Board of Real Estate Brokers and Salespersons policies and guidelines

This statement was approved by the Massachusetts Board of Registration of Brokers and Salespersons on Feb. 27, 2019. Its purpose is to clarify the board’s interpretation of which individuals are allowed to keep, maintain, and be signatories to escrow accounts.

An escrow account is an account where a broker deposits and maintains money of other individuals in a real estate transaction. The broker has no claim to this money. 

An escrow account may or may not include interest. If there is interest, the broker must make sure to note the interest at either the completion or termination of the transaction.

According to 252 CMR 3.10(a), all money paid to a real estate broker during the sale, renting, and exchange of property must be deposited in a bank escrow account — unless otherwise agreed to in writing by the individuals involved. The broker is responsible for the money until the transaction is either complete or terminated, at which point the money must be properly distributed. 

According to the board's interpretation of 262 CMR 3.10, only brokers (as defined by G.L. c. 112, §87PP) may 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 not allowed to be signatories on escrow accounts.

Public health and safety concerns related to overcrowding have led to several legal restrictions brokers should be aware of when leasing apartments. Real estate brokers and salespeople should familiarize themselves with the following laws concerning rentals to unrelated individuals:

• Massachusetts General Laws, Chapter 140, Section 22 
• 105 Code of Massachusetts Regulations 410 (State Sanitary Code)
• 780 Code of Massachusetts 310 (State Building Code)
• Local Boston zoning code, cited as Article 2, Section 2-1(19) and Article 2A - Definition of Family, Boston Zoning Code. 

You can access the statutes on the state legislature’s website. You can also contact the Regulations Division of the Massachusetts Secretary of State at (617) 727-2831 for copies of the regulatory codes. 

Questions about the Boston Zoning Code and maximum apartment occupancy should be directed to the City of Boston, Division of Inspectional Services at (617) 635-5322. You can also access the zoning code on the city’s website.

If you have questions related to particular rental situations, you may want to consult with city and state authorities and/or seek legal advice.

Board staff consults specific guidelines to decide whether a license will be denied due to criminal matters. These guidelines are outlined in detail in the Board of Real Estate Brokers and Salespersons CORI Policy. Certain crimes – such as murder, rape, sexual assault, aggravated assault, and kidnapping – will result in an automatic disqualification of license without board review.

CORI review procedure

The licensee will be notified and allowed to be present during the board’s executive decision-making session. When conducting an applicant’s CORI review, the board will keep the following in mind:

• The requirements of public protection

• Amount of time passed since conviction

• Age of licensee when the offense was committed

• Seriousness and circumstances of the offense

• Number of offenses

• Whether the licensee has pending charges

• Relevant rehabilitation (or lack of it)

• False or outdated information submitted by the licensee while applying for a license

• Any other relevant information

Licensees who believe their CORI is inaccurate may be allowed to place their application on hold for up to 6 months while attempting to correct the CORI.

After deciding to deny a license, all denials must be issued in writing as soon as possible. Denial letters must describe the factual and legal reasons behind the denial. Unless the denial is permanent, denial letters should specify when an individual may file a new application for licensure.

The denial must also outline the individual’s right to request a limited hearing on the board's reason(s) for the denial. This includes requiring the individual to file, in writing, a request for a hearing within 14 days of the date of the denial letter. If the individual does this, they are entitled to a hearing. If they do not, they should be provided with a notice that their request is denied and notify them of their rights.