The Alabama Real Estate Commission (“AREC”) held its fifth meeting of 2026 on May 21st in Birmingham, Alabama. The Commission noted that it conducted 31 company audits, two assistance visits to companies, and six education audits in April. The meeting included four formal hearings, with one that serves as an important warning regarding fiduciary duties owed in agency relationships and the limits of a licensee’s role.  

A licensee represented out-of-state buyers who were moving to Alabama. The licensee and the buyers met in-person and entered into a buyers’ agency agreement. The buyers and the licensee toured a few homes before submitting an offer, which was accepted. Upon inspection there were many issues which the buyers requested to be repaired and replaced, and the sellers agreed. The buyers asked their agent for the receipts from the repairs and replacements made to be provided by the seller prior to the final walkthrough. However, the one receipt they received only covered a small amount of the agreed-upon work. When the buyers followed up with their agent for the remaining receipts, the buyers’ agent assured them that the seller was in the process of supplying them, and that the buyers could proceed to final walkthrough and closing.

The buyers grew hesitant to proceed with the transaction on the initially set closing date and asked their agent whether they could have the inspector go back to the house to confirm that the agreed upon repairs and replacements had been made, to which the buyers’ agent merely informed that they “can” have the inspector come back, though they were still fine to close on the agreed upon closing date. At no point did the buyers’ agent recommend that the buyers ask the inspector to come back to confirm repairs due to the lack of receipts received from the seller. Rather, the buyers’ agent continued to assure them that the seller warranted the repairs had been made and that the receipts would be supplied.  

The buyers were unable to physically attend the final walkthrough because one was deployed overseas and the other was still out-of-state. So, the buyers’ agent physically attended and allowed one of the buyers to attend the final walkthrough by live video call. During final walkthrough, the buyers’ agent represented that the windows “looked good,” insinuating that agreed-upon repairs and/or replacement to the windows had been made. Following closing, the buyers discovered that many of the agreed-upon repairs had not, in fact, been completed. Additionally, the work which was performed was completed by an unlicensed individual, contrary to the parties’ repair agreement. 

The Commissioners found that the licensee acted outside the scope of their role by assuring the buyers that repairs had been completed based solely on visual observations during the walkthrough. The Commissioners imposed a $2,500 fine, a 90-day license suspension, and mandatory in-person continuing education courses. The Commissioners emphasized that licensees should avoid making representations which require the expertise of inspectors, lenders, or contractors. 

If you have questions about this topic and are an Alabama Association of REALTORS® member, please contact the Legal Line.