AREC Holds April 2024 Meeting

AREC Holds April 2024 Meeting

The Alabama Real Estate Commission held its monthly meeting at Baldwin REALTORS®. As always, the meeting included the Executive Director’s report. New real estate license numbers are up, with 36,533 unique real estate licensees as of April 25. The Commission performed 9 education audits and 18 company audits in March and reiterated their willingness to perform non-punitive “assistance visits” to help ensure a brokerage’s compliance with Alabama real estate license law. Read on to learn more about the meeting. 


Commission Changes

This month’s Commission meeting was busy with changes to the Commission. The Commission recognized former Commissioner J. Reid Cummings. Last month was Commission Chairman Susan Smith’s final Commission meeting, and her contributions to the Commission over her 6-year tenure were also recognized at this meeting. A new Commissioner, Kim Barelare, was sworn in and began her official time on the Commission. Finally, the Commissioners voted Jimme Ann Campbell as Chairman and Randy McKinney as Vice Chairman. 


Crackdown on Table Payments

The Commission heard multiple formal complaints against companies and qualifying brokers related to “table funding,” or the practice of salespeople and associate brokers being paid from title companies at closing, rather than from their qualifying broker. (As a reminder, the requirement that qualifying brokers must pay their associate brokers and salespeople directly comes from Alabama Code § 34-27-36(a)(14)).  Each of the qualifying brokers admitted to their wrongdoing, claiming an ignorance of the law, and immediately changed their company policies to disallow these types of payments. Even so, the Commission found all the qualifying brokers and companies in violation of license law and assessed a fine against all. Furthermore, the Commission signaled that it would be interested in potentially pursuing charges against salespeople and associate brokers, in addition to qualifying brokers and companies, in the future. 


Amended Documents

One formal complaint involved a real estate licensee who amended a document after some, but not all, parties had signed it. Ultimately, the document was not used in the transaction, so the harm in the situation was minimal. However, as the Commission heard the case, they found that the licensee’s legal documents were poorly completed in multiple regards. The Commission was concerned both by the amendment to the document and by his sloppy work on his contracts in general. The Commission found the licensee guilty, fined him $1000, and required that he take a continuing education course in contracts. This case highlights the importance of being meticulous when it comes to contracts.


Facebook Advertisements

Finally, the Commission heard a formal complaint against an inactive licensee who had been advertising properties on Facebook. The woman testified that she had assisted other people with setting up their AirBnB profiles, an activity for which a real estate license is not required. Additionally, she assisted with the upkeep of the properties, such as cleaning, and received a fee for her services. This type of activity also does not require a real estate license. However, the woman also posted advertisements for the properties on her Facebook. Because she did not own the properties that she was advertising, an Alabama real estate license was required for this action. The Commission found the woman in violation of license law and assessed a $250 fine.