The Alabama Real Estate Commission (AREC) held its monthly meeting in Montgomery on February 20. The Executive Director’s report stated that the rate of applications for new salesperson licensure increased to an average of 7.2 applications per day in January. AREC also held its monthly Coffee with the Commission meeting, during which recent and future updates to Alabama Real Estate Administrative Rules were discussed. Read on to learn more about the new rules and best practices from the Commission meeting hearings. 

• Out-of-State Co-Brokerage Agreements: Clarifies that out-of-state co-brokerage agreements must be made between the Qualifying Brokers of each brokerage.
• Nicknames: Clarifies that if you use a nickname in an advertisement, you must still use your surname. (Reminder: to use a nickname for an advertisement, that name must be registered with AREC.) 
• Physically Holding Records: Relaxes the requirement for record retention from requiring records to be held physically at your brokerage to allowing records to be maintained virtually. 
• Estimated Closing Statements: Clarifies that an Estimated Closing Statement is required for every offer and counteroffer when working with both buyers and sellers in single-family residential transactions. 
• Advertisement Font Sizing: Requires that in any advertising or marketing material, your brokerage’s name be written in an equally large or larger font size as the font size that your name is written in. 
• Full Text: To view the full text of the rule amendments that became effective February 14, 2025, please click here. 

• Mutual Releases: Clarifies that if a transaction terminates without consummation or if there is a disagreement regarding the disbursement of earnest money, one of the following is required to release the funds: 1) a mutual release signed by both parties or 2) a court order. 
• Full Text: To view the full text of the rule amendments that will become effective on April 14, 2025, please click here. 

Divorcing Couples

The Commission has recently seen a rise in issues involving couples who are in the process of getting divorced. As a reminder, if you are working with someone who is currently involved in a divorce, it is your responsibility to confirm who all the property owners are and involve all owners in the sale of the property. 

Documents, Transaction Coordinators, and Record Keeping 

One case heard by the Commission this month involved incomplete files. Specifically, about one-third of a licensee’s files that were audited were either lacking a RECAD form and/or Estimated Closing Statement, or those documents were not completed at the proper time. In defense, the licensee argued that it was the brokerage’s transaction coordinator who failed to include those documents in the file or have the documents completed at the proper time. The licensee did not produce copies of the documents that that were missing. Ultimately, the licensee and his brokerage were found guilty of violating Alabama license law and fined the maximum amount of $2,500 for each count. The Commission pointed out that even if the transaction coordinator was responsible for the completion of these documents, it was the licensee’s duty to supervise the transaction coordinator’s work. This case serves as a reminder that if you have any kind of assistant, you are responsible for their work – and the consequences of their work.