Alabama's Land Bank Takes Property the State Has Already Held for Three Years, Free

Ohio builds land banks county by county and funds them from delinquent taxes as they are collected. Pennsylvania lets any municipality over ten thousand people create one and funds it from taxes after a sale. Alabama did something different again: it created a single state authority that takes tax-delinquent land off the Department of Revenue for nothing, and then let cities and counties form their own authorities underneath it. For anyone maintaining the inventory, the most useful fact in the chapter is a waiting period.

A State Authority, and a Free Deed

Ala. Code § 24-9-2 states the purpose: the Alabama Land Bank Authority is created "for the purpose of acquiring tax delinquent properties in order to foster the public purpose of rehabilitating land which is in a nonrevenue-generating, nontax-producing status to an effective utilization status in order to provide housing, new industry, new commercial and economic development, other productive uses, jobs for the citizens, assemble parcels of real property for redevelopment, stabilize property values, and remove blight."

Acquisition runs through the Department of Revenue rather than through a foreclosure. Section 24-9-6(a): the authority "may submit a written request to the Land Commissioner of the Alabama Department of Revenue for the transfer of the state's interest in certain properties to the authority. Upon receipt of such request, the Land Commissioner shall issue a tax deed conveying the state's interest in the property to the authority."

And the consideration is nothing: "The authority shall not be required to pay the amount deemed to have been bid to cover delinquent taxes or any other amount in order to obtain the tax deed." The state writes off what it was owed in exchange for getting the parcel back into use.

The Three-Year Rule Is the Condition Report

What stops the authority taking everything is § 24-9-6(b)(1). Transfers are "limited to parcels that have been bid in for the state pursuant to Chapter 10 of Title 40 for at least three years and the state's interest in real property acquired pursuant to Chapter 29 of Title 40 for delinquent taxes administered by the state and held for at least three years."

Three years bid in for the state. That is a parcel nobody bought at a tax sale, that the state has carried since, and that has had no owner with an interest in maintaining it for at least that long - usually considerably longer, because the delinquency preceded the sale.

For a contractor that single condition predicts more about the work than any inspection form. Alabama land bank inventory is not recently vacated housing. It is land and structures that have been through a tax sale, failed to sell, and then sat. Vegetation, roof failure, unsecured openings and dumping are the normal condition rather than the exception, and the first visit on a newly transferred parcel is closer to a survey than a maintenance call.

Section 24-9-6(d) adds one limit worth knowing: nothing in Act 2013-249 "shall be construed to grant any power of eminent domain to the authority or any local authority." The authority acquires what the state already holds; it does not take.

What It May Do, and the Public Inventory

Section 24-9-6(c) sets out administration in two paragraphs. The first is a transparency rule that happens to be useful commercially: "All property acquired by the authority shall be inventoried and the inventory shall be maintained as a public record."

The second is the powers clause: the authority "shall have the power to manage, maintain, protect, rent, lease, repair, insure, alter, sell, trade, exchange, or otherwise dispose of any property acquired pursuant to subsection (b)(1), on terms and conditions determined in the sole discretion of the authority."

Manage, maintain, protect, repair, insure. Alabama does not itemise the tasks the way Ohio does - no mention of grass or boarding - but it names the verbs that cover the work and adds "in the sole discretion of the authority," which leaves scope and standard to the board rather than to a statute or a court. The section has been amended repeatedly: Act 2009-738, Act 2010-727, Act 2013-249, Act 2018-192 and Act 2021-345.

More Than a Hundred, and a City Can Have Its Own

Section 24-9-10 creates the second tier. Subsections (a) and (b) use the same test for municipalities and counties: "If the number of tax delinquent properties in a municipality exceeds 100," the governing body may adopt a resolution declaring that it is "wise, expedient, and necessary" that a local authority be formed.

Incorporation is by filing a certificate with the judge of probate of the county. Under § 24-9-10(c) the certificate must state the name of the local unit of government forming the authority, the name of the local authority, the size of its initial governing body - "which shall be composed of an odd number of members, but not less than five" - the qualifications, method of selection and terms of the initial board, a method for adopting bylaws, "a method for the distribution of proceeds from the activities of the local authority," a method for dissolution, and any other matters the local unit considers advisable.

Subsection (d) then links the tiers: following incorporation, a local authority may enter into an intergovernmental agreement with the state authority providing for the transfer to it of property the state authority holds within the municipality's corporate limits or the county's boundaries. Section 24-9-4(1) defines that agreement as "the intergovernmental cooperation agreement entered into between an authority and a local authority."

The practical consequence is that the counterparty on an Alabama parcel depends on whether a local authority exists where it sits, and whether the transfer has happened. Both are checkable before quoting.

What This Means If You Do the Work

• Expect long-neglected condition as the baseline: § 24-9-6(b)(1) only allows transfer of parcels bid in for the state for at least three years
• The authority pays nothing for the deed, so acquisition cost is not competing with the maintenance budget the way it does for a purchaser
• Scope authority is broad but undefined - "manage, maintain, protect, rent, lease, repair, insure, alter" at the authority's sole discretion, with no statutory standard to argue against
• The inventory is a public record under § 24-9-6(c)(1), which is the honest way to size a programme before pitching it
• Check whether a local authority exists for the municipality or county: above 100 tax-delinquent properties, one can be incorporated, and property may have been transferred down to it
• A local authority's certificate of incorporation sets a method for distributing proceeds - worth reading, because it shapes what money is available for work
• Neither the state authority nor a local authority has eminent domain, so the pipeline is limited to what the state already holds

For the other land bank models in the footprint, see Ohio, where the statute names grass cutting and board-ups and funds them from delinquent tax collections and Pennsylvania, which funds a land bank from taxes on property it has already sold. Alabama's other regimes over a building someone else owns are covered separately: there is no blighted-property receivership and the municipality does the work itself, what a tax-sale purchaser can recover as preservation improvements, a chapter 7 trustee in Alabama's Bankruptcy Administrator districts, and the Uniform Assignment for Benefit of Creditors Act in force since 1 October 2026. On the municipal side see Birmingham's registration under the 2026 act. Field capability is on our Alabama page.