The bill amends Sections 34-27-81 and 34-27-82 of the Code of Alabama 1975 to enhance clarity regarding real estate transactions, particularly focusing on agency relationships and brokerage agreements. Key insertions include the definition of "brokerage agreement" as a written contract between a brokerage firm and a consumer that outlines the terms of service and compensation. The bill redefines "client" as someone with an agency agreement and "consumer" as someone seeking real estate services. It mandates that a written agency agreement is necessary to establish an agency relationship and specifies the conditions under which a transaction brokerage relationship remains effective. Additionally, it requires licensees to provide a written disclosure form detailing available brokerage services to consumers before any confidential information is shared or services are rendered.

Moreover, the bill introduces several amendments to existing real estate laws, replacing the term "brokerage" with "brokerage agreement" and requiring consumers to sign such agreements to select specific brokerage services. It clarifies that a written brokerage agreement is necessary before a licensee can list a property or submit an offer on behalf of a consumer, while consumers are not obligated to enter into a written agreement to view properties. The bill also mandates that all real estate firms in Alabama utilize standardized agency disclosure forms developed by the Alabama Real Estate Commission. Additionally, it addresses referral fees, stipulating that any referral agreement must be in writing and defining terms related to real estate brokerage relationships. The act is set to take effect 30 days after its enactment.