Alabama license law requires various documents to be provided to consumers throughout a real estate transaction. The first two documents are required by the Real Estate Consumers Agency and Disclosure Act, or RECAD. RECAD requires that you present both the RECAD Brokerage Services Disclosure Form and your company’s Agency Disclosure Office Policy to the consumer at your initial contact with them. It also requires certain language to be included in purchase agreements in Alabama. Read on to learn more about RECAD’s requirements.

Note: This article is intended for information only and is not intended as legal advice. If you need legal advice, please contact a qualified attorney.

RECAD Brokerage Services Disclosure Form

What: The first disclosure required under RECAD is the RECAD Brokerage Services Disclosure Form (we’ll call it the “RECAD Form” in this article). This is the form that is created by the Alabama Real Estate Commission (“AREC”) and reviews the various representation types that are legal in Alabama (single agency, dual agency, and transaction facilitator). You can download the form here.

When:Alabama license law requires the RECAD Form in all types of real estate sales (residential, commercial, land). Specifically, you must give the RECAD Form to the consumer “as soon as reasonably possible and before any confidential information is disclosed to any other person by a licensee.” Ala. Code § 34-27-82(c). An easy rule of thumb is that you should give the RECAD Form to the consumer when you first meet them. But, if you meet a prospective buyer at an open house, the RECAD Form is not required until you provide additional services, such as a private tour or consultation.

Who: The only exception to having to provide the RECAD Form is when you’re working with “a corporation, nonprofit corporation, professional corporation, professional association, limited liability company, partnership, any partnership created under the Uniform Partnership Act, commencing at Section 10-8A-101, real estate investment trust, business trust, charitable trust, family trust, or any governmental entity in transactions involving real estate.” Ala. Code § 34-27-82(d). Although the RECAD Form isn’t required when you’re working with those types of entities, your company may nonetheless still require it. The RECAD Form is legally required for all other consumers in all types of real estate sales in Alabama.

Signature: Although the consumer’s signature is preferred, it isn’t required. If the consumer declines to sign the RECAD Form, you should note that they declined to sign and include the date.

Agency Disclosure Office Policy

What:The Agency Disclosure Office Policy (“ADOP”) is a form created by your company. First, it reviews the various types of representation that your company offers. Your company may offer all representation types allowed in Alabama (single agency, dual agency, and transaction facilitator), or it may offer a more limited range of representation types. Second, the ADOP gives the consumer general information about how the company is compensated. To view sample language that you can customize for your company’s ADOP, please click here.

When/ Who/ Signature – Licensees: Alabama license law includes two separate requirements related to your ADOP. First, at least once a year, the qualifying broker must give every licensee in his/her company a copy of the company’s ADOP. Licensees are required to sign the copy to indicate that they’ve received it and the qualifying broker is required to keep a copy of everyone’s signed ADOP on file.

When/ Who/ Signature – Consumers: Second, Alabama license law also requires the ADOP to be given to consumers. It must be given to the consumer at the same time as the RECAD Form. You may be wondering, “Why do I have to give the consumer two different documents that give largely the same information?” The RECAD Form is all about what’s legal in Alabama, whereas your ADOP is about your company specifically. Although there may be significant overlap between the two, it’s important that the consumer understands both what Alabama law allows and what your company offers. Just like the RECAD Form, the consumer’s signature on the ADOP is preferred. However, if the consumer declines to sign, you may note that they declined to sign and include the date.

Every offer to purchase must include this disclosure, and you are not permitted to alter the text of the disclosure in any way. AAR has updated our purchase agreement to be in compliance with this change – please ensure that the version you are using has a revision date of 9/2025 (this information can be found in the document’s footer). If you use a purchase agreement from a Local Association or one that is specific to your company, it is extremely important that you ensure it has been updated to reflect the changes to Alabama license law.