Alabama House Bill HB382 Engrossed / Bill

                    HB382ENGROSSED
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HB382
JPITTNN-2
By Representative Kiel
RFD: Commerce and Small Business
First Read: 04-Mar-25
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First Read: 04-Mar-25
A BILL
TO BE ENTITLED
AN ACT
Relating to real estate transactions; to amend Sections
34-27-2, 34-27-3, 34-27-8, 34-27-32, 34-27-36, 34-27-81,
34-27-82, 34-27-83, 34-27-84, 34-27-85, and 34-27-86, Code of
Alabama 1975, to further provide for penalties and fines for
certain violations; to provide for handling declined methods
of payment for license fees; to clarify when a real estate
consumer agency disclosure form is required; to further
clarify when a written brokerage agreement is required to
establish a brokerage relationship; to provide for a licensees
use of any office of the company under which he or she is
licensed; to further provide for the duties of a qualifying
broker; to further provide for the duties of a licensee; and
to add Section 34-27-39 to the Code of Alabama 1975, to
establish the scope and operation of teams.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 34-27-2, 34-27-3, 34-27-8,
34-27-32, 34-27-36, 34-27-81, 34-27-82, 34-27-83, 34-27-84,
34-27-85 and 34-27-86, Code of Alabama 1975, are amended to
read as follows:
"§34-27-2
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"§34-27-2
(a) For purposes of Articles 1 and 2 of this chapter,
the following terms shall have the respective following
meanings ascribed by this section :
(1) ASSOCIATE BROKER. Any broker other than a
qualifying broker.
(2) BROKER. Any person licensed as a real estate broker
under Articles 1 and 2 of this chapter.
(3) BUYER'S AGREEMENT. An agreement between a real
estate company and a person through which the company agrees
to assist the person with the purchase of real property in
exchange for a fee, whether as a fiduciary or non-fiduciary.
(3)(4) COMMISSION. The Alabama Real Estate Commission,
except where the context requires that it means the fee paid
to a broker or salesperson.
(4)(5) COMMISSIONER. A member of the commission.
(5)(6) COMPANY. Any sole proprietorship, corporation,
partnership, branch office, or lawfully constituted business
organization as the Legislature may provide for from time to
time, which is licensed as a company under Articles 1 and 2 of
this chapter.
(6)(7) ENGAGE. Contractual relationships between a
qualifying broker and an associate broker or salesperson
licensed under him or her whether the relationship is
employer-employee, independent contractor, or otherwise.
(7)(8) INACTIVE LICENSE. A license which is being held
by the commission office by law, order of the commission, at
the request of the licensee, or which is renewable but is not
currently valid because of failure to renew.
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currently valid because of failure to renew.
(8)(9) LICENSEE. Any broker, salesperson, or company.
(9)(10) LICENSE PERIOD. That period of time beginning
on October 1 of a year designated by the commission to be the
first year of a license period and ending on midnight
September 30 of the year designated by the commission as the
final year of that license period.
(11) LISTING AGREEMENT. An agreement between a company
and an owner wherein the company agrees to assist the owner in
the sale of the owner's real property in exchange for a fee,
whether as a fiduciary or non-fiduciary. The term includes an
agreement giving the company the right to list or market the
owner's real property upon the owner's future decision to sell
the property.
(10)(12) PERSON. A natural person.
(11)(13) PLACE OF BUSINESS.
a. A licensed broker living in a rural area of this
state who operates from his or her home, provided that he or
she sets up and maintains an office for the conduct of the
real estate business, which shall not be used for living
purposes or occupancy other than the conduct of the real
estate business. The office shall be used by the broker only
and not as a place of business from which any additional
licensee operates under his or her license. The office shall
have a separate business telephone, separate entrance, and be
properly identified as a real estate office.
b. All licensees located within the city limits or
police jurisdiction of a municipality shall operate from a
separate office located in the city limits or police
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separate office located in the city limits or police
jurisdiction. The office shall have a business telephone, meet
all other regulations of the Real Estate Commission, and be
properly identified as a real estate office. Hardship cases
may be subject to waiver of this regulation upon application
and approval by the commission.
c. All business records and files shall be kept at the
place of business as required by law or Real Estate Commission
rules.
(14) PRINCIPAL BROKER. As used in other states, the
term has the same meaning as "qualifying broker" in this
state.
(12)(15) QUALIFYING BROKER. A broker under whom a sole
proprietorship, corporation, partnership, branch office, or
lawfully constituted business organization as the Legislature
may from time to time provide is licensed, or a broker
licensed as a company to do business as a sole proprietorship
who is responsible for supervising the acts of the company or
proprietorship and all real estate licensees licensed
therewith.
(13)(16) RECOVERY FUND. The Alabama Real Estate
Recovery Fund.
(14)(17) SALESPERSON. Any person licensed as a real
estate salesperson under Articles 1 and 2 of this chapter.
(18) TEAM. Two or more licensees within the same
company who work together to provide services for which a
license is required and who hold themselves out to the public
as a distinct group within the company.
(b) The licensing requirements of Articles 1 and 2 of
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(b) The licensing requirements of Articles 1 and 2 of
this chapter shall not apply to any of the following persons
and transactions:
(1) Any owner in the managing of, or in consummating a
real estate transaction involving, his or her own real estate
or the real estate of his or her spouse ,or child, or parent.
