The Alabama Real Estate Commission (AREC) held its monthly meeting in Montgomery on June 20. New Alabama real estate license applications had a slight decline compared to last month, with a rate of 7.32 applications per day in May. New broker licenses also saw a decline, with 76 being granted in April, compared to 38 in May. AREC continues to audit brokerages that have not been audited in the last several years, and it performed 13 company audits in May. Read on to learn more about this month’s meeting, including best practices from this month’s cases.

AREC held discussion about short term rentals. Short term rentals are not currently within the jurisdiction of AREC or license law.  However, AREC plans to release a memo about AREC’s viewpoint on how license law impacts short-term rental hosts. Specifically, AREC is examining what activities AREC believes a short-term rental host may perform without a real estate license. Alabama REALTORS® will provide ongoing updates as this matter evolves.

The theme of this month’s hearings was to use caution when performing your duties as a licensee. First, use caution when making payments of any kind to AREC. You might know that if you submit a check to AREC and it bounces, that is considered a license law violation, but it is also a violation to do anything else that causes your payment not to go through. One case this month involved a licensee whose payment did not go through because she typed her credit card number incorrectly on the online payment portal. Although she was only assessed the minimum fine, she was still found guilty of a license law violation. It is important to be sure that all your financial information is correct before submitting it to AREC.

Next, use caution when handling consumer funds. There have recently been several cases involving comingling of operating account and trust account funds. These cases were not the result of malicious intent, but instead were the result of bookkeeper errors, staffing problems, and a lack of understanding of license law. Although no consumers were harmed by these violations, the companies and qualifying brokers involved were still found guilty and assessed a fine. If you have any questions about your requirements under license law and are an AAR member, please contact the AAR Legal Line.