The Alabama Real Estate Commission (“AREC”) held its sixth meeting of the year on June 22. The meeting began with various updates, including reports that finances are as expected and, in May 2023, the Commission received an average of 10.10 new license applications per day. It was also noted that AREC’s legal team will be meeting with Pearson VUE soon to review state-specific questions on the real estate licensure exam. Read more below to find out about the hearings and takeaways for you.

This month, the Commission heard 7 cases: 2 formal complaints, 4 applications for temporary salesperson license, and 1 determination of license eligibility. 6 scheduled cases were continued to a future date. 

All of the hearings for applications for temporary licensure were to address concerns related to prior criminal conviction(s). If you have a potential agent in this situation, the best practice is to be honest about what happened and to demonstrate how your actions have changed since the criminal case occurred. Ultimately, all four applications for temporary licensure were granted. 

Both formal complaints heard during the June 2023 meeting demonstrate the necessity to be aware of and follow Commission regulations – and related license laws – closely. 

One complaint was related to a licensee’s failure to notify AREC of his pending criminal charges within the 10-day period required by license law. It is important to note that two different violations can come from criminal matters. Most licensees are aware that it is a violation of license law to be convicted of a felony or crime of moral turpitude while holding an active license. But licensees also need to know that failing to notify AREC of pending criminal charges within 10 days of notice of the charge is also a violation. In this case, the licensee’s failure to timely notify AREC of his criminal cases resulted in the loss of his license and $4,500 in fines. 

The other complaint stemmed from overage in a licensee’s trust account, which was caused by her failure to remove management fees from that account. The complaint listed this as comingling of funds, although the Commissioners noted that this was an unusual type of comingling because it was not for personal gain, nor did it result in harm to any consumers. The issue began when the licensee’s financial management software crashed, causing her to have to manually handle her books. Instead of transferring management fees from the trust account to the operating account and then making payments, she paid some business expenses directly from the trust account.  Although the licensee was careful to ensure that no consumers were harmed, the Commission noted that license law must be followed exactly. Here, the law requires that the management fees are moved into an operating account, rather than being held in the trust account, and that business expenses are deducted from the operating account. In the end, the Commission found the licensee guilty and fined both her and her company $250. While discussing this case, the Commission gave advice to other licensees who may suffer from a computer crash or other loss of data. If the licensee calls AREC and requests an “Assistance Visit,” AREC will help the licensee get back on track and ensure that they are doing so while in compliance with license law. 

¹With the exception of traffic-only offenses, which do not have to be reported to AREC. If you’re not sure if an offense is traffic-only, it is always better to err on the side of caution.

As scheduled, AREC will not hold a commission meeting in July and will next meet on August 17 in Montgomery.