Alabama Real Estate Broker Exam — All Questions

Which body issues, renews, and disciplines real estate broker licenses in Alabama?

• a.The Alabama Association of Realtors
• b.The Alabama Department of Insurance
• c.The Alabama Real Estate Commission (AREC)✓
• d.The county probate court where the broker practices

The Alabama Real Estate Commission (AREC), created under Title 34, Chapter 27 of the Code of Alabama, licenses and regulates brokers and salespersons. A trade association such as the Alabama Association of Realtors is a private membership group with no licensing power, and probate courts and the Department of Insurance have no jurisdiction over real estate licensing.

In Alabama, a real estate company that employs associate licensees must operate under a:

• a.Temporary salesperson license
• b.Qualifying broker who holds the company license and is responsible for its activity✓
• c.Registered agent filed only with the Secretary of State
• d.Notarized partnership agreement filed with AREC

Alabama distinguishes the company license from the qualifying broker. Each real estate company must have a qualifying broker who holds the company (broker) license and is legally responsible for the brokerage's operations, trust funds, and the licensed activity of the associate brokers and salespersons under it. Associate licensees may not operate independently of that qualifying broker.

Alabama first issues a new salesperson a temporary license. That temporary license becomes an original (permanent) license only if the licensee:

• a.Sells at least one property within the first year
• b.Pays a one-time reinstatement penalty
• c.Passes a second state examination within 12 months
• d.Completes the required 30-hour post-license course before the temporary license expires✓

Alabama issues a temporary license valid for one year (12 months) that cannot be renewed. To obtain the original permanent license, the licensee must complete the mandatory 30-hour post-license course within that period. If the course is not completed, the temporary license lapses and the person must re-qualify. Brokers must understand this because they supervise newly licensed temporary salespersons.

Under Alabama license law, a qualifying broker must keep transaction and trust-account records available for AREC inspection for at least:

• a.Three years✓
• b.Ninety days
• c.Six months
• d.Ten years

Alabama requires brokers to retain records of real estate transactions, including trust (escrow) account records, for three years and to make them available for inspection by the Commission. Proper recordkeeping is a core supervisory duty of the qualifying broker; failure to maintain records is a common basis for AREC discipline.