The monthly meeting of the Alabama Real Estate Commission took place last week on Thursday, September 22. All eight commissioners (one vacant seat) were present at the meeting. The agenda was fairly normal, with typical reports and hearings, except that commissioners decided to switch license examination providers. Read below for a brief summary of the meeting as well as best practices from two of the cases.

A task force to determine whether AREC could change license examination providers was formed several months ago. The Task Force made two recommendations that were adopted by the Commission at the meeting.

The two recommendations were to swap to a new license examination provider and new digital fingerprint collection service. Requests for Proposals (RFPs) for both needs were sent earlier in the year. Of the two license examination providers that responded, commissioners selected Pearson VUE, which will begin on January 1, 2023. The current provider will continue through December 31, 2022. The only respondent to the second RFP, Field Print, was approved as the digital fingerprint collection service, replacing the current provider which will no longer offer the service.

Commissioners heard four complaints, two applications for a determination of licensing eligibility, two applications for a salesperson’s temporary license, one request for an extension to apply for salesperson license, one application for a determination of licensing eligibility for a reciprocal license, one hardship request for a home operation, and one hardship request for a penalty fee waiver.

Two cases or complaints contained important lessons to learn. In one case, a non-licensed company that bought and sold properties used an employee, who has a real estate license under a different company, to market and do other licensed activity, paying the employee a salary to do so. The Commission found the licensee/employee and company to have violated license law, noting that the licensee/employee was not a partner or officer with the ability to make management decisions affecting overall company policy (i.e., did not fall within the owner definition in Rule 790-x-1-.03(2)). Even if a person has the authority to bind the company as the employee in this case did, employees must fall within the ownership exemption in order to engage in licensed activity.

A second complaint involved a real estate agent who was placed on inactive status after failing to complete his or her continuing education (CE) at the beginning of a renewal cycle. For one and a half years, the salesperson continued to engage in real estate activity while inactive. The broker was not notified and was unaware of the inactive status of the agent. While the broker was not charged since the Commission did not and has not notified brokers when an agent fails to complete the requisite CE hours, the Commission is likely to notify brokers in the future. Regardless, a best practice for brokers is to check CE status for each agent upon renewal.

Commissioners voted to approve one rule amendment for certification and two other rule amendments for filing. The amendment to be certified makes changes to the requirements to become a pre-license/post-license course instructor. You can learn more about the rule amendment in our previous article here and read the actual rule amendment here (see the crossed out and underlined language).

The other two rule amendments delete the same, archaic language in two different rules. The language requires education schools to turn in documents if the school shuts down without a successor in interest. Due to electronic records, this language is no longer needed.

The Commission’s next meeting is on October 14 at 9 am in Mobile at the University of South Alabama’s Faculty Club. The last meeting of the year will take place on November 17. As a reminder, all Commission meetings are viewable online on the AREC website here.