Under Alabama Agency Law (Code of Alabama §34-27-81 et seq.), all of the following statements about agency disclosure requirements are correct EXCEPT:
Correct Answer
C) Verbal disclosure at first substantive contact fully satisfies Alabama's agency disclosure requirement
Option C is the EXCEPT answer because it is false. Alabama Agency Law requires written disclosure of agency status — verbal disclosure alone does NOT satisfy the requirement. Code of Alabama §34-27-81 et seq. specifically mandates written disclosure, and a licensee who relies solely on verbal communication has failed to comply with Alabama's agency disclosure law regardless of when the verbal disclosure occurred.
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Previous Question
Broker James has two salespersons in his firm: Agent Amy represents seller Carol, and Agent Bob represents buyer Dan in the same transaction. James wants to structure this as a designated agency arrangement to avoid dual agency issues. Under Alabama Agency Law, how should James properly handle this situation?
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Licensee Rachel represents seller Tom in the sale of his Montgomery home. Prospective buyer Wendy contacts Rachel and, after Rachel discloses her representation of Tom in writing, Wendy states she does not want any representation and prefers to work directly with Rachel on her own behalf. Rachel continues to assist Wendy as a transaction broker. Later, Wendy alleges Rachel failed to disclose a material defect known to Rachel but not to Tom. Under Alabama Agency Law, which statement most accurately describes Rachel's disclosure obligations as a transaction broker?