Alabama License Law 34-27-2. Definitions; (11) PLACE OF BUSINESS (a-c) a. A licensed broker living in a rural area of this state who operates from his or her home, provided that he or she sets up and maintains an office for the conduct of the real estate business, which shall not be used for living purposes or occupancy other than the conduct of the real estate business. The office shall be used by the broker only and not as a place of business from which any additional licensee operates under his or her license. The office shall have a separate business telephone, separate entrance, and be properly identified as a real estate office. b. All licensees located within the city limits or police jurisdiction of a municipality shall operate from a separate office located in the city limits or police jurisdiction. The office shall have a business telephone, meet all other regulations of the Real Estate Commission, and be properly identified as a real estate office. Hardship cases may be subject to waiver of this regulation upon application and approval by the commission. c. All business records and files shall be kept at the place of business as required by law or Real Estate Commission rules. [editor - for at least 3 years] Alabama License Law 34-27-32. Requirements for license; application; termination; fees. (e-h) (e) An application for a company license or branch office license shall be made by a qualifying broker on a form prescribed by the commission. The qualifying broker shall be an officer, partner, or employee of the company. (f) An applicant for a company or broker license shall maintain a place of business. (g) If the applicant for a company or broker license maintains more than one place of business in the state, he or she shall have a company or branch office license for each separate location or branch office. Every application shall state the location of the company or branch office and the name of its qualifying broker. Each company or branch office shall be under the direction and supervision of a qualifying broker licensed at that address. No person may serve as qualifying broker at more than one location. The qualifying broker for the branch office and the qualifying broker for the company shall share equal responsibility for the real estate activities of all licensees assigned to the branch office or company. (h) No person shall be a qualifying broker for more than one company or for a company and on his or her own behalf unless: (1) All companies for which he or she is and proposes to be the qualifying broker consent in writing. (2) He or she files a copy of the written consent with the commission. (3) He or she will be doing business from the same location. A person licensed under a qualifying broker may be engaged by one or more companies with the same qualifying broker. Alabama License Law 34-27-34. Who may serve as qualifying broker; responsibility of qualifying broker. (a) (1) A broker may serve as qualifying broker for a salesperson or associate broker only if licensed in Alabama, his or her principal business is that of a real estate broker, and he or she shall be in a position to actually supervise the real estate activities of the associate broker or salesperson on a full-time basis.. (2) A salesperson or associate broker shall not perform acts for which a license is required unless licensed under a qualifying broker. A qualifying broker shall be held responsible to the commission and to the public for all acts governed by this chapter of each salesperson and associate broker licensed under him or her and of each company for which he or she is the qualifying broker. It shall be the duty of the qualifying broker to see that all transactions of every licensee engaged by him or her or any company for which he or she is the qualifying broker comply with this chapter. Additionally, the qualifying broker shall be responsible to an injured party for the damage caused by any violation of this chapter by any licensee engaged by the qualifying broker. This subsection does not relieve a licensee from liability that he or she would otherwise have. Alabama License Law 34-27-83. Agency disclosure office policy. Any broker acting in a real estate transaction shall adopt a written agency disclosure office policy which specifically enumerates the types of brokerage service arrangements a licensee may offer or accept.   (a) The qualifying broker for each brokerage company shall provide every licensee a copy of the agency disclosure policy regarding the types of brokerage services offered by their company. This policy shall be explained to all licensees at least once a year. (b) A form acknowledging receipt of the office policy statement and a satisfactory explanation of its contents shall be signed by each licensee and a copy retained by the brokerage company for three years. Alabama License Law - 34-27-84. Obligations of licensees (c) [also referred to as the minimum service provision, further explanation can be found in a Charles R. Sowell Article) (c) When accepting an agreement to list an owner's property for sale, the broker or his or her licensee shall, at a minimum, accept delivery of and  present to the consumer all offers, counteroffers, and addenda to assist the  consumer in negotiating offers, counteroffers, and addenda, and to answer the consumer's questions relating to the transaction.  Alabama License Law - Rules 790-X-3.-03. Deposit Of Funds. (1) The deposit and accounting for at all times of all funds belonging to or being held for others in a separate federally insured account or accounts in a financial institution located in Alabama shall require that the qualifying broker be a customer of the financial institution holding all such accounts and the qualifying broker shall be one of the persons with authority to deposit and withdraw funds and to write or make checks as necessary on all such accounts. (2) Each real estate salesman or associate broker shall pay over to his or her qualifying broker all funds coming into his or her possession in trust for other parties immediately upon receipt of same. (3) Each qualifying broker is responsible for deposit of all funds belonging to others coming into his or her possession or of a salesperson or associate broker licensed under him or her where such funds are to be held in trust, unless the qualifying broker is expressly relieved of such responsibility in writing. In cases where the funds are U. S. currency, i.e. cash as opposed to a check or note, these funds shall be deposited immediately. In cases where a check is received as earnest money and the contract form states that the check is to be held for a specific length of time or until the occurrence of a specific event, then the check shall be deposited when the contract form states, or if no time for deposit is specified in the contract form, then the check shall be deposited when the offer becomes a contract. (4) Funds to be held in trust under a contract for sale involving more than one qualifying broker shall be held and deposited by any of the qualifying brokers involved in the sale. All funds to be held in trust, whether by contract for sale, or by lease or property management agreement, shall be held and deposited by the qualifying broker who is providing these services to the owner. In cases where a successor qualifying broker is to provide these services, the first broker shall provide a complete accounting of the funds and shall transfer the funds to the successor broker. The qualifying broker who is currently providing services to the owner shall be responsible to the public and to the commission for all funds. Upon request by the Commission or its authorized representative, each qualifying broker shall promptly account for any trust funds being held by that qualifying broker. (5) Each qualifying broker shall promptly disburse to the appropriate party or parties any trust funds within 7 days of the consummation of the transaction for which the funds were deposited. If for any reason the transaction is not consummated, or if for any reason there is a disagreement involving to whom trust funds should be disbursed, the qualifying broker shall not disburse any trust funds except pursuant to a written agreement signed by all parties or pursuant to a court order. (6) This Rule shall not prohibit a broker from depositing with the appropriate court any trust funds which are the subject of disagreement among or between parties under the rules of interpleader or other lawful procedure.