(2) An attorney-at-law performing his or her duties as
an attorney-at-law.
(3) Persons acting without compensation and in good
faith under a duly executed power of attorney authorizing the
consummation of a real estate transaction.
(4) Persons or a state or federally chartered financial
institution acting as a receiver, trustee, administrator,
executor, or guardian; or acting under a court order or under
authority of a trust instrument or will.
(5) Public officers performing their official duties.
(6) Persons performing general clerical or
administrative duties for a broker so long as the person does
not physically show listed property.
(7) Persons acting as the manager for an apartment
building or complex. However, this exception shall not apply
to a person acting as an on-site manager of a condominium
building or complex.
(8) Persons licensed as time-share sellers under
Article 3 of this chapter performing an act consistent with
that article.
(9) Transactions involving the sale, lease, or transfer
of cemetery lots."
"§34-27-3
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"§34-27-3
(a)(1) Co-brokerage agreements between a licensed
principal broker of another state and licensed qualifying
broker of this state are governed by this section.
(2) A licensed principal broker of another state may
act as co-broker in a sale or lease transaction with a
licensed qualifying broker of this state by executing a
written agreement specifying each parcel of property covered
by the agreement if the state in which the nonresident broker
is licensed offers the same privileges to licensees of this
state.
(3) A co-brokerage agreement is limited to three
transactions per calendar year, per licensed out-of-state
principal broker. A transaction may include multiple
properties if the properties are part of the same portfolio.
(4) A licensed out-of-state principal broker shall not
use a co-brokerage agreement to engage in transactions in
Alabama totaling more than fifty million dollars ($50,000,000)
in any calendar year.
(b) Whenever an Alabama qualifying broker enters into a
co-brokerage agreement with a nonresident licensed
out-of-state principal broker to perform in Alabama any of the
acts described in Section 34-27-30 in Alabama, the Alabama
qualifying broker shall file within 10 days with the
commission a copy of each such written agreement not more than
10 days after the agreement is signed by all of the parties	.
By signing the agreement, the nonresident licensed
out-of-state principal broker agrees to abide by Alabama law ,
and the rules and regulations of the commission; and further
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and the rules and regulations of the commission; and further
agrees that civil actions may be commenced against him or her
in any court of competent jurisdiction in any county of this
state in which a claim may arise. Complaints against the
licensed out-of-state principal broker related to the Alabama
transaction governed by a co-brokerage agreement shall also be
forwarded to the state governmental body with regulatory
authority over the out-of-state principal broker's license.
(c) All co-brokerage agreements with licensed
out-of-state principal brokers for transactions occurring in
Alabama shall include all of the following provisions and
acknowledgments:
(1) A listing or joint listing of the property
involved.
(2) A specification of all material terms, including,
but not limited to, the financial terms.
(3) That an Alabama broker shall supervise the showing
of property located in Alabama and any subsequent
negotiations.
(4) That the name of the Alabama broker shall appear in
all advertising of real property located in the state.
(5) That the Alabama broker shall verify that the
licensed out-of-state broker is a licensed principal broker in
another state.
(6) That any earnest money deposited pursuant to the
agreement shall be held in escrow by the Alabama qualifying
broker unless both the buyer and the seller agree in writing
to relieve the Alabama qualifying broker of this
responsibility."
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responsibility."
"§34-27-8
(a) A majority of the commission members shall
constitute a quorum for the conduct of commission business.
The commission may adopt and enforce all rules and regulations
pursuant to the state administrative procedure statutes Alabama
Administrative Procedure Act necessary for the administration
of this chapter, and to otherwise do all things necessary and
convenient for effecting this chapter.
(b) In addition to the powers granted in this section,
the commission may adopt and enforce rules and regulations
governing the requirements of agency disclosure by licensed
brokers and salespersons.
(c) Each offer to purchase prepared after August 1,
1998, shall have prominently displayed the following AGENCY
DISCLOSURE clause which shall be completed and initialed as
indicated:
The listing company _________ is:
(Two blocks may be checked)
____ An agent of the seller.
____ An agent of the buyer.
____ An agent of both the seller and buyer and is
acting as a limited consensual dual agent.
____ Assisting the _____ buyer _____ seller as a
transaction broker.
The selling company _________ is:
(Two blocks may be checked)
____ An agent of the seller.
____ An agent of the buyer.
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____ An agent of the buyer.
____ An agent of both the seller and buyer and is
acting as a limited consensual dual agent.
____ Assisting the _____ buyer _____ seller as a
transaction broker. "
"§34-27-36
(a)(1) The commission or its staff may on its own, or
on the verified complaint in writing of any person,
investigate the actions and records of a licensee. The
commission may issue subpoenas and compel the testimony of
witnesses and the production of records and documents during
an investigation. If probable cause is found, a formal
complaint shall be filed and the commission shall hold a
hearing on the formal complaint.
(2) In each instance in which a licensee is found in
violation of any of the conduct prohibited in subsection (b),
the commission may impose any of the following penalties:
a. A fine of not less than one hundred dollars ($100)
nor more than five thousand dollars ($5,000).
b. Require the licensee to complete an approved
education course or courses in addition to completing the
existing continuing education requirements.
c. Issue a public reprimand.
d. Revoke or suspend any or all licenses held under
this chapter by the licensee. The commission shall revoke or
suspend the license or impose a fine of not less than one
hundred dollars ($100) nor more than two thousand five hundred
dollars ($2,500), or both, or reprimand the licensee in each
instance in which the licensee is found guilty of any of the
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instance in which the licensee is found guilty of any of the
following acts set out in this section. The commission may
revoke or suspend a license The suspension may continue until
such time as the licensee has completed an approved continuing
education course ,and/orhas made restitution to accounts
containing funds to be held for other parties , or both. The
commission may also stay the revocation or suspension of a
license and require completion of an approved education course
and/or, require the making of restitution to accounts
containing funds to be held for other parties , or both.
