An interesting assortment of questions that the MAR legal hotline fielded this month. Check it out!
Q: The Listing Broker is asking for a copy of my Buyer Agreement with my client, am I required to share it?
A: No. Buyer agreements contain private information and business practices, similar to listing agreements. They are not meant to be enforced by other members in the field. The existence of a buyer agreement does not change the terms of compensation offered in the listing agreement or the purchase contracts between the buyer and seller. If there is a discrepancy between what was agreed to on an underlying fee agreement and what services were provided or compensation paid, that would be resolved by the parties to that contract. Compensation details for all brokers involved will be documented in the Purchase and Sale Agreement and the settlement statement.
Q: How do you determine if a tenant has a child under six without asking for age on the application?
A: To avoid potential fair housing discrimination, housing applications do not require the age of occupants to be identified. Usually, the only permissible indication of age is acknowledging an occupant over 18. Once the applicant is approved, landlords will be informed if a child under 6 will occupy the property through the lease agreement. See, for example, Paragraph 8 of MAR’s Standard Residential Lease. This ensures compliance with lead safety regulations without violating the fair housing rights of potential tenants based on familial status. For more information, see The Massachusetts Lead Law.
Q: As a REALTOR benefiting from the release in the NAR Settlement, how should we proceed when MLSs still allow a reflection of compensation?
A: The NAR Settlement releases NAR members from claims by those home sellers that listed a home on an MLS that paid a commission from December 17, 2016 up until the class notice date of August 17, 2024. Importantly, the NAR Settlement does NOT protect a member if they choose to engage in the same or similar practices that were at issue after August 17, 2024. Additionally, the NAR practice changes are meant to address the practices that were at issue to prevent future liability if they comply with the changes.
Therefore, it is MAR’s recommendation that REALTORS should not indicate compensation at all on any MLS (including advertising that compensation is offered but not reflected on the MLS) and if given the option, the field should be skipped entirely. For more information, see: The NAR Settlement and How it Affects You
Q: Can a landlord hold a security deposit in a CD?
A: No. Massachusetts law requires security deposits to be held in a separate, interest-bearing escrow account. CDs have restrictions on withdrawals and potential penalties, making them non-compliant with the law. Deposits must be in an account that is not subject to claims by the landlord’s creditors and can be transferred to a new owner. If the deposit is held for more than a year, tenants must receive interest at either 5% or the rate paid by the bank if it is lower. For more information, see Massachusetts Security Deposit Law.
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Services provided through the Massachusetts Association of REALTORS® is intended for informational purposes and does not constitute legal advice, nor does it establish an attorney-client relationship. The Massachusetts Association of REALTORS®, by providing this service, assumes no actual or implied responsibility for any improper use of responses to questions through this service. The Massachusetts Association of REALTORS® will not be legally responsible for any potential misrepresentations or errors made by providing this service. For more information regarding these topics authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at legalhotline@marealtor.com.