Alabama Real Estate Salesperson Exam — All Questions

The principle of contribution states that the value of a component or improvement is measured by:

• a.The raw number of square feet of floor area or land area that the improvement happens to occupy
• b.The owner's personal emotional attachment to and sentimental feelings about that improvement
• c.Its original construction or installation cost in every case, dollar for dollar, with no exception
• d.How much it adds to the overall value of the property, not its cost✓

Under contribution, an improvement is worth the amount it adds to the whole property's market value, which may be more or less than its cost. This principle explains why some renovations do not fully return their expense, a key point in over-improvement analysis.

Under Internal Revenue Code Section 121, a qualifying homeowner may generally EXCLUDE from taxable capital gain:

• a.Up to $250,000 of gain if single, or $500,000 if married filing jointly✓
• b.Up to a full one million dollars of gain on any property at all, at any time and any frequency
• c.All gain on any and every investment or rental property the taxpayer happens to own and sell
• d.Absolutely nothing, because gain on the sale of a home is always fully and entirely taxable

Section 121 lets homeowners who owned and used the home as their principal residence for at least two of the prior five years exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). It applies to a primary residence, not to investment property.

Depreciation recapture on the sale of investment real estate means that:

• a.All of the depreciation deductions previously claimed are simply refunded to the investor in cash
• b.The investor is legally required to physically restore and rebuild the depreciated building itself
• c.Gain from prior depreciation may be taxed, often at a special rate✓
• d.No income tax is ever owed at all on the sale of a property that has previously been depreciated

When depreciated property is sold at a gain, the portion of gain due to depreciation deductions is 'recaptured' and taxed under special rules, reflecting the earlier tax benefit. It is a tax concept, not a requirement to rebuild, and it increases, not eliminates, tax on sale.

Which appraisal approach is generally MOST reliable for a special-purpose property, such as a church or public school, that rarely sells and earns no market income?

• a.The sales comparison approach, which depends on recent sales of similar comparable properties
• b.The income approach, which converts a property's market rental income into an indicated value
• c.The gross rent multiplier method, which relies on typical market rents that these lack entirely
• d.The cost approach✓

Special-purpose properties have few or no comparable sales and generate no market rent, so the cost approach (replacement cost new, less depreciation, plus land) is typically most reliable. Sales comparison lacks comparables and the income/GRM methods need market income these properties do not produce.

The four characteristics an item must have to possess value in the market, often remembered as DUST, are:

• a.Debt, Utility, Supply, and Taxes, a mix of unrelated financing and cost terms rather than value
• b.Demand, Utility, Scarcity, and Transferability✓
• c.Depreciation, Use, Sale, and Title, which describe stages of ownership rather than value itself
• d.Demand, Ownership, Scarcity, and Time, which swaps in two terms that are not part of the concept

For something to have market value it must have Demand (buyers who want it), Utility (usefulness), Scarcity (limited supply), and Transferability (the ability to convey it). The DUST acronym captures these four essentials of value.

Which body licenses and regulates real estate salespersons and brokers in Alabama?

• a.The Alabama Department of Revenue
• b.The Alabama Association of Realtors
• c.The Alabama Real Estate Commission✓
• d.The Alabama Secretary of State

The Alabama Real Estate Commission (AREC) administers the Alabama real estate license law found in Title 34, Chapter 27 of the Code of Alabama. It issues, renews, and disciplines salesperson and broker licenses.

When a person first qualifies for an Alabama salesperson license, what type of license is initially issued?

• a.A permanent salesperson license
• b.A temporary (original) salesperson license valid for a limited time until post-license education is completed✓
• c.A broker license
• d.A reciprocal license

Alabama first issues a 'temporary' (original) salesperson license. To obtain the permanent license, the licensee must complete the required post-license course within the temporary license period. If the post-license course is not completed in time, the temporary license lapses.

In Alabama, a licensed salesperson must perform licensed real estate activity:

• a.Under the supervision of a qualifying broker with whom the salesperson's license is placed✓
• b.Only as an independent contractor with no broker
• c.Directly for the Alabama Real Estate Commission
• d.Only after obtaining a separate escrow license

An Alabama salesperson must have their license placed with, and act under the supervision of, a qualifying broker. The qualifying broker is responsible for the salesperson's licensed activity, advertising, and handling of trust funds.

Under the Alabama Real Estate Consumers Agency and Disclosure Act (RECAD), when must a licensee provide the required written brokerage services disclosure?

