An Alabama deed of trust transfers a property title to an independent third party known as the “trustee” who holds onto the title until the property’s owner, the “borrower,” pays back a loan to a moneylender. This document is used as an alternative to a mortgage. Should the borrower in a deed of trust default on their loan, the trustee can conduct a non-judicial foreclosure whereby they can sell the property without involvement from a court. A title company often acts as the trustee, although the parties can select any person or company for the role.
- Statutes: §§ 35-10-11 to 35-10-16, § 35-10-3, § 40-22-2
- Formatting: No state-wide requirements; the Probate Court may impose formatting standards on a local level.
- Signing Requirements (§ 35-4-20, § 35-4-23, § 35-4-29): Must include a notarial acknowledgment or attestation by one (1) subscribing witness (or two (2) witnesses if the borrower can’t physically sign).
- Where to Record: Probate Court
- Recording Fees: Around $9 to $16 for the first page and $3 for each additional page.
- Real Estate Sales Validation (Form RT-1): Required by the Probate Court to validate certain facts about the transfer.