(b) A licensee is prohibited from doing all of the
following:
(1) Procuring or attempting to procure, a license, for
himself or herself or another, by fraud, misrepresentation, or
deceit, or by making a material misstatement of fact in an
application for a license.
(2) Engaging in misrepresentation or dishonest or
fraudulent acts when selling, buying, trading, or renting real
property of his or her own or of a spouse ,or child, or
parent.
(3) Making a material misrepresentation, or failing to
disclose to a potential purchaser or lessee any latent
structural defect or any other defect known to the licensee.
Latent structural defects and other defects do not refer to
trivial or insignificant defects but refer to those defects
that would be a significant factor to a reasonable and prudent
person in making a decision to purchase or lease.
(4) Making any false promises of a character likely to
influence, persuade, or induce any person to enter into any
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influence, persuade, or induce any person to enter into any
contract or agreement.
(5) Pursuing a continued and flagrant course of
misrepresentation or the making of false promises through
agents or salespersons or any medium of advertising or
otherwise.
(6) Publishing or causing to be published any
advertisement which deceives or which is likely to deceive the
public, or which in any manner tends to create a misleading
impression or which fails to identify the person causing the
advertisement to be placed as a licensed broker or
salesperson.
(7) Acting for more than one party in a transaction
without the knowledge and written consent in writing of all
parties for whom he or she acts.
(8)a. Failing, within a reasonable time, to properly
account for or remit money coming into his or her possession
which belongs to others, or commingling money belonging to
others with his or her own funds.
b. Failing to deposit and account for at all times all
funds belonging to, or being held for others, in a separate
federally insured account or accounts in a financial
institution located in Alabama.
c. Failing to keep for at least three years a complete
record of funds belonging to others showing to whom the money
belongs, date deposited, date of withdrawal, and other
pertinent information.
(9) Placing a sign on any property offering it for
sale, lease, or rent without the consent of the owner.
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sale, lease, or rent without the consent of the owner.
(10) Failing to voluntarily furnish a copy of each
listing, contract, lease, and other document to each party
executing the document with reasonable promptness.
(11) Paying any profit, compensation, commission, or
fee to, or dividing any profit, compensation, commission, or
fee with, anyone other than a licensee or multiple listing
service. This subdivision shall not prevent an associate
broker or salesperson from owning any lawfully constituted
business organization, including, but not limited to, a
corporation or limited liability company or limited liability
corporation, for the purpose of receiving payments
contemplated in this subsection. The business organization
shall not be required to be licensed under this chapter, and
shall not engage in any other activity requiring a real estate
license.
(12) Paying or receiving any rebate from any person in
a real estate transaction.
(13) Inducing any party to a contract to breakbreach
the contract for the purpose of substituting a new contract,
where the substitution is motivated by the personal gain of
the licensee.
(14) If the licensee is a salesperson or associate
broker, accepting a commission or other valuable consideration
for performing any act for which a license is required from
any person or company except his or her qualifying broker.
(15) If the licensee is a qualifying broker or company,
allowing a salesperson or associate broker licensed under him
or her to advertise himself or herself as a real estate agent
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or her to advertise himself or herself as a real estate agent
without the name or trade name of the qualifying broker or
company appearing prominently on the advertising; or if the
licensee is a salesperson or associate broker, advertising
himself or herself as a real estate agent without the name or
trade name of the qualifying broker or company under whom the
salesperson or associate broker is licensed appearing
prominently on the advertising. For purposes of this
subdivision, "prominently" means using a font size that is
equal to or larger than any other name, text, or logo, other
than terms like "for sale" or "for lease," in the
advertisement and situated and sized for the purpose of
gaining the attention of consumers viewing the advertisement.
(16) Presenting to the commission, as payment for a fee
or fine, a check that is returned unpaid.
(17)(16) Establishing an association, by employment or
otherwise, with an unlicensed person who is expected or
required to act as a licensee, or aiding, abetting, or
conspiring with a person to circumvent the requirements of
this chapter.
(18)(17) Failing to disclose to an owner the licensee's
intention to acquire, directly or indirectly, an interest in
property which he or she or his or her associates have been
employed to sell.
(19)(18) Violating or disregarding any provision of
this chapter or any rule, regulation, or order of the
commission.
(20)(19) If a broker, accepting accepts a "net listing"
agreement for sale of real property or any interest therein. A
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agreement for sale of real property or any interest therein. A
"net listing" agreement is one that stipulates a net price to
be received by the owner with the excess due to be received by
the broker as his or her commission.
(21)(20) Misrepresenting or failing to disclose to any
lender, guaranteeing agency, or any other interested party,
the true terms of a sale of real estate.
(22)(21) Failing to inform the buyer or seller at the
time an offer is presented that he or she will be expected to
pay certain closing costs and the approximate amount of those
costs.