• a.Only at closing
• b.At the time of first substantive contact (the first meeting or communication about a specific property or the consumer's needs)✓
• c.Only when the consumer signs a purchase contract
• d.Never, because Alabama does not require agency disclosure

RECAD requires the licensee to provide a written disclosure of brokerage services (the 'Real Estate Brokerage Services Disclosure') at the first substantive contact with a consumer, describing the types of brokerage relationships available before confidential information is shared.

Under Alabama's RECAD, which brokerage relationship allows a licensee to assist a buyer and a seller in a transaction as customers without being the agent, fiduciary, or advocate of either, provided it is disclosed?

• a.Single agency
• b.Subagency
• c.Designated single agency
• d.Transaction facilitator✓

Under Alabama's RECAD, as amended effective October 1, 2025 (Act 2025-380 / HB 382), the recognized brokerage relationships are single agency, dual agency, designated single agency, and transaction facilitator. A transaction facilitator (formerly called a 'transaction broker') assists one or more parties as customers without being the agent, fiduciary, or advocate of either party. Subagency is no longer recognized in Alabama.

In Alabama, who is responsible for maintaining the trust or escrow account that holds earnest money and other client funds?

• a.The individual salesperson
• b.The buyer's attorney
• c.The qualifying broker✓
• d.The Alabama Real Estate Commission

In Alabama 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 client funds with personal or business funds is a violation of Alabama license law.

The Alabama Real Estate Recovery Fund is used to:

• a.Pay commissions that brokers fail to split with salespersons
• b.Reimburse members of the public who suffer monetary loss from certain licensee violations and obtain an unpaid court judgment, up to statutory limits✓
• c.Fund the Commission's day-to-day operations
• d.Provide continuing education to licensees at no cost

The Alabama Real Estate Recovery Fund reimburses members of the public who obtain a valid, unpaid court judgment against a licensee for certain violations, subject to statutory per-transaction and per-licensee caps. A licensee who causes a payout may have their license suspended until the fund is repaid.

How many hours of approved pre-license education must an Alabama salesperson applicant complete before taking the licensing exam?

• a.30 hours
• b.60 hours✓
• c.90 hours
• d.150 hours

Alabama requires 60 clock hours of Commission-approved pre-license education to qualify for the salesperson examination. After receiving the temporary license, the licensee must also complete a required post-license course to obtain the permanent salesperson license.

What is the minimum age at which Alabama will issue a real estate salesperson license?

• a.Eighteen years of age
• b.Nineteen years of age✓
• c.Twenty-one years of age
• d.Twenty-three years of age

Alabama sets the floor at 19, not the 18 used by most states. The Commission's documentation rule makes the applicant prove it with a driver license, passport, or birth certificate. Cite: Ala. Code 34-27-32(a)(4); Ala. Admin. Code r. 790-X-2-.01(1).

An Alabama applicant begins the 60-clock-hour salesperson prelicense course. By when must it be finished for the hours to count?

• a.Within one year from the start date of the course✓
• b.Within six months from the start date of the course
• c.Within two years from the start date of the course
• d.Within 90 days of the first class meeting

Miss the one-year window and the student receives no credit for the classes already completed and must begin the course over. The same rule caps credit at eight hours per day. Cite: Ala. Admin. Code r. 790-X-1-.06(5)(c).

What is the passing grade on the Alabama salesperson licensing examination, and how long is the candidate given?

• a.75, with four hours allotted for the examination
• b.70, with three and one-half hours allotted✓
• c.80, with three and one-half hours allotted
• d.70, with one and one-half hours allotted

The Commission rule fixes the passing grade for both the salesperson and broker examinations at seventy and allots three and one-half hours. Cite: Ala. Admin. Code r. 790-X-2-.02(8).

After passing the Alabama examination, within what period must the applicant secure a qualifying broker and meet the remaining licensing requirements?

• a.Within 30 days after passing the examination
• b.Within 12 months after passing the examination
• c.Within 6 months after passing the examination
• d.Within 90 days after passing the examination✓

Within 90 days of passing, the applicant must secure a qualifying broker, after which the license is issued active or classified inactive. The qualifying broker submits a sworn statement accepting responsibility for the salesperson. Cite: Ala. Code 34-27-33(b).

How long is an Alabama temporary salesperson license valid?

