Alabama Real Estate Violations: Overview & Repercussions

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

Getting your real estate license in Alabama gives you opportunities to grow in an exciting industry. You must understand the rules and regulations, as well as the violations that exist in Alabama.

What Are Real Estate Violations?

You are entering into a dynamic and exciting career in real estate. There are unlimited possibilities in your new line of work. However, you must also be aware of rules and regulations that exist in Alabama that govern the real estate industry. Violations are actions that break the regulations and can create fines or restrictions put on you.

Who Regulates Real Estate in Alabama?

In Alabama, the Alabama Real Estate Commission establishes the rules that apply to real estate agents. Once you have your license, you will be expected to follow the commission's guidelines. You agree to abide by the rules in your work and in your interactions with clients and the general public in regards to real estate work. Let's look at several violations that you must avoid.

Types of Violations

Contracts

Let's imagine you have a client, Linda, who has recently entered a contract to sell her home to the buyer. However, she is getting cold feet because she regrets accepting the lower sales price the buyer offered. Linda asks you how she can get out of the sale. You cannot encourage or help Linda break the contract because she is legally bound to sell her property. Once your client enters into a contract, your client is legally required to fulfill his or her obligation.

Commissions

Your friend, Mark, is interested in real estate. He is thinking about getting his license but wants to see what real estate is like before spending the time and money to study for the exam. He asks you if he can help you with your next listing by showing it and helping sell the home. He suggests you pay him 10% of your commission when the house sells.

This is a big no-no. You cannot pay a commission to anyone who is not licensed. The Alabama Real Estate Commission is very clear that only licensed real estate professionals can earn a commission for completing a real estate commission. Additionally, you cannot let Mark do activities that require a real estate license, such as negotiating the terms of a contract or handling contracts.

Bad Checks

There are fees and payments that you must make to the commission, such as renewing your license, transferring your license, or other activities. The Alabama Real Estate Commission may accept your personal or business check. However, if your check bounces or is not paid by your bank, you have violated the payment rules of the commission. You may be fined additional charges or fees for the returned check.

Lotteries

You just listed a new property for Samuel, who has been transferred across the country for his new job. He is anxious to get his house sold right away and wants to find a creative way to attract buyers. He suggests you offer a lottery to potential buyers. People can buy a ticket, and the winning ticket will be worth $10,000 off the sales price of the house.

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