New 2017 Mandatory Agency Disclosure Form

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:

  1. Make a notation on the form where indicated;
  2. Provide the consumer a copy of the form; and
  3. 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.

New Smoke Detector Regulations Coming December 1st

Smoke detector regulations

October 9th-15th was Fire Prevention Week and this year’s theme was Don’t Wait, Check the Date! Replace Smoke Alarms Every 10 Years. This is also a good time to review the new Fire Prevention Regulations that are set to take effect on December 1st. The new regulations will amend the Fire Code and apply to any newly installed smoke detector. Because this is a change to the Code, homeowners will only be required to replace existing battery powered smoke alarms in pre-1975 buildings when the existing smoke alarm expires or is no longer operable. This may provide Realtors® with a good opportunity to reach out to homeowners and alert them to the coming changes so they can use the proper replacement when their current alarms expire. For additional information, please click here for a copy of the comments MAR provided or here for the Department of Fire Safety website.

2015-2016 Legislative Report | The Wednesday Word

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The 2015-2016 legislative session came to a frantic end just past midnight on July 31st, 2016. The end of the two year formal sessions marks the deadline for any significant legislation to pass the House and Senate and on to the governor’s desk. Due in large part to the advocacy of individual Realtor® members across the commonwealth, the Massachusetts Association of Realtors® can highlight several notable victories:

LEGISLATIVE SUCCESSES

Successfully Opposed Mandatory Energy Audits and Scoring

The Senate’s Energy Diversity Legislation contained language from a stand-alone bill that would have required sellers to perform a Mass Save energy audit prior to listing their home for sale and would also require the seller disclose to any prospective buyer the information in the energy audit. Additionally, the bill called for the Department of Energy Resources to design and implement an energy scoring and labeling system. Mandatory energy audits at or prior to the transfer of property would disrupt sales and would have a negative impact on the Massachusetts housing economy. Specifically, requiring energy efficiency scoring on homes in Massachusetts would have stigmatized our older homes, causing a substantial decline in home value.

 

Although the Senate included these proposals in their legislation, the House did not; therefore, they were subject to the conference committee appointed to negotiate the differences between the bills. More than 2,700 Realtors® took action and contacted their legislators to voice their strong opposition to the auditing and scoring proposals. That outreach, combined with our lobbying and marketing campaigns was successful in convincing the conference committee to leave those provisions out of the final bill, which was approved just hours before session ended.

 

Successfully Opposed Room Occupancy Taxes

The Senate’s economic development bill included provisions from stand-alone bills that would have extended the existing tax on hotels and motels to the rental of private homes. The House did not include the new tax in their economic development bill and it was therefore subject to a conference committee. Realtors® were successful in convincing the conference committee to exclude this new tax from the final bill.

 

Successfully Opposed Anti-Production Zoning Legislation

In May 2016, the Senate advanced a redrafted version of S.122 An Act promoting the planning and development of sustainable communities of by a vote of 23-15. After months of meetings, the Senate Committee on Ways & Means released a bill that was considerably improved from the original version but would still have negatively impacted housing production in Massachusetts at a time when the state is dealing with a severe housing crisis due in large part to a low rate of housing production that has not kept pace with population growth and needs. MAR successfully lobbied the House to not take the bill up before session ended and thereby defeated the proposal.

 

Successfully Opposed Real Estate Transfer Taxes

Legislators filed three different transfer tax proposals that would have created new transfer taxes on the sale of property in Provincetown, Nantucket, and one statewide effort. MAR successfully advocated against these proposals and none of them advanced before Sunday’s deadline.

 

Successfully Opposed Wetland Disclosure Legislation

This legislation would have required real estate licenses to research and disclose to prospective buyers the presence of any wetlands on a property. Such a requirement is far outside the scope of a real estate agent’s licensing and training. This proposal ultimately died in the House without a vote.

 

Successfully Advocated for Passage of Starter Home Legislation

MAR, along with other coalition members, advocated for the passage of legislation to encourage the production of “starter homes.” Communities will be able to voluntarily encourage the production of homes smaller than 1,850 square feet on lots smaller than a quarter acre. This will complement the current success that Chapter 40R has had with mixed-use and multifamily housing with the single family houses that young families are currently seeking. Importantly, this policy targets young families and other entry level buyers who are currently priced out of the market. Single family housing production continues to be far below the level that is required to meet demand, which results in increasing housing prices. The starter home program will help communities meet the demand by encouraging the production of affordable market rate single-family homes.

