building that partially encroaches onto Mary’s property by 10 feet. Mary can see the storage building but does not say anything to John about the building encroaching on her side of the property line. For 10 years, John uses the storage building as if it were located on his side of the property line. Under Alabama law, John may be able to establish that he “owns” the portion of the property on which his storage building sits through a claim of adverse possession.
- Process for Claiming Title-Quiet Title Action: If the required elements of adverse possession can be met, the party seeking to obtain title to the property in question may file a petition to quiet title in the circuit court of the county where the property is located. If the petitioner is successful, the clerk of court will file the judgment in the county probate court within 30 days of the judgment. The probate court will then record the judgment in the county’s property records.[iv]
A deed is a document that states ownership of real property. The parties to a deed are typically a grantor (the party conveying the property) and a grantee (the party receiving the property). In Alabama, deeds must be signed in front of up to two witnesses or acknowledged by a notary public.[v] Additionally, in order for a grantee to be recognized as the legal owner of the property, all deeds must be recorded in the probate office for the county in which the property is located.[vi] Prior to a deed being accepted for recording, transfer and recording fees must be paid.[vii] Finally, if the deed itself does not contain the total purchase price, actual value, or assessed market value of the property at issue, a completed Real Estate Sales Validation Form must accompany the deed for recording.
There are several types of deeds that convey different warranties or guarantees with the property. The basic types of deeds used in Alabama are as follows:
- General Warranty Deed: A general warranty deed is a common deed used in real estate transactions and is the preferred deed for buyers/grantees. This type of deed guarantees that the grantor is the owner of the property, has the right to convey the property to the grantee, and that no liens are attached to the property. This type of deed also guarantees that the grantor will make no claim to the property in the future and that no previous owner has claims to the property. Additionally, a general warranty deed provides a guarantee that if any third-party claim is made against the property in the future, the grantor will be responsible for remedying the situation. While providing this type of guarantee may seem onerous for a grantor, most hire a title company to carefully check the title to the property and obtain title insurance to fight off any claims that may arise after the transaction.
- Statutory (Special) Warranty Deed: A statutory or special warranty deed transfers title but only provides a limited guarantee as to claims of others. This type of deed guarantees that the current grantor is the owner of the property, has the right to convey the property, and will make no claims to the property in the future. This type of deed guarantees that no liens or other title defects were placed on the property during the grantor’s ownership but does not cover any potential title defects caused by previous owners.
- Quitclaim Deed: A quitclaim deed provides no title guarantee to the property. In fact, a quitclaim deed does not even guarantee that the grantor is the owner of the property. Quitclaim deeds are used in situations where ownership is not in question or are so tentative that the grantor will not provide guarantees. Examples include divorce agreements to transfer interest to the property from one spouse to the other and the sale of property owned by governments because of unpaid property taxes.[viii]
An easement allows a non-owner of property the legal right to access or use the property of another. Easements are often referred to as “non-possessory” interests in property. The property owner is the grantor, or owner of the servient tenement, while the party receiving the easement is known as the grantee, or owner of the dominant tenement. There are several different types of easements. This article discusses easements appurtenant and easements by necessity and also references easements in gross[ix] and prescriptive easements.[x]
- Easement Appurtenant: An easement appurtenant exists between adjoining parcels of land owned by different parties. These easements “run with the land” which means future property owners will have the benefit of the easement as well as the current owner. Because easements appurtenant run with the land, they are often written and formalized in the parties’ respective property deeds.
- Example of easement appurtenant: Parcel A is a beachfront property. Parcel B is located directly behind Parcel A. Although the owner of Parcel B has other means of accessing the beach, the most convenient point of entry is through Parcel A. The owner of Parcel A agrees to grant an easement appurtenant to Parcel B. Both owners record amended property deeds to reflect the easement. When the owner of either Parcel A or B conveys the property to someone else, the easement appurtenant will remain with both parcels.
- Easement by Necessity: An easement by necessity allows the owner of the landlocked property to access adjoining property in order to gain entry and exit from his or her property without being considered a trespasser. To create an easement by necessity, Alabama law requires that there be a genuine necessity, mere convenience is not enough.[xi] The party seeking the easement by necessity has the burden of establishing that the easement is “reasonably necessary for the enjoyment of the land.”[xii] “Easements by necessity almost always involve access roads across the servient tenement connecting the dominant tenement to a public road or highway.”[xiii] Finally, Alabama law requires original unity of ownership of the dominant and servient tenements (meaning the two parcels must have been previously owned by the same party as a single piece of property) for an easement by necessity to be established.[xiv]
- Common example of an easement by necessity: Jack owns 100 acres of land. Jack decides to sell 20 acres of land on the back of his property. Access to the public road is only available through the front portion of Jack’s property. Sam purchases the 20 acres of Jack’s property. In order to prevent Sam from being landlocked, Sam would be granted an easement by necessity to enter upon Jack’s property in order to gain access to the public road.
