Alabama Brokerage Practice and Consumer Protection
This chapter covers Alabama's day-to-day practice rules: trust and escrow accounts, advertising and supervision, and the Alabama Real Estate Recovery Fund that protects consumers.
Trust and Escrow Accounts
The qualifying broker is responsible for the brokerage's trust or escrow account. Client funds such as earnest money must be deposited into that account and kept separate from the broker's own funds. Commingling or converting client funds violates Alabama license law and can lead to discipline.
Advertising and Supervision
Alabama advertising must be conducted under the qualifying broker and must not be false or misleading. A salesperson advertises in the name of the brokerage. Because the qualifying broker supervises the salesperson, violations by the salesperson can also expose the broker to discipline.
The Alabama Real Estate Recovery Fund
The Recovery Fund reimburses members of the public who obtain a valid but unpaid court judgment against a licensee for certain violations of the license law, subject to statutory per-transaction and per-licensee limits. A licensee who causes a payout may have their license suspended until the fund is repaid with interest.