Dear Alabama REALTORS®,

We hope you are having a good September. We're writing to share an important update from the Alabama Real Estate Commission (AREC) regarding upcoming license law changes that go into effect on October 1.
 
One upcoming change is the elimination of Limited Consensual Dual Agency from Alabama license law and its replacement with Dual Agency and Designated Single Agency. Beginning October 1, 2025, Dual Agency will only apply when the same individual licensee is an agent for both the buyer and seller in the same transaction. Simply put, starting October 1, Dual Agency will be based on the licensee, not the company. Designated Single Agency, on the other hand, will apply when multiple licensees under the same qualifying broker are agents for both the buyer and seller in the same transaction.
 
As members have worked to understand and prepare for these changes, questions about the application of Dual Agency and Designated Single Agency have arisen. One specific question has been which representation type will be at play when a qualifying broker is an agent for one party to a transaction and a licensee under that broker is an agent for the opposite party in the same transaction. Alabama REALTORS® (AAR) relayed these questions to AREC’s Legal Division for additional clarification and guidance. 

In response, AREC released a memo to provide further clarity on how AREC will interpret Dual Agency and Designated Single Agency. We are grateful to AREC’s for this additional guidance. Their full memo can be found here. A summary is below: 

• No Dual Agency Triggered: A qualifying broker representing one party as an agent while one of their licensees represents the opposite party as an agent does not trigger Dual Agency. No Dual Agency Agreement is needed. 
• Designated Single Agency Applies: This situation will trigger Designated Single Agency. The qualifying broker would need to designate themselves as the single agent for their client and designate the other licensee as the single agent for the licensee’s client. This designation must be made in writing, but there is no required format. AAR will offer a Single Agent Designation Form beginning October 1, 2025. 
• High Risk for Qualifying Brokers: Based on AREC’s guidance, there is an inherent high level of risk when a qualifying broker serves as a designated single agent. This designation prevents the qualifying broker from being able to supervise the licensee representing the opposite party. If an issue arose from the licensee’s lack of supervision, the qualifying broker would face a potential license law violation. Although not strictly forbidden, the practice should be approached with caution. 

 
Based on AREC’s guidance and interpretation of the law, AAR recommends against qualifying brokers designating themselves as single agents because of the risk involved when the qualifying broker is unable to supervise their licensee. AAR’s Legal Team gives recommendations that are the most likely to protect you from liability. Instead of a qualifying broker designating themselves as single agents, a broker may consider alternative steps, such as: 

• Having another licensee (who is not the qualifying broker) represent the client instead, or
• Referring the business elsewhere

Thank you for your attention as we prepare for these changes. If you would like to review written summaries of the changes, recordings of AAR’s webinar series covering the changes, frequently asked questions, or previews of our revised Statewide Legal Forms, please visit our HB 382 Resource Page. If you have any questions, please contact AAR’s Legal Line or reach out to AREC.