Note: This article is intended for information only and is not intended as legal advice. No attorney-client relationship has been established. If you need legal advice, please contact a qualified attorney.

The Legal Line is a free resource available to Alabama REALTORS®. Below are some recent questions submitted and their responses. If these questions spark a question for you, please contact us!

Q1: Under the license law changes that went into effect on October 1, 2025, is dual agency determined based on the individual licensee or the company?

A1: Starting October 1, 2025, dual agency is determined based on the individual licensee. Dual agency is triggered by the same licensee representing both a buyer and seller in the same transaction as an agent. A signed Dual Agency Agreement is required from both parties before the licensee may prepare or submit an offer on behalf of the buyer.

Q2: Does designated single agency apply between branches of a company?

A2: It depends on the structure of the company. Designated single agency is defined under license law as applying “[w]hen two or more licensees under the same qualifying broker are in separate agency agreements with a different party in the same transaction.” Ala. Code § 34-27-82(g). If the company is structured such that there is a company-wide qualifying broker who is over all the branches, then designated single agency will apply both within and between branches. It applies within each branch because of the branch qualifying broker, who is over all licensees in the branch. It applies between branches because of the company qualifying broker, who is over all licensees in every branch. Whichever qualifying broker is over both licensees in the transaction – whether that’s the branch qualifying broker or the company qualifying broker – will need to be the one to make the designation.

If, however, each branch has its own qualifying broker and there is no company-wide qualifying broker over all branches, designated single agency will only apply within each separate branch. This is because the branches do not have a qualifying broker in common and therefore, licensees from different branches are not under the same qualifying broker.

Q3: If I am a Team Leader and someone leaves my Team, should I remove them entirely from the Team Member List that I must give our qualifying broker?

A3: No. The goal of the Team Member List is to help you maintain a historical record of who was on the Team at various points in time. If someone leaves the team, rather than removing them from the list entirely, you should simply indicate the date that they left the team.

Q4: Are Compensation Agreements between brokers illegal now?

A4: No, they are not illegal. However, AAR does not recommend their use due to the potential for both confusion and lack of disclosure to the consumer. We no longer offer such a form and do not support continued use of previous versions of the form. If you wish to continue to engage in broker-to-broker compensation, you must work with an attorney to have your own Compensation Agreement created.

That being said, the buyer is still permitted to request that the seller pay the buyer’s broker’s compensation. AAR recommends making such a request in the Purchase Agreement.