Test 15: Massachusetts Agency

third party in the transaction who the agent does not represent.

A client is the principal in a real estate transaction. The broker is the agent. An unrepresented party is a customer. A customer is not inherently a principal since that party can buy another property in a different transaction

Larry must obtain Sam’s written consent.

Larry wants to retain Sheila as a seller subagent. Massachusetts law requires the client’s written consent to establish a seller or buyer subagency relationship.

at the first substantive contact to discuss specific property.

The agency disclosure form must be given to a seller at the first substantive contact to discuss specific property. The seller is not required to ask for it. Making the disclosure after the listing agreement is signed defeats the purpose of the form, which is to provide the seller with information about the nature of the relationship between the agent and the seller.

does not represent either the buyer or the seller.

A facilitator in a real estate transaction does not represent either party and does not owe any fiduciary duties. However, a facilitator must disclose any defects in the property of which the facilitator is aware.

In a seller agency, the broker is the listing agent.

In a seller or buyer subagency the client has vicarious liability for the subagent’s conduct and representations.

Confidentiality

Confidentiality is owed by an agent to his/her principal. A facilitator is not an agent for any party to the transaction.

the broker is a dual agent

The broker is a dual agent in a designated agency situation. Each party must give written consent to a designated agency which includes consent that the broker will act as a dual agent.

The licensee must note the refusal on the form

If a buyer, seller, landlord or tenant refuses to sign the agency disclosure form the licensee must note that on the form and the form must be retained for three years.

Before an offer is signed

The informed written consent for a dual agency must be signed before an offer is signed. The offer is almost always made by the buyer.

Designated agency requires the informed, written consent of the clients.

Designated agency is allowed in Massachusetts. It is similar to a dual agency because the broker represents both parties, but different because the salespersons represent the buyer and seller exclusively.

Only the client

Fiduciary duties entail the highest level of trust and confidentiality; they are only owed to a client. For example, confidentiality is not owed to a customer.

A specific disclosure form is not required if the licensee posts signs or distributes materials that conspicuously disclose any pre-existing agency relationships.

Licensees are not required to distribute the Massachusetts Mandatory Real Estate Licensee-Consumer Relationship Disclosure form at an open house if the licensee posts signs or distributes materials that conspicuously disclose any pre-existing agency relationships. There is no specific agency disclosure form for an open house.