 

REMAINING ITEMS TO ADDRESS

Mortgage Forgiveness Debt Relief

Legislation that would have exempted debt forgiven during a short sale from a homeowner’s taxable income did not make it to the Governor’s desk before time ran out this session. H. 3770 An Act relative to discharge of indebtedness of principal residence from gross income received a favorable report from the Joint Committee on Revenue but was not taken up by either chamber before the July 31st deadline.

 

Scrap Metal

Both the House and Senate each advanced legislation that would have regulated the sale of scrap metal. Unfortunately, the chambers were unable to reach an agreement on which proposal should pass as the final bill and the proposal died.

 

The H.O.M.E. Bill

S.119 An Act improving housing opportunities and the Massachusetts economy focused on specific areas of Massachusetts zoning law that our members identified as provisions that could be changed to aid the production of much needed workforce and middle class housing. The Joint Committee on Housing recognized the importance of many of the provisions contained in the bill when it included S.119 in a favorable report of H.1111, another housing production bill. This action, unfortunately marked the end of the progress of that specific bill.

Thank you to Realtors® across the Commonwealth for advocating on these issues!

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; and Justin Davidson, Legislative & Regulatory Counsel)

REALTOR® Day on Beacon Hill Recap| The Wednesday Word

13529139_10154887328297506_2101616727979380665_nOn June 21, 2016, over 400 Massachusetts Realtors® traveled to the State House to participate in the 31st annual “Realtor® Day on Beacon Hill.” Realtors® discussed key issues that impact consumers, housing and the economy. The 2016 keynote address was provided by Lieutenant Governor Karyn Polito.

To read the full press release, please visit: https://www.marealtor.com/news/press-releases/2016/06/22/over-400-massachusetts-realtors-converged-on-beacon-hill-to-push-for-land-use-zoning-reforms-and-mortgage-debt-relief

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; and Justin Davidson, Legislative & Regulatory Counsel)

REALTOR® Day on Beacon Hill Briefing: Land Use & Zoning Issues | The Wednesday Word

12802814_10154557034337506_7894024781621756710_nCALL FOR ACTION REMINDER – You should have received a Call for Action from MAR President Annie Blatz urging your State Senators to oppose S.2311. If you have yet to respond to this CFA, please do so immediately!

The 21st Annual REALTOR Day on Beacon Hill is just TWO weeks away! To help you prepare to attend REALTOR® Day on Beacon Hill at the Massachusetts State House on Tuesday, June 21, we continue with Wednesday Word blog posts that discuss the 2015-2016 Legislative Issues. This post gets into the details of the zoning bill that MAR opposes.

ISSUE: Massachusetts is currently dealing with a severe housing crisis due in large part to a low rate of housing production which has not kept pace with population growth and needs. Highlighted below are three examples of how S.2311 would negatively impact housing production in Massachusetts
S.2311 An Act promoting housing and sustainable development
Sponsor:
Senator Wolf (D-Harwich)
Legislative Actions to Date:
Currently before the Senate. Debate scheduled for June 9, 2016.

Development Impact Fees
Issue
: This section would add a new Section 9E to the Zoning Act, which would establish statutory authority for municipalities to impose development impact fees for water, wastewater, stormwater management, solid waste, roads, and parks and recreation.

Why Realtors® Oppose Development Impact Fees: Development impact fees involve complex legal, planning, and economic principles that are not adequately addressed this legislation. Development impact fees increase the cost of new development, especially for residential projects, which will reduce the number of projects that are economically feasible. To the extent that the increased development costs are passed on to consumers in the form of higher prices, impact fees also make housing less affordable. In states that have authorized impact fees by statute, impact fees are the exclusive means for local governments to address capital facilities and services needs to serve growth in communities. By contrast, the proposed legislation would not prevent a municipality from imposing both development impact fees and other burdensome and costly mitigation requirements as a condition of development approval.

Inclusionary Zoning

Issue: Inclusionary zoning would authorize municipalities to impose mandatory inclusionary zoning requirements upon development projects, provided that “municipal affordable housing concessions” (e.g., density, floor area ratio, or building height bonuses) are provided for affected projects.

Why Realtors® Oppose Inclusionary Zoning: By expressly authorizing municipalities to impose mandatory inclusionary requirements, the legislation would unfairly burden developers with the substantial costs of fulfilling society’s obligation to ensure the availability of affordable housing. It would significantly impact the cost of development in these municipalities, and would necessarily increase the cost of market rate housing to the detriment of first-time homebuyers and others looking to move into or remain in the community, who do not qualify for subsidized housing. The burden to provide affordable housing options should either be shared more broadly, or provided on a voluntary basis in response to meaningful incentives consistent with a plan for the creation of such housing.

