Alabama Governor Signs Real Estate Bill into Law
Alabama Governor Ivey signed the bill into law on Tuesday after it passed the state Senate earlier this month. The bill, originally introduced as House Bill 230 by State Representative Randall Shedd (R-Cullman) in early February, reaffirms Alabama’s existing Real Estate Consumers Agency and Disclosure Act (RECAD) framework.
The law places emphasis on early discussions of brokerage services and compensation, while also prohibiting consumers from signing a contract with an agent at the beginning of their relationship. This move is supported by the Alabama Association of Realtors in response to the Department of Justice’s (DOJ) concerns regarding the National Association of Realtors’ (NAR) commission lawsuit settlement agreement.
Under NAR’s settlement terms, consumers are required to sign a buyer representation agreement with their buyer’s agent before touring a property. Despite the flexibility provided by the agreement, the DOJ raised antitrust concerns, stating that it could limit competition among buyer brokers.
Alabama Realtors, led by CEO Jeremy Walker, expressed concerns about the potential impact of buyer broker agreements on consumer choice and competition. While some industry professionals argue in favor of delaying the signing of such agreements, others, like James Dwiggins, CEO of NextHome, believe that having buyers sign agreements before property tours helps prevent steering issues.
Despite differing opinions within the industry, the new law in Alabama aims to strike a balance between consumer protection and competition in the real estate market.