ALABAMA LICENSE LAW EXAM
QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
In the state of Alabama, what is the difference between a customer and a client?
A. a client pays the commission
B. a client is a seller while a customer is a buyer
C. a client has signed an agreement for specific services
D. a licensee has duties to a client but not to a customer - ANS D
Which of the following is NOT an allowed brokerage relationship in Alabama?
A. a limited nonconsensual dual agency
B. a single agency
C. a sub agency
D. a transaction brokerage - ANS A
In which brokerage relationship is the broker NOT working under a signed agreement?
A. single agency
B. transaction brokerage
C. sub agency
D. limited consensual dual agency - ANS B
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,Broker Joe is representing both the buyer and the seller in the sale of a property in Huntsville.
To legally do this, what must Joe do?
A. Disclose the non-agency relationship to both the buyer and the seller
B. Sign an agency agreement with both clients qualifying broker prior to providing any
brokerage services
C. Obtain written consent from both clients to enter into the relationship agreement
D. Notify both clients which will receive preferential treatment during the transaction -
ANS C
Which brokerage relationship would be common for brokers in a company that is located in a
large market area with many Alabama listed properties.
A. single agency
B. transaction brokerage
C. sub agency
D. limited consensual dual agency - ANS D
In which agency relationship might a customer in Alabama become confused as to whom the
agent represents?
A. single agency
B. transaction brokerage
C. sub agency
D. limited consensual dual agency - ANS D
Alabama mandates a consumer's right to a minimum level of service. This mandate does NOT
include which of the following services?
A. helping a consumer negotiate price
B. presenting and receiving offers
C. assisting with financing
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, D. answering questions - ANS A
Licensees are required to keep their client's confidential information confidential even if
A. disclosing the information is required by law
B. the information was obtained through public knowledge
C. the client authorizes the disclosure in writing
D. information would help the buyer decide whether or not to purchase the property - ANS D
Alabama license law prohibits a licensee employed by a qualifying broker from mishandling
trust funds. Which of the following does NOT constitute this license's mishandling of trust
funds?
A. accepting cash as earnest money
B. transferring earnest money from a trust account into an operating account
C. depositing cash into qualifying broker's trust account
D. None of the above - ANS A
Which of the following constitutes illegal commingling?
A. Depositing funds from different transactions into the same trust account
B. Depositing funds from different clients into the same trust account
C. Depositing clients funds and business funds into the same account
D. Depositing business funds to cover bank charges into a client trust account - ANS C
Which of the following statements is TRUE?
A. Funds belonging to others must be deposited into an insured account.
B. Trust fund accounts must insure each deposit for $200.00.
C. Trust fund accounts must be located in any bank who's home office is in Alabama.
D. Trust funds must be deposited into a financial institution located in Alabama. - ANS A
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
In the state of Alabama, what is the difference between a customer and a client?
A. a client pays the commission
B. a client is a seller while a customer is a buyer
C. a client has signed an agreement for specific services
D. a licensee has duties to a client but not to a customer - ANS D
Which of the following is NOT an allowed brokerage relationship in Alabama?
A. a limited nonconsensual dual agency
B. a single agency
C. a sub agency
D. a transaction brokerage - ANS A
In which brokerage relationship is the broker NOT working under a signed agreement?
A. single agency
B. transaction brokerage
C. sub agency
D. limited consensual dual agency - ANS B
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,Broker Joe is representing both the buyer and the seller in the sale of a property in Huntsville.
To legally do this, what must Joe do?
A. Disclose the non-agency relationship to both the buyer and the seller
B. Sign an agency agreement with both clients qualifying broker prior to providing any
brokerage services
C. Obtain written consent from both clients to enter into the relationship agreement
D. Notify both clients which will receive preferential treatment during the transaction -
ANS C
Which brokerage relationship would be common for brokers in a company that is located in a
large market area with many Alabama listed properties.
A. single agency
B. transaction brokerage
C. sub agency
D. limited consensual dual agency - ANS D
In which agency relationship might a customer in Alabama become confused as to whom the
agent represents?
A. single agency
B. transaction brokerage
C. sub agency
D. limited consensual dual agency - ANS D
Alabama mandates a consumer's right to a minimum level of service. This mandate does NOT
include which of the following services?
A. helping a consumer negotiate price
B. presenting and receiving offers
C. assisting with financing
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, D. answering questions - ANS A
Licensees are required to keep their client's confidential information confidential even if
A. disclosing the information is required by law
B. the information was obtained through public knowledge
C. the client authorizes the disclosure in writing
D. information would help the buyer decide whether or not to purchase the property - ANS D
Alabama license law prohibits a licensee employed by a qualifying broker from mishandling
trust funds. Which of the following does NOT constitute this license's mishandling of trust
funds?
A. accepting cash as earnest money
B. transferring earnest money from a trust account into an operating account
C. depositing cash into qualifying broker's trust account
D. None of the above - ANS A
Which of the following constitutes illegal commingling?
A. Depositing funds from different transactions into the same trust account
B. Depositing funds from different clients into the same trust account
C. Depositing clients funds and business funds into the same account
D. Depositing business funds to cover bank charges into a client trust account - ANS C
Which of the following statements is TRUE?
A. Funds belonging to others must be deposited into an insured account.
B. Trust fund accounts must insure each deposit for $200.00.
C. Trust fund accounts must be located in any bank who's home office is in Alabama.
D. Trust funds must be deposited into a financial institution located in Alabama. - ANS A
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