• a.Six months from the date the examination was passed
• b.Two years from the date the certificate was issued
• c.One year after the first of the month following issuance✓
• d.Until the licensee's first September 30 renewal deadline

The statute measures the year from the first day of the month after issuance, and a temporary license cannot be renewed. If the post license requirements are not met in that year it automatically expires and lapses. Cite: Ala. Code 34-27-33(c)(1) and (c)(2); Ala. Admin. Code r. 790-X-2-.03(2).

For how much of its one-year life may an Alabama temporary salesperson license be on ACTIVE status?

• a.Only the first six months following issuance✓
• b.The full twelve months, active throughout
• c.Only the final six months of the license year
• d.Only the first 90 days following issuance

The license may be active only during the six months following issuance. To stay active past that point the holder must finish the post license course and have the original license issued; otherwise the temporary license goes inactive for its remaining six months. Cite: Ala. Admin. Code r. 790-X-2-.03(3); Ala. Code 34-27-33(c)(2).

Which course must an Alabama temporary salesperson complete to have the original (permanent) license issued?

• a.A 15-clock-hour post license course
• b.A 60-clock-hour post license course
• c.A 30-clock-hour post license course✓
• d.A 45-clock-hour post license course

The 30-clock-hour post license course is required of every temporary salesperson licensee, active or inactive, within the first year of licensure. Cite: Ala. Code 34-27-33(c)(2); Ala. Admin. Code r. 790-X-1-.06(5)(e).

When may an Alabama licensee begin the post license course and earn credit for it?

• a.Any time after passing the licensing examination
• b.As soon as the prelicense course final exam is passed
• c.Only after the original (permanent) license is issued
• d.Only after the temporary license has been issued✓

The rule requires the temporary license to be issued first, and the holder must give the temporary license number to the instructor before being allowed to begin. Cite: Ala. Admin. Code r. 790-X-2-.03(1).

An Alabama licensee finishes the post license course and has the original license issued. What is the effect on continuing education at the first renewal?

• a.The requirement is halved to eight hours
• b.There is no CE requirement at that renewal✓
• c.It has no effect; 15 hours are still due
• d.The hours carry over to the next period

The holder of an original license who completed the post license course is not subject to the continuing education requirement for the first renewal of that license. Cite: Ala. Code 34-27-33(c)(4).

What continuing education must an Alabama salesperson complete each license period?

• a.15 clock hours, 3 of them the Risk Management course✓
• b.12 clock hours, all of them elective subjects
• c.15 clock hours, 6 of them the Risk Management course
• d.21 clock hours, 3 of them the Risk Management course

Salespersons take 15 clock hours per license period: 3 in the Commission-approved Risk Management course and 12 in other approved courses. Cite: Ala. Admin. Code r. 790-X-1-.11(1).

How do the 15 continuing education hours break down for an Alabama associate broker or qualifying broker?

• a.15 hours of freely chosen elective coursework
• b.3 hours of Risk Management and 12 hours elective
• c.3 hours Risk Management, 3 hours Broker, 9 elective✓
• d.6 hours of Risk Management and 9 hours elective

Since October 1, 2022 brokers must take the 3-hour Risk Management course, the 3-hour Commission-approved Broker course, and 9 elective hours. The extra Broker course is what separates them from salespersons. Cite: Ala. Admin. Code r. 790-X-1-.11(2).

Besides a high school diploma and 60 clock hours of approved coursework, what does Alabama require of an applicant for a broker license?

• a.Twelve months of active licensure in Alabama only
• b.Five years of licensure in any state, active or inactive
• c.Thirty-six months of continuous active licensure
• d.An active salesperson license 24 of the past 36 months✓

The applicant must show an active real estate salesperson license in any state for at least 24 months of the 36-month period immediately preceding the application. Cite: Ala. Code 34-27-32(d)(1), (2) and (3).

How does Alabama license law define a 'license period'?

• a.January 1 through midnight December 31 of the final year
• b.October 1 through midnight September 30 of the final year✓
• c.July 1 through midnight June 30 of the final year
• d.The twelve months following the date of issuance

A license period begins October 1 of the first year the Commission designates and ends at midnight on September 30 of the designated final year. Every license expires at midnight September 30 of that final year. Cite: Ala. Code 34-27-2(a)(10); 34-27-35(i).

Which of these managers is NOT exempt from Alabama's real estate licensing requirement?

