Notes From the Legal Hotline: November 2022
Q: If a transaction falls apart and there is a dispute over the release of escrow funds, can the seller place the property back on the market and go under contract with a new buyer? A: Maybe. It is a best practice to fully resolve any outstanding issues with the failed transaction prior to placing the property back on market and proceeding with a subsequent purchaser. Unfortunately, not all situations are able to be resolved in a timely manner. If this is the case, the seller should always be advised to consult with their legal counsel to determine whether they
Notes From the Legal Hotline: October 2022
Q: Can a brokerage operate as a designated agency on a per-transaction basis? A: No, because of the way agency relationships in real estate transactions work, the type of agency a brokerage practices must be consistent for all transactions. A brokerage may elect to transition from traditional agency to designated agency, or vice versa, as an office policy, but the type of agency practiced at any given time must be consistent amongst all transactions. A brokerage may not switch the agency it practices from one transaction to the next. In a “traditional agency” brokerage, each licensee in the office has
Notes From the Legal Hotline: September 2022
Q: The financing contingency date in the contract has passed and the buyer has not informed us of whether they received a commitment – is the deal dead? A: Not necessarily. The passing of any contingency date without an extension or notification of withdrawal by the buyer simply means that the contingency is no longer available to the buyer, but the deal may proceed. If the buyer has not obtained an extension and then is unable to obtain financing to purchase the property, the buyer may terminate the transaction, however, any deposit funds may be subject to forfeiture as liquidated
Notes From the Legal Hotline: August 2022
Q: Should a buyer’s agent be checking permits for their clients? A: No. A buyer’s agent’s job is to ensure that their client’s interests are best served throughout the transaction. While this may include advising the client regarding potential issues with outstanding permits or unpermitted work on the property, the agent should not be the one researching this issue. Our recommendation is that REALTORS® always be the source of the source. A buyer’s agent should be advising their clients to inquire about any work that was done on the property that may have required permits and assisting the client with
Notes From the Legal Hotline: July 2022
Q: I have a tenant who is offering to pay 6 months of rent upfront – is that allowed? A: No. For tenancies greater than 100 days in duration, the provisions of the Security Deposit statute apply. The statute prohibits a lessor from requiring a tenant to pay any amount in excess of: First month’s rent Last month’s rent calculated at the same rate as the first month’s rent Security deposit equal to the first month’s rent The purchase and installation cost for a new lock and key. On occasion, a prospective tenant may offer to pay rent in advance.
Notes From the Legal Hotline: June 2022
Q: What do REALTORS® need to know to avoid antitrust liability? A: The best way to avoid antitrust liability is to ensure that all business decisions are made independently within the brokerage. The potential for antitrust liability arises any time two or more competitors discuss their business practices. REALTORS® must always be alert to discussions that focus on commission rates, pricing structures, listing policies, or marketing practices of other brokerages. If a discussion becomes troubling, immediately suggest a change of topic, or remove oneself from the conversation. Within the real estate arena, we most often hear of antitrust issues arising
Notes From the Legal Hotline: May 2022
Q: If I have two buyer clients interested in submitting an offer on the same property, am I a dual agent? A: No, dual agency occurs when one licensee represents both sides of the transaction. An agent may represent multiple buyers interested in the same property without entering into a dual agency relationship. Although license law does not require clients to consent or receive notice if this situation arises, the MAR Buyer Agency Agreement does include language that acknowledges that it is a possibility that the agent may represent multiple buyers submitting offers on the same property. Given the current
Notes From the Legal Hotline: April 2022
Q: There has been a lot of discussion about website accessibility lately. Is there anything that I need to do? A: Over the last several years there have been a few notable cases across the country addressing the issue of website accessibility under the Americans with Disabilities Act (ADA), but the Department of Justice (DOJ) was slow to provide specific guidance or regulation on this topic. On March 18, 2022, the DOJ published new guidance on website accessibility, offering some much-needed clarity in this arena. As the DOJ did not provide a regulation with detailed standards for accessibility, businesses will
Notes from the Legal Hotline: March 2022
Q: If I select “Designated Agency” on the Massachusetts Mandatory Licensee-Consumer Relationship Disclosure, are there any other forms I need to provide my client to establish designated agency? A: Yes, although selecting Designated Agency on the Relationship Disclosure is necessary to identify the agency capacity in which you are working, it does not establish the required consent to designated agency, nor does it provide notice that it is a designated transaction. Consent to designated agency may be established through an exclusive representation agreement, such as the MAR Exclusive Right to Sell Listing Agreement or Exclusive Buyer Agency Agreement, or through
Notes From the Legal Hotline: February 2022
Q: A salesperson in my office has set up an LLC; can I pay their commission to the LLC? A: No. A broker may only pay fees and commissions from real estate transactions to an affiliated salesperson, broker, or a business entity with a corporate broker license. Commissions may not be paid to an unlicensed LLC. To take advantage of the benefits available to corporations, the LLC, or other corporate entity, must first be licensed with the Board of Registration of Real Estate Brokers and Salespersons. Any business entity seeking a corporate broker’s license must have an officer or partner