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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…

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…

 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…

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…

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…

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 property with the consent of the buyer. Cooperating brokers, however, must still refrain from using listing photographs without the consent of the listing broker. Q: Can a landlord ask a prospective tenant if they need a de-leaded apartment? A: No,…

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 REALTOR® is obligated to provide a truthful answer. If the answer is unknown, or additional information is requested, REALTORS® should direct the buyer to an appropriate resource. Q: Can a tenant be responsible for paying the water bill? A: Yes,…

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). While the Status Change Form may be used to demonstrate a “meeting of the minds” between the listing agent and the seller(s), any modifications to a contract should always be clearly made in writing, signed, and dated by all the…

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 be a violation of the statute. Additionally, the collection of prepaid rent deprives the tenant of the ability to withhold rent which they may be legally entitled to do. Otherwise qualified tenants may offer to hold the funds in a…

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 the animal is not obvious or is otherwise unknown. HUD has specifically noted that such documentation from the internet is generally insufficient to satisfy the reliable documentation requirement. It is important to note that this does not disqualify reliable documentation…