Minor Subdivisions

Issue: This would establish a “minor subdivision” process that would replace the approval not required (“ANR”) process in cities and towns that choose to adopt a minor subdivision ordinance or bylaw.

Why Realtors® Oppose a Minor Subdivision Process: This opt-in approach would result in a patchwork of subdivision controls across the Commonwealth in which some communities have an ANR process and others have a minor subdivision process. Eliminating the use of ANRs would be significant because land divisions that formerly would have qualified for ANR would now be subject to review in a minor subdivision process, or full subdivision review. This type of review would involve additional time, less certainty, and more burdensome conditions than the current ANR process. While the concept of a minor subdivision on an existing street may be a good one in the abstract, it should not come at the expense of the sole means of expeditious land division under ANR endorsement.

Please be sure to visit the MAR Government Affairs page and Day on the Hill Facebook event for additional information.

2016 MAR President Annie Blatz invites you to REALTOR® Day on Beacon Hill, where REALTORS® will have a chance to network and learn about the key legislative issues that will affect the real estate industry and private property in 2016. Attend the REALTOR® Day on the Hill and make an impact on the legislative process.

REALTOR® Day on Beacon Hill is scheduled for:
Tuesday, June 21st, 2016
10:00 to 11:00AM
Massachusetts State House, Great Hall

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; Justin Davidson, Legislative & Regulatory Counsel; and Christine Howe, Public Policy and Finance Coordinator)

REALTOR® Day on Beacon Hill Briefing: Energy & Environment Issues | The Wednesday Word

12802814_10154557034337506_7894024781621756710_nThe 21st Annual REALTOR Day on Beacon Hill is just three weeks away! To help you prepare to attend REALTOR® Day on Beacon Hill at the Massachusetts State House on Tuesday, June 21, we continue with Wednesday Word blog posts that discuss the 2015-2016 Legislative Issues.

This is the second post in the series and reviews our positions on the following issues: Mandatory Energy Scoring and Wetland Disclosure:

Oppose Mandatory Energy Scoring

S.1761 An Act relative to home energy efficiency

Status: Referred to the Joint Committee on Telecommunications, Utilities & Energy including an extension until July 1.

Why MAR Opposes S.1761: This bill seeks to require sellers or their agents to perform a Mass Save energy audit prior to listing a home for sale and disclose to any prospective buyer the information in the energy audit at the time of the listing. Additionally, the bill commissions the design and implementation of an energy scoring and labeling system. Over and above having an enormous impact on an individual’s right to freely transfer land, such requirements would negatively affect the real estate industry in the Commonwealth. Massachusetts is home to some of the oldest housing stocks in the country and mandatory energy scoring of such older homes would significantly stigmatize and potentially devalue an individual’s largest investment.

Oppose Wetland Disclosure Legislation

H.150 An Act relative to to the disclosure of wetlands on property

Status: Reported favorably by Joint Committee on Consumer Protection & Professional Licensure

Why MAR Opposes H.150: If passed, the proposed legislation would require real estate licensees to disclose to prospective buyers that a property to be sold is in its entirety or in part a wetland. Requiring brokers to investigate and report to buyers on the various wetland restrictions overlay maps, and provisions in each community would exceed the practice of brokerage as defined in Chapter 112.

As with any other condition affecting real property for sale, buyers are free to ask questions of the seller about wetlands on the property, create contingencies in purchase agreements that allow for an inspection for wetland areas, and research information through public records.  The Massachusetts Association of REALTORS believes that these methods of acquiring relevant information are far superior to legislatively mandating that brokers perform services beyond their areas of expertise and training.  For the foregoing reasons, MAR believes H.150 should not advance.

Please be sure to visit the MAR Government Affairs page and Day on the Hill Facebook event for additional information.

2016 MAR President Annie Blatz invites you to REALTOR® Day on Beacon Hill, where REALTORS® will have a chance to network and learn about the key legislative issues that will affect the real estate industry and private property in 2016. Attend the REALTOR® Day on the Hill and make an impact on the legislative process.

REALTOR® Day on Beacon Hill is scheduled for:
Tuesday, June 21st, 2016
10:00 to 11:00AM
Massachusetts State House, Great Hall

We look forward to seeing you there!

(Please note: This blog post was prepared by MAR Legal Staff: Michael McDonagh, General Counsel; Ashley Stolba, Associate Counsel; Justin Davidson, Legislative & Regulatory Counsel; and Christine Howe, Public Policy and Finance Coordinator)