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AlabamaHB3822025 Regular SessionHouseWALLET

Real estate transactions; required disclosure forms; description of brokerage services; terms of compensation; required written brokerage agreements under certain circumstances; penalties and fines for certain violations; duties of qualifying brokers and licensees; scope of operation of teams

Sponsored By: Jamie Kiel (Republican)

Enacted

Property & Estates

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Bill Overview

Analyzed Economic Effects

16 provisions identified: 4 benefits, 3 costs, 9 mixed.

Real estate violations bring stronger penalties

The Commission can fine licensees $100 to $5,000 for each instance of prohibited conduct. It can require approved education, issue public reprimands, or suspend or revoke licenses. Suspensions can continue until education or restitution to accounts holding others’ money is completed; suspensions or revocations can also be stayed on those terms. After a hearing and violation finding, unlicensed people or businesses can face the applicable licensee fine range. Their fines can increase by gains from the violation and Commission costs; a cease-and-desist order is not always required first.

Buyers and sellers control shared representation

A licensee can represent both buyer and seller only after all clients give prior, informed written consent. All parties must sign before that dual representation begins. When agents under one broker have separate agency agreements with different parties, the broker can designate separate single agents. Those agents are not dual agents. The broker and agents are not presumed to know information held by a party they do not represent.

Clearer brokerage disclosures for home buyers

Beginning October 1, 2025, companies must use Commission-prepared forms explaining brokerage choices, offered services, and general compensation information. Disclosure comes as soon as reasonably possible, before confidential information is shared or services begin, including property showings. Exceptions cover a seller’s agent conducting an open house, rental and property management services, and specified business, trust, and government transactions. The law replaces the old statutory offer clause with a prominent, completed and initialed disclosure identifying each licensee’s representation role. Brokers must distribute written service policies, explain them annually, and keep signed acknowledgments for three years.

Home sellers get defined brokerage services

Licensees must keep protected information private unless a listed exception applies. Exceptions cover legal requirements, the party’s written permission, information becoming public, or avoiding a breach of duties to a client. After accepting a listing agreement, licensees must accept and present offers, counteroffers, and addenda. They must also help with negotiations and answer the consumer’s transaction questions.

Family property transactions get broader exemptions

An owner needs no real estate license to manage or complete transactions involving their own, spouse’s, child’s, or parent’s property. The law adds a parent’s property to this exemption. It also extends licensee misconduct protections to transactions involving a parent’s property. Licensees cannot misrepresent facts or act dishonestly or fraudulently in those transactions.

Out-of-state license holders face Alabama requirements

Reciprocal-license applicants must document a current out-of-state license, complete at least six hours of approved Alabama coursework, and pass an Alabama exam. They must meet Alabama continuing education requirements or show their other-state license remains active. Issuance, renewal, and Recovery Fund fees match those for original Alabama licenses. Current Alabama license holders who move into Alabama must report their address and other license-status changes within 10 days.

Real estate applicants face stronger screening

Real estate license applicants must provide fingerprints and pay for state and national background checks, current when the license is issued. The Commission can reject applicants convicted of, or pleading guilty or no contest to, felonies or crimes involving moral turpitude. Rejection is discretionary, not automatic. A real estate license revocation in any state within the past two years bars licensing. An out-of-state application rejection within two years also bars licensing, except for failing a written exam; older rejections or revocations require Commission approval.

Brokerage ads emphasize the responsible company

When required in an agent’s ad, the qualifying broker’s or company’s name must stand out and attract attention. Its font must be at least as large as other names, text, or logos, except terms like “for sale.” The law removes a separate advertising violation for failing to identify the person placing the ad as a licensed broker or salesperson. Other restrictions on deceptive or misleading ads remain.

False property statements carry shared responsibility

Clients are not automatically liable for a licensee’s false statements. Clients may be liable if they knew or should have known about the false statement. They may also be liable when the licensee repeats false information they supplied. Licensees are protected from liability for false information supplied by clients, customers, or other licensees unless they knew or should have known it was false.

Written agreements define home buyers’ representation

Licensees need a written brokerage agreement stating service terms before listing property or submitting an offer for pay. You cannot be required to sign one just to see a property. Agency requires a written agreement signed by both the consumer and licensee. Without a signed brokerage agreement, the licensee remains a transaction facilitator, not an agent with fiduciary duties. The law lists single agents, dual agents, and transaction facilitators as available roles, but no longer lists sub-agency.

