Notes From the Legal Hotline: April 2024
Q: What do REALTORS® need to know about Fair Housing? A: Everything! REALTORS® play a pivotal role in ensuring fair housing compliance throughout a transaction. When working with buyers, not only should REALTORS® ensure that equal access to available properties is provided, but also that prospective buyers are not directed towards or away from certain neighborhoods based on demographics. Do not make assumptions about where a prospective buyer might like to live; buyers should be provided the opportunity to make that determination on their own terms. Your job as their REALTOR® is to be a resource to aid the buyer
Notes From the Legal Hotline: March 2024
Q: What disclosures are required in Massachusetts? A: Massachusetts real estate transactions are generally ruled by the principle of caveat emptor, or buyer beware. Massachusetts home sellers are only required to inform prospective purchases of whether the property is serviced by a septic system (Title 5) and, for properties built prior to 1978, sellers must provide a Property Transfer Lead Paint Notification & Certification. Further, any information provided by a seller, such as on the Seller Statement of Property Condition or in response to direct questions from a buyer, must be accurate. Real Estate licensees, however, have a heightened disclosure
Notes from the Legal Hotline: February 2024
Q: Can commissions be paid to an LLC? A: Whether commissions can be paid to an LLC depends on how the LLC is established and by whom. First and foremost, Massachusetts real estate licensing laws prohibit the sharing of fees, commissions, or other valuable consideration with an unlicensed individual. This restriction extends to corporate entities, such as LLCs, which must be validly licensed. For a corporation to become licensed, Massachusetts General Laws Chapter 112, Section 87UU mandates that a partner or officer of the corporation hold an individual broker’s license. This means that the corporate entity must have its own
Notes From the Legal Hotline: January 2024
Q: An unrepresented buyer attended my open house and scheduled a follow up showing with me. I answered all their questions about the property and now they want to submit an offer using a buyer’s agent. Can I tell the buyer they can’t use their own agent at this point? A: No. A buyer may choose who they want to represent their interests in a real estate transaction, and a listing agent has no authority to deprive a buyer of that right. In situations such as this, however, there may be a question of procuring cause. While the listing agent
Notes From the Legal Hotline: December 2023
Q: Who may receive a referral fee? A: Referral fees may only be paid to individuals who hold a real estate license; unlicensed individuals may never be given anything of value in exchange for a referral. Within the broad category of “licensee,” however, there are several nuances that are important to take note of when paying a referral fee. An individual holding an active salesperson’s license may only receive real estate related compensation through the broker with whom they are affiliated. Any referral fee owed to an active salesperson would be paid to the salesperson’s broker and then distributed to
Notes From the Legal Hotline: November 2023
Q: May a buyer’s agent advertise a listed property of another brokerage? A: Permission should always be obtained prior to advertising the listing of another brokerage, even if you are a cooperating buyer’s agent. Advertising a listing that is not yours, regardless of your participation in the transaction, could result in a Code of Ethics, MLS, copyright, and/or licensing complaint being filed against you. Once a transaction closes, however, Article 12 of the Code of Ethics, does permit a cooperating broker who participated in the transaction to claim to have “sold” the property, including placing a sold sign on the
Notes From the Legal Hotline: October 2023
Q: Must a REALTOR® affirmatively disclose whether a listed property is haunted? A: No, psychological impacts on a property, such as hauntings, are not required to be affirmatively disclosed to a prospective buyer and are, in fact, specifically exempted from affirmative disclosure under Massachusetts General Law Chapter 93, Section 114, commonly referred to as the Stigmatized Property Law. In 1998, the Stigmatized Property Law was enacted, which specifically states that brokers do not have a duty to investigate or affirmatively disclose murders, suicides, paranormal phenomena, or other possible stigmas. However, as with any direct inquiry from a prospective buyer, a
Notes From the Legal Hotline: September 2023
Q: Is completing an MLS Status Change form sufficient to alter the terms of the Exclusive Right to Sell Listing Agreement? A: No, the Status Change Form is an MLS form and is not a contract. Any changes to the terms of the original listing agreement, such as marketing terms, listing price, or length of the agreement, should be addressed in an addendum to the listing agreement, and signed and dated by all parties. The MAR Forms Library contains a number of helpful addenda, including: Agreement to Suspend Marketing of Property (#696) and Extension of Time of Representation Agreement (#697).
Notes From the Legal Hotline: August 2023
Q: A prospective tenant has poor credit and offered to pay the full year’s rent up front – is that allowed? A: No, rentals for 100 days or more are governed by Massachusetts General Laws Ch. 186, Sec. 15b, which prohibits a landlord from collecting any funds in excess of: First month’s rent, Last month’s rent, Security deposit not to exceed first month’s rent, and The cost to change the lock and key. Regardless of whether the landlord requests funds in excess of these specifically enumerated amounts, or they are offered by the tenant, the collection of said funds would
Notes From the Legal Hotline: July 2023
Q: A tenant provided the landlord with a document stating that their dog is a registered service animal. Is this legitimate? A: It is unlikely that this document will aid a tenant in obtaining a reasonable accommodation to allow for their dog. While many online sites offer certificates, licenses, or other registration documents stating that an animal is a service animal, no such registration, licensing, or certification process exists under the law. The Fair Housing Act allows for a landlord to request reliable documentation from a tenant when a reasonable accommodation is requested and the disability and/or disability-related need for