The bill amends Sections 34-27-81 and 34-27-82 of the Code of Alabama 1975 to enhance clarity and transparency in real estate transactions, particularly regarding agency relationships and brokerage agreements. Key insertions include the definition of "brokerage agreement," which now requires explicit compensation details, and a redefined "client" that emphasizes the agency agreement with a broker. The bill mandates that a written agency agreement is necessary to establish an agency relationship and outlines the conditions under which a transaction brokerage relationship remains valid without such an agreement. Additionally, it requires licensees to provide a written disclosure form to consumers at the initial contact, detailing available brokerage services before any confidential information is shared, with exceptions for seller's agents during open houses.

Moreover, the bill introduces significant changes to existing real estate laws by replacing the term "brokerage" with "brokerage agreement" and stipulating that consumers must sign a brokerage agreement to select a specific type of service. It clarifies that a written brokerage agreement is necessary before a licensee can list a property or submit an offer, while consumers are not obligated to enter into such an agreement to view a property. The bill also standardizes agency disclosure forms for all real estate firms in Alabama, addresses referral fees by requiring written agreements, and defines terms related to real estate brokerage relationships. These amendments aim to protect consumers and improve the overall integrity of real estate transactions, with the new provisions taking effect 30 days after enactment.