(23)(22)a. Having entered a plea of guilty or nolo
contendere to, or having been found guilty of or convicted of
a felony or a crime involving moral turpitude.
b. Having a final money judgment rendered against him
or her which results from an act or omission occurring in the
pursuit of his or her real estate business or involves the
goodwill of an existing real estate business.
(24)(23) Offering free lots or conducting lotteries for
the purpose of influencing a party to purchase or lease real
estate.
(25)(24) Failing to include a fixed date of expiration
in a written listing agreement or failing to leave a copy of
the agreement with the principal.
(26)(25) Conduct which constitutes or demonstrates
dishonest dealings, bad faith, or untrustworthiness.
(27)(26) Acting negligently or incompetently in
performing an act for which a person is required to hold a
real estate license.
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real estate license.
(28)(27) Failing or refusing on demand to produce a
document, book, or record in his or her possession concerning
a real estate transaction conducted by him or her for
inspection by the commission or its authorized personnel or
representative.
(29)(28) Failing within a reasonable time to provide
information requested by the commission during an
investigation or after a formal complaint has been filed.
(30)(29) Failing without cause to surrender to the
rightful owner, on demand, a document or instrument coming
into his or her possession.
(31)(30) If a qualifying broker or company, failing to
keep in theirhis, her, or its files copies of all contracts,
leases, listings, and other records pertinent to real estate
transactions for a period of three years.
(b) If it appears that a person , firm, corporation, or
any business entity has engaged, or is about to engage, in an
act or practice constituting a violation of Article 1 or 2 of
this chapter or any rule or order of the commission, the
commission, through the Attorney General, may institute legal
actions to enjoin the act or practice and to enforce
compliance with Articles 1 and 2 of this chapter or any rule
or order of the commission. To prevail in an action, it shall
not be necessary to allege or prove either that an adequate
remedy at law does not exist or that substantial or
irreparable damage would result from the continued violation.
(c)(1) Notwithstanding any other provisions of law, the
commission may issue an order requiring any accused person,
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commission may issue an order requiring any accused person,
firm, corporation, or business entity to cease and desist from
engaging in activities requiring a license under this chapter
when the accused person, firm, corporation, or business entity
is not licensed under this chapter. The order shall be entered
by the executive director after a finding of probable cause by
the commission staff. The order shall become final 15 days
after its service upon the accused, unless the accused
requests a hearing before the commission. Upon hearing the
case and finding violations, the commission may make the cease
and desist order final and the commission may impose a fine
for each violation in an amount consistent with the range of
fines applicable to licensees, and in addition, may impose a
fine in the amount of any gain or economic benefit that was
derived from the violation, and in addition, may impose a fine
in the amount of the commission's costs incurred. Any fines
not paid as ordered shall be enforceable in any court with
competent jurisdiction and proper venue.
(2) Notwithstanding any other provisions of law, the
commission may decline to issue an order requiring any accused
person, firm, corporation, or business entity to cease and
desist from engaging in activities requiring a license under
this chapter when the accused person, firm, corporation, or
business entity is not licensed under this chapter. In this
instance, the commission shall proceed to give appropriate
notice of the violations and hold a hearing thereon. Upon
hearing the case and finding violations, the commission may
impose a fine for each violation in an amount consistent with
the range of fines applicable to licensees, and in addition,
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the range of fines applicable to licensees, and in addition,
may impose a fine in the amount of any gain or economic
benefit that was derived from the violation, and in addition,
may impose a fine in the amount of the commission's costs
incurred. Any fine or fines not paid as ordered shall be
enforceable in any court with competent jurisdiction and
proper venue.
(d) The commission shall notify the licensee and
qualifying broker in writing regarding the complaint.
(e) The commission shall notify the complainant,
licensee, and qualifying broker in writing regarding the
disposition of the complaint.
(f) If a licensee presents a form of payment to the
commission, or to any third party on the commission's behalf,
which is declined or rejected by a financial institution or
merchant service company, the licensee shall have 30 days,
upon electronic notification from the commission, to submit
full and valid payment for the initial fee or fine and an
additional fee for submitting the faulty payment, not to
exceed the maximum amount allowed by Section 8-8-15. Failure
to submit full and valid payment within 30 days of electronic
notification by the commission will result in the licensee's
license becoming inactive until licensee submits full payment.
Failure to submit full and valid payment within six months
after electronic notification by the commission shall result
in the licensee's license lapsing. "
"§34-27-81
As used in this article, the following words shall have
the following meanings:
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the following meanings:
(1) AGENCY AGREEMENT. A written brokerage agreement
between a brokercompany and a clientconsumer which creates a
fiduciary relationship between the company's qualifying
broker, including any licensees designated by the qualifying
broker to sign the agreement, and the consumera principal, who
becomesis commonly referred to as a client of the qualifying
broker and designated licensee through the agreement .
(2) BROKER. Any person licensed as a real estate broker
pursuant to Articles 1 and 2 of this chapter.
(3) BROKERAGE AGREEMENT. A specific written agreement
between a brokerage firmcompany as defined by Section 34-27-2
and a consumer which establishes a brokerage relationship. The
brokerage agreement shall contain a statement of the terms and
conditions of the brokerage services to be provided , including
any compensation to be paid to or through the company. The
term includes agency agreements and transaction facilitator
agreements.
(4) BROKERAGE SERVICE. Any service, except for rental
or property management services, provided by a broker or
licensee to another person and includes all activities for
which a real estate license is required under Articles 1 and 2
of this chapter.
