Activities that require a license
Rule 790-X-1-.03 sets out the list, and the common thread is that anything resembling brokerage — bringing parties together, negotiating terms, holding other people's money — is licensed activity that must run through a licensed real estate company in Alabama.
- Renting or leasing real estate located in Alabama
- Offering to rent or lease real estate
- Negotiating, or attempting to negotiate, a rental or lease
- Listing or offering to list real estate for rent or lease
- Aiding or offering to aid in locating or obtaining property to rent
- Procuring prospects for a lease or rental, or procuring properties for the same
- Agreements for the collection and escrow of security deposits and rent
- Coordinating physical maintenance and repairs, where no other regulator's license is required or where the licensee holds it
The owner exemption
Alabama exempts individuals managing their own property, or transacting real estate business concerning their own property. The Code defines 'owner' to include not just the individual but, for a corporation or partnership, a partner or corporate officer with the authority to make management decisions affecting the overall policy of the entity.
The exemption is narrow in an important way: it excuses the license, not every other legal obligation. Landlord-tenant law, fair housing, security deposit handling and local requirements still apply.
Apartments versus condominiums
Apartment building managers are generally exempt from Alabama's property management licensing requirement, which lets an on-site apartment manager lease units in the building they manage without a real estate license.
That exemption does not extend to condominiums. Under §34-27-2(b)(7), an on-site manager of a condominium building or complex needs a license. The distinction catches people out because the day-to-day work looks similar.
What it means for a brokerage
If your company manages property, the activity belongs inside the licensed entity, under the qualifying broker's supervision, with rent and deposits handled under the same trust fund discipline as earnest money. Property management agreements and leases should be filed systematically and kept current, and the rent roll should agree with the leases it is supposed to reflect — that is an item an office audit checks directly.