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Real Estate > Massachusetts Licensing Law > Flashcards

Massachusetts Licensing Law Flashcards

1
Q

Where does licensing law come from?

A

State legislature

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2
Q

Who enforces the law?

A

The Board of Real Estate brokers & Salespersons

AKA “The Board”

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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.
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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.
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5
Q

How often do licenses need to be renewed?

A

Biennially (every 2 years).

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6
Q

What is required for a license renewal?

A
  • 12 hours of continuing education.

- Fee

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7
Q

Inactive licensee may what?

A

Make referrals for a fee.

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8
Q

What must a broker do when they hire a licensee?

A

Inform the board.

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9
Q

How many MA brokers may a licensee work for at a time?

A

1

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10
Q

What do brokers have for their licensees activities?

A

Vicarious liability.

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11
Q

What can brokers never do?

A

Hire unlicensed people for real estate activities.

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12
Q

Where must licenses be displayed?

A

In the workplace.

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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.
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14
Q

MA has full reciprocity with…

A
  • Connecticut
  • Georgia
  • Iowa
  • Nebraska
  • New Mexico
  • Pennsylvania
  • Rhode Island
  • New York (only brokers have full reciprocity).
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15
Q

MA has limited reciprocity with…

A
  • Colorado
  • Delaware
  • Idaho
  • Kentucky
  • Maine
  • New Hampshire
  • North Carolina
  • South Carolina
  • South Dakota
  • Washington
  • West Virginia
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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
Q

Do all verbal & written offers need to be presented to the client?

A

Yes

26
Q

How long must brokers maintain advertising records?

A

3 years

27
Q

What is bait & switch advertising & is it allowed?

A
  • It is the advertising of something that either does not exist or something that is unavailable.
  • Never allowed
28
Q

Blind advertising

A
  • Never allowed.
  • Sales person can’t advertise under their own name.
  • Must include name or brokerage in any ads.
29
Q

Registration of promotional sale of out of state properties

A
  • Developers may register w/ the board at their own expense.
  • Brokers must alert the board with 7 days of listing acceptance.
30
Q

Conflicts of Interest

A

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
Q

Mandatory Agency Disclosure Form

A
  • 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
Q

What is the exemption to the mandatory agency disclosure form?

A

Open houses

  • Individual mandatory agency forms are not required.
  • Must disclose agent’s relationship to the seller in sign, brochure, etc.
33
Q

Types of agency on a disclosure form

A

-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
Q

What do you owe someone you represent vs. someone you don’t represent?

A
  • You owe OLD CAR to someone you represent.

- You owe honesty to everyone, even those you don’t represent.

35
Q

Rental fee disclosure

A

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
Q

How could you temporarily or permanently lose your R/E license?

A
  • 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
Q

What is a net listing?

A

Where someone offers to pay an agent any money paid over the asking price. This commission structure is not allowed.

38
Q

License hearings

A

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.

Real Estate (19 decks)

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