HB230 Alabama 2025 Session

Updated Jan 14, 2026

House Bill

Enacted

Current Status

2025 Regular Session

Session

Sponsor

Summary

Primary Sponsor: Randall Shedd Representative
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
Description: Under existing law, a licensee of a real estate transaction must provide a written disclosure form to a consumer describing the types of brokerage services, as required by the Real Estate Consumers Agency and Disclosure Act (RECAD), prior to a consumer disclosing any confidential information. This form is adopted by the Alabama Real Estate Commission. In addition, a licensee must inform the consumer of the brokerage services specifically provided by the licensee's company. A written agreement is required to establish an agency relationship but is not required to establish a transaction brokerage relationship.
Pursuant to the National Association of Realtors (NAR) settlement agreement approved by the U.S.
District Court for the Western District of Missouri, NAR created a new rule requiring brokers working with prospective buyers to enter into a written agreement with the prospective buyer prior to the prospective buyer touring a home. This requirement conflicts with existing law.
In response to recent changes in industry practices, this bill would provide that a consumer must receive a disclosure form from the licensee prior to a HB230 INTRODUCED real estate licensee showing him or her a property; and the disclosure of the specific brokerage services the licensee's company provides must be in writing and include general information related to compensation of the licensee.
This bill would provide that after the disclosure, a consumer retains the option to enter into a brokerage agreement with the brokerage company; however, the consumer is not required to enter into a written brokerage agreement as a prerequisite to the licensee showing him or her a property.
This bill would further provide that a licensee and consumer are only required to execute a written brokerage agreement if the licensee will either list the property for sale or submit an offer to a seller on behalf of the consumer; and any brokerage agreement entered into must provide terms of compensation to the licensee and company.
This bill would further provide that a referral agreement between real estate licensees must be in writing.
Subjects: Property & Estates