(5)(6) CONSUMER. A person who obtains information,
advice, or services concerning real estate from a real estate
licensee.
(6)(5) CLIENT. A person who has an agency agreement
with a broker for brokerage service, whether he or she be
buyer or seller.
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buyer or seller.
(7) CUSTOMER. A person who is provided brokerage
services by a broker or licensee but who is not a client of
the broker.
(8) DUAL AGENCY. An agency relationship in which the
same brokerage firm a licensee, with the informed written
consent of all parties to a transaction, represents both the
seller and the buyer in the same real estate transaction once
all parties have signed the consent agreement . Circumstances
which establish a dual agency include, but are not limited to,
one of the following:
a. When two or more licensees licensed under the same
broker each represent a different party to the transaction.
b. When one licensee represents both the buyer and
seller in a real estate transaction.
(9) INFORMED CONSENT. A consumer's agreement to allow
something to happen which is based upon full disclosure of
facts needed to choose appropriate brokerage services.
(10) LICENSEE. Any broker, salesperson, or company as
defined in Section 34-27-2 .
(11) LIMITED CONSENSUAL DUAL AGENT. A licensee who,
with the written informed consent of all parties to a
contemplated real estate transaction, is engaged as an agent
for both the buyer and seller. Circumstances which establish
dual agency include, but are not limited to, one of the
following:
a. When two or more licensees licensed under the same
broker each represent a different party to the transaction.
b. When one licensee represents both the buyer and
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b. When one licensee represents both the buyer and
seller in a real estate transaction.
(12)(11) MATERIAL FACT. A fact that is of significance
to a reasonable party which affects the party's decision to
enter into a real estate contract.
(13)(12) QUALIFYING BROKER. A broker under whom a
corporation, partnership, branch office, or lawfully
constituted business organization, as the Legislature may from
time to time provide, is licensed, or a broker licensed to do
business as a sole proprietorship who is responsible for
supervising the acts of the company, or proprietorship and all
real estate licensees licensed there with.
(14)(13) REAL ESTATE TRANSACTION. The purchase, sale,
lease and rental, option, or exchange of an interest in real
estate.
(15)(14) SINGLE AGENT. A licensee who is engaged by and
represents through an agency agreement only one party in a
real estate transaction. A single agent includes, but is not
limited to, onemay be only one of the following:
a. Buyer's agent, which means a broker or licensee who
is engaged by and represents only the buyer in a real estate
transaction.
b. Seller's agent, which means a broker or licensee who
is engaged by and represents only the seller in a real estate
transaction.
(16) SUB-AGENT. A licensee who is empowered to act for
another broker in performing real estate brokerage tasks for a
principal, and who owes the same duties to the principal as
the agent of the principal.
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the agent of the principal.
(17)(15) TRANSACTION BROKERFACILITATOR. A licensee who
assists one or more parties in a contemplated real estate
transaction without being an agent or fiduciary or advocate
for the interest of that party to a transaction . The term has
the same meaning as "Transaction Broker" provided in Act
98-618."
"§34-27-82
(a) When engaged in any real estate transaction, the
licensee may act as a single agent, sub-agent, a limited
consensual dual agent, or as a transaction brokerfacilitator.
(b) At the initial contact between a licensee and the
consumer and until such time a broker enters into a specific
written agreement to establish an agency relationship with one
or more of the parties to a transaction, the licensee shall
not be considered a transaction facilitator and not an agent
of that consumer. An agency relationship shall not be assumed,
implied, or created without a written bilateral agency
agreement signed by the licensee and the consumer establishing
the terms of the agency relationship. In the absence of a
signed brokerage agreement between the parties, the
transaction facilitator relationship shall remain in effect.
(c) As soon as reasonably possible and before any
confidential information is disclosed to any other person by a
licensee, theThe licensee shall provide a written disclosure
form to a consumer for signature describing the alternative
types of brokerage services, as identified in subsection (a),
that are available to clients and customers of real estate
brokerage companies , as soon as reasonably possible and before
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brokerage companies , as soon as reasonably possible and before
any confidential information is disclosed to any other person
by a licensee. Such disclosure must occur at least prior to a
licensee providing any brokerage service, which includes a
licensee showing a property as to a prospective buyer but does
not include a seller's agent conducting an open house as to
prospective buyers. As part of the disclosure, the The
licensee shall also provideinform a consumer as toin writing
the specific types of brokerage services that are provided by
his or her company , as required by Section 34-27-83, which
shall also include general information on how the company and
licensee are compensated for the brokerage services . A broker
shall not be required to offer or engage in any one or in all
of the alternative brokerage arrangements services specified
in subsection (a). The licensee will provide a written form to
the consumer for their signature describing the alternative
types of brokerage arrangements available. All rental or
property management services are excluded from the
requirements of this subsection.
(d) A licensee shall not be required to comply with the
provisions of subsection (c) when engaged in transactions with
any corporation, non-profitnonprofit corporation, professional
corporation, professional association, limited liability
company, partnership, any partnership created under the
Uniform Partnership Act ,(commencing at Section 10-8A-101 ),
real estate investment trust, business trust, charitable
trust, family trust, or any governmental entity in
transactions involving real estate.
