A: No; in general, an agreement for the sale of real property is not enforceable unless in writing and signed by the parties. Verbal agreements are only valid if purchase money has been paid and the purchaser has been put in possession of the property by the seller. So, if a purchaser makes an offer via text message and the seller accepts via text message, the agreement is only binding if signatures are present.

For a name in an email or text to count as a signature, Alabama law requires the signer to intend his or her name to be a signature (i.e., something like “Signed, Joe Smith”). Further, for an agent of a buyer or seller to have the ability to sign on behalf of his or her client, the client must provide separate written authorization to the agent.

The Legal Helpdesk has written an article providing tips for texting and emailing offers, which can be viewed here.

Laws:  Ala. §§ 8-9-2(5), 8-1A-7, and 8-1A-2(9); Bowen v. Sec. Pest Control, Inc., 879 So. 2d 1139, 1142 (Ala. 2003); Hight v. Byars, 569 So. 2d 387, 389 (Ala. 1990).

A: The process depends on the specific facts but here are some things to remember.  A sewer company may have obtained a judgment lien on the property for unpaid utility bills. Judgment liens are court judgments recorded in the probate office as a lien against the property of the defendant. Since the lien is recorded, the lien should appear in a title search conducted by an experienced professional.  Also, the utility company may require payment of a prior owner’s unpaid bills through documents signed by the buyer. Buyers should review covenants and the deed carefully because some require purchasers to pay unpaid bills before the utilities can be turned on. Especially for properties in foreclosure, potential buyers should contact the utility companies to prevent unpaid bills from being a surprise. On a related note, keep in mind that under Alabama law, landlords are shielded from having to pay their tenants’ unpaid utility bills, unless the landlord agrees to pay.

Laws:  Ala. Code §§ 35-9-15; 35-9A-404(a).

A: License law does not differentiate treatment of refundable versus non-refundable earnest money. Alabama license law states that when a real estate licensee acts as an escrow agent and the transaction at issue is not consummated, he or she should not release escrow funds until (1) the parties agree in writing to release the funds, or (2) if the parties cannot agree, upon adjudication by a court of law. If a real estate transaction is consummated, the earnest money generally goes toward the purchase price. Whether the funds remain “earnest money” or become a “deposit” after the inspection period should not affect what happens to the money. Earnest money should remain in escrow until the transaction is consummated, or if not consummated, either the parties agree on what to do with the funds or a court issues an order on the funds.

Laws:  Admin. Code R. 790-x-3-.03.

A: The Legal Helpdesk is not aware of any legal prohibitions to the transferring of earnest money from the escrow account to the broker to satisfy the commission owed to the broker after closing. There are three things to keep in mind in this situation. One, Alabama license law requires commission money to go to the broker first, after which the broker can pay commission to the agent(s). Second, Alabama license law requires brokers to keep a copy of all records pertinent to real estate transactions, which includes the final closing statement, on file for three years. The closing statement will also serve as a record related to escrow funds as required by state law, proving that a transfer from the earnest money account was valid. Third, all funds held in trust, like earnest money, must be distributed to the appropriate party within seven days after the closing.

Laws:  Ala. Code §§ 34-27-36(a)(14) , 34-27-36(a)(31), and 34-27-36(a)(8)(c); Ala. Admin. R. 790-x-3-.03(5).