The Alabama Real Estate Recovery Fund
Area V is worth a single scored item on the broker exam, split in the outline between payment into the fund and payment from it.
Paying in
Section 34-27-31(c) collects $30 from each applicant for an original broker or salesperson license, refundable if no license issues, and a salesperson who later becomes a broker may request a refund of one of the two fees. Under subsection (d), when the fund's balance drops below $500,000 every active broker and salesperson pays another $30 per license on the commission's order; inactive licensees do not contribute until activation.
Paying out, and what it costs the licensee
The fund reimburses actual or compensatory damages — not interest or court costs — sustained in Alabama through a licensee's violation of Article 1 or 2 or the commission's rules. Payments on claims arising out of the same transaction are capped at $25,000 in the aggregate regardless of the number of claimants, and payments against any one person at $50,000 in the aggregate. The claimant must notify the commission by certified mail when the action begins, obtain a judgment, exhaust bonding companies and settlements, and apply to the court on 10 days' notice. If the fund pays, all of the licensee's licenses may be terminated and no new license need be issued until the fund is repaid in full plus 12 percent annual interest — a debt bankruptcy does not discharge.
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State-specific details
State exam facts
- State regulator
- Alabama Real Estate Commission (AREC)
- Exam vendor
- Pearson VUE
- Prelicensing education
- 60-clock-hour broker pre-license course (minimum grade 70)
- Passing score
- 70 (scaled score, 0-100)
- Scored questions
- 120
- Time limit
- 210 minutes
Who regulates real estate brokers in Alabama?
The Alabama Real Estate Commission (AREC) licenses brokers, salespersons and companies under Title 34, Chapter 27 of the Code of Alabama. AREC contracts with Pearson VUE to schedule and deliver the licensing exams, and candidates must pre-register with the Commission before an exam authorization is sent to Pearson VUE.
What experience do I need before the Alabama broker exam?
An applicant who holds no out-of-state broker license must prove an active real estate salesperson license in any state for at least 24 of the 36 months immediately preceding application, high school graduation or the equivalent, and completion of a Commission-approved course of at least 60 clock hours (Ala. Code § 34-27-32). Applicants have six months after finishing the course to pass the exam.
How is the Alabama broker exam structured?
It is two multiple-choice portions taken in one 3.5-hour appointment: an 80-item national/general portion with 2.5 hours allotted, and a 40-item Alabama state portion with 1 hour. There is no simulation section. Ten to fifteen unidentified pretest items are also included and do not count. Candidates receive one overall scaled score, and a 70 or higher passes; fail the overall exam and the entire test must be retaken.
What is the biggest topic on the Alabama state portion?
Violations which may result in disciplinary action — 12 of the 40 scored state items, 30% of the state portion on its own. Pearson VUE's outline lists thirteen lettered violations under it, from misrepresentation and advertising to rebates, lotteries and the handling of documents, all drawn from the prohibited-acts list in Ala. Code § 34-27-36.
Sources: https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/093300.pdf, https://www.pearsonvue.com/us/en/al/realestate.html, https://arec.alabama.gov
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