AAR reviewed the regulatory amendments and new regulation recently proposed and published by the Alabama Real Estate Commission (AREC). We applaud AREC’s efforts. Many of the amendments provide much needed updates to AREC’s regulations and positively reflect AREC’s mission to protect consumers. AAR submitted a comment letter providing feedback and requesting additional consideration on  several of the proposed rule changes. The letter can be found below. 

AREC's Proposed Rule Changes  can be found here. 

Dear Vaughn: 

On behalf of the Alabama REALTORS®, please accept these comments on the proposed amendments and new regulation recently proposed and published by the Alabama Real Estate Commission (AREC). Several of the amendments provide much needed updates to AREC’s regulations and positively reflect the AREC’s mission to protect consumers. We respectfully bring to your attention areas for additional consideration with the proposed rule changes. 

AREC’s Proposed Amendment to Rule 790-x-3-.03 

We appreciate AREC’s efforts to clarify the handling of earnest money. This has been an ongoing area of confusion across the state for many years. We recommend additional changes to the proposed amendment to enhance clarity. 

The proposed language indicates: 1) language in a purchase agreement signed before a transaction falls through cannot suffice as a release, and 2) a release is not needed when a transaction closes but is always required when a transaction fails to close. 

As proposed in the proposed amendment, the current language requires agents to determine when a transaction has failed, suggesting they wait for a written termination before obtaining a release and disbursing trust funds. However, it could also imply that a release is needed when either a breach occurs or both parties agree to sign one. 

Additionally, applying the rule to both unconsummated and disputed transactions creates redundancy. The existing sub-section already requires a release if: 1) the transaction does not close, or 2) there is a disagreement over trust fund distribution. Situations where a transaction closes but disputes remain are already covered, making part of the new language unnecessary. 

Recommendation: To remove redundancy and ambiguity, we suggest the following language: 

“If for any reason the transaction terminates without consummation, or if there is a disagreement regarding the disbursement of trust funds, the qualifying broker shall not disburse any trust funds except pursuant to a written agreement signed by all parties after or upon termination, or pursuant to a court order.” 

This revision clarifies requirements, makes clear that a mutual release is required if a transaction terminates without closing, excludes the use of pre-termination releases, and removes redundant clauses. 

AREC’s Proposed Amendment to Rule 790-x-1-.06 

We appreciate AREC’s efforts to modernize both pre license and post license education efforts but are concerned about removing the current six (6) hour daily limit on course work. 2 

While we recognize the intent to modernize regulations by accounting for advancements in technology, the current limit serves an essential purpose. A maximum daily limit ensures that licensees do not rush and click through hours of webinar content with minimal retention of crucial rules, regulations, and laws. In such scenarios, even if tests are passed, the depth of retained knowledge is significantly reduced, potentially lowering standards in the real estate profession to the detriment of consumers. 

Recommendation: To balance modernization with quality education, we suggest retaining a daily cap but increasing it to a maximum of eight (8) hours per day for all courses. It is difficult for any profession to absorb more than eight (8) hours of educational content and training in a single day. This approach supports comprehensive learning while accommodating flexible scheduling. 

AREC’s Proposed Amendment to Rule 790-x-1-.12 

We support the proposed amendment and deletion of the rarely used 1.5-hour continuing education course option. This format is seldom practical as it must be part of an existing three-hour course. 

As part of this discussion, we want to reiterate our support for allowing one (1) hour continuing education courses, which are standard in other professions. There are many valuable and important real estate topics that could be offered to licensees that are ideally suited for a one-hour course but are not long enough to create a three-hour course. One-hour courses would offer more flexibility and access to valuable, concise content without needing to fit into three-hour segments. Based on previous discussions, we understand there may be technical limitations within AREC’s system for tracking one-hour courses, but updating this technology is essential for expanding educational options, benefiting both licensees and consumers. We were encouraged by AREC’s recent Coffee with the Commission webinar, which expressed a commitment to more creative continuing education opportunities to enhance professionalism. One-hour courses would help further this initiative by increasing flexibility, accessibility, and opportunities for licensees. 

AREC’s Proposed New Rule 790-x-3.16 and AREC’s Proposed Amendment to Rule 790-x-2-.05 

We support the proposed new rule and amendment. We appreciate and support AREC’s efforts to establish clear guidelines on advertising within the real estate profession, especially considering the growing complexity with the use of online platforms and social media. Clear rules for licensees, including team or group members, are essential for protecting consumers and promoting fair practices among licensees. We believe this can be achieved without imposing additional fees or burdensome registration requirements on licensees as previously suggested in AREC’s legislation. 

AREC’s Proposed Amendment to Rule 790-x-1-.03 

We note a potential scrivener’s error in the statutory reference within the proposed new subsection 790-x-1-.03(3)(c). We believe the statutory citation should be § 34-27-36(a)(2). 

We appreciate the opportunity to provide feedback on the proposed amendments and new rule during the allowable public comment period. AAR’s Public Policy Committee and legal team have approved these comments and recommendations. Please reach out if you have any questions or if we can be of further help. 

Warm regards,

Jeremy Walker

Chief Executive Officer

Wes Grant 

Chair of AAR’s License Law Workgroup