Alabama Real Estate Commission Audit Checklist Requested Items For Office Audit   [from the Real Estate Commission's web site] Place of Business Signage Real Estate Licenses R.E.C.A.D. Office Policy (*Acknowledgment of policy signed by all licensees.) Location of closed contracts for past three (3) years All pending sales files Location of all lease contracts, management agreements and rental records Copies of past six (6) months bank statements with canceled checks for all escrow accounts Copies of latest bank reconciliation performed on all escrow accounts, if available Checkbook and or computer check register for all escrow accounts Duplicate deposit tickets with validated bank receipt for all escrow accounts Any lists or ledgers documenting the funds held for escrow purposes NOTE: "Escrow Funds" include sales binders, security deposits, rent receipts, and or any other funds held for members of the public.

AUDIT CHECKLIST OFFICE INSPECTION SUGGESTIONS [from the Real Estate Commission's web site] Balance escrow account checkbook as soon as possible after the receipt of each statement. Tape canceled checks back into the checkbook adjacent to the stub so you will have a complete record of the check and not have to search statement envelopes for the check in question. Prepare a continuous list of pending contracts with the amount of earnest money involved. Mark off each transaction as it closes, the money is refunded, or it is forfeited by purchaser or seller. If the bank imposes a service charge, the charge should be deducted from the account before the remainder of the commission is removed to prevent overdraft charges. The Commission has ruled that additional designated funds may be deposited into the account to cover bad checks, service charges, etc. Keep all pending contracts separate from closed contracts.   Maintain a separate escrow account for rental or leased property to distinguish it from sales contracts which do not have repairs, owner's payments, etc. Keep written receipts for all funds received, whether by cash or check, as a means of internal control.