• a.A person managing an apartment building
• b.A person managing an apartment complex
• c.An on-site manager of a condominium complex✓
• d.An owner managing his or her own property

Alabama exempts persons acting as the manager for an apartment building or complex, but the statute states in terms that this exception does not apply to an on-site manager of a condominium building or complex. Cite: Ala. Code 34-27-2(b)(7) and (b)(1).

Which transaction is expressly excluded from the Alabama licensing requirement by statute?

• a.A brokerage's lease of farmland for an absentee owner
• b.A licensee's sale of a vacant residential building lot
• c.The auction of a foreclosed residential lot
• d.The sale, lease, or transfer of cemetery lots✓

The licensing requirements of Articles 1 and 2 do not apply to transactions involving the sale, lease, or transfer of cemetery lots. Auctioning real estate, by contrast, requires a license. Cite: Ala. Code 34-27-2(b)(9); Ala. Admin. Code r. 790-X-1-.03(4).

At an Alabama real estate auction, which person does the Commission say does NOT need a real estate license?

• a.A ground man who only relays crowd bids to the auctioneer✓
• b.The auctioneer who calls the bids on the real estate
• c.The person who agreed to auction the real estate
• d.The person who offered to auction the real estate

Anyone who auctions, offers, attempts, or agrees to auction real estate must be licensed. The Commission's rule carves out only the 'ground men', provided their activity is limited to relaying crowd participation bids. Cite: Ala. Admin. Code r. 790-X-1-.03(4); Ala. Code 34-27-30(5).

What is the maximum fine the Alabama Real Estate Commission may impose per count against a licensee found in violation?

• a.One thousand dollars ($1,000) per count
• b.Five thousand dollars ($5,000) per count✓
• c.Ten thousand dollars ($10,000) per count
• d.Two thousand five hundred dollars ($2,500)

Act 2025-380, effective October 1, 2025, raised the ceiling from $2,500 to $5,000 per count; the floor stays at $100. The Commission may also require extra education, issue a public reprimand, or suspend or revoke the license. Cite: Ala. Code 34-27-36 as amended by Act 2025-380 (HB382), effective October 1, 2025.

What is the aggregate cap on Alabama Real Estate Recovery Fund payments for claims against any one person?

• a.Twenty-five thousand dollars ($25,000)
• b.One hundred thousand dollars ($100,000)
• c.Fifty thousand dollars ($50,000)✓
• d.There is no aggregate cap per person

Payments based on judgments or settlements against any one person may not exceed $50,000 in the aggregate. A separate cap limits all claims arising out of the same transaction to $25,000. Cite: Ala. Code 34-27-31(b)(2).

Three buyers are injured in a single Alabama transaction and each obtains an unpaid judgment against the same salesperson. How much may the Recovery Fund pay out in total for that transaction?

• a.$25,000, regardless of the number of claimants✓
• b.$25,000 to each of the three claimants
• c.$50,000, regardless of the number of claimants
• d.$50,000 to each of the three claimants

Payments for claims arising out of the same transaction are capped at $25,000 in the aggregate, regardless of the number of claimants. Cite: Ala. Code 34-27-31(b)(3).

The Alabama Recovery Fund pays a judgment against a licensee. What happens to that licensee?

• a.Nothing, because the fund exists to absorb such losses
• b.The license is suspended for one year and then restored
• c.A bankruptcy discharge wipes out the duty to repay the fund
• d.All licenses may be terminated until the fund is repaid✓

The Commission may terminate all of the licensee's licenses and may refuse a new license until the amount paid is repaid in full with interest at 12 percent a year. A discharge in bankruptcy does not relieve the licensee of that obligation. Cite: Ala. Code 34-27-31(e)(6).

An Alabama licensee is served with a civil summons and complaint arising out of a real estate transaction. What must the licensee do?

• a.Report it at the next license renewal on the renewal form
• b.Notify the Commission in writing within 10 days, by certified mail✓
• c.Notify the Commission only if a judgment is later entered
• d.Notify the qualifying broker, who reports it to the Commission

Each licensee must notify the Commission by certified mail within 10 days after notice of a criminal prosecution, or of a civil summons and complaint involving a real estate transaction or the goodwill of a real estate business, and must enclose a copy. Cite: Ala. Code 34-27-31(j).

An Alabama company's qualifying broker dies. What becomes of the company license?

