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Teams: Advertising, Compensation & Liability

Wednesday, June 27, 2018   (0 Comments)
Posted by: Maria Brogan
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Massachusetts Real Estate Teams 

Teams have become an increasingly popular structure for real estate offices throughout Massachusetts. As with any emerging practice, many Realtors® have been looking for guidance with regard to establishing and maintaining teams. Although a handful of states have implemented specific laws and regulations governing real estate teams, Massachusetts does not have any team-specific laws or regulations at this time. Existing laws and regulations, however, do apply to teams.

What restrictions are there on advertising as a Team?

The same rules that apply to advertising for Brokers and individual Realtors®

apply to teams. The Realtor® Code of Ethics, Article 12, covers advertising extensively. When advertising as a team, it may be easy to forget the basis rules of advertising:

  1. The team cannot advertise only their name – the broker affiliation must appear on all advertisements;
  2. The Realtor® firm name must appear in a reasonable and readily apparent manner in all advertisements; and

  3. All communications from the Team must be honest and truthful and present a true picture.


In addition to the requirements in the Realtor® Code of Ethics, state regulations require that all advertisements include the name of the real estate broker or brokerage.

It is critical to remember that Teams are not brokerages and should not act as such. It must be clear to other Realtors®, prospective clients, and the general public that the Team is a subdivision of a brokerage and not an independent company.


How is a Team paid?

Due to the nature of the Team structure, a Team may often appear to be an independent company; however, the Team leader is not necessarily a broker, and, as such, payments may not be made to the Team, but must be made to the broker and distributed as per the brokerage’s policy. All salespersons that are part of a team must be affiliated with a broker. Additionally, the Team may not operate its own escrow account or hold client funds in any manner. The funds must be paid into an account maintained by the broker.

The key thing to remember with running a Team is that a Team is not a brokerage and should not be held out as one. Failure to adhere to these rules and regulations could result in an investigation by the Board of Registration, an ethics complaint, or even a 93A lawsuit from a deceived client.


Source: Massachusetts Association of REALTORS® Legal Dept.