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: Can the AAR Residential Purchase Agreement or Lot/Land Purchase Agreement (RF 2.1(A) and 2.1(B)) be used in commercial transactions?

A1: No. Neither RF 2.1(A) nor RF 2.1(B) are designed for use in commercial transactions and may not include information that is crucial to such a transaction. AAR recommends seeking a purchase agreement that is specifically designed for commercial transactions, whether from another company/licensee, a local Association of REALTORS®, or from retained counsel.

Q2: In Paragraph 5, Subsection (c) of AAR’s Residential Purchase Agreement, is the term “Financing Deadline” related to the date the Buyer receives a loan approval and/or commitment letter from their lender or is it the date by which the Buyer has obtained a clear to close from their lender?

A2: In the AAR Purchase Agreements, the “Financing Deadline” in Paragraph 5(c)(ii) is the date by which the buyer must be cleared to close. This term is defined in our Definitions Guide. If the parties wish to include an additional deadline where the Buyer must receive a loan approval or commitment letter from the lender by a specific date, this may be added to “Additional Provisions” in Paragraph 31 of the Purchase Agreement.

Q3: How do I determine whether I should use RF 1.4(A) – Dual Agency Agreement, RF 1.4(B) – Dual Agency Agreement for Multiple Licensees, or RF 6.4 – Single Agent Designation Agreement?

A3: Each form is designed for a different situation:

• RF 1.4(A) is designed to obtain the consumers’ permission for dual agency involving a single licensee. Under Alabama license law, dual agency applies when the same licensee represents both the buyer and seller in the same transaction as an agent (not a transaction facilitator).
• RF 1.4(B) is designed to obtain the consumers’ permission for dual agency involving two or more licensees. The definition for dual agency above applies, but RF 1.4(B) is to be used when multiple licensees working for the same qualifying broker are all dual agents (all representing both buyer and seller as agents) in a transaction.
• RF 6.4 is designed to obtain a qualifying broker’s permission for multiple licensees under him/her to proceed as designated single agents in a transaction. Designated single agency applies when multiple licensees under the same qualifying broker represent opposite sides of the transaction, both as agents. For example, Company XYZ has Licensees A and B. Licensee A serves as the agent for the seller in a transaction, and Licensee B serves as the agent for the buyer in the same transaction. Licensees A and B must have their qualifying broker’s written permission to proceed as designated single agents. For information about when a qualifying broker serves as a designated single agent, see AREC’s guidance.
• Additional information from AAR can be found here.

Q4: If a section of the AAR Purchase Agreement doesn’t apply to a transaction, do the parties need to initial it? For example, if a buyer is requesting an inspection contingency, should the parties initial the “without inspection” portion of the Purchase Agreement?

A4: No. If a section doesn’t apply to the transaction, the parties do not need to initial it.