Licensees get payment deadlines, risk inactivation

When a payment to the Commission or its payment provider is rejected, the Commission sends electronic notice. Licensees have 30 days to replace the fee or fine and pay an additional fee, subject to the legal cap. Without full, valid payment within 30 days after notice, the license becomes inactive; it lapses after six months. An unpaid returned check is no longer a separate disciplinary violation. The underlying payment obligation remains.

Out-of-state brokers gain access with caps

Out-of-state principal brokers can partner with Alabama qualifying brokers for sales or leases without the former reciprocity condition. Each out-of-state broker is limited to three transactions and $50 million in total value per calendar year; one portfolio may count as one transaction. Written agreements must identify properties and key terms, require Alabama supervision of showings and negotiations, name the Alabama broker in ads, and document license verification. The Alabama broker must file the agreement within 10 days after all parties sign and hold earnest money unless buyer and seller waive that duty in writing. Related complaints must go to the out-of-state broker’s regulator.

Agents gain business payment options, face limits

Salespersons and associate brokers can accept pay for licensed real estate work only from their qualifying broker. They can own a lawfully formed business that receives covered compensation, even without a real estate license for that business. The business cannot perform other work requiring a real estate license.

Brokerages gain sharing options, face office limits

Each Alabama business location needs a company or branch license and a qualifying broker licensed at that address. One person cannot serve as qualifying broker at multiple locations; the company and branch brokers share responsibility for assigned licensees. A broker can serve multiple companies, or a company and their own business, only when all relevant companies share an address. Each company must consent in writing, with consent filed with the Commission. Licensees can work for multiple companies sharing that broker and use offices of companies under which they are licensed.

Brokerages get temporary help after incapacity

When a qualifying broker dies or becomes disabled, the company can use a temporary qualifying broker. That authority lasts no more than six months after the temporary license is issued. The replacement must be a broker or have held a salesperson license for at least one year before applying. Without a fully licensed broker by the deadline, the company and all licenses under it become inactive after two weeks’ electronic notice.

Real estate teams avoid separate licensing

Beginning October 1, 2025, real estate teams need no separate Commission business-organization license or registration, but people cannot join multiple teams. The qualifying broker must designate a team leader and cannot hand the broker’s duties to that leader. Leaders must keep membership lists and give them to the broker; these rules also cover licensees presenting themselves as team members. Team ads must name at least one member and the licensed company; team names need written broker approval and must include “team” or “group.” The Commission must adopt rules for team names, advertising, and marketing.

Sponsors & Cosponsors

Sponsor

  • Jamie Kiel

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 435 • No: 1

Senate vote • 5/6/2025

Motion to Read a Third Time and Pass - Adopted Roll Call 951

Yes: 34 • No: 0

House vote • 4/17/2025

Motion to Adopt - Adopted Roll Call 900

Yes: 99 • No: 1

House vote • 4/17/2025

Third Reading in House of Origin

Yes: 101 • No: 0 • Other: 1

House vote • 4/17/2025

Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 902

Yes: 101 • No: 0

House vote • 4/17/2025

Motion to Adopt - Adopted Roll Call 901

Yes: 100 • No: 0 • Other: 2

Actions Timeline

  1. Enacted

    5/14/2025House

  2. Motion to Read a Third Time and Pass - Adopted Roll Call 951

    5/6/2025Senate

  3. Ready to Enroll

    5/6/2025House

  4. Ready to Enroll

    5/6/2025House

  5. Enrolled

    5/6/2025House

  6. Signature Requested

    5/6/2025Senate

  7. Delivered to Governor

    5/6/2025House

  8. Read for the Second Time and placed on the Calendar

    4/24/2025Senate

  9. Reported Out of Committee Second House

    4/23/2025Senate

  10. Read for the first time and referred to the Senate Committee on Fiscal Responsibility and Economic Development

    4/22/2025Senate

  11. Pending Committee Action in Second House

    4/22/2025Senate

  12. Third Reading in House of Origin

    4/17/2025House

  13. Commerce and Small Business Engrossed Substitute Offered

    4/17/2025House

  14. Motion to Adopt - Adopted Roll Call 900

    4/17/2025House

  15. Kiel 1st Amendment Offered

    4/17/2025House

  16. Motion to Adopt - Adopted Roll Call 901

    4/17/2025House

  17. Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 902

    4/17/2025House

  18. Engrossed

    4/17/2025House

  19. Commerce and Small Business 1st Amendment

    3/6/2025House

  20. Reported Out of Committee House of Origin

    3/6/2025House

  21. Read for the Second Time and placed on the Calendar

    3/6/2025House

  22. Read for the first time and referred to the House Committee on Commerce and Small Business

    3/4/2025House

  23. Pending Committee Action in House of Origin

    3/4/2025House

Bill Text

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