(a) For purposes of this section the following terms have the following meanings:
Terms Used In Alabama Code 8-42-3
Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
Lien: A claim against real or personal property in satisfaction of a debt.
Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
Probate: Proving a will
property: includes both real and personal property. See Alabama Code 1-1-1
Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
real property: includes lands, tenements and hereditaments. See Alabama Code 1-1-1
state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
Statute: A law passed by a legislature.
Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(1) RECORDING. Presenting a document to a county judge of probate for official placement in the public land records.(2) RESIDENTIAL REAL ESTATE. Real property located in this state which is used primarily for a dwelling and contains one to four dwelling units.(3) SERVICE AGREEMENT. A contract under which a person agrees to provide services in connection with the purchase or sale of residential real estate.(4) SERVICE PROVIDER. An individual or entity that provides services to another party under a service agreement.(5) UNFAIR SERVICE AGREEMENT. A service agreement in which the services subject to the agreement are not performed within one year after the date upon which the agreement commences and provides any of the following:
a. Purports to run with the land or to be binding on future owners of interests in the real property.b. Allows for assignment of the right to provide the service without notice and agreement of the owner of residential real estate.c. Purports to create a lien, encumbrance, or other real property security interest.(b) This act does not apply to any of the following:
(1) A home warranty or other type of similar product that covers the cost of maintenance of a major housing system, such as plumbing or electrical wiring, for a set period of time from the date a house is sold.(2) An insurance contract.(3) An option to purchase or right of refusal to purchase real estate.(4) A maintenance or repair agreement entered into by a homeowners’ association in a common interest community.(5) Agreements to manage residential real estate.(6) A declaration of any covenants, conditions, or restrictions created in the formation of a homeowners’ association, a group of condominium owners, or other common interest community, or an amendment to the declaration.(7) A mortgage loan or commitment to make or receive a mortgage loan.(8) A security agreement under Alabama’s Uniform Commercial Code, relating to the sale or rental of personal property or fixtures.(9) Water, sewer, electrical, telephone, cable, or other regulated utility service providers.(c) This statute does not impair the rights granted by a mechanic’s or materialman’s lien under Section 35-11-210, Code of Alabama 1975, et seq, or by another judicially imposed lien.(d) If a service agreement is unfair under this section, it is unenforceable.(e) If a person enters into an unfair service agreement with a consumer, that agreement shall be deemed a deceptive act under the Alabama Deceptive Trade Practices Act, commencing with Section 8-19-1, Code of Alabama 1975.(f) No person shall record or cause to be recorded an unfair service agreement, or notice or memorandum of an unfair service agreement in the state.
(1) If an unfair service agreement is recorded in this state, it shall not provide actual or constructive notice against an otherwise bona fide purchaser of the residential real property to which it pertains, or against a creditor with a security interest in the residential real property to which it pertains.(2) A service provider who records or causes to be recorded an unfair service agreement or notice or memorandum thereof in this state is liable to an affected party for ten thousand dollars ($10,000) in statutory damage.(g) If an unfair service agreement, or notice or memorandum of an unfair service agreement, is recorded in the state, any party with an interest in the residential real property to which it pertains may take either or both of the following actions:
(1) Apply to the circuit court in the county where the recording exists to seek a court order declaring the agreement is void and of no effect.(2) In addition to the statutory damages described in subsection (f)(3), recover actual damages, plus costs and attorney fees as may be proven against the service provider who recorded the agreement.
