Free Practice Questions for Real Estate Massachusetts-Real-Estate-Salesperson Exam

In Massachusetts, licensee relationship disclosure is governed by M.G.L. c. 112, § 87AAA and 254 CMR 3.00. State law requires that real estate agents disclose their agency relationship to prospective buyers and sellers at the first personal meeting to discuss a specific property. This requirement is primarily intended for residential transactions involving one- to four-family properties.

This disclosure clarifies whether the agent represents the seller, the buyer, or is functioning in another capacity (such as a facilitator). It ensures that consumers are fully informed about where the licensee’s loyalty lies before substantive discussions occur.

The law does not require agency disclosure for mere inquiries (phone or internet), for general real estate discussions, or for commercial property listings. The specific trigger is the first personal meeting to discuss a specific single-family property.

When a real estate license is suspended in Massachusetts, the licensee must surrender their license to the Board of Registration immediately. Suspension means the licensee is temporarily prohibited from engaging in real estate activities.

The licensee cannot continue to work, make referrals, or conduct any real estate transactions during the suspension period. They must follow the suspension terms set by the Board, and the license will be reinstated after the suspension period has ended, provided they comply with any further requirements. The licensee may appeal the decision, but this must be done separately from the immediate surrender requirement.

The correct current answer is C, the party who hired the broker or salesperson. This is a major Massachusetts law change that makes older practice questions on rental broker fees obsolete.

Effective August 1, 2025, a landlord who hires a broker to market and lease an apartment is responsible for paying that broker. The landlord cannot require the tenant to pay the landlord ' s broker fee as a condition of obtaining the tenancy.

A tenant can still independently engage a broker or salesperson to represent the tenant in locating and negotiating for housing. In that case, the tenant who hired the broker can be responsible for the agreed fee.

Massachusetts guidance further explains that a broker cannot represent both landlord and tenant in a residential rental transaction under this newer framework.

Study Guide Reference: Property Management — Massachusetts Residential Rental Broker Fees.

The correct answer is B, Buyer. Massachusetts Board buyer-agency guidance explicitly recognizes that compensation alone does not create an agency relationship.

The broker ' s representation is determined by the agency agreement, disclosures, informed consent, and conduct—not simply by which party ultimately funds the broker ' s compensation.

Thus, a buyer ' s broker can remain the fiduciary representative of the buyer even where compensation is paid through a seller concession or another lawful transaction structure.

The broker continues to owe the buyer obligations such as loyalty, confidentiality, disclosure, reasonable care, accountability, and obedience to lawful instructions.

Payment by the seller does not automatically create dual agency. Dual representation requires the separate legal consent process described by Massachusetts agency law.

Study Guide Reference: Agency — Buyer Agency and Compensation.

Under M.G.L. c. 186, § 15B, landlords in Massachusetts must pay interest on both the security deposit and the last month ' s rent if these funds are held for more than one year. The interest must be paid annually and credited to the tenant’s account, unless the tenant and landlord have a written agreement stating otherwise.

The first month ' s rent is not subject to interest requirements. The landlord must hold the security deposit in a separate, interest-bearing account, and the interest accrues for the benefit of the tenant.

Therefore, the landlord must pay interest on both the security deposit and last month ' s rent.

Massachusetts law (M.G.L. c. 112, §§ 221–226, Home Inspector Licensing Act) regulates the relationship between real estate agents and home inspectors. To prevent conflicts of interest and protect consumers, a real estate broker or salesperson may not directly recommend one specific home inspector. Instead, they are required to provide buyers with the official list of licensed home inspectors prepared by the Commonwealth of Massachusetts.

This rule ensures impartiality and prevents brokers from steering buyers to inspectors who might be biased. Giving out business cards or providing a shortened list of inspectors violates this regulation. The buyer is free to choose any licensed inspector from the state-approved list.

The correct answer is C, the broker. Massachusetts Board consumer guidance expressly distinguishes brokers from salespersons regarding transaction funds.

A broker is responsible for accepting and escrowing funds such as earnest-money deposits and for supervising transactions performed by affiliated salespersons. A salesperson has no authority or control over escrow funds.

This is a central reason Massachusetts requires salespersons to operate under broker supervision rather than independently. The broker bears responsibility for compliance with escrow-account rules, segregation, recordkeeping, and proper final disposition of money.

A salesperson who receives a deposit during the course of a transaction must promptly transmit the funds according to the brokerage ' s lawful procedures rather than opening or controlling a separate escrow account.

Study Guide Reference: Massachusetts License Law — Broker Escrow Responsibility and Salesperson Limitations.

The Massachusetts Fair Housing Law (M.G.L. c. 151B) prohibits discrimination in housing based on race, color, religion, sex, sexual orientation, gender identity, national origin, age, ancestry, veteran status, familial status, disability, or receipt of public assistance. Asking about a tenant’s place of birth could reveal information about national origin or ancestry, which are protected classes under both state and federal fair housing law.

By contrast, landlords and brokers are legally permitted to verify income and occupation to determine financial qualifications, and Massachusetts law also permits certain criminal history checks in compliance with state and federal guidelines. However, questioning applicants about their place of birth is directly discriminatory and unlawful.

The correct answer is C. Massachusetts Board guidance interprets 254 CMR 3.10 as allowing brokers—not salespersons or unlicensed employees—to maintain and exercise authority over brokerage escrow accounts.

The Board recognizes that modern firms may have several affiliated brokers, so it permits appropriately affiliated brokers within the brokerage to serve as account signato ries. What it does not permit is handing escrow-account control to an affiliated salesperson, accountant, bookkeeper, or unlicensed employee.

This allocation of authority reflects the broker ' s regulatory responsibility for safeguarding funds belonging to consumers. Earnest-money deposits and other transaction funds must remain segregated from business funds and properly accounted for.

A salesperson may receive a deposit during a transaction but must transmit it to the employing broker according to applicable procedures rather than assuming independent control of the escrow account.

Study Guide Reference: Massachusetts License Law — Escrow Accounts and Broker Responsibility.

The correct answer is B, a properly designated escrow account. Massachusetts imposes strict rules on the handling of transaction funds belonging to others.

A broker who receives deposits in connection with a transaction generally must place them in an appropriately established escrow account unless the parties have made another legally valid written arrangement. The money must remain separate from the broker ' s personal or operating funds.

Placing client money into the brokerage ' s ordinary operating account creates improper commingling. Using the money for the broker ' s personal or business purposes can constitute the much more serious act of conversion.

A salesperson who receives deposit money does not maintain an independent escrow account; the salesperson must promptly transmit the funds to the responsible employing broker for lawful handling.

The ultimate right to the money depends on the contract and outcome of the transaction. Deposit funds do not automatically become the seller ' s property merely because an offer was accepted.

Study Guide Reference: Massachusetts License Law — 254 CMR Professional Standards; Escrow Deposits, Segregation and Accounting.