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After several years of discussion, the Boston City Council passed legislation regulating short term rentals in the City of Boston. The primary effect of the proposed Ordinance would be to establish a registration system for all short-term rentals and to impose limitations on such rentals in the City of Boston.

A “Short-Term Rental” is defined as the use of a residential unit by a person for less than 28 consecutive dates. Also, licensed rooming houses, licensed bed and breakfasts, units offered under certain circumstances for person receiving medical treatment and their families, and short-term business/institutional stays of at least ten days, are all excluded from this Ordinance.

The Committee on Government Operations made several changes to the bill including allowing owner adjacent units to be rented for 365 days a year.  Under a prior version of the bill owner adjacent bills were capped at 120 days a year. The bill also added a requirement that the Commissioner of ISD report on the effectiveness of the new law beginning on June 30, 2019. Three amendments to the bill were also added including a sunset provision allowing residential units with executed leases for short term rentals to operate through September of 2019.   Mayor Walsh has indicated he plans to sign the bill into law. 

Please stay tuned for a member update from GBREB regarding the specific provisions of the law once it is signed by Mayor Walsh. 

Short Term Rental Bill Passes In Boston
The GBAR Brokerage Counseling Line has received an increasing number of calls from members requesting information about setting up a Team and what are the Massachusetts regulations that cover Real Estate Teams within a brokerage.  Other questions received, which are equally pertinent include advertising and worker classification issues by Teams and what rules or laws must be followed.  

REALTORS® are subject not only to the licensure rules of the Commonwealth of Massachusetts, but also by The REALTOR® Code of Ethics and any local statutory or regulatory rules.  Although a handful of states have implemented specific laws and regulations governing real estate teams, the Commonwealth of Massachusetts has not yet legislated any team-specific laws or regulations.
Even though no current laws or regulations surrounding Real Estate Teams in Massachusetts have been codified, there several rules (laws, regulations and Articles of the Code of Ethics) governing REALTORS® licensed in the Commonwealth that are of particular importance to teams.

When working in or managing a team, it may be easy to run afoul of these rules * :

1) Real estate salespersons must be associated with a broker (254 CMR 3.00);
2) Real estate commission fees may only be paid to a broker (254 CMR 3.00);
3) Salespersons are prohibited from advertising in their own name and all advertisements must include the name of the broker (254 CMR 3.00);
4) REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (REALTOR® Code of Ethics, Art. 12);
5) The name of the REALTOR® firm must be disclosed in a reasonable and readily apparent manner in all advertisements (REALTOR® Code of Ethics, Art. 12, Standard of Practice 12-5);
6) Salespersons and brokers other than the Brokerage firm are prohibited from holding client funds, (254 CMR 3.00);
7) Agency disclosure issues including undisclosed dual agency (254 CMR 3.00);  and
8) Non-licensed team members performing real estate activities reserved for licensees only (MGL c. 112, § 87RR).

*The following is meant to be representative, but is not an exhaustive list of all rules (as defined) pertaining to real estate Teams.  Consultation with your legal advisor is recommended prior to setting up any real estate Team


“Broker” when defined above means the brokerage firm with which the Team is affiliated.  Any commissionable transactions will always belong to the Brokerage firm, not the team as the Brokerage is the entity with which the public is engaging and because the team is not a separately licensed brokerage firm.  It is also important that all advertising and communications with the public include, in a prominent manner, the name and contact information of the Brokerage firm, in addition to that of the Team.

Although the broker of record for a brokerage firm may have different policies and procedures for Teams separate from agents under their direct supervision and training, a broker of record may share, but cannot delegate its responsibility for supervision solely to a Real Estate Team or Team Leader.  Ultimate responsibility for the action of all sales agents and broker-associates affiliated with the brokerage firm lies with the broker of record. Ultimately, “the buck stops here” with the broker of record, as he or she is both liable and responsible for the actions of all agents and team members affiliated with the brokerage.

In summary, if running a Team, remember one key thing: You are not a brokerage, so do not hold yourself 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 disgruntled or potentially deceived client.
For more information, please see a selected list of articles and resources below, or contact William G. Mullen III, Esq, GBAR Legal Counsel & Director of Risk Management at 617-399-7842.

Resources:
State Statutes and Regulations for Unlicensed Assistants (NAR)
Legal Issues for Teams (NAR) 
How to create a winning real estate team, (REALTOR® Magazine/Daily Real Estate News, July 29, 2016)
7 reasons your real estate team will fail, (REALTOR® Magazine, Mar. 2016)
Teams: Important Considerations Regarding Real Estate Teams in Massachusetts
MassHousing recently announced a $2,500 closing cost credit for Massachusetts veterans who use their ‘Operation Welcome Home’ loan program to buy a home. This savings in in addition to the program’s offer to finance up to 97 percent of the purchase price of a single-family home or condominium.

“Closing costs can run into the thousands of dollars, and by helping our veterans reduce those costs, we will make homeownership more affordable for them,” said MassHousing Executive Director Chrystal Kornegay in a press release. “When combined with MassHousing’s existing financing options, which offer military members and Gold Star families down payment assistance and up to 100-percent financing, this new closing cost credit will give the men and women who serve our country substantially more buying power.”

