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Alabama Rent-to-Own Lease Agreement

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Updated June 11, 2025

An Alabama rent-to-own agreement allows a tenant to rent a property and have an option to purchase during the lease term. The tenant will pay rent and continue the tenancy in accordance with State law. The landlord, who is also the seller, is recommended to screen the tenant in the same manner as any other tenant prior to occupancy.

Alabama Laws

Requirement to Record: A buyer is not legally required to record an option to purchase in Alabama. A buyer can record an option to purchase[1] and must do so in the county where the property is located[2] (See County Probate Offices).

One Year After Expiration: If a year passes after the termination date for an option to purchase, the option ceases to provide notice of its existence.[3]

Maximum Term: No option to purchase shall exist beyond a period of 20 years.[4]

No Duration: If an option to purchase has no duration, it is unenforceable 2 years after its creation.[4]

Signing Requirements: An option to purchase must be in writing and signed by the seller.[5]

Leasing Disclosures (3)

1. Lead-Based Paint Disclosure & EPA Pamphlet – For any residence built before January 1, 1978.[6]

2. Owner/Manager Identification – The name and address of the landlord, manager, or person authorized to act on their behalf must be mentioned in the lease.[7]

3. Abandonment (conditional) – If the landlord prefers to have the tenant notify them in the event of any absence of more than 14 days, it must be mentioned in the lease.[8]

Selling Disclosures (2)

1. Agency Disclosure Form (conditional) – If a licensed real estate agent is representing a seller, this must be given to the buyer. [9][10]

2. Seller’s Property Disclosure Statement (optional) – Not required, but informs the buyer of any property defects. However, material defects affecting the health or safety of an individual, not known or observable by the buyer, must be disclosed.[11]

Sample

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