Alabama Condo Due Diligence Checklist

Where Alabama due diligence deserves the most attention

Legal Framework

Condominiums (post-1990): Governed by the Alabama Uniform Condominium Act of 1991, Ala. Code §§ 35-8A-101 through 35-8A-417 (Acts 1990, No. 90-551). It is Alabama’s adaptation of the Uniform Condominium Act and applies to all condominiums created after January 1, 1991. It governs creation, declarations, allocation of common-element interests, association powers, assessments, liens, insurance, purchaser protections, offering statements, and resales.

Reserve Studies and Reserve Funding

No reserve study / no reserve line in the budget: Treat as a near-certainty of future special assessments, especially on the coast.; Reserves small relative to a 20-40-year-old beachfront high-rise: Salt-air corrosion accelerates concrete spalling, rebar rust, and envelope failure; a thin reserve on an older oceanfront tower is a major red flag.; Recent or pending special assessment in the minutes: Strong signal of reserve inadequacy.; Fannie/Freddie ineligibility tied to “deferred maintenance” or “inadequate reserves”: A direct, lender-confirmed red fla…

Structural Inspections and Building Safety

Alabama has no statewide periodic structural-recertification mandate for condos — there is no equivalent of Florida’s milestone-inspection law (SB-4D), Miami-Dade/Broward 40-year recertification, NYC Local Law 11, or California SB-326/SB-721. This is a notable gap given Alabama’s stock of aging, salt-exposed Gulf-front high-rises.

Insurance Requirements and Insurance-Market Risk

Property insurance on the common elements against all risks of direct physical loss commonly insured against (or fire-and-extended-coverage for conversion buildings), with total coverage (after deductibles) of not less than the greater of 80% of actual cash value at purchase/each renewal *or* the percentage needed to avoid any co-insurance penalty (excluding land, excavations, foundations).; Liability insurance covering occurrences commonly insured against, in an amount set by the board but not less than the declaration’s minimum.; Unit owners are insure…

Resale Disclosures and Buyer Cancellation Rights

Alabama gives condo buyers strong statutory disclosure and cancellation rights; HOA buyers get far less.

Assessments, Special Assessments, and Borrowing

`special_assessment_pending_or_recent` – Storm/repair/insurance special approved or proposed.; `large_storm_deductible_passthrough` – Special tied to named-storm deductible.; `budget_increase_significant` – Year-over-year dues jump (coastal insurance-driven).; `assessment_owner_vote_required` – Declaration requires owner approval, none documented.