The Alabama Real Estate Commission (“AREC”) held its monthly meeting in Montgomery on October 23, 2025. The Commissioners voted on a new Chair, Betsy Echols, and a new Vice Chair, Jim Dye. This month’s meeting also included an opportunity for public comments about four proposed rules by AREC. Three of the four proposed rules (relating to 1) the RECAD Brokerage Services Disclosure Form, 2) Agency Disclosure Office Policies, and 3) Real Estate Teams) will simply convert current emergency rules into standing (non-emergency) rules. The final rule relates to Distance Education Courses and will allow synchronous virtual courses to have the same examination options as asynchronous virtual courses. Written comments about the proposed rules may still be submitted to AREC and are due no later than 4:30 PM on November 4, 2025.

AREC Deputy Commissioner Wendy Alkire presented the Executive Director’s report in place of Director Vaughn Poe, who was not in attendance. The report provided an update on the Commission's building roof replacement, which is projected to be completed by Thanksgiving. Commissioners voted to adopt the 2027 budget, reflecting a 5% decrease from the 2026 budget, which is elevated due to deferred maintenance on the Commission building. AREC staff anticipates that the budget to return to normal levels in 2028.

Multiple formal complaints this month centered around “failing, within a reasonable time, to properly account for or remit money coming into his or her possession which belongs to others, or commingling money belonging to others with his or her own funds” (a violation of Ala. Code § 34-27-36(b)(8)(a)). Although this can sometimes happen innocently – one person demonstrated that it was the result of various bank fees, which left the account with less money than it should have had – having an unbalanced escrow account is still considered a license law violation. The Commission typically gives more leniency in cases like this, in which a lack intentional/ malicious conduct is shown. Even so, it’s extremely important to keep a close eye on all accounts associated with your business and understand any fees, requirements, etc. that they may have. To help you understand Alabama license law’s requirements related to trust funds and how to properly create and maintain ledgers, AREC has created a new trust account resource. To view the resource, click here.

One case involving an unbalanced escrow account was further compounded by the licensee’s failure to submit documentation which was requested by AREC. If you find yourself in an audit or investigation, the worst thing that you can do is to ignore the Commission’s requests. Not only will the original issue not go away, but you’ll also find yourself facing an additional charge for failing to provide the requested documentation. In the case this month, the failure to comply (along with other specific facts of the case) led to the licensee being fined over $14,000 and losing her license.

Another formal complaint this month related to estimated closing statements, sometimes called “net sheets.” In this case, a consumer reported a licensee for conduct that, upon investigation, the Commission did not find any evidence of. However, during the investigation, it was discovered that the consumer did not sign a net sheet in connection with the transaction, although the licensee claimed the consumer was given one. As a result, the licensee was given a monetary fine and ordered to attend mandatory Continuing Education courses. As a reminder, estimated closing statements are required to be both given to and signed by the consumer in residential transactions upon the making or receipt of any offer or counteroffer. (Ala. Admin. Rule 790-X-3-.04.)