CNN Week 7 – Two REALTOR® Bills Filed, Budgets Move, Incentives Signed
April 24, 2023
Sixteen legislative days remain in the 2023 legislative session after last week. The legislature used three, instead of the expected two, days after the Senate hit a snag on a few of the sunset bills. We are nearing the half-way through the session with 17 legislative days and just over 8 weeks remaining. Read on for a brief summary of the week’s legislative activities.
Last week, the package of four economic development bills passed and were signed into law by the Governor. Generally, the bills saw smooth sailing except for a few senators who expressed dissatisfaction with the fact economic incentives are even needed. With those bills’ passage, the only remaining “necessity” for the legislature to consider are the budgets. The General Fund budget bill (HB 124) advanced out of House committee and is expected to be considered by the full House next week. The education budget will likely come up in committee next week as well. Legislators have expressed a desire to finish early, but until the budgets pass, any talk of an early departure is optimistic.
A few other hot topic bills from the week are: a bill shielding law enforcement and government employee’s personal information from public records passed a committee, a bill extending a ban on transgender athletes to colleges passed the House, and a package of bills pushed by the District Attorneys addressing fentanyl possession, firearm possession for those out on bail and retail theft are moving.
Real Estate Related Legislation
Work Force Housing: A bill that would create more workforce housing in Alabama, HB 357, sponsored by Rep. Cynthia Almond, was filed on Thursday. The legislation seeks to address the shortage of housing for Alabama’s workers by providing a tax credit to incentivize developers to build more affordable housing units for Alabama’s workforce. The program would be managed by the Alabama Housing Finance Authority and projects would be awarded in cooperation with the Alabama Department of Commerce. The developments would provide income restricted housing for workers who make no more than 60% of the Adjusted Median Income within a community. The non-refundable credit is against state tax liability and will utilize any available federal dollars. The Alabama REALTORS® are advocates for the legislation.
Right to List Agreements and Wholesaling: A bill that would limit right to list agreements and create penalties for wholesaling of real property, SB 228, cosponsored by Sen. Dan Roberts, Sen. Sam Givhan, and Sen. Shay Shelnutt, was filed Thursday. The legislation would address two large issues that are unfair to homeowners in Alabama. The first would address long-term right to list agreements, where companies are offering incentives to homeowners in return for a 40-year listing agreement on a home. The listing agreements are then recorded as liens against the property. Several states have already banned the practice and Florida Attorney General has filed a complaint to stop it in Florida. The second issue would address the wholesaling of residential property and require disclosure to the seller and prospective buyers by a wholesaler and provides penalties for violations. Commercial and other property types are excluded from the legislation. The Alabama REALTORS® are advocates for the legislation.
Home Inspector Liability: A bill that would further insulate home inspectors from claims by homeowners, HB 118, sponsored by Rep. Danny Garrett, received a public hearing in the House Judiciary Committee on Wednesday. At the hearing, advocates for the bill representing home inspectors stated that legislation is needed because home inspectors are seeing an increase in claims by homeowners against them and believe inspectors are being asked to provide “warranties” for homes. The Alabama REALTORS® and the Alabama Home Builders have expressed opposition to HB 118 as further insulating home inspectors from almost any accountability or claims by homeowners for the negligence of an inspector.
Electrical Contractor: A bill that would enhance the licensure requirements and penalties for electrical contractors, HB 302, sponsored by Rep. Mac Butler, has been filed in the House of Representatives. As drafted, the bill would eliminate an owner exemption which allows owners of property to perform routine maintenance on his or her property. The Alabama REALTORS® have expressed concern with the language of the bill and are advocating for an amendment which would maintain an exemption for owners of property, property managers and their agents to perform routine maintenance work such as changing of light switches, ceiling fans, lights, electrical outlets and receptacles, and other work commonly performed by handymen.
Indemnification Agreements: A bill that would limit the ability to contract and negotiate indemnification agreements, SB 24, sponsored by Sen. Greg Albritton, recently received a public hearing in the Senate. Advocates for the legislation believe that subcontractors are being unfairly asked to sign indemnification agreements by general contractors and as a result are being included in lawsuits filed by trial lawyers for issues they believe they are not responsible for. From a legal standpoint, trial lawyers frequently file lawsuits, using a “shotgun” approach that names any and all known contractors and subcontractors in a construction defect case or related litigation. As the lawsuits move forward, unresponsible parties are released from the lawsuit through negotiated settlements and/or dismissals. Opponents of the legislation, have advocated that the legislation diminishes the right to for parties to negotiate contracts at arm’s length, and would lead to more litigation within the construction and real estate industries to the detriment of property owners. The Alabama REALTORS® and other business groups have expressed opposition to the legislation as drafted. The solution to this issue may be to increase accountability for trial lawyers who file frivolous lawsuits against contractors and subcontractors without accountability or recourse.
Senate Confirmation - Jim Dye: The Alabama Senate confirmed Jim Dye to the Alabama Real Estate Commission representing the Sixth Congressional District of Alabama on Wednesday. Governor Kay Ivey appointed Jim Dye last September to fill the vacant seat for the Sixth Congressional District subject to confirmation by the Alabama Senate. We congratulate Commissioner Dye on his confirmation. His term goes through September 2026.
Alabama Real Estate Commission- One Year Renewal: The bill renewing the Alabama Real Estate Commission for one year, HB 195, sponsored by Rep. Matt Simpson, passed the Senate on Tuesday. As Required by the Alabama Sunset Law, each licensing body is subject to review and audit by the Alabama Department of Examiners of Public Accounts, which then reports any findings to the Alabama legislature for the renewal or termination of the licensing body. Most licensing agencies or departments are renewed by the Legislature in four-year increments. This year, the Real Estate Commission is up for a one-year renewal for the third time in three years. HB 195 renews AREC for one more year and now moves to Governor Kay Ivey to be signed into law.
The Legislature returned today with the House reconvening at 1 pm and the Senate at 2:30 pm. The budgets are expected to be a high priority this week, which will likely see three legislative days and take us over the halfway mark of the session.