Test 12: Requirements Governing Licensees

Large home with a view

Ads should describe property characteristics, not the people who should buy it.

The salesperson’s name

Ads must always be done in the name of the broker and include the company name, address and telephone number. The salesperson’s name and contact information will often be included, but it is not legally required.

Real estate licensees are exempt from Massachusetts’ independent contractor statute.

Pursuant to a 2014 Massachusetts Supreme Judicial Court case real estate licensees are exempt from the independent contractor statute but the case did not specify the relationship between a broker and a salesperson.

broker salesperson.

In Massachusetts a broker who works for another broker is called a broker salesperson. Although the broker salesperson holds a broker license, he or she is subject to the same limitations of practice as a licensed salesperson.

Troy, who showed the property to the buyer after Sarah showed it, negotiated the purchase contract, and provided the necessary disclosures.

Procuring cause is based on who set into motion an unbroken chain of events that led to a sale. Although Sarah showed the property first her chain of events were interrupted by Troy and did not result in the sale.

Broker Betty must present the offer to Sheila.

In Massachusetts a listing broker must present oral offers to the seller. A buyer’s agent has the authority to communicate the offer to a listing broker. A licensee is required to present an offer even if the licensee thinks it is invalid, unreasonable or unworthy.

Yes, she must disclose her interest, in writing, to all parties.

Any interest a licensee has in property subject to a transaction must be disclosed, in writing, to all parties. Disclosure to the Board is not required.

Disclose his interest, in writing, to all parties.

A listing agent who is a partial owner in the listed property must disclose that interest in writing. The licensee is not required to stop acting as the seller’s agent unless the licensee has an option to purchase the property.

The salesperson’s employing broker

A real estate salesperson can only be compensated by his or her employing broker. The broker receives compensation from a client and then splits it with a salesperson according to their agreement.

It must be beyond the reach of creditors.

To safeguard trust funds they must be beyond the reach of creditors. They can be deposited in a bank located in Massachusetts, cannot have commingled funds, and can only be maintained by a broker.

Three years

The record retention requirements for trust accounts is three years.

It depends on the agreement of the parties

The agreement of the parties will specify to whom interest is owed.

It specifies the amount of damages a defaulting party must pay a non-defaulting party.

A liquidated damages clause specifies the amount of damages a defaulting party must pay a non-defaulting party. A typical liquidated damages clause in a real estate purchase agreement applies only to a buyer default and not a seller default. This allows a buyer to pursue specific performance in the event of a seller breach.

Yes, if the property is registered with the Board.

Out of state property that is registered with the Board can be listed and sold by a Massachusetts broker. The registration is valid for one year and can be renewed annually.

When the buyer and seller agree that funds can be withdrawn

Funds can only be withdrawn from a broker trust account when the parties agree or upon a court order.

It is illegal steering.

The subject ad could steer some people toward and other people away from the neighborhood based on religion.

It does not identify the broker.

All ads must be done by and in the name of the broker and the broker must be identified. The listing price is not required and information regarding the economic status of the neighborhood does not discriminate based on a protected class.

regardless of their experience or how they are classified.

Regardless of employment classification or years of experience a supervising broker must provide the Board with contact information for all affiliated licensees.

Three years

The document retention requirement in Massachusetts is generally three years.