COMPANY LICENSE  (from the Real Estate Commission's Web Site.) Any sole proprietorship, corporation, partnership, branch office, or lawfully constituted business organization as the Legislature may provide from time to time, which is licensed as a company under Articles 1 and 2 of this chapter. An applicant for a company or broker license shall maintain a place of business. If the applicant for a company or broker license maintains more than one place of business in the state, he or she shall have a company license for each separate location or branch office. A company license shall become invalid on the death or disability of a qualifying broker.  Within 30 days after the death or disability, the corporation, or the remaining partners of the successor partnership, if any, may designate another of the officers, members, or salespersons to apply for a license as temporary qualifying broker. The original fee for each company license shall be $85 per year for each year or portion of a year remaining in the respective license period, and the renewal fee for each license shall be $85 dollars per year for each year of the license period. Every license shall expire at midnight on September 30 of the final year of each license period.  This applies to company licenses as well as salesperson and broker licenses.

Company License Requirements by Charles R. Sowell, General Counsel (Briefly Legal and article appearing in Fall 2008 Alabama Real Commission Update)  reprinted with permission. Believe it or not, this simple subject is not so simple. This article will deal with state company licenses issued by the Alabama Real Estate Commission, not with local licensing. Real estate companies must purchase city and/or county licenses when required by local law. Our office is not involved with these local licenses. Every qualifying broker and every place of business are required by the Alabama Real Estate License Law to have a company license. Corporations, LLCs, and sole proprietorships are the most common examples of business organizations comprising companies as defined by our law.  Company licenses are applied for by the qualifying broker on a company license application form. This form and many others are available on our Web site. Our Web address is http://www.arec.alabama.gov/index.asp  [link below] so if you have not done so, please take a minute and put it in your "Favorites" or "Bookmark" it in your Web browser. There is a whole lot more information there, too, available for free. The only other kind of company license is a branch office license. A branch office must have a license designating it as a branch office. The commission has a special form used to apply for a branch office license. This is because the law provides that the branch qualifying broker and the main company qualifying broker both share responsibility for the actions at the branch office. This has more complications than you might think, especially regarding the Real Estate Consumer's Disclosure Act(RECAD). Brokers must consider the RECAD consequences of setting up branch offices. For example, if a salesperson licensed at a branch office becomes an agent of a property owner by entering into an agency listing agreement, then every licensee at every office is an agent for that seller. If a salesperson licensed at a branch office becomes an agent of a buyer by entering into a buyer agency agreement, then every licensee at every office is an agent for the buyer. If company policy provides that all consumers, sellers and buyers, are treated as customers under transaction brokerage, then the company licensees are not an agent of either party. I will not spell out all the possible combinations, but you get the idea. Just like any other company on an in-house sale, relationships must be changed to limited consensual dual agency when a buyer with an agency relationship desires to purchase a listed property with an agency relationship at any of the company's offices. Remember, an in-house sale at a company with branch offices can involve more than one office. The listing might be at the main office or at a branch and the buyer's agency agreement might have been entered into at another branch office. Every activity requiring a real estate license must be conducted in the name of the licensed company under the qualifying broker. We have received some phone calls where the caller says something like this: "Our qualifying broker got out of the property management business, so some of us agents are going to manage property off the books and our broker says this is OK with them as long as he/she is left out of it." If this is your idea of having fun with me, you need to know every call like that takes about a year off of my life. Licensees have received disciplinary action for running a property management company without a company license. Our law and rules also provide for issuance of multiple broker and company licenses when your business model has this need.  We sometimes get calls from brokers and their attorneys asking about company licensing requirements. There is more to the subject than I have covered. If this article has caused you to be overcome with interest, there is some riveting reading in SECTION 34-27-32(E) THROUGH (I) of the license law. If this is not enough you will be absolutely mesmerized by RULE 790-X-2-.04. If you have questions, our office is easy to contact  and ready to help.

Links: Alabama Real Estate License Law -  http://acre.cba.ua.edu/pdfs/license_index/License_Law.html Alabama Real Estate Commission - http://www.arec.alabama.gov/index.asp