Answers provided on the Legal Line do not constitute legal advice. If you have a question that requires legal advice, AAR recommends speaking with retained counsel.

AAR's Legal Line is here to help all AAR members with questions they may have about the AAR Statewide Legal Forms, Alabama license law, property law, and more. Below are some recent questions and answers that you may find helpful.

Q1: An owner of a property For Sale by Owner has located a buyer and approached me about assisting with the paperwork for the transaction. What documents am I required to complete and have on file?

A1: Because you are providing licensed services in the transaction and have not executed an agency representation agreement with either consumer, under Alabama license law, you are a transaction facilitator for both the buyer and seller. Therefore, you will need to give each consumer a copy of the RECAD Brokerage Services Disclosure Form and your Agency Disclosure Office Policy and ask that they sign acknowledging receipt (although they are not legally required to sign). If you’re being compensated by either party, you are required to have a written Transaction Facilitator Agreement with them. You will also need to complete net sheets for both buyer and seller. Finally, you will need to maintain a copy of the Purchase Agreement (along with all the other documents listed in this answer) in your files for at least 3 years.

Q2:Following the October 1, 2025, changes to license law, should the company name or agent/transaction facilitator’s name be written in the Agency Disclosure on the Purchase Agreement?

A2: As of October 1, 2025, the Agency Disclosure on the Purchase Agreement requires the name of the individual agent/transaction facilitator, not the company name.

Please note that the text of the Agency Disclosure is required by law and may not be changed in any way.

Q3: Am I required to use the AAR Estimated Closing Statement or an Estimated Closing Statement that comes from my local association? Can I use the settlement statement prepared by the lender instead?

A3: You are not required to use a specific MLS or association’s Estimated Closing Statement. However, you can’t use the settlement statement that is prepared by the lender because Alabama license law requires that the licensee him/herself is the one to prepare the Estimated Closing Statement. You may create your own template for an Estimated Closing Statement (subject to your Qualifying Broker’s approval), but you must be the one to fill it out.

Q4: What if certain expense types listed on the AAR Estimated Closing Statement don’t apply to my transaction?

A4: If a certain type of expense listed on the AAR Estimated Closing Statement doesn’t apply to your transaction, feel free to leave it blank. We included many different types of expenses on our Estimated Closing Statements so that they could be used for a range of transactions.