Notes From the Legal Hotline: May 2024

May 1, 2024

- By The MAR Legal Team

Q: I have heard that the NAR settlement received preliminary approval and the opt-in period has begun. What does it mean to be covered by the settlement and do I need to do anything as a member of MAR? A: Most members will not have to do anything to be covered by the terms of the settlement, so long as you are a REALTOR® member on the date of the class notice, which is expected to be August 17, 2024. The agreement is meant to create some finality to these issues and seeks to release NAR, over one million NAR members, all state and local REALTOR® associations, all association-owned MLSs, and all brokerages with an NAR member as principal (at the time of the Class notice) whose residential transaction volume in 2022 was $2 billion or below, from liability for…

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Notes From the Legal Hotline: April 2024

April 11, 2024

- By The MAR Legal Team

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 in making the right decision for them. Similarly, when taking a new listing, REALTORS® should have a conversation with the seller about the importance of fair housing. Many sellers may be tempted to use impermissible criteria, such as race or…

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White House Announcement on Housing

March 13, 2024

- By NAR Contributing Article

This is an NAR contributing article written by Erin Stackley On Thursday, February 29, the White House announced its “New Actions to Boost Housing Supply and Lower Housing Costs,” aimed at creating more affordable homes and increasing transparency in rental housing. 35314

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Notes From the Legal Hotline: March 2024

February 29, 2024

- By The MAR Legal Team

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 obligation under Massachusetts General Laws Ch. 93A and must inform prospective buyers of any known material facts related to the property that may influence a buyer’s decision to purchase the property. While this does not obligate the licensee to discover…

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Notes from the Legal Hotline: February 2024

February 1, 2024

- By The MAR Legal Team

 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 corporate broker’s license in addition to the officer’s individual broker’s license. If the principal no longer holds an active broker’s license, the corporation also loses its valid license. As a result of this requirement, salespersons may never receive real estate…

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Notes From the Legal Hotline: January 2024

December 21, 2023

- By The MAR Legal Team

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 may not be obligated to compensate that buyer broker, they are still obligated to cooperate, unless it is not in the best interests of the client (See Code of Ethics, Article 3). REALTORS® must take care to not allow issues…

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2023 Year in Advocacy Review

December 13, 2023

- By The MAR Legal Team

2023 was a banner year by any metric for MAR advocacy success. Here’s the rundown:  Fighting Rent Control and Transfer Taxes  2023 saw the rise in two significant threats to housing in Massachusetts – rent control and transfer taxes. The former was proposed as part of a sweeping ballot question to be included on the 2024 election ballot. Fortunately, supporters fell significantly short of the required signatures to reach the ballot. However, we anticipate this issue will return, likely with greater organization and funding for the 2026 election cycle. In the meantime, we continue to oppose several bills before the Legislature. Read more about the ballot question campaign and watch our testimony opposing rent control bills here.  Transfer taxes have now risen to the fore as progressive housing advocates’ top target. Proposals would place a significant burden on the housing…

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Notes From the Legal Hotline: December 2023

December 4, 2023

- By The MAR Legal Team

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 the salesperson according to the terms of their agreement. An individual with an inactive salesperson’s license may receive a referral fee directly, as there is no affiliation requirement for inactive licensees (see M.G.L. Ch. 112, Sec.87XX1/2). An individual holding a…

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Forms Updates – November 2023

November 28, 2023

- By The MAR Legal Team

Below are some important updates to the MassForms™ Library. Be sure to confirm that you are using the latest versions of these forms. You can access these forms here. UPDATED: Listing Agreements (Forms 692, 693, 707, 708, 709, 715, 721) All versions of the Listing Agreement in the Library have been updated to allow for the fee due to the broker to be entered as either a dollar amount or a percentage of the sale price. Additionally, language in the dispute resolution paragraph has been updated to allow for a panel of at least three (3) arbitrators for consistency with the NAR’s Code of Ethics and Arbitration Manual and MAR’s policies for conducting arbitration proceedings. UPDATED: Buyer Representation Agreements (Forms 701, 702, 703, 720, 714) Language in the dispute resolution paragraph has been updated to allow for a panel of…

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Rent Control Ballot Question Ended, Opposition Continues

November 13, 2023

- By The MAR Legal Team

Proponents of the 2024 ballot question that proposed to lift the statewide prohibition on rent control and give municipalities control over everything from evictions to real estate broker’s fees to removal of properties from the rental market have suspended their efforts. Supporters fell significantly short of the roughly 75,000 voter signatures required to move the ballot question onto the next step in the approval process. Read more about the process here.   While that means MAR’s direct opposition to the ballot question has largely stopped before it could begin, our conversations with a broad swath of like-minded groups will continue as we work to educate stakeholders and the general public about unintended consequences this policy will have for Massachusetts. Keep an eye on the 2026 election for another potential ballot question on this issue.  While the ballot process is ending, the…

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