(e) After disclosure, the consumer may make an
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(e) After disclosure, the consumer may make an
affirmative election of a specific type of brokerage
arrangementservice that is available from the real estate
brokerage company by signing a brokerage agreement . The
brokerage agreement shall contain a statement of the terms and
conditions of the brokerage services that the broker will
provide. The consumer or customer may not be required to enter
into a written brokerage agreement in order for a licensee to
show a property to a consumer or customer. Notwithstanding
subsection (d), a written brokerage agreement is required
prior to a licensee either listing for sale or submitting an
offer on a property on behalf of a customer or client for
compensation. In the absence of a signed brokerage agreement
between the parties, the transaction brokerage relationship
shall remain in effect.
(f) When serving as a transaction brokerfacilitator,
the duties of the licensee to all the parties to a real estate
transaction are limited to those which are enumerated in
Section 34-27-84. A signed brokerage agreement between the
parties or, in the absence of a signed brokerage agreement,
the continuation of the transaction brokeragefacilitator
relationship, shall constitute informed consent by the
consumer as to the services the consumer shall receive from
the broker.
(g) When two or more licensees under the same
qualifying broker are in separate agency agreements with a
different party in the same transaction, the qualifying broker
can designate those licensees as single agents as to the
licensee's client. A designated single agent is not a dual
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licensee's client. A designated single agent is not a dual
agent, and neither the qualifying broker, the designated
single agent, nor any other licensee involved in the
transaction shall be assumed to have knowledge to any other
party with whom the licensee has not entered into an agency
agreement.
(g)(h) Disclosure forms shall be provided to buyers and
sellers. All real estate brokerage firmscompanies operating
within the State of Alabama shall use the same agency
disclosure forms. Disclosure forms describing the alternative
types of brokerage services identified above shall be written
by the Alabama Real Estate Commission.
(i) Each offer to purchase shall prominently display a
representation disclosure clause in the following form,
completed and initialed as indicated:
The listing licensee,       is:
___ An agent of the seller.
___ A dual agent.
___ Assisting the seller as a transaction facilitator.
The selling licensee,       is:
___ An agent of the buyer.
___ A dual agent.
___ Assisting the buyer as a transaction facilitator.
(h)(j) Nothing in this section shall prohibit the
consumer from entering into a written contract with a
qualifying broker which contains provisions for services not
specifically identified in the written disclosure form."
"§34-27-83
Any qualifying broker acting in a real estate
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Any qualifying broker acting in a real estate
transaction shall adopt a written agency disclosure office
policy which specifically enumerates the types of brokerage
service arrangements services a licensee may offer or accept.
(a)(1) The qualifying broker for each brokeragereal
estate company shall provide every licensee a copy of the
agency disclosure policy regarding the types of brokerage
services offered by their company. This policy shall be
explained to all licensees at least once a year.
(b)(2) A form acknowledging receipt of the agency
disclosure office policy statement and a satisfactory
explanation of its contents shall be signed by each licensee
and a copy retained by the brokeragereal estate company for
three years."
"§34-27-84
(a) Licensees shall have all of the following
obligations to all parties in a real estate transaction:
(1) To provide brokerage services to all parties to the
transaction honestly and in good faith.
(2) To exercise reasonable skill and care in providing
brokerage services to all parties.
(3) To keep confidential any information given to the
licensee in confidence, or any information obtained by the
licensee that the licensee knows a reasonable individual would
want to keep confidential, unless : (i) disclosure of this
information is required by law, violates a fiduciary duty to a
client, becomes public knowledge, or (ii) the disclosure is
authorized by the party in writing ; (iii) the information
becomes public knowledge; or (iv) failure to disclose the
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becomes public knowledge; or (iv) failure to disclose the
information violates a fiduciary duty to a client .
(4) To account for all property coming into the
possession of the licensee that belongs to any party to the
real estate transaction.
(5) When assisting a party in the negotiation of a real
estate transaction, to present all written offers in a timely
and truthful manner.
(6) To act on behalf of the licensee or his or her
immediate family, or on behalf of any other individual,
organization, or business entity in which the licensee has a
personal interest only with prior timely written disclosure of
this interest to all parties to the transaction.
(b) A licensee may provide requested information which
affects a transaction to any party who requests the
information, unless disclosure of the information is
prohibited by law or in this article.
(c) When accepting an agreement to list an owner's
property for sale, the broker or his or her licensee shall, at
a minimum, accept delivery of and present to the consumer all
offers, counteroffers, and addenda to assist the consumer in
negotiating offers, counteroffers, and addenda, and to answer
the consumer's questions relating to the transaction."
"§34-27-85
(a) In addition to the duties enumerated in Section
34-27-84, a licensee shall provide all of the following
services to clients:
(1) Loyally represent the best interests of the client
by placing the interests of the client ahead of the interests
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by placing the interests of the client ahead of the interests
of any other party, unless loyalty to a client violates the
duties of the licensee to other parties under Section
34-27-84, or is otherwise prohibited by law.
(2) Disclose to the client all information known by the
licensee that is material to the transaction and not
discoverable by the client through reasonable investigation
and observation, except for confidential information as
provided in subdivision (3) of subsection (a) of Section
34-27-84(a)(3). A licensee shall have no affirmative duty to
discover the information.
(3) Fulfill any obligation required by the agency
agreement, and any lawful instructions of the client that are
within the scope of the agency agreement, that are not
inconsistent with other duties as enumerated in this article.
