RECAD: Alabama Agency and Disclosure
The Alabama Real Estate Consumer Agency and Disclosure Act (RECAD) defines how licensees may work with consumers. This chapter explains the default transaction-broker relationship, the agency disclosure, dual agency, and the duties that survive even without agency.
The Transaction Broker Default
Under RECAD, a licensee who has not signed a written single-agency agreement is presumed to be a transaction broker who assists the parties without representing either as an agent. Single agency, subagency, and dual agency arise only by written agreement. This default makes the written agency disclosure central to every Alabama transaction.
Agency Disclosure Timing
RECAD requires the licensee to disclose the types of brokerage services and obtain a signed acknowledgment before entering a written brokerage agreement or before the consumer discloses confidential information, whichever comes first. Early disclosure lets a consumer understand whether anyone represents them before they share negotiating information.
Dual Agency and Surviving Duties
A firm may represent both buyer and seller as a limited consensual dual agent only with the informed written consent of both parties, and it must not reveal one party's confidential information to the other. Even a non-agent transaction broker still owes honesty, reasonable skill and care, accounting for funds, and disclosure of known material defects. What is absent in a transaction brokerage is fiduciary loyalty and advocacy.