Notes from the Legal Hotline: March 2023

March 2, 2023

- By The MAR Legal Team

Q: Are there any limitations on the types of transactions a real estate licensee may engage in?

A: Once an individual is properly licensed as either a broker or a salesperson in Massachusetts, they are legally permitted to engage in any type of real estate transaction throughout the Commonwealth. Licensees, however, may be subject to discipline under 254 CMR 3.14(e) if they assume any duties or responsibilities that they are not adequately prepared to undertake or for which they have not achieved competency. Additionally, Article 11 of the REALTOR® Code of Ethics contains a similar requirement:

REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client.

REALTORS® seeking clients in geographic areas or transaction types in which they are unfamiliar or inexperienced are well-advised to seek the assistance of their broker or another licensee who possesses the requisite skill.

Q: Can a real estate broker directly compensate a salesperson who has unaffiliated with that broker and affiliated with a new broker?

A: Yes. Although Massachusetts General Laws Chapter 112, Section 87VV prohibits a salesperson from accepting “any valuable consideration for the performance of any act as a real estate salesman from any person except the broker with whom he is affiliated,” the Board of Registration for Real Estate Brokers and Salespersons has clarified the manner in which compensation may be remitted to a formerly affiliated salesperson. The former broker may distribute the commission owed to the salesperson in accordance with the contractual terms between the salesperson and the former brokerage. This underscores the importance of brokers and their affiliated salespersons entering into a comprehensive Independent Contractor Agreement, as well as a separation agreement that addresses pending transactions at the time of the salesperson’s departure from the brokerage.


Written by: Justin Davidson, General Counsel; Catherine Taylor, Associate Counsel; Jonathan Schreiber, Legislative & Regulatory Counsel; and Kate Berard, Associate Counsel.

Services provided through the Massachusetts Association of REALTORS® is intended for informational purposes and does not constitute legal advice, nor does it establish an attorney-client relationship. The Massachusetts Association of REALTORS®, by providing this service, assumes no actual or implied responsibility for any improper use of responses to questions through this service.  The Massachusetts Association of REALTORS® will not be legally responsible for any potential misrepresentations or errors made by providing this service. For more information regarding these topics authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at