29.1 AL – General Issues
🚨 License Law Violations — General Issues
Section 34-27-36 of the Alabama license law lists the conduct that can cost you your license. This topic covers the general categories every licensee must recognize.
🎯 Learning Objectives
- Recognize the general categories of conduct that trigger discipline
- Know the penalty ranges the Commission may impose
- State the licensee’s duty to notify the Commission of legal actions
The Big Picture
The Alabama Real Estate Commission protects the public by disciplining licensees who violate the license law or Commission rules. Violations fall into recognizable families — this lesson’s remaining topics cover honesty, accountability, and representation issues in detail. The “general issues” below round out the list, and the state exam draws 15 of its 40 questions from the violations outline, making this the heaviest-weighted Alabama subject.
General Violation Categories
- Violating any rule or order of the Commission — the catch-all. Ignorance of a rule is not a defense.
- Inducing a party to break a contract — for example, persuading a seller to breach an existing listing so you can take it, or a buyer to abandon a signed purchase agreement for another deal.
- Lotteries and prize schemes — offering real estate as a lottery prize or running games of chance to promote sales is prohibited.
- Bad checks — since October 1, 2025 (Act 2025-380) a check to the Commission returned for insufficient funds is no longer a license-law violation; it is handled administratively: 30 days after electronic notice to pay in full plus a fee, otherwise the license becomes inactive, and it lapses if still unpaid after six months.
- Unlicensed practice — performing or offering to perform acts requiring a license without one, or compensating an unlicensed person for licensed activity.
- Acting for more than one party without the knowledge and consent of all parties represented.
Penalties the Commission May Impose
| Action | Details |
|---|---|
| Reprimand | Formal censure on the licensee’s record |
| Fine | $100 – $2,500 per violation |
| Suspension | License temporarily inactive for a stated period |
| Revocation | License terminated; reapplication requires meeting original requirements |
The 10-Day Notification Duty
📌 Memorize this: a licensee must notify the Commission in writing, by certified mail, within 10 days of receiving a criminal prosecution or a civil summons related to a real estate transaction — and again when the case is decided or dismissed. Copies of the legal documents must be included.
Failing to report is a separate violation on its own, even if the underlying case is ultimately dismissed.
🔑 Key Takeaways
- Violations = the heaviest-weighted Alabama exam topic (15 of 40 questions)
- General categories: rule violations, inducing breach, lotteries, bad checks, unlicensed practice
- Fines run $100–$2,500; the Commission can reprimand, suspend, or revoke
- 10 days, certified mail, in writing — the notification rule for suits and prosecutions
