The bill amends Sections 34-27-81 and 34-27-82 of the Code of Alabama 1975 to clarify the requirements for real estate transactions, particularly focusing on agency relationships and brokerage agreements. Key insertions include the definition of "brokerage agreement" as a written agreement between a brokerage firm and a consumer that outlines the terms of brokerage services, including compensation. The bill redefines "client" and "consumer," stating that a client has an agency agreement, while a consumer seeks real estate information or services. It specifies that a written agency agreement is necessary to establish an agency relationship and outlines the conditions under which a transaction brokerage relationship remains in effect. Additionally, it mandates that licensees provide a written disclosure form to consumers at the initial contact, detailing available brokerage services before any confidential information is shared.
The bill also introduces amendments regarding the use of standardized agency disclosure forms by all real estate firms in Alabama, which will be developed by the Alabama Real Estate Commission. It replaces the term "brokerage" with "brokerage agreement" and requires consumers to sign a brokerage agreement to select a specific type of brokerage service. While a written brokerage agreement is necessary before a licensee can list a property or submit an offer, consumers are not required to enter into such an agreement to view a property. The bill further addresses referral fees, stipulating that any referral agreement must be in writing, and defines terms related to real estate brokerage relationships. Overall, these amendments aim to enhance transparency and protect consumers in real estate transactions, taking effect 30 days after enactment.