The Alabama Real Estate Commission (“AREC”) held its seventh meeting of 2026 on August 20^th in Montgomery, Alabama. All commissioners were present except Commissioner Emmette Barran. Executive Director Vaughn Poe did not provide a public update to the Commissioners or the public; instead, his report was electronically distributed to the Commissioners. The meeting included an update from the Association of Real Estate License Law Officials (“ARELLO”) CEO Jessica Hickok regarding their organization’s current areas of focus.

AREC delayed the vote on its proposed rule concerning earnest money (Rule 790-X-3-.03). The Commission did, however, vote to move forward with proposed amendments to Rule 790-X-1-.18(13) and Rule 790-X-3-.14.

As summarized by AREC, the proposed amendment to Rule 790-X-1-.18(13) would align the rule with federal law governing professional license portability for military spouses. The current rule requires a military spouse to complete Alabama’s reciprocal licensing requirements within 365 days after receiving a temporary license. If those requirements are not completed, the temporary license expires. Under the proposed amendment, the temporary licenses would remain valid for as long as the military spouse’s servicemember remains on active-duty orders in Alabama. The proposed amendment to Rule 790-X-3-.14 would correct a typographical error in the existing rule. 

The meeting also included one formal hearing which provided important guidance for licensees when advising consumers and handling offers. 

The formal hearing offered an important reminder that a licensee should not substitute their own judgment for the lawful instructions of a client. 

In this case, divorcing sellers needed to sell their home quickly and had a family friend interested in purchasing the property. The listing licensee did not offer dual agency as a service, so the buyer was referred to another licensee within the same brokerage. 

The buyer, who already had a preapproval letter, submitted an offer containing the terms requested by the sellers. The sellers instructed the listing licensee to accept the offer and signed a purchase agreement through an online document platform. However, the listing licensee intentionally left the acceptance date blank because of concerns about the buyer’s financing. 

The listing licensee then encouraged the represented buyer to apply with another lender and later contacted that lender directly to inquire about the buyer’s financing status. After learning that the buyer was not approved by that lender, the listing licensee encouraged the sellers to consider other offers. When the sellers expressed concern that they had already signed the first offer, the licensee advised them that the agreement was incomplete because the agreement acceptance date had not been entered and that they could accept another offer. The sellers subsequently signed a second purchase agreement. 

The sellers ultimately terminated their relationship with the listing licensee and later completed the transaction with the original buyer. However, resolving the situation delayed the sale for several months and potentially exposed the sellers to liability under two signed purchase agreements. 

The Commissioners found the licensee guilty of violating Ala. Code § 34-27-36(b)(26) by acting negligently or incompetently in performing an act requiring a real estate license. The Commission fined the licensee $2,500, suspended their license for 15 days, and required the licensee to complete an additional Code of Ethics continuing education course within 30 days. 

This case serves as a reminder that licensees must respect agency relationships, follow their clients’ lawful instructions, and remain within the proper scope of their role. Licensee may identify concerns and help clients evaluate their options, but they should not make independent legal or financial decisions for a client. 

A licensee should not advise a seller that an agreement is ineffective or that the seller may accept another offer. When questions arise regarding the enforceability of an agreement, the licensee should consult their qualifying broker and recommend that the client seek legal counsel. 

If you have questions about these topics and are an Alabama Association of REALTORS® member, please contact the Legal Line.