Law passed by MA Legislature in June 2004, approved by the Governor

PROVIDING CONSUMER CHOICE OF BROKERAGE RELATIONSHIPS

SECTION 501:  Chapter 112 of the General Laws is amended by inserting after Section ZZ the following::

Section 87ZZ1⁄2. Relationships With Consumers

         A.     This section shall only apply to brokerage services for the intended purchase or sale of land with a building intended for use as one to four residential dwellings or the purchase or sale of land on which a building is intended to be constructed for use as one or two residential dwellings. Nothing herein shall prohibit the relationships described in this section provided that a real estate broker complies with the applicable provisions of paragraphs (B) through (E).

         B.     With informed consent from a buyer, a real estate broker may appoint one or more affiliated licensees to act as a "designated agent" on behalf of the buyer and one or more other affiliated licensees to act as a "designated agent" on behalf of a seller in a potential real estate transaction. With informed consent from a seller, a real estate broker may appoint one or more affiliated licensees to act as a "designated agent" on behalf of the seller and one or more other affiliated licensees to act as a "designated agent" on behalf of a buyer in a potential real estate transaction. Appointment of a designated agent shall not be made unless the consumer has consented, at the commencement of the consumer's agency relationship with the real estate broker, that the agency relationship shall not extend to any other licensee affiliated with the broker and shall be limited to one or more designated licensees. Upon appointment of a designated agent the responsibility to satisfy agency duties owed a buyer or seller shall be solely the responsibility of the designated agent. When a designated agent is appointed, information known or acquired by the designated agent shall not be imputed to the appointing broker or to other affiliated licensees. Notwithstanding the foregoing, licensees shall have an obligation to reveal known material defects in a listed property and other matters required by law. When a real estate broker has appointed designated agents for both buyer and seller, the broker shall be presumed to be a "dual agent" who does not exclusively represent either the buyer or seller. The appointing broker is authorized to assist in negotiations, but shall be neutral with regard to any conflicting interests. Appointment of a designated agent shall not limit the appointing broker's responsibility for breach of duty by the designated agent.

         C.     There is a conclusive presumption that a buyer or seller has given informed consent to a designated agency relationship, including consent to dual agency of the appointing broker, if the buyer or seller signs a disclosure that substantially contains the descriptions in paragraph A of this section. Such disclosure and consent shall be deemed to satisfy the common law. Consent may be given in advance of identifying a property or transaction, but not later than the date a purchase and sale agreement is signed. Thereafter, other designated agents may be substituted or appointed without further consent.

         D.     No real estate broker shall offer subagency when marketing a property for sale without informing the seller about vicarious liability and obtaining signed consent.

         E.      A real estate broker may provide services as a "transactional broker" who does not represent a buyer or seller and who does not owe agency duties.

SECTION 502: On or before July 1, 2005 the Board shall promulgate regulations in accordance with section 501 that prescribe forms for written disclosure, when applicable, by real estate licensees regarding: (1) designated agency; (2) consent to subagency; (3) dual agency; and (4) the relationship of transactional broker.

SECTION 503:  Sections 501 shall become effective on July 1, 2005.