The Alabama Real Estate Commission (AREC) held its monthly meeting in Montgomery on September 18. The Executive Director’s report stated that AREC is currently receiving applications for new licenses at a rate of 7.8 applications per day. As a reminder, this is an education renewal year. If you are an instructor, school, or administrator, you should renew your license as soon as possible (you must renew prior to September 30 to avoid being placed on inactive status). Read on to learn more about the takeaways from the hearings held during this month’s meeting. 

One case this month involved a licensee who failed to provide estimated closing statements (sometimes called “net sheets”) to the consumers he worked with. One of the reasons he made this choice is because he was concerned that certain aspects of the estimated closing statement would not be accurate until they were closer to the closing date. 

Estimated closing statements are not required to be 100% accurate. Rather, the goal is to provide the consumer with "the licensee’s best estimates of all costs . . . at closing and the approximate amount of these costs.” See Ala. Real Estate Admin. Rule 790-X-3-.04. While you should do your best to get as close as possible to what the consumer’s costs at closing will be, the law does not require you to know the exact amount. As a reminder, the law requires that you provide the consumer with an estimated closing statement anytime they make or receive an offer or counteroffer. Preparing an estimated closing statement at the time of listing is a best practice, but is not legally required.  

Another violation involved an advertisement that was incompliant with license law. Specifically, the advertisement failed to prominently display the name of the company and/or qualifying broker who was responsible for it. 

There are three layers to the legal requirement to identify the company/ broker. First, the licensee’s company and/or qualifying broker must appear on all advertisements. Second, the company/ qualifying broker’s name must be prominent. (See Ala. Code § 34-27-36(a)(15) for both requirements.) In this context, “prominent” means that the company/ qualifying broker’s name must be in a font that is the same size or larger than all other text of the advertisement, with the exception of the words “For Sale” and “For Lease.” Finally, you must identify your company/ qualifying broker by the name that appears on the license – not a nickname or shortened version. 

If you have an advertisement that you would like to be reviewed for compliance, please contact AREC.