Board of Registration Guidance: All Advertising Must Contain Brokerage in Display

After several years of trying to get the Massachusetts Board of Registration of Brokers and Salespersons to issue guidance in related to long-standing unclear real estate provisions, they finally did so last week. In that guidance, there are needed answers that particularly will change the way real estate is conducted in Massachusetts.

Here are the details:

All Real Estate Advertising Must Display the Brokerage

Under the guidance issued by the Board of Registration, all advertising of real property for sale, rent, or exchange in Massachusetts must contain the name of the real estate brokerage. This means all Twitter posts, Facebook posts, Instagram posts and any other posts on social media about real estate must contain your real estate brokerage within the display itself.

While the National Association of REALTORS® Code of Ethics provides a “one click away” safe harbor provision for digital advertising, the Board of Registration says that “one click away” does not satisfy Massachusetts law.

This means all posts advertising real property for sale, rent, or exchange in Massachusetts by a real estate licensee -- whether it’s a post on your personal page in Facebook group, or on your Facebook business page -- must identify your real estate brokerage on the post itself. Remember, you do not have to pay something for it to be an ad -- a post may be an ad.

Recently, CCIAOR has stepped up its enforcement of this issue. We regularly receive screenshots from fellow REALTORS® showing posts that are not “one click away.” We believe we’ll receive additional complaints now where the brokerage is not disclosed on the ad itself. However, while we’ll continue to notify the party who committed the violation of the law to educate them, we can not enforce real estate license law violations, only issues pertaining to the REALTOR® Code of Ethics. If you would like to pursue a license law violation against a broker or agent, you would need to file a complaint with the Board of Registration of Brokers and Salespersons.

What name do you disclose - the name of your broker or the brokerage itself? The Board of Registration has clarified that you should disclose the name of the licensed entity. If there is a corporate entity then that entity, or its properly and municipally filed d/b/a must be included somewhere conspicuously in that advertisement. If it is a sole proprietorship then the actual Broker’s name (or d/b/a) must be conspicuously placed in the advertisement. Only using the broker of record’s name for a licensed entity runs afoul of this rule.

After several years of trying to get the Massachusetts Board of Registration of Brokers and Salespersons to issue guidance in related to long-standing unclear real estate provisions, they finally did so last week. In that guidance, there are needed answers that particularly will change the way real estate is conducted in Massachusetts.

Other Guidance issued, includes:

Licensees Must Be Displayed in the Office

The Board of Registration clarified that all licensees of brokers and salespersons affiliated with an office must be conspicuously posted in the office of the brokerage of which the licensee is affiliated. While it is a best practice to keep one’s license on their person, the regulation is silent on the issue and does not require it.

Commission Payments of Licensees Need to be Paid to Licensed Real Estate Entities

No real estate broker shall pay a commission to a corporation, LLC, partnership, LLP, association or society unless an officer in that entity is a licensed Massachusetts real estate broker and designated as the broker of record for the entity. The broker of record must be currently licensed at all times, otherwise the license of the entity shall cease. The broker of record shall be in responsible charge of the business entity and personally responsible for the acts, its employees, and agents.

Commissions can be Paid Directly to Formerly Affiliated Licensees by Procuring Cause Broker

All commissions should be paid to the Broker whose agency is the procuring cause of a transaction. Thereafter, the broker distributes the commission in accordance with the contractual

relations with the licensee either still within the brokerage or former affiliated licensees. This addresses the issue that arises when an agent’s license either expires or moves to another broker affiliation after procuring cause, but before the commission is paid.

Limitations on Offer Presentations from Sellers Should be in Writing

Real estate agents are obligated to present all offers that they receive to the seller or the seller's representative. This is provided for in the Board's regulations at 254 CMR 3.11(d). Repeatedly questions come to the Board concerning whether to present offers "substantially" below the asking price.

Moreover, the Board is asked whether additional offers that come in must be presented to the seller once the seller has accepted an offer.

The Board long ago interpreted its own regulation on offers noting that real estate agents are under no licensing law obligation to present additional offers that may be tendered once a seller accepts an offer. Indeed, some might argue that presenting additional offers may place agents in the position of interfering with an ongoing contractual relationship for their own personal gain, which is prohibited by the licensing law. The Board went on to note further that, obviously, the licensing law regulates real estate agents and not the sellers (or buyers) in the transaction.

Consequently, where a seller accepts an offer but instructs his or her agent to present additional offers the agent may present these so called "back-up offers." In this situation the agent is following the instructions of the client and, of course, the back -up offer only can come to fruition where the accepted offer fails to lead to a purchase and sale agreement.

Concerns over whether offers "substantially" below the seller's asking price should be presented at all are answered by the licensing law cited herein. Again, that law requires the presentation of all offers. Naturally, however, the seller is free to set the parameters. Specifically, if a seller instructs his or her agent not to present offers that fall below a certain price the agent can follow those instruction without violating the licensing law. Keep in mind that, as noted before, it is the seller calling the shots. The agent cannot decide on his own to make such judgments. The Board recommends that Seller Agents who receive these instructions get them in writing, as this practice will help to mitigate potential liability.