Effective November 1, 2005 Section 34-27-84 Alabama Code has been amended. This is the section of RECAD (Real Estate Consumer Agency Disclosure Act) that deals with obligations of real estate licensees to the parties in a transaction. The amendment adds provisions commonly referred to as minimum services to a listing broker's obligations under a listing agreement. Here is what the law now says:  When accepting an agreement to list an owner's property for sale, the broker or his or her licensee shall, at 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.

A little context is in order to help explain this new law.  Alabama is one of several states that have added, or are considering adding similar provisions. These changes have come as a reaction to concerns about a fairly new business practice being offered by some brokers. These brokers are accepting a particular kind of listing agreement from property owners. The agreement typically provides that the broker will place the owner's property in the local multiple listing service, and the broker will give no further service to the owner. These brokers have become known as minimum services brokers. This is why the law dealing with this issue has become known as minimum services legislation. The reason for the concern about this should be obvious. Owners should not be left on their own to deal with all the details of a transaction, and not even have their questions answered. My goal is to help you understand what the new law means in every day practice. As we will see, too, the law applies to all brokers and their personnel, not just to limited services brokers. The list that follows is not all inclusive.  These are just the major points the law addresses or affects. The law applies only to listing brokers and their licensed office personnel. Existing law deals with responsibilities of licensees working with buyers, commonly called selling agents, although they might not have an agency relationship with their buyer. The law applies regardless of any agency relationship established between the listing broker and the consumer. This means the requirements apply to agents, limited consensual dual agents, and transaction brokers. It is not at all likely that a limited services broker will be anything other than a transaction broker, but the new requirements apply, regardless. It requires that listing company licensed personnel accept and transmit offers, etc., to the owner and to a buyer with whom they might be working. Let's not forget existing license law on this point. Alabama Real Estate Commission Rule 790-X-3-.08 has always required that agents acting for a principal shall transmit to the principal all written offers.  Also preserved is existing Section 34-27-84(a)(5) Alabama Code which requires presentation of all written offers when assisting a party in negotiations. There is no explicit provision in the license law that requires a licensee to actually draft or reduce an offer or counteroffer to writing. Licensees will have to continue to use their judgment and whatever commitments, such as agency agreements, they make to consumers along this line.  Alabama Real Estate Commission Rule 790-X-3-.04 will continue to apply. This is the rule that requires estimated closing statements. A licensee who procures a written offer from a buyer in a single family residential transaction is obligated to prepare and furnish one to the buyer. A licensee who presents a written offer to a seller in a single family residential transaction is obligated to prepare and furnish one to the seller. The requirement to assist the consumer in negotiations means, at minimum, that the licensee will relay a party's position on a particular matter to the other party. This obligation will continue as long as negotiations last between the seller and a potential buyer. The last point is easy to understand. If the licensee gets questions from a consumer, buyer or seller, those questions will be answered, consistent with existing law. For example, this provision does not change existing law on keeping confidential information.

Again, it should be noted that the information presented in the preceding article relates ONLY to people buying & selling houses in the state of ALABAMA and their agents.