Alabama Real Estate Salesperson Exam — All Questions

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.

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).