SB 228 — Relating to residential real estate transactions; to require buyers to make certain disclosures to homeowners and other interested parties that the buyer intends to engage aspects of a wholesale transaction; and to deem unenforceable certain unfair service agreements purporting to establish a long-term right to list between real estate companies and residential real estate owners; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Section 111.05 of the Constitution of Alabama of 2022.

SB228 ENGROSSEDENROLLED Q3ME11-2Q3ME11-3 By Senators Roberts, Givhan, Shelnutt RFD:

20-Apr-23 2023 Regular Session Page 0 SB228 EngrossedEnrolled 2Enrolled, 4An AAct, BILL3 TO BE ENTITLED AN ACT 9 Relating to residential real estate transactions;

Page 1 SB228 Engrossed (2) Certain unfair service agreements provide a real estate company with the right to market, list, or assist in selling a residential property for up to 40 years, binding homeowners and successors in interest through a recorded memorandum and penalizing the homeowner or successor in Page 1 SB228 Enrolled interest for breach of the agreement.

(a) A person may acquire an equitable interest in a single-family residential property as the buyer under a contract for the purchase and sale of the property and Page 2 SB228 Engrossed then may assign or offer to assign the interest for a fee if the buyer discloses in writing all of the following:

(2) To the seller of the property, the buyer's intent Page 2 SB228 Enrolled to market its equitable interest prior to commencing any marketing of the property.

Page 3 SB228 Engrossed Section 3.

Real property located in Page 3 SB228 Enrolled this state which is used primarily for a dwelling and contains one to four dwelling units.

95 (4) SERVICE PROVIDER.

A service agreement in which the services subject to the agreement are not performed within one year after the date upon which the agreement 95 commences and provides any of the following:

Page 4 SB228 Engrossed (2) An insurance contract.

Page 4 SB228 Enrolled (5) Agreements to manage residential real estate.

(f) No person shall record or cause to be recorded an Page 5 SB228 Engrossed unfair service agreement, or notice or memorandum of an unfair service agreement in the state.

(1) If an unfair service agreement is recorded in this state, it shall not provide actual or constructive notice against an otherwise bona fide purchaser of the residential Page 5 SB228 Enrolled real property to which it pertains, or against a creditor with a security interest in the residential real property to which it pertains.

Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of local funds, the bill is excluded from further requirements and application under Section 111.05 of the Constitution of Page 6 SB228 Engrossed Alabama of 2022, because the bill defines a new crime or amends the definition of an existing crime.

Page 76 SB228 EngrossedEnrolled Senate________________________________________________ ReadPresident forand thePresiding firstOfficer timeof andthe referredSenate ................20-Apr-23________________________________________________ toSpeaker of the SenateHouse committeeof onRepresentatives CountySB228 andSenate Municipal27-Apr-23 GovernmentI Readhereby forcertify that the secondwithin timeAct andoriginated placedin ................25-Apr-23and onpassed the calendar:Senate, as amended.

1 amendment Read for the third time and passed ................27-Apr-23 as amended Yeas 31 Nays 0 Abstains 0 Patrick Harris, Secretary.

PageHouse 8of Representatives Passed:

09-May-23 By:

Senator Roberts Page 7