Sandwich Lease Options.

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Are sandwich lease options legal in Alabama? Does the option to purchase agreement need to be recorded? How soon does it need to be recorded?

Do not record the Option to Purchase Agreement. That will tell everyone the details of your deal. Only record a Memorandum of Option to cloud the title. 

Record it before you write a check.

If you lease to the subtenant and give the a purchase option, then you avoid most of the Alabama S.A.F.E. Act problems and federal Dodd-Frank problems.  It's best to hire an attorney. This area in tricky in Alabama.