HB230 Alabama 2025 Session

Summary

Primary Sponsor

Randall Shedd

Republican

Session

2025 Regular Session

Title

Real estate transactions; required disclosures; description of brokerage services; terms of compensation; required written brokerage agreements under certain circumstances

Summary

HB230 clarifies when disclosures are required, when written brokerage agreements are needed, and when referral agreements must be in writing in Alabama real estate transactions.

What This Bill Does

It requires licensees to give a Real Estate Brokerage Services Disclosure Form to a consumer before showing a property and to provide a written description of the specific brokerage services offered by the licensee’s company along with general information about compensation. After disclosure, the consumer can choose to enter into a brokerage agreement, but a written agreement is not required just to view a property; a written agreement is only required if the licensee will list the property for sale or submit an offer on the consumer’s behalf, and it must state compensation terms. The bill also requires referral agreements between licensees to be in writing, standardizes disclosure forms for all Alabama firms, and excludes rental or property management services from certain disclosure requirements while clarifying key terms like agency and transaction brokerage.

Who It Affects

• Consumers (buyers and sellers) who work with real estate licensees; they will receive disclosures, learn about brokerage service options, and decide whether to sign a brokerage agreement.
• Real estate licensees and brokerage firms; they must provide the disclosure form, explain available services and compensation, and may require a written brokerage agreement in certain cases.
• Organizations such as corporations, nonprofit corporations, LLCs, partnerships, trusts, and government entities; licensees are exempt from certain disclosure requirements when transacting with these entities.

Key Provisions

• Licensees must provide a Real Estate Brokerage Services Disclosure Form to the consumer before showing a property.
• The disclosure must describe the specific brokerage services available from the licensee’s company and include general information about compensation.
• A written brokerage agreement is not required to view a property, but is required prior to listing a property for sale or submitting an offer on behalf of the consumer, and must state terms of compensation.
• Referral agreements between real estate licensees must be in writing.
• All Alabama real estate firms must use the same agency disclosure forms written by the Alabama Real Estate Commission.
• Rental or property management services are excluded from these disclosure requirements.
• The bill defines key real estate terms (agency agreement, brokerage agreement, single agent, transaction broker, etc.).
• The act becomes effective 30 days after enactment.

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

Subjects

Property & Estates