Massachusetts Licensing Law Flashcards
1
Q
Where does licensing law come from?
A
State legislature
2
Q
Who enforces the law?
A
The Board of Real Estate brokers & Salespersons
AKA “The Board”
3
Q
Who are the exceptions to the licensing law?
A
- General public buying, selling, or renting for themselves.
- Hourly/salary employees whose daily activities involve the management of real estate (property managers).
- Lawyers
- People w/ written power of attorney.
- Public officers/employees on official business.
- Auctioneers, appraisers, employees of lenders/insurance companies.
- Anyone under a court order.
- Trustees.
4
Q
Escrow Accounts
A
Escrow Accounts (trust accounts)
- Special bank account for holding clients money.
- Must be separate from broker’s personal or other business accounts.
- Commingling is strictly prohibited.
- Brokers must maintain escrow records for 3 years.
- Real estate board can inspect at any time in those 3 years.
- Deposit checks must be turned over to the broker immediately.
- Return money to clients as soon as possible.
- Conversion of a deposit must have written permission from both parties (buyer & seller).
- if there is a dispute about escrow money, broker needs a court order to release funds.
5
Q
How often do licenses need to be renewed?
A
Biennially (every 2 years).
6
Q
What is required for a license renewal?
A
- 12 hours of continuing education.
- Fee
7
Q
Inactive licensee may what?
A
Make referrals for a fee.
8
Q
What must a broker do when they hire a licensee?
A
Inform the board.
9
Q
How many MA brokers may a licensee work for at a time?
A
1
10
Q
What do brokers have for their licensees activities?
A
Vicarious liability.
11
Q
What can brokers never do?
A
Hire unlicensed people for real estate activities.
12
Q
Where must licenses be displayed?
A
In the workplace.
13
Q
License reciprocity
A
- We give states whatever they give us.
- You must still apply for their state license to be able to practice & pay a fee.
- No education requirement for full reciprocity. Typically, state education required for limited reciprocity.
14
Q
MA has full reciprocity with…
A
- Connecticut
- Georgia
- Iowa
- Nebraska
- New Mexico
- Pennsylvania
- Rhode Island
- New York (only brokers have full reciprocity).
15
Q
MA has limited reciprocity with…
A
- Colorado
- Delaware
- Idaho
- Kentucky
- Maine
- New Hampshire
- North Carolina
- South Carolina
- South Dakota
- Washington
- West Virginia
16
Q
Physical location state
A
- Out of state licensees may not perform services.
- Must stay in their home state to receive a commission.
17
Q
Cooperative State
A
- Out of state licensees may perform real estate services.
- Must enter into a written co-broke agreement w/ the in-state licensee.
18
Q
Turf State
A
Out of state licensees may only receive referral compensation.
19
Q
Real Estate LLCs
A
- Must have a brokers license.
- Must designate one of their officers as a broker of record.
- If a broker of record dies, entity may operate up to one year.
- If sole proprietor does, the board issues temporary license that is good for one year (can be anyone who was chosen by the estate of the deceased).
20
Q
What do agents need to list properties on MLS or to put up a “for sale” sign?
A
Written permission from the seller.
21
Q
All money paid to the agent comes from who?
A
The employing broker only.
22
Q
How long must brokers keep rental fees paid?
A
3 years
23
Q
Do agents need to be licensed to be entitled to a commission?
A
Yes
24
Q
What is the fine for practicing w/out a license?
A
$500
25
Do all verbal & written offers need to be presented to the client?
Yes
26
How long must brokers maintain advertising records?
3 years
27
What is bait & switch advertising & is it allowed?
- It is the advertising of something that either does not exist or something that is unavailable.
- Never allowed
28
Blind advertising
- Never allowed.
- Sales person can't advertise under their own name.
- Must include name or brokerage in any ads.
29
Registration of promotional sale of out of state properties
- Developers may register w/ the board at their own expense.
- Brokers must alert the board with 7 days of listing acceptance.
30
Conflicts of Interest
Agents must disclose any of conflicts of interest in writing.
-When representing themselves as the client.
-When representing family members through blood or marriage.
-When representing business associates.
Written disclosure required if purchasing property that the agent represents.
31
Mandatory Agency Disclosure Form
- Mandatory in MA.
- Explains your role in the transaction.
- Discloses relationship between agent & perspective buyer/seller.
- Must be given as first personal meeting discussing a specific property.
- Client signs, dates, & if they decline to sign, that must be noted.
- Must keep records for 3 years.
32
What is the exemption to the mandatory agency disclosure form?
Open houses
- Individual mandatory agency forms are not required.
- Must disclose agent's relationship to the seller in sign, brochure, etc.
33
Types of agency on a disclosure form
-Seller's agent: represents the seller; owes OLD CAR
-Buyer's agent: represents the buyer; owes OLD CAR
-Disclosed dual agent: represents both the buyer & seller in the same transaction. Must have written consent from both parties.
Non designated agent: owes OLD CAR to all clients of the brokerage. Broker of record & all agents of the brokerage become dual agents.
Designated agent: Appointing agent designates another agent to represent a client. Broker of record becomes dual agent.
Facilitator (non agents, transaction brokers/coordinators, contract brokers): Assist buyers or seller in reaching an agreement. They don't represent either party. They must act honestly and disclose any defects.
34
What do you owe someone you represent vs. someone you don't represent?
- You owe OLD CAR to someone you represent.
| - You owe honesty to everyone, even those you don't represent.
35
Rental fee disclosure
Written notice required for all rentals.
-Whether or not they will be paying a fee.
-The amount of the fee, timing, & manner of payment.
-Whether or not a fee is due if tenancy is created.
-Tenant must agree to pay a fee before they can be charged.
-Must be signed at first personal meeting.
Any refusal to sign must be noted.
Records must be kept for 3 years.
36
How could you temporarily or permanently lose your R/E license?
- License obtained/renewed using false info.
- Didn't disclose that you were a dual agent.
- Didn't disclose you were the principal in a transaction/
- Intoxication.
- Failure to return client money within reasonable time.
- Payment of a referral fee to unlicensed people.
- Undisclosed rebate or commission kickbacks.
- Commingling client money w/ business or personal funds.
- Inducing someone to break a contract for personal gain.
- Failure to disclose a conflict in writing.
- Accepting a new listing.
- Failure to report a conviction, felony or misdemeanor within 30 days.
37
What is a net listing?
Where someone offers to pay an agent any money paid over the asking price. This commission structure is not allowed.
38
License hearings
Public hearing upon written complaint or board initiative.
-10 days notice of hearing.
-Legal representation permitted, but not entitled.
-Board has subpoena power & can call witnesses.
-Decisions can be appealed in superior court within 20 days.
License must be returned to the board within 7 days if agent is found guilty.
