MA Real Estate Licensing Law

License law study points (pt 3)

-Agents and brokers need written permission to list property on MLS and to place a for sale sign on the seller's property -All money paid to the agent must come from their employing broker -Commissions are established by negotiation, there is not standard commission rate -Fine for practicing without license is $500 -Brokers must keep records of rental fees paid to the broker for 3 years

Types of agency (all listed on MA mandatory disclose)

-Buyer/ seller agency: represents the buyer or seller -Dual agency: represent both parties (written permission from both) -Facilitator: represent neither party -Designated agency: only you represent the client in your office

License suspension and revocation

-Commingling -Lying when you get / renew your license -Act as undisclosed dual agent -Do real estate while intoxicated -Steal client money -Paying referral fees/ commission to unlicensed person -Undisclosed kickbacks for money your client spent -Induce your client to break real estate contract for your own gain -Fail to provide copies of R.E contracts (email is not adequate w/o read receipt) -Fail to disclose a conflict of interest -Net listing- where the commissions is unspecified, commissions must be a flat fee or pre stated % of sale price -Violating fair housing law (automatic) - enforced by MCAD -The board can conduct public hearing and can call witnesses, can be appealed in 20 days, must return license in 7 days

License law study points (pt 1)

-Licenses are renewed every two years on your birthday (biennially) - must complete 12 hours of continuing education -Inactive licensees may make referrals to active licensees for a fee -Salespersons may receive their broker's license after 3 years of work experience (at least 25 hours per week) - you may not hold both -Brokers must inform board when they hire real estate agents- may not work more than one MA broker at a time, brokers have vicarious liability for their agents activities, agents and brokers must display their licenses in their usual place of business, brokers cannot hire unlicensed salespersons

Conflicts of interest

-Must be disclosed in writing -If you represent yourself (including indirectly), represent family (blood, marriage), business partner -Cannot purchase property when you represent the seller

Agency and fee disclosures

-Must provide buyers and sellers with a mandatory agency disclosure notice developed by the real estate board - discloses the relationship of the agent with the prospective purchaser or seller, must be provided at first personal meeting for the purpose of discussing a specific property -Prospective tenant must sign, agent signs, put your lisence #, date it, give original copy to tenant, keep a copy -For sales have to provide an agency disclosure form on first personal meeting to discuss particular property -Not required at open house, but you must obviously disclose your agency relationship with the seller on available materias

Rental fee disclosure

-Must provide every prospective tenant with a written notice at their first meeting that states whether the prospective tenant will pay a fee, along with the fees amount, timing, and manner of payment, and whether or not a fee is due if a tenancy is not created -Tenants must agree to pay a fee to be charged

License law study points (pt 2)

-Some states have reciprocity with MA, meaning that your MA license permits you to receive a license in those states without taking another real estate class or test Reciprocity with MA: alabama, california, connecticut, georgia, iowa, louisiana, maine, missouri, new hampshire, new mexico, new york, ohio, oregon, rhode island, washington, -MA is a physical location state: out of state licenses cannot perform real estate services but can receive commission is done out of state -Cooperative states: permit out of state licensees to perform real estate services in the state if they enter into a co-broker agreement with an in-state licensee -Turf states: only permit out of state licensees to receive a referral fee -Entities involved in real estate (LLC) must have a broker's license, must designate one of their officers the broker of record (must have brokers license), if broker passes away it may operate 1 year without, if a sole proprietor passes away the board may issue a temporary license good for one year

Licensing Law

-The board of registration of real estate brokers and salesperson enforces the license law (part of division of professional licensure) -Created in 1960 -Made up of 5 members, each member has a 5-year term with one term expiring each year -3 board members must be brokers with at least 7 years of experience and two members must be unlicensed and represent the public -1 board member is appointed chairperson -Unpaid, and must meet at least four times a year (with at least 3 members present) -Written records of meetings are made available on website -Budget comes from state budget and any fees they collect go to state treasury

Escrow Accounts

-Trust accounts, special bank accounts for hold clients money, typically used by broker to hold deposits on offers and purchase and sale contracts, brokers that act as escrow agents must have a binding agreement between the parties to the transaction and specific instructions on when the funds should be delivered -Must keep funds in separate bank account from their business funds, does not have to bear interest -Salesperson cannot have access to this account -Must maintain escrow records for 3 years -Clients who are entitled to their deposited money must get it back asap -Not commission ** and no unauthorized conversions -Conversions require written permission from both parties

** MA law requires a real license for anyone that does any of the following things on behalf of someone else and gets paid

Assists in, advertises, and or holds themselves engaged in, the business of selling, renting, leasing, negotiation, exchanging, purchasing, or deal in real estate, or assists with the procuring of prospects for the sale, exchange, purchase, leasing or renting of real estate

Broker Bonds

Effectively insurance policies for escrow accounts, every licensed broker must provide the board with a survey bone for $5,000. This bond is for the benefit of any person harmed by the loss of escrow funds caused by the broker (not insurance for the broker)

Broker

allowed to work for themselves and can handle client money, must be bonded

No discriminatory advertising:

brokers and salesperson must never engage in discriminatory advertising

exceptions to license

lawyers, people doing transactions for yourself, purely salaried employees (property managers), public officials and employees, auctioneers, appraisers, insurance company employees, persons acting under court order (executors, guardians), trustees

Salesperson

must work under broker as either an employee or an independent contractor, may not handle client money, do not need to be bonded

Registration of the promotional sale of out of state properties:

out of state property developers must not this registration on their advertisements, brokers who accept out of state property development listings must inform the board within 7 days of accepting the listing

No blind advertising:

salesperson may not advertise under their own name only, they must include the name of their brokerage in any advertisements, broker ads must disclose the name of the broke and that they are a real estate broker