Key Takeaways

  • Net listings are NOT explicitly prohibited in Massachusetts but are strongly discouraged
  • Kickbacks and undisclosed referral fees are prohibited
  • Misrepresentation and fraud can result in license revocation and criminal charges
  • Salespersons cannot operate independently and must work under a licensed broker
  • Blind advertising (without broker identification) is prohibited
Last updated: January 2026

License Law Violations

Understanding prohibited practices is essential for maintaining a valid Massachusetts license.

Prohibited Practices

Misrepresentation and Fraud

TypeDescription
Intentional fraudDeliberate false statements
Negligent misrepresentationCareless false statements
Material omissionFailing to disclose material facts
ConcealmentHiding known defects

Examples of Misrepresentation

ViolationExample
False property claimsMisstating square footage
Hidden defectsConcealing foundation problems
Title issuesNot disclosing liens
Zoning misrepresentationWrong zoning information

Net Listings

Massachusetts Position

StatusDetails
Not explicitly illegalUnlike some states
Strongly discouragedRisk of conflict
Potential violationsCan lead to fraud claims
Best practiceAvoid net listings

Exam Note: While not explicitly banned, net listings create inherent conflicts of interest and are not recommended in Massachusetts.

Kickbacks and Referral Fees

Prohibited

ViolationDescription
Undisclosed paymentsSecret kickbacks
Payments to unlicensedReferral fees to non-licensees
RESPA violationsSettlement service kickbacks
Secret arrangementsHidden compensation

Allowed

PermittedConditions
Disclosed referralsWritten disclosure
Between licenseesProperly documented
Cooperative compensationMLS arrangements

Advertising Violations

Blind Advertising

ViolationRequirement
Blind adsMust include broker name
Agent-only adsMust identify broker
Team adsBroker must be identified

False Advertising

ViolationExample
Bait and switchUnavailable listings
False claimsExaggerated features
Misleading photosAltered images
Price misrepresentationWrong prices

Operating Without Broker

Salesperson Restrictions

Cannot DoMust Do
Collect fees directlyThrough broker
Advertise independentlyInclude broker name
Operate independentlyUnder broker supervision
Open own officeWork from broker office

Unlicensed Activity

ViolationConsequence
Practice without licenseCriminal offense
Expired licenseSame as unlicensed
Inactive licenseCannot practice

Other Violations

Discrimination

TypeConsequence
Fair housing violationsLicense discipline
Chapter 151B violationsMCAD action
Federal violationsHUD enforcement

Failure to Supervise (Brokers)

ResponsibilityConsequence
Agent misconductBroker liable
Training failuresBroker discipline
Office violationsBroker responsible
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Massachusetts License Violations
Test Your Knowledge

Are net listings legal in Massachusetts?

A
B
C
D
Test Your Knowledge

What is a "blind ad" in real estate?

A
B
C
D