25.2 AL – Disciplinary Actions and Process

Alabama law identifies actions and conduct that violate real estate laws and AREC rules. When a person or business entity is believed
to have violated those laws or rules, a complaint can be filed with the Commission. This topic walks through the process:
complaints → hearings → penalties → rehearing → appeals.

Complaints (How a Case Starts)

When a complaint is made about a licensee’s conduct—or when AREC has reason to believe a violation occurred—AREC or its staff may
investigate the licensee’s actions and records. The matter is assigned to an investigator who works with the Attorney General to
determine whether probable cause exists to file a formal complaint.

AREC staff may develop a formal complaint charging a licensee or timeshare seller with a violation of Code of Alabama 1975,
Chapter 27 of Title 34, or a Commission rule/regulation. This can happen because of a third-party complaint or on AREC’s own initiative.

What a Formal Complaint Must Include

• Name(s) of the accused party (or parties)
• Legal authority and jurisdiction under which the charge is made
• Type and issuance date of the accused party’s license
• Specific law and/or rule allegedly violated
• Brief description of the acts or omissions that allegedly constituted the violation

Notice + Scheduling

• AREC serves the accused a copy of the complaint (personally or by certified mail).
• AREC notifies the accused party’s qualifying broker in writing that a complaint has been filed.
• AREC schedules a complaint hearing and gives the accused 15-day notice of time/date/place.
• AREC notifies the complainant, licensee, and qualifying broker in writing of the determination.
• If AREC refuses to issue a license to an applicant, AREC must notify the applicant and give the applicant 15 days
  to request a hearing.

Hearings (Rights, Location, and Evidence)

• Any licensed or unlicensed person/entity charged with a violation has the right to a hearing.
  The applicant/accused may present testimony and question witnesses.
• The accused may waive the hearing and settle. Settlement may include pleading guilty and consenting to discipline,
  or the parties reaching a settlement and withdrawing the complaint.Important: Even if a complaint is withdrawn, AREC may still hold a hearing.

Where Hearings Are Held

• Hearings are held in Montgomery County unless AREC chooses another allowed location.
• AREC may hold the hearing in the county where the accused/applicant resides or maintains a place of business,
  or in any county where AREC has a scheduled meeting.

Subpoenas + Witnesses

• AREC may subpoena witnesses, records, and documents on its own or at the request of the complainant/respondent.
• The party requesting subpoenaed witnesses must deposit a cashier’s check or certified check to cover witness fees, mileage, and expenses.
• Subpoenaed witnesses must attend; failure can result in circuit court action against the witness.
• Witnesses are sworn by a commissioner, the executive director/assistant executive director, or a hearing officer.
  AREC reviews testimony and records to determine whether a violation occurred.

Disciplinary Actions and Penalties (What AREC Can Do)

AREC’s enforcement jurisdiction covers licensees and also people who choose to practice real estate without a license.
If a licensee is found guilty of a violation, AREC may take one or more of the following actions:

• Require additional continuing education beyond existing CE requirements
• Revoke or suspend the license
• Impose a fine of $100 to $5,000
• Revoke or suspend the license and impose a fine
• Reprimand the licensee

A license can be revoked or suspended until the licensee completes an approved continuing education course or makes restitution
to designated accounts holding funds for other parties. AREC may suspend the revocation/suspension while the licensee completes the
education or restitution requirements.

Stopping Ongoing Violations (Attorney General + Cease and Desist)

• If a person/entity violates Alabama license law, rule, or regulation, AREC may take legal action through the Attorney General
  to stop the violation and enforce the law/rule.
• If the accused is unlicensed and doing activities requiring a license, AREC may issue a cease and desist order.
  The executive director issues the order after staff finds probable cause.
• The cease and desist order becomes final 15 days after service unless the accused requests a hearing.
  If a hearing finds a violation, the order may become final and AREC may impose a fine for each violation.
• AREC may also fine the amount of any gain/economic benefit from the violation, plus the costs incurred by AREC.
  Unpaid fines are enforceable in court.
• AREC may choose not to issue a cease and desist order and instead give notice and hold a hearing; penalties are the same if found guilty.

Rehearing (Asking AREC to Reconsider)

An accused party may file an application for rehearing if they disagree with AREC’s findings. The application must specify the grounds
and must be filed within 30 days of receiving notice of the decision.

A rehearing is appropriate if the final decision was one or more of the following:

• In violation of constitutional or statutory provisions
• In excess of the Commission’s statutory authority
• In violation of a Commission rule
• Made upon unlawful procedure
• Based on an error of law
• Clearly wrong in view of the evidence
• Unreasonable or arbitrary, or based on an abuse of discretion

Within 30 days of receiving the application, AREC must schedule a new hearing, enter an order without a hearing, or grant/deny the application.
If AREC does not enter an order within 30 days, the rehearing is considered denied.

All hearings on contested cases are conducted by a hearing officer appointed by the Commission, who ensures the hearing follows
Alabama law and AREC rules.

Appeals (Taking the Case to Circuit Court)

AREC’s findings are final unless the applicant/accused files an appeal within 30 days of the final order.
The notice of appeal may be filed in Circuit Court in:

• Montgomery County, or
• the county of the accused’s residence, or
• the county where the accused corporation is registered or has its principal place of business

• The appealing party must post a $200 bond with the circuit court clerk (who notifies AREC).
• Filing an appeal does not automatically suspend the decision, but the circuit court may stay the decision pending appeal.
• AREC must file the case record with the circuit court within 30 days of service (the court may allow more time).
• The appealing party must file a complaint explaining the issues within 30 days of filing the appeal notice.

If the appeal court affirms AREC’s decision, the appealing party pays the costs. If the court does not affirm the decision, AREC pays the costs.
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