• a.It stays valid until the end of the current license period
• b.It transfers automatically to the senior associate broker
• c.It becomes invalid; a temporary qualifying broker may be named✓
• d.It becomes invalid, and the company must apply for licensure again

The company license becomes invalid on the death or disability of the qualifying broker. Within 30 days the company may designate an officer, member, or salesperson to apply as temporary qualifying broker, and may then operate under that person for no more than six months. Cite: Ala. Code 34-27-32(l).

An Alabama salesperson receives an earnest money check from a buyer. What must the salesperson do with it?

• a.Pay it over to the qualifying broker immediately upon receipt✓
• b.Deposit it in the salesperson's own trust account within 3 days
• c.Hold it until the seller accepts or rejects the written offer
• d.Deliver it to the closing attorney named in the sales contract

Each salesperson or associate broker must pay over to the qualifying broker all funds coming into his or her possession in trust for other parties immediately upon receipt. Deposit is then the qualifying broker's responsibility. Cite: Ala. Admin. Code r. 790-X-3-.03(2) and (3).

An Alabama contract form says nothing about when the earnest money check is to be deposited. When must the qualifying broker deposit it?

• a.Within three business days of receiving the check
• b.Immediately, on the day the check changes hands
• c.Within seven business days of receiving the check
• d.When the offer becomes a contract✓

If the contract form specifies a time or event, the check is deposited then; if it is silent, the check is deposited when the offer becomes a contract. U.S. currency, by contrast, must be deposited immediately. Cite: Ala. Admin. Code r. 790-X-3-.03(3).

An Alabama sale closes. How quickly must the qualifying broker disburse the trust funds held for that transaction?

• a.Within 30 calendar days of consummation
• b.Within 7 business days of consummation✓
• c.Within 3 business days of consummation
• d.Within 10 calendar days of consummation

Unless the rule states otherwise, each qualifying broker must promptly disburse trust funds to the appropriate parties within 7 business days of the consummation of the transaction for which they were deposited. Cite: Ala. Admin. Code r. 790-X-3-.03(5).

An Alabama sale falls through and buyer and seller both demand the earnest money. What may the qualifying broker do?

• a.Release the funds to whichever party the sales contract favors
• b.Return the funds to the buyer after 30 days of deadlock
• c.Disburse only under a signed written agreement or court order✓
• d.Retain the funds as compensation for the work performed

Where there is a disagreement about disbursement, the qualifying broker may not disburse except under a written agreement signed by all parties or under a court order. The rule separately permits depositing the disputed funds with the court by interpleader. Cite: Ala. Admin. Code r. 790-X-3-.03(5) and (7).

An Alabama COMMERCIAL tenancy ends and the qualifying broker holds the security deposit. Within what period must any itemized notice of amounts withheld and the balance due be delivered?

• a.60 calendar days after termination and delivery of possession✓
• b.14 calendar days after termination and delivery of possession
• c.35 calendar days after termination and delivery of possession
• d.90 calendar days after termination and delivery of possession

For commercial leases the Commission rule sets 60 calendar days for the itemized written notice and the amount due. Deposits and checks left unclaimed by the tenant are forfeited after 90 calendar days. Residential security deposits instead follow Ala. Code 35-9A-201 and 35-9A-205. Cite: Ala. Admin. Code r. 790-X-3-.03(6)(b).

In an Alabama single-family residential sale, when must a licensee furnish a complete estimated closing statement?

• a.Once, at the time the seller signs the listing agreement
• b.Only at closing, with the settlement statement
• c.Only when the client asks the licensee for one in writing
• d.Each time a written offer or counteroffer is presented✓

The licensee must furnish a complete estimated closing statement each time he or she prepares or presents a written offer or counteroffer, showing best estimates of all costs and their approximate amounts. The recipient acknowledges it by dated signature on the form. Cite: Ala. Admin. Code r. 790-X-3-.04(1).

What does the Alabama Real Estate Commission's rule say about automatic extension clauses in listing contracts?

• a.They are allowed if the seller initials the clause
• b.Listing contracts shall contain no such provision✓
• c.They are allowed for terms of 90 days or shorter
• d.They are allowed only in commercial listings

The rule is a flat prohibition: listing contracts shall contain no provision for automatic extensions. Cite: Ala. Admin. Code r. 790-X-3-.05.

Under the Alabama rule on advertising teams, what must a team's name do?

