What a Massachusetts Agent Owes You, and the Form

Open house season picks up after the first week of September, and the paperwork that decides your relationship with an agent gets signed before you walk through the first house. The form is short, and it’s worth reading before you sign it. Here’s what 254 CMR 3.00, the professional standards for Massachusetts brokers and salespeople, requires.

The notice, and when it has to reach you

A broker or salesperson has to provide a notice developed and approved by the board that clearly discloses their relationship with you. The timing is the part people miss: at the time of the first personal meeting between you and the licensee for the purpose of discussing a specific property. It isn’t a form you get at the offer or at the closing. They have to ask you to sign and date it, give you the original, and keep a copy for three years from the date on the notice. They also have to sign it themselves, state whether they’re a broker or a salesperson, give their license number and date it.

If you don’t want to sign

You don’t have to. If you decline, the licensee makes a notation of the date the notice was given and that you declined to sign, and keeps that notice for the same three years. Open houses are carved out: no written notice is required for everyone who walks through, provided the broker conspicuously discloses any pre-existing agency relationship by sign, poster, distributed listing literature or property description form. Where that literature is handed out at an open house, the agency disclosure in it has to be more conspicuous than any other written material in it.

What a full agency relationship means

The rules spell out the duties an agent owes a client: loyalty, full disclosure, confidentiality, to account for funds, reasonable care, and obedience to lawful instruction. A designated seller’s agent or a designated buyer’s agent owes that full set to the person they represent.

What changes with a dual agent

For land with a building intended for use as a one to four unit residential dwelling, which is the scope the rule sets for itself, a broker or salesperson may act for both the seller and the prospective buyer, but only with informed written consent from both. The consent form has to say that a dual agent assists both but stays neutral on any conflicting interest between them. Because of that neutrality, the form has to say the dual agent can’t fully satisfy the duties of loyalty, full disclosure, reasonable care and obedience to lawful instructions. Two duties remain: confidentiality of material information, and accounting for funds. The confidentiality duty continues after the brokerage relationship ends.

The exceptions to a dual agent’s confidentiality

Confidential material information may not be disclosed by a dual agent except in four situations the form has to name: if disclosure is expressly authorized, if it’s required by law, if it’s intended to prevent illegal conduct, or if it’s necessary to prosecute a claim against a person represented or to defend a claim against the broker or salesperson.

Designated agency, and the facilitator

For those same one to four unit residential properties, a broker may appoint affiliated licensees to represent the seller and the buyer separately, with written consent from each side after being told what that means. If designated agents from the same brokerage sit on both sides, the appointing broker is the dual agent and stays neutral. Separately, a licensee can work with you as a non-agent facilitator, sometimes called a transaction broker, where no agency relationship exists at all. The notice has to say so, and it’s due at the same moment, the first personal meeting about a specific property. A facilitator owes you honest and accurate presentation of the property, disclosure of known material defects, and accounting for funds. A facilitator does not owe you confidentiality on anything you say. A facilitator relationship can be changed to an agency relationship with the written agreement of the person represented.

What I’d do with this

Ask two questions before you look at anything: what relationship am I signing into today, and what happens if I end up wanting the house your brokerage has listed. Either answer is fine, as long as you know which one you’re getting before you start. If you want me to walk through the form with you before you start touring, send me a note. Diana Kim, REALTOR®, eXp Realty.