The Alabama Real Estate Commission (“AREC”) held its monthly meeting on November 20, 2025 in Montgomery. Of note, the Commission is creating a second Risk Management course. The current Risk Management course covers material from the initial consumer interaction through execution of a purchase agreement, but the new course will cover the period from execution of the purchase agreement through closing. A training session for Risk Management instructors will take place in May 2026. If you are certified to teach Risk Management and interested in the training session, keep an eye out for further communications from AREC. 

Read on to learn more from the hearings and insights to help keep you compliant.

Multiple formal complaints this month involved individuals and companies that were conducting licensed activities without having an active real estate license.

In one case, a licensed real estate company entered a joint venture with a company that was not licensed. The testimony seemed to indicate that the individuals from the licensed company were not aware that the other company was not licensed. However, lack of knowledge is not an excuse, and everyone involved was found in violation of license law. Anytime you’re considering hiring an individual or going into business with another company, it’s crucial that you verify their licensure status. You can do so by contacting AREC or by using their online license search tool.

Another case involved a company and its qualifying broker, both with active real estate licenses, allowing an individual whose license had lapsed to conduct licensed activities. Unlicensed individuals are permitted to do certain tasks, such as answering phone calls, handling bookkeeping, and overseeing repairs (for a more detailed list of activities an unlicensed individual may perform, click here). However, in this case, the unlicensed individual was opening doors to properties that consumers were interested in and filling out contracts. Additionally, in at least one instance, a website indicated that the unlicensed individual was the listing agent. These activities require an active real estate license. The qualifying broker, company, and individual were all found in violation and fined, and the qualifying broker was assigned mandatory education. (The individual’s license is still lapsed, and they will be required to pay the fine before they are eligible to reactivate their license.)

Finally, a third case involved a salesperson who created an unlicensed management company and began managing rentals outside of the company where her license was held. The property management company handled rents and deposits through its own accounts, even though the company did not have a license or a qualifying broker managing it. The qualifying broker who held the salesperson’s license was aware of her property management company, but claimed he was not aware that she didn’t hold a qualifying broker’s license. Because the salesperson engaged in real estate activity outside of the company where her license was held and the property management company was unlicensed, the salesperson, the qualifying broker, and the property management company were all found in violation.   

All three cases serve as an important reminder to verify licensure, refresh your memory on what activities require a license, and recognize the fact that your license only allows you to conduct licensed activities through the qualifying broker who holds your license. If you need help with these topics and are an Alabama Association of REALTORS® member, please contact the Legal Line.