By Joseph Autilio
Executive Director, Board of Registration
Below, the Massachusetts Board of Registration of Real Estate Brokers and Salespersons answers queries by agents in the field regarding real estate licensing in Massachusetts.
Remitting Escrow Funds
Q. Is it fine as long as I ultimately remit escrow funds?
A. When money is paid over to a broker during the pendency of a transaction, it must be placed into an escrow account, interest or non-interest bearing, unless the parties agree otherwise in writing. Your escrow
obligations are governed by Board Regulation 254 CMR 3.00(10). They are also part of the pre-licensing and continuing education curriculums approved by the Board.
There are several escrow obligations that should be reemphasized from time to time:
Escrow funds are to be accounted for and properly remitted either at the consummation of a purchase and sale transaction, or at the time such transaction terminates without a closing. Brokers who use such funds for business or personal reasons—even if the funds are ultimately remitted—are in violation of the escrow regulations.
Make sure that only brokers have check writing ability on the escrow accounts. Licensed salespeople and any non-licensees must not be on escrow accounts and cannot have check writing ability.
Keep a record of payments to you for deposit into your escrow
account, as well as when such deposits are made and the amount
of the deposit. Also record to whom disbursements are made, the amount of the disbursement, and when they are made. Interest earned on interest-bearing escrow accounts must also be properly accounted for on deposited funds.
Escrow funds do not exist for your personal or business use and are not available for your use, even if you ultimately replace them. The mere act of using them is a serious violation of the Board’s Regulations, as well as paying a commission out of escrow funds before a closing. The Board suggests that brokers and salespeople periodically review the escrow regulations.
Keep Your Address Current
Q. Why all the fuss over an incorrect address?
A. The law requires that all real estate agents keep the Board informed of their current addresses but, practically speaking, the Board cannot reach you for license renewal unless you provide it with your current address.
Remember, if agents need added incentive on reporting current addresses, the Multiple Listing Service discontinues your access when your license
has expired. Agents can avoid interruptions in their practice, by simply notifying the Board promptly of any change in address.
The Board of Registration of Real Estate Brokers & Salespersons
office in Boston can be reached at 617-727-2373.