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AlabamaHB4962026 Regular SessionHouseWALLET

Class 2 municipalities, foreclosure bidding preference and notice for adjoining owners

Sponsored By: Barbara Drummond (Democratic)

Enacted

Counties & Municipalities

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 1 costs, 0 mixed.

Qualifying neighbors get first chance at foreclosures

Beginning October 1, 2026, qualifying adjoining homeowners receive municipal lien foreclosure notices in Alabama’s Class 2 municipalities. Their principal residence must share a boundary with the property and meet the law’s owner-occupied definition. To bid before the public auction, they must submit a sworn statement confirming ownership, occupancy, and tax-exemption eligibility. They must qualify under Sections 40-9-19, 40-9-19.1, 40-9-20, or 40-9-21, or be family of a deceased person eligible for an exemption not yet granted. The municipality accepts the highest qualifying neighbor bid, cancels the auction, and requires immediate payment; without neighbor bids, the public sale proceeds. Municipal ordinances must also provide adjoining owners a way to participate in rehabilitation and use of foreclosed property.

Foreclosure bids must cover liens and taxes

Beginning October 1, 2026, Class 2 municipal lien foreclosure bids must cover the full redemption amount. That amount includes each municipal code lien payoff plus the property’s tax payoff. Code liens cover unpaid housing and building enforcement fines, penalties, abatement costs, and enforcement costs. Their payoff includes principal, 7.5% yearly interest from filing, collection costs such as title searches and publication, and legally allowed penalties. Tax payoff covers delinquent state, county, and municipal property taxes, including unpaid prior years; calculations depend on the property’s tax-sale status. Tax liens remain ahead of municipal code liens, and tax certificate holders include qualifying purchasers, assignees, and the State.

Sponsors & Cosponsors

Sponsor

  • Barbara Drummond

    Democratic • House

Cosponsors

  • Adline Clarke

    Democratic • House

  • Sam Jones

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 189 • No: 0

Senate vote • 4/2/2026

Motion to Read a Third Time and Pass - Adopted Roll Call 1062

Yes: 30 • No: 0

Senate vote • 4/2/2026

Third Reading in Second House

Yes: 30 • No: 0

House vote • 3/17/2026

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 903

Yes: 15 • No: 0 • Other: 89

House vote • 3/17/2026

Third Reading in House of Origin

Yes: 64 • No: 0 • Other: 41

House vote • 3/17/2026

Motion to Adopt - Adopted Roll Call 902

Yes: 50 • No: 0 • Other: 55

Actions Timeline

  1. Enacted

    4/9/2026House

  2. Third Reading in Second House

    4/2/2026Senate

  3. Motion to Read a Third Time and Pass - Adopted Roll Call 1062

    4/2/2026Senate

  4. Ready to Enroll

    4/2/2026House

  5. Enrolled

    4/2/2026House

  6. Signature Requested

    4/2/2026Senate

  7. Delivered to Governor

    4/2/2026House

  8. Reported Out of Committee Second House

    4/1/2026Senate

  9. Read for the Second Time and placed on the Calendar

    4/1/2026Senate

  10. Read for the first time and referred to the Senate Committee on Mobile County Legislation

    3/31/2026Senate

  11. Pending Committee Action in Second House

    3/31/2026Senate

  12. Third Reading in House of Origin

    3/17/2026House

  13. Mobile County Legislation Engrossed Substitute Offered

    3/17/2026House

  14. Motion to Adopt - Adopted Roll Call 902

    3/17/2026House

  15. Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 903

    3/17/2026House

  16. Engrossed

    3/17/2026House

  17. Reported Out of Committee House of Origin

    3/11/2026House

  18. Read for the Second Time and placed on the Calendar

    3/11/2026House

  19. Read for the first time and referred to the House Committee on Mobile County Legislation

    2/24/2026House

  20. Pending Committee Action in House of Origin

    2/24/2026House

Bill Text

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