Alabama Commercial Lease Recording: Protecting a Term Longer Than 20 Years

A business can negotiate a favorable 25-year lease, invest heavily in the property, and still face a dispute over whether the final five years are enforceable. The problem may have nothing to do with late rent or poor maintenance. It may begin with a recording step that was overlooked shortly after signing. Alabama commercial lease recording deserves attention while the transaction is being completed, when the documents and people involved are still available.

For a landlord, the lease may support the property’s expected income and value. For a tenant, the remaining term may justify construction, equipment, and financing. Both sides should know what was signed, what was recorded, and when. A signed lease in an office file and an instrument recorded in the county probate office perform different functions.

Hands signing a document. Illustrative stock photograph from Wix; not a client or case image.

The Alabama commercial lease recording rule

Alabama Code § 35-4-6 limits a leasehold estate to 99 years. For a lease longer than 20 years, the portion exceeding 20 years is void unless the lease or a memorandum is properly acknowledged or approved and recorded within one year after execution in the probate office of the county where the property is located.

The one-year period is tied to execution. A later opening date, rent commencement date, or completion of construction should not simply be substituted for the date specified in the statute. Put the signing history in front of counsel if counterparts were signed on different dates or the agreement makes effectiveness depend on a later event. Resolve the timing question while there is still time to act.

Consider a hypothetical retailer planning a costly buildout under a 25-year direct lease from the owner. The retailer’s budget assumes that improvement costs will be spread across the entire term. A missing recording can put that assumption in dispute. The statute’s consequence concerns the excess term; it should not be summarized as an automatic cancellation of every obligation from the first day of occupancy.

A memorandum can preserve the required public record

Recording does not always require putting every negotiated business term into the public record. Alabama Code § 35-4-51.1 allows a memorandum signed and acknowledged by both lessor and lessee. It must contain the parties’ names, lease term, renewal or extension options, and the required property description. The statute permits specified survey or plot-plan alternatives in the circumstances it describes.

That option is useful when a lease contains detailed financial arrangements, operating obligations, and other provisions the parties do not want to reproduce unnecessarily. The memorandum must still be accurate. Compare it with the executed lease rather than an earlier negotiation draft. Review every referenced exhibit before submission, particularly the property description and any plan showing the leased portion of a larger building or tract.

After recording, obtain the recorded instrument and examine it page by page. Check that it identifies the correct parties and property and includes the attachments actually intended for recording. Keep the recording information with the lease file. A closing checklist marked complete is helpful, but the recorded document is what a later lawyer, buyer, or lender will need to inspect.

Rent acceptance does not erase the statutory problem

In Ex parte Achenbach, 783 So. 2d 4 (Ala. 2000), the Alabama Supreme Court considered an unrecorded ground lease with an original term exceeding 20 years. The Court applied § 35-4-6 and rejected the argument that a party could be prevented by estoppel from asserting the statutory invalidity. It overruled contrary estoppel reasoning in the earlier Eastwood Mall decision.

The practical lesson is straightforward: a long history of rent payments is not a sound substitute for checking compliance. A buyer who receives a rent roll showing many years remaining should ask for the recorded lease or memorandum, not assume the spreadsheet proves the remaining term. The same review matters when a tenant is purchasing a business whose value depends on staying in its current location.

Do not turn that lesson into a shortcut for declaring someone else’s lease invalid. The parties may have a recorded memorandum that is missing from the management file. There may also be later agreements, assignments, or facts requiring a different legal analysis. Search the actual record and assemble the complete document history before sending a demand based on an assumed defect.

Shelves holding organized files. Illustrative stock photograph from Wix; not a client or case image.

A timely but defective recording presents a different question

G.R.L.C. Trust v. Garrison Decatur Crossings, LLC, No. 1170315 (Ala. June 15, 2018) involved a memorandum recorded on time but missing an intended legal-description exhibit. The Supreme Court affirmed reformation based on evidence of mutual mistake. It distinguished Achenbach, where the lease had not been recorded within the statutory period.

That distinction can matter greatly in an existing dispute. A completely missing recording and a timely recording with an omitted attachment are not the same factual problem. Reformation also requires proof; it is not a promise that a court will repair every incomplete document. Preserve the closing drafts, transmittal messages, signed exhibits, and correspondence showing what both parties intended when the instrument was executed.

For a current transaction, prevention is preferable to a lawsuit over reconstruction. Assign responsibility for preparing, signing, submitting, and checking the memorandum. If a filing is rejected, keep the rejection and arrange prompt review. Do not let a missing acknowledgment or exhibit sit unresolved because everyone assumes someone else is handling the recording.

Subleases and later agreements need their own review

The document’s legal character also matters. In Rochester-Mobile, LLC v. C&S Wholesale Grocers, Inc., No. 1160185 (Ala. June 16, 2017), the Alabama Supreme Court held that the sublease before it was not void under § 35-4-6. The opinion explains why the statute’s restrictions on creation of a long leasehold should not automatically be imposed on a sublease of an existing interest.

That decision is a reason to classify the transaction accurately, not a reason to ignore recording and title issues generally. Determine whether the document is a direct lease, assignment, sublease, amendment, or new agreement. Read the underlying lease and any required consents. A title on the first page does not replace a review of the rights the document actually transfers.

Renewal options also belong in the review. Do not examine only the bold initial-term heading while overlooking pages that govern extensions. Ask counsel to assess the full arrangement and the recording history. Similarly, do not assume every amendment restarts the original recording clock or that a late filing necessarily cures an earlier defect. Those conclusions require the documents and applicable authority.

Build a lease file that survives a sale or dispute

Keep the signed lease, memorandum, recording evidence, legal-description exhibits, amendments, assignments, and option notices together. Include a chronology identifying execution, recording, rent commencement, and any later changes. If the file came from a prior owner or manager, identify missing items now. Reconstructing a decades-old transaction becomes harder when the people who handled the closing are unavailable.

Apex Law handles commercial landlord-tenant disputes in Alabama. To request a review, use our Alabama contact form and identify the property’s county, the parties’ roles, and the concern about the lease term. Tell us about any pending sale, financing deadline, termination demand, or lawsuit. With the signed documents and recording history, we can evaluate the actual issue before a missing piece of paperwork becomes a dispute over years of occupancy or rent.