All Realtors® should be aware that the Board of Registration for Real Estate Brokers and Salespersons has issued a NEW Mandatory Agency Disclosure Form. The form’s official title is the Massachusetts Mandatory Real Estate Licensee – Consumer Relationship Disclosure. The form is designed to provide the same kinds of disclosures to consumers while clarifying and simplifying some aspects of the old form. We put together a Q&A below to help you understand the changes. You should start using the new form immediately.
Q: Why did the Board of Registration issue a new agency disclosure form?
A: the Board of Registration wanted to make the form easier to use while still providing the required agency disclosures for the customers and clients that Realtors work with. To do this, the board convened a subcommittee made up of experts including practitioners, attorneys, and real estate instructors to look at the current form and suggest changes.
Q: What is different in the new form?
A: The form accomplishes the same objectives as the old form, but some of the language in the form is new and the layout is different. Similar to the old form, the new form states that it is not a contract, but now that text is bold and underlined.
The form still requires licensees to select either “Seller’s agent,” “Buyer’s agent,” or “Facilitator.” You will notice that the section below this has changed on the new form. Now licensees will need to check a box indicating if their office is working as a designated agency office or a non-designated agency office. This is intended to alert the consumer (buyer or seller) whether other licensees associated with your office will also be the consumer’s agent. (Because facilitators are not agents of either the buyer or seller, this second check off does not apply to them.)
Once you have disclosed that you are a seller’s agent or a buyer’s agent, you will then need to check off the box that describes your office policy.
- If the policy of your office is only to offer “single agency” your relationship between the brokerage firm and the consumer (buyer or seller) will be the same for every agent in your office.
- If the policy of your office is to appoint individual associates as “designated agents” for the seller and to appoint other individual associates as “designated agents” for the buyer, then you should check the Designated Agency box, disclosing that the agency relationship is limited to the designated individuals.
Remember, before an agent may be appointed for the opposing party in a Designated Agency scenario, written consent must be obtained from the buyer and seller. Consent may be obtained, in advance, in either a listing agreement or in a buyer agency agreement, or in a later consent form. Finally, this consumer relationship disclosure form, by itself, is not a consent to designated agency.
The new form has also corrected a deficiency in the old form regarding situations where a licensee works in a designated agency firm and wants to show his/her listing to a customer. In those instances, there was not a way to disclose this to the customer on the old disclosure form.
Q: I am in the middle of a transaction and have already used the old form. Do I need my client to complete a new form? Also, what happens if someone uses the old form now that the new form is in effect?
If you have used the old form while it was still in effect, you have met the requirements to disclose your agency relationship with customers and clients and so a new form is not needed. For any future usage, the new form is currently in effect and should be used with all customers and clients moving forward. Copies of the form can be downloaded from the Board of Registration’s website and is currently being made available in all MAR electronic forms platforms. MAR has been informed that the Board is not planning to discipline licensees for using the wrong form in the near future. The Board of Registration will hold their next meeting on March 21st and we will share any updates on this information at that time.
Q: Where can I find a copy of the new form?
A: The form is now available on the Board of Registration’s website http://www.mass.gov/ocabr/licensee/dpl-boards/re/ under the section entitled “application and forms.” MAR is currently working to include the new form in all electronic forms platforms as well as paper versions.
Q: When does the form become effective?
A: The form is currently in effect and you should use it when having a personal meeting to discuss a specific property with a client or customer.
Q: How long must my brokerage firm keep a copy of the executed brokerage disclosure form?
A: Three years. This requirement has not changed.
Q: Has anything changed regarding the timing of when I need to use the form?
A: No, this has not changed. Regardless of your relationship with the buyer or seller, all licensed brokers and salespersons must present the brokerage disclosure form at the first personal meeting to discuss a specific property.
Q: What if the consumer refuses to sign the form?
A: The process if a consumer refuses to sign the form remains the same:
- Make a notation on the form where indicated;
- Provide the consumer a copy of the form; and
- Keep the other copy for your file.
Q: Why isn’t there a box to check as a dual agent?
A: Dual agency arises when there is a conflict caused by representing both the buyer and seller. By itself, disclosure of an agency relationship with either the buyer or seller cannot be a conflict. Before a licensee may act as a “dual agent,” written consent must be signed by both the buyer and seller. Consent may be obtained before it is known for certain that dual representation will actually occur (either in a listing agreement or a buyer agency agreement) or once it becomes known that the licensee represents both the seller and prospective buyer. If consent was obtained before it was known that a dual agency situation has arisen, a notice must be given to the buyer and seller to advise them that dual agency has actually occurred.
Q: If I disclose that I work in a designated agency brokerage office, does that mean I am precluded from showing a buyer into my client’s listing?
A: No, you may work with the buyer in your capacity as a designated seller’s agent. The unrepresented buyer is your customer. If you have a separate agreement to work with that buyer as a designated buyer’s agent, you must obtain signed consent from both the buyer and the seller to work as a “dual agent.” As a dual agent, you cannot advocate the interest of one client if doing so conflicts with the interest of your other client. You must be neutral as to any conflict.