(b) A brokerlicensee who represents more than one
client in a real estate transaction owes the duties as
specified in subsection (a) to each client, except where the
duties to one client will violate the fiduciary duties of the
licensee to other clients.
(c) A brokerlicensee may provide brokerage services as
a limited consensual dual agent only with the prior written,
informed consent of all clients of the brokerlicensee in the
transaction."
"§34-27-86
(a) A client is not liable for a misrepresentation made
by a brokerlicensee in connection with the brokerlicensee
providing brokerage services unless the client knows or should
have known of the misrepresentation or the brokerlicensee is
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have known of the misrepresentation or the brokerlicensee is
repeating a misrepresentation made by the client to the
brokerlicensee.
(b) A licensee shall not be liable for providing false
information to a party in a real estate transaction if the
false information was provided to the licensee by a client of
the licensee or by a customer or by another licensee unless
the licensee knows or should have known that the information
was false."
"§34-27-32
(a) A license for a broker or a salesperson shall be
registered to a specific real estate office and shall be
issued only to, and held only by, a person who meets all of
the following requirements:
(1) Is trustworthy and competent to transact the
business of a broker or salesperson in a manner that
safeguards the interest of the public.
(2) Is a person whose application for a real estate
licensurelicense has not been rejected in any state on any
grounds other than failure to pass a written examination
within the two years prior to the application for a real
estate licensurelicense with Alabama. If the applicant's
rejection for a real estate licensurelicense in any state is
more than two years from the date of application for licensure
witha license in Alabama, then the applicant may not be issued
an Alabama real estate license without the approval of the
commissioners.
(3) Is a person whose real estate license has not been
revoked in any state within the two years prior to application
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revoked in any state within the two years prior to application
for a real estate licensure withlicense in Alabama. If the
applicant's real estate licenselicensure revocation in any
state, including Alabama, is more than two years from the date
of application for licensure witha license in Alabama then the
applicant may not be issued an Alabama real estate license
without the approval of the commissioners.
(4) Is at least 19 years oldof age.
(5) Is a citizen of the United States or, if not a
citizen of the United States, a person who is legally present
in the United States with appropriate documentation from the
federal government, or is an alien with permanent resident
status.
(6) Is a person who, if a nonresident, agrees to sign
an affidavit stating the following and in the following form:
"I, as a nonresident applicant for a real estate
license and as a licensee, agree that the Alabama Real Estate
Commission shall have jurisdiction over me in any and all of
my real estate related activities the same as if I were an
Alabama resident licensee. I agree to be subject to
investigations and disciplinary actions the same as Alabama
resident licensees. Further, I agree that civil actions may be
commenced against me in any court of competent jurisdiction in
any county of the State of Alabama.
"I hereby appoint the Executive Director or the
Assistant Executive Director of the Alabama Real Estate
Commission as my agent upon whom all disciplinary, judicial,
or other process or legal notices may be served. I agree that
any service upon my agent shall be the same as service upon me
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any service upon my agent shall be the same as service upon me
and that certified copies of this appointment shall be deemed
sufficient evidence and shall be admitted into evidence with
the same force and effect as the original might be admitted. I
agree that any lawful process against me which is served upon
my agent shall be of the same legal force and validity as if
personally served upon me and that this appointment shall
continue in effect for as long as I have any liability
remaining in the State of Alabama. I understand that my agent
shall, within a reasonable time after service upon him or her,
mail a copy of the service by certified mail, return receipt
requested, to me at my last known business address.
"I agree that I am bound by all the provisions of the
Alabama Real Estate License Law the same as if I were a
resident of the State of Alabama.
___________________Legal Signature of Applicant"
(b) The commission may reject the application of any
person who has been convicted of or pleaded guilty or nolo
contendere to a felony or a crime involving moral turpitude.
(b)(1)(c)(1)a. A person who holds a current real estate
salesperson license in another state, including persons who
move to and become residents of Alabama, shall apply for a
reciprocal salesperson license on a form prescribed by the
commission. A person who holds a current broker license in
another state, including persons who move to and become
residents of Alabama, shall apply for a reciprocal broker
license on a form prescribed by the commission.
b. The applicant shall submit proof that he or she has
a current real estate license in another state as evidenced by
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a current real estate license in another state as evidenced by
a certificate of licensure, together with any other
information required by the commission. The applicant shall
also show proof that he or she has completed at least six
hours of course work in Alabama real estate which is approved
by the commission. Applicants for a reciprocal license shall
not be subject to the complete examination or temporary
license requirements of Section 34-27-33, but shall pass a
reasonable written examination prepared by the commission on
the subject of Alabama real estate. A person who holds a
reciprocal license shall show proof of completion of
continuing education either by meeting the requirements of
Section 34-27-35 or by showing proof that his or her other
state license remains active in that state.
c. The fees for issuance and renewal of a reciprocal
license shall be the same as those for original licenses
pursuant to Section 34-27-35. The recovery fund fee for
issuance of a reciprocal license shall be the same as for an
original license pursuant to Section 34-27-31.
(2) A person who holds a current Alabama license who
moves to and becomes a resident of the state shall within 10
days submit to the commission notice of change of address and
all other license status changes.
(c)(d) A person who does not hold a current real estate
broker license in another state desiring to be a real estate
broker in this state shall apply for a broker'sbroker license
on a form prescribed by the commission which shall specify the
real estate office to which he or she is registered . Along
with the application, he or she shall submit all of the
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with the application, he or she shall submit all of the
following:
(1) Proof that he or she has had an active real estate
salesperson'ssalesperson license in any state for at least 24
months of the 36-month period immediately preceding the date
of application.