Relatedly, the National Associations of REATLORS® (NAR) recently released its 2018 Veterans & Active Military Home Buyers and Sellers Profile, which evaluates the differences of active-service and veteran home buyers and sellers compared to those who have never served in the military. Among the many statistics in the report, it indicates that among recent home buyers, 17 percent were veterans and 2 percent were active-military. Half of the active-service military buyers were first-time buyers and 68 percent are first-time sellers. 

According to a release from NAR, “Despite lower median incomes ($84,000), more stable job security and no down-payment financing options give aspiring military homeowners an advantage over their civilian peers. Fifty-six percent of active duty and 41 percent of veterans put no money down when buying a home, compared to 7 percent of non-military.

For more information view this release and infographic, or download the full report here.
 
Veterans Eligible for Closing Cost Credit from MassHousing
On Monday, June 18, the National Association of REALTORS® (NAR) will launch a Call for Action (CFA) to push Congress to reauthorize the National Flood Insurance Program (NFIP) before it lapses on July 31.  Flood insurance is required for a mortgage in more than 20,000 communities nationwide and millions of small business and home owners depend on this program for their flood insurance, and a lapse in the program can impact nearly 40,000 home sales per month.

Among NAR’s policy standing on the issue, it supports:
Reauthorizing a long term and gradually strengthening NFIP;
Encouraging the development of private market options to offer comparable flood insurance coverage at lower cost than NFIP;
Providing federal assistance to high-risk property owners, including guaranteed loans, grants and buyouts in order to build to higher standards and keep insurance rates affordable;
More granularly pricing NFIP policies to better reflect the property's specific risk; and
Improving flood map accuracy so fewer property owners have to file expensive appeals.

Watch your email for this important CFA from NAR on Monday, June 18. It only takes a minute to let your member of Congress and Senators know how important flood insurance is for the market. 

NAR to Issue Call for Action to Extend Flood Insurance
GBAR is looking for volunteers for two new task forces; a Technology Task Force and a REALTORS® Political Action (RPAC) Fundraising Task Force. The formation of both groups was approved by the GBAR Board of Directors at their most recent meeting.

The Technology Task Force will be responsible for evaluating business tools and technologies for agents and brokers and providing recommendations and reports to the existing Membership Committee for perspective on new benefits and resources to provide to members. If you have a background or prior experience in the technology field or like to explore and analyze new technologies, please consider volunteering for this task force.

Our RPAC Fundraising Task Force will focus on promoting member awareness and understanding of RPAC and will help organize activities and event fundraisers to help GBAR achieve our RPAC fundraising and participation goals. 

If you have interest in either or both task forces please contact Susan Melanson at smelanson@gbreb.com
 
Seeking Volunteers for Technology & RPAC Fundraising Task Forces
All GBAR members are invited to the Annual Awards & Networking Breakfast, next Friday, June 22 at the Venezia Restaurant in Boston from 9:30 a.m. to 12:30 p.m. This event honors and celebrates the professional achievements and community accomplishment of our members and has strong emphasis on networking with peers and industry affiliates, and truly sitting back and enjoying the day.
In addition to the REALTOR® of the Year award, we also present the Andrew F. Hickey Distinguished Service Award, Good Neighbor Award, REALTOR® Spirit Award, and the Affiliate Member of the Year Award. Click here to learn more about each award

This event is a great way to get out of the office environment and kick off summer with your team. Tables of 10 and individual tickets are available. We hope to see you there!

Join Us to Honor Members at the GBAR Awards Breakfast
 

Education & Events

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Real Estate Safety Matters: Safe Business = Smart Business
Jun 27, 2018
GBAR Member Service & Training Center
68 Main Street
Reading, MA
GBAR New Member Orientation (Natick, MA)
Jun 28, 2018
Hampton Inn
319 Speen Street
Natick, MA
Rentals The Right Way!
Jul 10, 2018
GBAR Member Service & Training Center
68 Main Street
Reading, MA
GBAR New Member Orientation (Dedham, MA)
Jul 12, 2018
Holiday Inn
55 Ariadne Road
Dedham, MA
REALTOUR - Southern Norfolk Region (Randolph, MA)
Jul 16, 2018
Lantana
43 Scanlon Dr
Randolph, MA
REALTOUR - Metro Boston Region (Waltham, MA)
Jul 17, 2018
Hilton Garden Inn Boston-Waltham
450 Totten Pond Rd,
Waltham, MA
REALTOUR - Metro West Region (Natick, MA)
Jul 18, 2018
Crowne Plaza
1360 Worcester St.
Natick, MA
YPN Country Club Night
Jul 19, 2018
Framingham Country Club
16 Gates Street
Framingham, MA
Lunch & Learn: Cyber Security Awareness
Jul 20, 2018
GBAR Training Center
68 Main St.
Reading, MA
 

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Real Estate Safety Matters: Safe Business = Smart Business
GBAR Member Service & Training Center
10:30am
 
GBAR New Member Orientation (Natick, MA)
Hampton Inn
 
Rentals The Right Way!
GBAR Member Service & Training Center
8:00am
 
GBAR New Member Orientation (Dedham, MA)
Holiday Inn
 
REALTOUR - Southern Norfolk Region (Randolph, MA)
Lantana
9:30am
 
REALTOUR - Metro Boston Region (Waltham, MA)
Hilton Garden Inn Boston-Waltham
9:30am