HB3 Alabama 2024 Session

Summary

Primary Sponsor

Rolanda HollisRepresentative

Democrat

Session

Regular Session 2024

Title

Real estate commission; real estate brokers, companies, salespersons; training, qualifications licensure; penalties for certain licensee conduct; required disclosures, prohibited conduct

Summary

HB3 would overhaul Alabama's real estate licensing rules by expanding training, disclosures, and oversight, while adding restrictions on nonresident co-brokerage and creating new team and school licensing requirements.

What This Bill Does

It adds detailed training, qualification, licensure, and renewal standards for real estate companies, brokers, salespersons, teams, and training schools; restricts co-brokerage transactions with nonresident brokers and requires filing and supervision, plus penalties for failures to disclose certain transaction details; establishes standardized agency disclosures and clarifies agency relationships (single agent, dual agent, transaction broker) to protect consumers; creates a comprehensive framework for team licensing, school bonding, and ongoing education, with new background checks and enforcement tools. It also introduces temporary licenses, reciprocity provisions, and various non-substantive language updates, with most provisions taking effect for licenses issued on or after October 1, 2024.

Who It Affects

• Licensed Alabama real estate brokers, salespersons, and real estate companies, who would face new training, licensure, renewal, and disciplinary requirements as well as expanded responsibilities and oversight.
• Nonresident co-brokers and Alabama-licensed brokers who engage in co-brokerage transactions, who would be subject to annual transaction limits (three co-brokerage deals per year per nonresident principal broker), monetary caps, filing requirements, supervisory obligations, and liability for acts of the nonresident broker.
• Real estate schools, branch offices, administrators, and instructors, who would face new licensing, bonding (including surety bonds for proprietary prelicense schools), fee schedules, and ongoing education requirements, plus penalties for violations.
• Consumers and property owners, who would gain clearer agency disclosures, defined agency relationships (single agent, dual agent, designated agent, and transaction broker), and standardized forms to improve transparency in real estate transactions.

Key Provisions

• Sets training, qualifications, licensure, and renewal rules for real estate entities and individuals, including students, schools, and license applicants, and adds Section 34-27-39 for team licensing.
• Imposes limits on nonresident co-brokerage: co-brokerage agreements limited to three transactions per year per licensed nonresident principal broker, with Alabama brokers supervising Alabama-transaction aspects and ensuring advertising lists the Alabama broker; requires filing copies with the Alabama Real Estate Commission within 10 days of signing.
• Requires penalties for licensee conduct, including failing to disclose equitable interests in residential contracts, failing to specify listing expiration dates, and improper encumbrances recorded on properties listed, as well as other specified violations.
• Establishes standardized agency disclosures and policies: requires licensees to disclose agency relationships (single agent, dual agent, transaction facilitator) to consumers, provide written agency disclosure forms, and display agency information prominently; reinforces duties to all parties under Section 34-27-84 and client duties under Section 34-27-85.
• Creates a formal team licensing framework: team leaders must be licensed Alabama associate brokers, teams require a team license with specific fees, renewal rules, and processes for dissolution, name changes, and member additions/removals.
• Expands school oversight and financial protections: bonds for proprietary prelicense schools, annual fees for schools, administrators, and instructors; continuing education requirements; thresholds for penalties and enforcement; authorizes rules for supervising and disciplining schools and instructors.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Businesses & Financial Institutions