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
| Type | Description |
|---|---|
| Intentional fraud | Deliberate false statements |
| Negligent misrepresentation | Careless false statements |
| Material omission | Failing to disclose material facts |
| Concealment | Hiding known defects |
Examples of Misrepresentation
| Violation | Example |
|---|---|
| False property claims | Misstating square footage |
| Hidden defects | Concealing foundation problems |
| Title issues | Not disclosing liens |
| Zoning misrepresentation | Wrong zoning information |
Net Listings
Massachusetts Position
| Status | Details |
|---|---|
| Not explicitly illegal | Unlike some states |
| Strongly discouraged | Risk of conflict |
| Potential violations | Can lead to fraud claims |
| Best practice | Avoid 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
| Violation | Description |
|---|---|
| Undisclosed payments | Secret kickbacks |
| Payments to unlicensed | Referral fees to non-licensees |
| RESPA violations | Settlement service kickbacks |
| Secret arrangements | Hidden compensation |
Allowed
| Permitted | Conditions |
|---|---|
| Disclosed referrals | Written disclosure |
| Between licensees | Properly documented |
| Cooperative compensation | MLS arrangements |
Advertising Violations
Blind Advertising
| Violation | Requirement |
|---|---|
| Blind ads | Must include broker name |
| Agent-only ads | Must identify broker |
| Team ads | Broker must be identified |
False Advertising
| Violation | Example |
|---|---|
| Bait and switch | Unavailable listings |
| False claims | Exaggerated features |
| Misleading photos | Altered images |
| Price misrepresentation | Wrong prices |
Operating Without Broker
Salesperson Restrictions
| Cannot Do | Must Do |
|---|---|
| Collect fees directly | Through broker |
| Advertise independently | Include broker name |
| Operate independently | Under broker supervision |
| Open own office | Work from broker office |
Unlicensed Activity
| Violation | Consequence |
|---|---|
| Practice without license | Criminal offense |
| Expired license | Same as unlicensed |
| Inactive license | Cannot practice |
Other Violations
Discrimination
| Type | Consequence |
|---|---|
| Fair housing violations | License discipline |
| Chapter 151B violations | MCAD action |
| Federal violations | HUD enforcement |
Failure to Supervise (Brokers)
| Responsibility | Consequence |
|---|---|
| Agent misconduct | Broker liable |
| Training failures | Broker discipline |
| Office violations | Broker responsible |
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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