Bill > SB246

This bill aims to protect Alabama homeowners by regulating certain real estate practices, specifically focusing on "wholesaling" and "unfair service agreements." Wholesaling real estate involves a buyer contracting to purchase a home, then assigning that contract to another buyer for a profit before the initial purchase is complete; this bill requires these wholesalers to disclose their limited interest and intent to assign the contract to the original seller. It also addresses "unfair service agreements," which are contracts that grant a real estate company rights to market or sell a property for up to 40 years, potentially binding future owners and penalizing the current homeowner for breach; these agreements are now deemed unenforceable if they are unfair, meaning they are not performed within a year and attempt to bind future owners or create liens. Furthermore, the bill establishes regulations for "investment-oriented real property solicitations," which are communications or offers where the primary expected profit comes from reselling or appreciating the property rather than from occupancy, treating these solicitations similarly to securities transactions and requiring disclosures, limiting the number of unsolicited communications to a property owner, and allowing homeowners a 30-day cancellation period for certain unsolicited offers to buy their property. The Alabama Securities Commission (ASC) is granted broad authority to administer and enforce these regulations, including issuing licenses, conducting investigations, imposing fines, and pursuing legal action.

Business and Industry

https://alison.legislature.state.al.us/bill-search