Advisory

Advisory Board Policies and Guidelines (Real Estate Brokers and Salespersons)

Date: 12/11/2017
Referenced Sources: Division of Occupational Licensure

Table of Contents

Policy Statement on Signatories to Escrow Accounts

The Massachusetts Board of Registration of Brokers and Salespersons (“the” Board”) approved this policy statement on February 27, 2019. The purpose of this policy statement is to clarify the Board’s interpretation of signatories to escrow accounts pursuant to 252 CMR 3.10(a) which provides:

“(10) Client Funds

(a) Escrow Accounts. Unless otherwise agreed to in writing by the parties in transactions involving the sale, purchase, renting or exchange of real property, all money of whatever kind and nature paid over to a real estate broker to be held during the pendency of a transaction shall be immediately deposited in a bank escrow account and such broker shall be responsible for such money until the transaction is either consummated or terminated, at which time a proper account and distribution of such money shall be made. An escrow account is an account where the broker deposits and maintains the money of other parties in a real estate transaction and such broker has no claim to such money. An escrow account may be interest or non-interest bearing but where it is interest bearing the broker must make a proper account of such interest at either the consummation or termination of the transaction….”

The Board has long interpreted 262 CMR 3.10 as allowing for only Brokers, as defined by G.L. c. 112, §87PP, to keep, maintain and be signatories to escrow accounts. Only the Broker of Record and Brokers employed by or affiliated with that Broker of Record, may be signatories on Escrow Accounts. Salespersons and non-licensees are strictly prohibited from being signatories on Escrow Accounts.

Advisory / Apartment Rentals

Recently concerns over broker conduct in renting apartments to an impermissible number of unrelated individuals were directed to the Board.

Public health and safety concerns related to the over-crowding of residences have resulted in a number of legal restrictions that brokers should be aware of when leasing apartments.

The Board advises that real estate brokers and salesmen become familiar with the following laws concerning rentals to unrelated individuals. These provisions are Massachusetts General Laws chapter 140, section 22, 105 Code of Massachusetts Regulations 410 (the State Sanitary Code), 780 Code of Massachusetts 310 (the State Building Code) and the local Boston zoning code, cited as Article 2, Section 2-1(19) and Article 2A - Definition of Family, Boston Zoning Code.

The Board suggests that you obtain copies of the above-cited statutory and regulatory provisions for a more comprehensive understanding of Boston's occupancy restrictions and building restrictions.

You can access the state statutes on the Internet at www.mass.gov/legis. You can also contact the Regulation's Division of the Massachusetts Secretary of State at (617) 727-2831 for copies of the regulatory codes. Questions regarding the Boston Zoning Code concerning maximum apartment occupancy should be directed to the City of Boston, Division of Inspectional Services at (617) 635-5322. You can access the zoning code online at www.cityofboston.gov.

If you have questions in particular rental situations you may want to consult with the City and State authorities noted herein and seek legal advice. The Board thanks you for your attention to this matter.

Determination of Good Moral Character Compliance for Initial Broker or Salesperson

Referenced Sources:
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