(2) Proof that he or she is a high school graduate or
the equivalent.
(3) Proof that he or she has completed a course in real
estate approved by the commission, which shall be a minimum of
60 clock hours.
(4) Any other information requested by the commission.
(d)(e) A person who does not hold a current real estate
salesperson license in another state desiring to be a real
estate salesperson in this state shall apply for a
salesperson's license with the commission on a form prescribed
by the commission which shall specify the real estate office
to which he or she is registered. Along with the application	,
he or she shall furnish all of the following:
(1) Proof that he or she is a high school graduate or
the equivalent.
(2) Proof that he or she has successfully completed a
course in real estate approved by the commission, which shall
be a minimum of 60 clock hours.
(3) Any other information required by the commission.
(e)(f) An application for a company license or branch
office license shall be made by a qualifying broker on a form
prescribed by the commission. The qualifying broker shall be
an officer, partner, or employee of the company.
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an officer, partner, or employee of the company.
(f)(g) An applicant for a company or broker license
shall maintain a place of business.
(g)(h) If the applicant for a company or broker license
maintains more than one place of business in the state, he or
she shall have a company or branch office license for each
separate location or branch office. Every application shall
state the location of the company or branch office and the
name of its qualifying broker. Each company or branch office
shall be under the direction and supervision of a qualifying
broker licensed at that address. No person may serve as
qualifying broker at more than one location. The qualifying
broker for the branch office and the qualifying broker for the
company shall share equal responsibility for the real estate
activities of all licensees assigned to the branch office or
company.
(h)(i) No person shall be a qualifying broker for more
than one company or for a company and on his or her own behalf
unless he or she meets all of the following requirements :
(1) All companies for which he or she is and proposes
to be the qualifying broker consent in writing.
(2) He or she files a copy of the written consent with
the commission.
(3) He or she will be doing business from the same
locationAll companies for which he or she is and proposes to
be the qualifying broker share the same company address .
(j) A person licensed under a qualifying broker may be
engaged by one or more companies with the same qualifying
broker.
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broker.
(k) An individual may use any office of a company under
which he or she is licensed.
(i)(l) A company license shall become invalid on the
death or disability of a qualifying broker. Within 30 days
after the death or disability, the corporation, or the
remaining partners or the successor partnership, if any, may
designate another of its officers, members, or salespersons to
apply for a license as temporary qualifying broker. The person
designated as temporary qualifying broker shall either be a
broker or have been a salesperson for at least one year prior
to filing the application. If the application is granted, the
company may operate under that temporary qualifying broker for
no more than six months after the death or disability of its
former qualifying broker commission issues the temporary
qualifying broker license . Unless the company designates a
fully licensed broker as the qualifying broker within the 	six
monthssix-month period , the company license and all licenses
under the company shall be classified inactive by the
commission after two weeks prior electronic notice .
(j)(m) The commission shall require both state and
national criminal history background checks to issue a
license. Applicants shall submit required information and
fingerprints to the commission, Federal Bureau of
Investigation, Alabama State Law Enforcement Agency, or its
successor, or to a fingerprint processing service that may be
selected by the commission for this purpose. Criminal history
record information shall be provided to the commission from
both the State of Alabama and the Federal Bureau of
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both the State of Alabama and the Federal Bureau of
Investigation. The commission can use the provided criminal
history for the determination of the qualifications and
fitness of the applicant to hold a real estate license. The
applicant shall assume the cost of the criminal history check.
The criminal history mustshall be current to the issuance of
the license.
(k)(n) The commission may charge a fee of ten dollars
($10) for furnishing any person a copy of a license,
certificate, or other official record of the
commissionercommission."
Section 2. Section 34-27-39 is added to the Code of
Alabama 1975, to read as follows:
§34-27-39
(a) A licensee who acts as a member of a team, or holds
himself or herself or to be a member of a team, shall be
subject to this section.
(b) The leader of any team shall be designated as team
leader with the qualifying broker. The qualifying broker
cannot delegate to the team leader the responsibilities and
duties of the qualifying broker. The team leader shall
maintain a list of the members of the team and provide the
list to the qualifying broker.
(c) A team does not require licensure or registration
with the commission as a separate business organization. 
(d) No person shall be a member on more than one team. 
(e) The commission shall adopt rules addressing what
words may or may not be used in a team name and how teams may
advertise and market. At a minimum, any licensee who
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advertise and market. At a minimum, any licensee who
advertises as being part of a team shall do all of the
following:
(1) Include the name of at least one of the team
members in the advertisement.
(2) Include the name of the company with whom the
licensee is licensed in the advertisement.
(3) Include the term "team" or "group" in the team
name.
(4) Receive written authorization from the qualifying
broker of the licensee to include the team name in the
advertisement.
Section 3. This act shall become effective on October
1, 2025.
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1, 2025.
House of Representatives
Read for the first time and referred
to the House of Representatives
committee on Commerce and Small
Business
................04-Mar-25
Read for the second time and placed
on the calendar: 
 1 amendment
................06-Mar-25
Read for the third time and passed
as amended
................04-Apr-25
Yeas 101 
Nays 0
Abstains 0
John Treadwell
Clerk
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