Real Estate Updated Massachusetts-Real-Estate-Salesperson Exam Questions and Answers by renesmae

Under Massachusetts real estate license law, a broker must disclose any personal interest, or the interest of an immediate family member, in a transaction to all parties. This is a matter of fiduciary duty and is explicitly required under 254 CMR 3.00.

Failing to disclose that the seller is the broker’s cousin constitutes a conflict of interest and violates the duty of loyalty, disclosure, and honesty to the client (the buyer). While it is not illegal to buy or sell property involving relatives, the relationship must always be made known to avoid misrepresentation or concealment of material facts.

Therefore, the broker is in violation because the familial relationship was not disclosed.

The correct answer is B. A three-year lease falls within the class of agreements that ordinarily requires sufficient written evidence under the Statute of Frauds. An oral agree ment calling for a three-year lease therefore generally cannot be enforced as a three-year term in the same manner as a properly documented written lease, absent some applicable legal exception.

The important distinction is between void and unenforceable. A Statute of Frauds problem does not necessarily mean that no relationship or legal rights can ever arise. For example, occupancy and acceptance of rent can potentially create another form of tenancy depending on the circumstances. But the originally asserted three-year term ordinarily cannot simply be enforced on the basis of an oral promise.

Massachusetts Board contract curriculum requires candidates to understand the Statute of Frauds, leases, contract validity classifications, and the distinction between oral and written agreements. It also specifically recognizes that some brokerage listing agreements can be oral—a separate rule that should not be confused with a multi-year lease.

Study Guide Reference: Contracts — Statute of Frauds; Leases; Enforceable versus Unenforceable Agreements.

In Massachusetts, licensee relationship disclosure is governed by M.G.L. c. 112, § 87AAA and 254 CMR 3.00. State law requires that real estate agents disclose their agency relationship to prospective buyers and sellers at the first personal meeting to discuss a specific property. This requirement is primarily intended for residential transactions involving one- to four-family properties.

This disclosure clarifies whether the agent represents the seller, the buyer, or is functioning in another capacity (such as a facilitator). It ensures that consumers are fully informed about where the licensee’s loyalty lies before substantive discussions occur.

The law does not require agency disclosure for mere inquiries (phone or internet), for general real estate discussions, or for commercial property listings. The specific trigger is the first personal meeting to discuss a specific single-family property.

The correct answer is C. Massachusetts Board guidance interprets 254 CMR 3.10 as allowing brokers—not salespersons or unlicensed employees—to maintain and exercise authority over brokerage escrow accounts.

The Board recognizes that modern firms may have several affiliated brokers, so it permits appropriately affiliated brokers within the brokerage to serve as account signato ries. What it does not permit is handing escrow-account control to an affiliated salesperson, accountant, bookkeeper, or unlicensed employee.

This allocation of authority reflects the broker ' s regulatory responsibility for safeguarding funds belonging to consumers. Earnest-money deposits and other transaction funds must remain segregated from business funds and properly accounted for.

A salesperson may receive a deposit during a transaction but must transmit it to the employing broker according to applicable procedures rather than assuming independent control of the escrow account.

Study Guide Reference: Massachusetts License Law — Escrow Accounts and Broker Responsibility.