Alabama is about to make it a felony to sell a house you do not own, and on October 1 the state gets a new agency, a new fund, and a fast-track court process built specifically to undo those sales.
Governor Kay Ivey signed SB292, the Alabama Property Protection Act of 2026, into law on April 15 as Act No. 2026-536. The bill was sponsored by Sen. Arthur Orr of Decatur and carried in the House by Rep. Paul Lee of Dothan. According to the Alabama Association of REALTORS 2026 legislative recap, it passed on the final day of the regular session and was backed by the Alabama Bankers Association, the Alabama Land Title Association, the Southeast Land Title Association, and Alabama REALTORS.
The law targets what the industry calls seller impersonation fraud. The Alabama Securities Commission, which the act puts in charge of enforcement, describes the classic version: someone pretending to be the owner of a parcel contacts a real estate agent through a website, lists the property, and closes the whole deal electronically without ever meeting anyone in person. “Because the property is undeveloped,” the Commission writes, “the actual owner likely won’t learn of the fraudulent sale for some time.”
If you own a vacant lot in Ensley, a house you inherited three years ago and have not been back to, or a paid-off rental you manage from out of state, that description is you.
What actually changes on October 1
The text of the enrolled bill spells out the mechanics.
Agents cannot list for a seller they have never met. Under the new Section 35-21-5(a), a licensed agent or broker may not enter into an agreement to sell or lease real property when the seller is unknown to them and is not physically present, unless the seller produces government-issued identification and ownership records.
Closing agents have to verify identity on exactly the properties fraudsters like. Section 35-21-5(b) requires a settlement agent, before closing on Class III property that is vacant or not owner-occupied and carries no mortgage, to run identity document validation and identity verification on the seller. Those records get kept for five years.
Listing sites have to check ownership too. A new Chapter 19J of Title 8 requires online real estate platforms, for listings that come straight from an owner rather than through a broker or MLS, to collect a copy of the owner’s unexpired photo ID plus a deed, title history, county recorder record, or will before publishing the listing.
Remote notarization gets tighter. The act rewrites the notary statutes and adds a provision aimed squarely at AI: an electronic notary must refuse the act if “the image presented of the signatory appears to be artificially generated.”
The penalties get real. Fraudulent sale or lease of residential real property moves from a Class A misdemeanor to a Class D felony. A new crime, aggravated fraudulent sale or lease, is a Class C felony, and it triggers automatically when the victimized owner is 70 or older. The Securities Commission can impose civil penalties of up to $100,000 per transaction, payable into a newly created Alabama Title Fraud Recovery Fund that exists to reimburse victims for actual economic damages.
And there is finally a fast lane to get your house back. Section 6-6-540 is amended to create an expedited quiet title action for fraudulent conveyance claims, with a preliminary hearing required within 30 days of service. If the Commission voids a conveyance administratively and nobody appeals within 30 days, the circuit court must enter an enforcement order within 30 days of the quiet title petition and can waive the filing fees for good cause. Where the court finds the defendant fraudulently created the instrument, the owner can recover costs and reasonable attorney fees.
The part most owners should act on
Buried in Section 12-13-55 is the most useful line in the whole act for an ordinary property owner. Each county judge of probate may set up a real property owner notification service that alerts owners whenever a document is recorded in their name or against their address. Once established, the law says, the service “shall be free and available to any property owner who owns real property in the county.”
Section 35-21-6 also lets the Commission fund a statewide alert system that texts or emails an owner when something is recorded against their property.
Neither one is automatic. The statute says “may,” not “shall,” and the Commission has said it is still drafting the rules, processes, and forms. If you own property in Jefferson County, the move after October 1 is to call the Probate Office and ask whether the notification service is live and how to sign up.
Why this lands hardest on Birmingham
Fraudsters pick targets by profile, and the profile is consistent: no mortgage, no occupant, no one driving by. Birmingham has an unusually deep supply of exactly that. Estates that sat unsettled after a parent died. Houses in Fairfield and Powderly and Woodlawn that have been empty for years. Lots that were split off decades ago and never built on. Out-of-state heirs who have never seen the property they own.
There is also a hard deadline hiding in the law. Under Sections 35-21-4(a) and 8-6-61(j)(4), a forfeiture action or civil penalty has to be commenced no later than four years after the fraudulent transfer is recorded. A civil action against an agent, broker, or settlement agent runs on the same four-year clock from the recording date. If nobody is watching the property, that clock can run out before the owner ever learns a deed was filed.
The practical takeaway
The new law gives Alabama owners a genuine remedy that did not exist before. It also confirms something that was already true: a vacant, unmortgaged, unmonitored house is a liability that quietly accumulates risk, and the risk is not just deferred maintenance and code tickets anymore.
If you have been carrying an empty Birmingham house because dealing with it felt like more trouble than it was worth, the calculus changed. Selling it removes the exposure entirely.
At Birmingham Homebuyers we buy houses in any condition, including inherited property, vacant property, and houses that need more work than the owner wants to fund. There is no listing, no agent commission, and no repair list. If you want a number, you can request a cash offer today, or read more about selling an inherited house fast in Birmingham and what probate requires before you sell in Alabama.
We buy throughout the metro, including Birmingham, Bessemer, Hueytown, Pleasant Grove, and Gardendale.
This article is general information about a new Alabama statute, not legal advice. If you believe a document has been fraudulently recorded against your property, contact an attorney and the Alabama Securities Commission at 1-800-222-1253.
Sources
- Alabama Securities Commission, “The Alabama Property Protection Act” — https://asc.alabama.gov/statutes/the-alabama-property-protection-act/
- SB292 Enrolled, Act No. 2026-536, full text — https://asc.alabama.gov/wp-content/uploads/2026/05/The-Alabama-Property-Protection-Act-of-2026-SB292.pdf
- Alabama Association of REALTORS, “2026 Legislative Session Recap,” April 21, 2026 — https://www.alabamarealtors.com/posts/2026/04/21/2026-legislative-session-recap