• a.Include the surname of the team's designated leader
• b.Include the word 'company' so consumers can find it
• c.Include the word 'team' or 'group'✓
• d.Include the license number of the qualifying broker

The team's name must include the word 'team' or 'group' and must avoid terms suggesting it is a real estate company, including 'corporation', 'limited liability company', 'partnership', 'business', 'enterprise', and 'company'. Cite: Ala. Admin. Code r. 790-X-3-.16, effective February 14, 2026.

Which statement about real estate teams is correct under Alabama law?

• a.No licensee may be a member of more than one team✓
• b.A team must be licensed separately as a business organization
• c.The team leader assumes the qualifying broker's supervisory duties
• d.A team may advertise without naming any of its members

Alabama added a teams statute effective October 1, 2025. A team needs no separate licensure, no licensee may belong to more than one team, the leader must be designated with the qualifying broker and keep a member list, and the qualifying broker's duties cannot be delegated to the leader. Cite: Ala. Code 34-27-39, added by Act 2025-380 (HB382).

How many transactions may one out-of-state principal broker do in Alabama under co-brokerage agreements in a calendar year?

• a.One transaction per calendar year
• b.Ten transactions per calendar year
• c.There is no numerical limit in the statute
• d.Three transactions per calendar year✓

Co-brokerage is capped at three transactions per calendar year per licensed out-of-state principal broker, and those transactions may not total more than $50,000,000 in any calendar year. A transaction may cover multiple properties if they are part of the same portfolio. Cite: Ala. Code 34-27-3(a)(3) and (a)(4), as amended by Act 2025-380, effective October 1, 2025.

The Commission inspects an Alabama brokerage office. How far back must the escrow or trust account bank statements and canceled checks go?

• a.The past three months of statements
• b.The past six months of statements✓
• c.The past twelve months of statements
• d.The past twenty-four months of statements

The records a qualifying broker must make available on an office inspection include copies of the past six months of bank statements with canceled checks for all escrow or trust accounts, along with reconciliations, check registers, and deposit tickets. Cite: Ala. Admin. Code r. 790-X-3-.09(2)(f).

An Alabama buyer has toured three houses with a licensee but has signed no brokerage agreement. What is the licensee's relationship to that buyer?

• a.Implied buyer's agent, created by the course of dealing
• b.Subagent of the listing broker in each transaction
• c.Transaction facilitator, because no agreement was signed✓
• d.Dual agent, because the licensee served both sides

Until a broker enters a specific written agreement establishing an agency relationship, the licensee is a transaction facilitator. An agency relationship may not be assumed, implied, or created without a written bilateral agency agreement signed by both licensee and consumer. Alabama removed subagency from the statute effective October 1, 2025. Cite: Ala. Code 34-27-82(b); 34-27-81, as amended by Act 2025-380.

Under RECAD as amended, at what point must an Alabama licensee deliver the Real Estate Brokerage Services Disclosure to a prospective buyer?

• a.Before providing any brokerage service, including a showing✓
• b.Before the buyer signs a written offer to purchase a home
• c.Within 24 hours after the licensee first shows a property
• d.At the closing table, along with the other required disclosures

The disclosure must be provided as soon as reasonably possible, before any confidential information is disclosed, and at least before the licensee provides any brokerage service, which includes showing a property to a prospective buyer. A seller's agent conducting an open house is the stated exception. Cite: Ala. Code 34-27-82(c), current text as published by AREC.

An Alabama consumer refuses to sign the Real Estate Brokerage Services Disclosure form. What should the licensee do?

• a.Decline to provide any brokerage services to that consumer
• b.Ask a witness to sign the form in the consumer's place
• c.Send the unsigned form to the Commission within 10 days
• d.Note the refusal on the form and continue✓

Consumers are not required by law to sign the form, though the licensee should encourage it. If the consumer declines, the licensee makes a note to that effect on the form. Cite: Ala. Admin. Code r. 790-X-3-.13(2).

With which of these buyers is an Alabama licensee NOT required to comply with the RECAD written disclosure requirement?

• a.A married couple purchasing a second home
• b.A limited liability company purchasing a warehouse✓
• c.An individual investor purchasing a rental duplex
• d.A buyer purchasing with a VA-guaranteed loan

The disclosure requirement does not apply to transactions with corporations, nonprofit or professional corporations, professional associations, limited liability companies, partnerships, real estate investment trusts, business, charitable, or family trusts, or governmental entities. It still applies to individuals. Cite: Ala. Code 34-27-82(d).