Alabama Real Estate: Complaints, Hearings, Rehearings & Appeals

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

The Alabama Real Estate Commission oversees the actions of agents and handles complaints made from clients or the commission. Learn how a complaint is handled and what rights the agent has.

What are Complaints?

Your colleague, Patrick, has received a real estate complaint, a reported problem from a client or other party or a claim from the Alabama Real Estate Commission regarding a violation of commission rules or regulations. His complaint stemmed from a claim from a buyer he represented that he mishandled earnest money funds by spending the money. Agents are only to deposit that money into a trust fund. This is a very serious accusation and one that the commission will thoroughly investigate.

How are Complaints Handled?

When the commission receives a legitimate complaint from a client or from random checks by the commission, a process is followed to review the problem.

A formal complaint is provided from the commission. The document includes:

  • name(s) of the accused party
  • the authority that is making the charge
  • the type of license held by the person or group being investigated
  • the laws or rules that may have been broken, and
  • a description of what happened

The commission has the right to hold a hearing to review the facts of the situation, allowing the afflicted parties to speak and possibly come to a solution. If the license admits to the problem, a hearing may be skipped and the commission can impose a fine and/or penalty. Otherwise, the hearing allows all sides to be heard and the commission makes a final decision.

In our example, Patrick received the notice of a hearing and proceeded with the review. He claimed he had used the funds but then later replaced the money and deposited it into his trust account. Because this was a direct violation of earnest money laws, the commission imposed a significant fine and suspended his license for two years, the maximum suspension time.

Rights of the Agent

If a hearing is held, the agent has the right to provide evidence and testimony to explain his or her side of the story. If a penalty is imposed, the licensee has the right to appeal the commission's decision.

Patrick accepts the penalty for the misuse of earnest money funds. However, he feels that suspending his license will cause a financial hardship for him and damage his business. He appeals the decision, explaining that the use of the funds was a mistake and was rectified as quickly as possible. Because this was his first infraction, the commission believed there may be additional facts that should be considered and granted him an appeal.

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