Here are some additional articles on easements:
"What is an Easement, and Why You Might Have to Share Your Property"
"Discussing Easements with Your Clients"
- Surveys are Important: Mortgage companies often require surveys as part of the lending process. However, even if the mortgage company you are dealing with does not require a survey, it may still be prudent to recommend your clients obtain a survey. Obtaining a survey may answer many questions your clients have about the property, such as whether there are any encroachments over the boundary lines of the property.[xv] Knowing the boundary lines of their property also may prevent your clients from becoming involved in a property line dispute later on. Since Alabama is a caveat emptor state, recourse against the seller will be difficult in these disputes, further encouraging surveys. Recently, the Legal Helpdesk received a call from an owner who purchased his house through a foreclosure sale. Unbeknownst to the owner, the house sits on two lots, previously owned by the same owner, but the deed from the foreclosure sale only mentions one of the lots. A survey may have alerted the current owner to the issue prior to closing. If you believe a client may have an issue, you can assist your client in obtaining an accurate survey of their property to determine boundary lines and refer to them a licensed and experienced land surveyor.
- Know the Type of Deed being Conveyed: Be aware of the type of deed your client is receiving and the warranties (or the lack of warranties) that accompany the deed. If you believe your client may have an issue involving the deed to their property, you can assist them in obtaining legal advice specific to their situation by referring them to an experienced real estate attorney.
- Easements Present: Be aware of any easements that may be present that run with the land and may affect your client’s use of the property. If you believe your client may have an easement issue, you can assist your client by referring them to a title insurance company who can conduct a title search for the property and review any recorded easements that may affect your client’s use of their property. Additionally, a title search will typically reveal whether any liens or mortgages are attached to the property. Finally, utility easements should be recorded and revealed through a title search. However, some utility easements may have been recorded many decades ago and may not show up in a title search. If your client has questions about whether a utility easement is present on their property and none are revealed during a title search, you can assist your client by referring them to the relevant utility company. That company should be able to inform your client whether the company has an easement for the property. In fact, Alabama Power has specialists assigned to various regions of the state who can assist your client in determining whether Alabama Power has an easement for their property. Contact information for these specialists can be found here.
- Homeowners Associations: Be aware of whether the neighborhood your client is interested in has a homeowners’ association (HOA). HOA’s do not always appear on the deed. If an HOA is present, you can assist your client in obtaining relevant HOA documents, such as bylaws. Being able to assist your client in obtaining these documents may prevent your client from purchasing a home in a neighborhood with an HOA that enforces a restriction that would have been a deal breaker for your client. For example, an HOA may have a setback restriction that makes the client’s building plans impossible. HOA documents can be found at the county probate office in the county where the neighborhood is located. Additionally, HOAs formed after January 1, 2016 are required to file organizational documents with the Alabama Secretary of State and can be searched for here[xvi].
[i] Adverse Possession by Prescription: This type of adverse possession requires the party seeking ownership of the property to have actual, exclusive, open, notorious, and hostile possession under a claim of right (intention to claim the property but lacking a written document showing the party seeking ownership as owner of the property) for a period of 20 years. (Dickinson v. Scruggs, 196 So. 3d 1183, 1187 (Ala. Civ. App. 2015) (citing Fitts v. Alexander, 170 So. 2d 808 (Ala. 1965)).
[ii] Statutory Adverse Possession: Statutory adverse possession requires the same elements as adverse possession by prescription, but if the party seeking ownership holds the property under color of title (meaning the party seeking ownership has a written document showing him or her as the apparent owner of a piece of property, but the document has some type of flaw) or has paid property taxes on the property for 10 years, the trespasser may acquire legal title to the property after 10 years, as opposed to 20 years required for adverse possession by prescription. (Ala. Code § 6-5-200). The color of title requirement for statutory adverse possession may be a deed or will that lists the trespasser as the owner of the property but has a legal defect, such as the grantor being mentally incapacitated.
[iii] Dickinson, 196 So. 3d at 1187 (citing Reynolds v. Rutland, 365 So. 2d 656 (Ala. 1978)).
[iv] Ala. Code § 6-6-544
[v] Ala. Code § 35-4-20 and § 35-4-23
[vi] Ala. Code § 35-4-50 and § 35-4-62
[vii] Ala. Code § 40-22-1(a)
[viii] Ala. Code § 40-10-135
[ix] Easement in Gross: Commonly referred to as a utility easement, an easement in gross attaches a particular right to the holder of the easement rather than to the property itself. Easements in gross are commonly seen with utility companies wherein the company is granted an easement to access property in order to install and maintain power lines, water lines, gas lines, and cable lines.
[x] Prescriptive Easement: A prescriptive easement is similar to adverse possession but conveys an easement, not ownership, to the property. “To establish an easement by prescription, the claimant must use the premises over which the easement is claimed for a period of 20 years or more, adversely to the owner of the premises, under claim of right, exclusive, continuous, and uninterrupted, with actual or presumptive knowledge of the owner. The presumption is that the use is permissive, and the claimant has the burden of proving that the use was adverse to the owner.” Based on these requirements, if a party claiming a prescriptive easement was given permission to use the property, a prescriptive easement will not be granted.
[xi] Hall v. Hall, 216 So. 3d 1274, 1279 (Ala. Civ. App. 2016) (citing Benedict v. Little, 264 So. 2d 491 (Ala. 1972)).
[xii] Roberts v. Monroe, 75 So. 2d 492 (Ala. 1954).
[xiii] Hall v. Hall, 216 So. 2d at 1279 (citing Helms v. Tullis, 398 So. 2d 253, 255 (Ala. 1981)).
[xv] Property boundary lines can be found in plat maps, recorded in the county probate office. Some county probate offices have websites where members of the public can search for a property and view the boundary lines on a map and an aerial view as well.
[xvi] Ala. Code § 35-20-5. HOAs formed prior to January 1, 2016 may voluntarily file organizational documents with the Secretary of State but are not required to do so.
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