Real Estate License Complaint in Massachusetts: Board Process and Appeals
Massachusetts License Defense Attorney · Professional License Defense
Boston real estate moves fast. Condos in the Back Bay and the Seaport, Beacon Hill townhouses, multi-families in Jamaica Plain and Dorchester, and a large rental market all generate deposits, disclosures, and disputes. When a buyer, seller, landlord or tenant believes a broker or salesperson did something wrong, a complaint can reach the Board of Registration of Real Estate Brokers and Salespersons.
This guide explains the rules the Board enforces, the issues behind most complaints, and how a complaint moves from investigation to hearing and court review. The most important point is simple. If the Board asks for your response, respond on time. Get a lawyer promptly so the response is careful, complete and filed by the deadline.
The Board and the rules it enforces
The Board has five members, three licensed brokers and two public members, appointed by the Governor (G.L. c. 13, § 54). It serves within the Division of Occupational Licensure (DOL). The licensing statute is G.L. c. 112, §§ 87PP–87DDD½. The Board’s regulations are at 254 CMR, and the conduct rules for licensees are the Professional Standards of Practice in 254 CMR 3.00. Those regulations, not a trade association’s code of ethics, are what the Board enforces.
The Board may investigate any broker or salesperson, and it must investigate on the verified written complaint of an aggrieved person. It may suspend, revoke or refuse to renew a license when it finds that the licensee, among other things (G.L. c. 112, § 87AAA):
- knowingly made a substantial misrepresentation;
- acted for more than one party to a transaction without the knowledge and consent of all of them;
- failed, within a reasonable time, to account for or remit money belonging to others;
- commingled a principal’s money or property with his or her own;
- accepted, gave or charged an undisclosed commission, rebate or profit on expenditures for a principal;
- failed to give both buyer and seller a copy of the purchase and sale agreement; or
- accepted a net listing.
The Board may also act on a criminal conviction that shows a lack of good moral character. When the Massachusetts Commission Against Discrimination makes a final finding that a licensee committed unlawful discrimination in the course of the business, the Board must suspend the license for 60 days. The suspension is 90 days for a second violation within two years.
Common complaint issues in Boston
Deposits and escrow accounts
Unless the parties agree otherwise in writing, money paid to a broker to be held during a transaction must be deposited immediately in a bank escrow account. The broker is responsible for it until the deal closes or ends, and then must make a proper accounting and distribution. Brokers must keep detailed escrow records and keep copies of every check deposited and withdrawn for three years. These records are subject to inspection by the Board. A salesperson may not hold client funds and must turn deposits over to the employing broker immediately (254 CMR 3.00(10)). Escrow problems are especially serious because they can involve two separate statutory grounds at once: commingling and failure to account.
Misrepresentation and advertising
A buyer who discovers water damage, an illegal unit, or a zoning problem after closing may claim the agent knew and said nothing, or said something false. The statute targets knowing, substantial misrepresentation. Brokers also may not advertise in any way that is false or misleading (254 CMR 3.00(9)). Your file matters here: listing sheets, disclosure forms, inspection reports, and emails or texts about the property’s condition.
Agency disclosure and dual agency
At the first personal meeting to discuss a specific property, a licensee must give a prospective buyer or seller the Board’s agency disclosure notice, ask the person to sign it, and keep a copy for three years (254 CMR 3.00(13)(a)). For one-to-four family residential transactions, a licensee may act as a dual agent only with the informed written consent of both buyer and seller, on the form prescribed by the Board (G.L. c. 112, § 87AAA¾; 254 CMR 3.00(13)(b)). Missing or incomplete paperwork can by itself support a complaint.
Conflicts of interest and offers
If you or a relative has a personal financial interest in a property, you must disclose it in writing to all parties and get written acknowledgment. All offers must be conveyed to the owner promptly. No licensee may advise against using an attorney in a real estate transaction (254 CMR 3.00(11)–(12)).
Other obligations that become complaints
Licensees must report any criminal conviction to the Board within 30 days. They may not discriminate in providing services, practice on an expired license, or take on work beyond their competence (254 CMR 3.00(14)). A salesperson must be engaged by a licensed broker and may not run his or her own real estate business (254 CMR 3.00(6)).
How a complaint moves through the process
1. Intake and investigation
Complaints against DOL board licensees go to the Division, which may open a complaint and investigate in coordination with the Board. The Board has broad investigative powers. It can summon witnesses and require the production of books and papers, and it can ask the Superior Court to enforce a summons (G.L. c. 112, § 87BBB).
2. Your response, and the deadline that actually matters
You may have read that you have “10 days to notify the Board that you have hired an attorney.” No statute or regulation we have found creates that rule. No regulation requires it, but many Board letters ask you to tell the Board within 10 days whether you will be represented by an attorney. If your letter does, follow it. What matters is the deadline in the Board’s request. If you ignore it, the Board decides what to do next without hearing your side. Call a lawyer as soon as the letter arrives. Your attorney will contact the investigator, organize your transaction file and escrow records, and prepare a written response that is filed on time. Do not try to settle the complaint directly with the complainant. The Board can proceed regardless.
3. Investigative conference and settlement
Boards may hold investigative conferences before an Order to Show Cause issues, and may meet to discuss a negotiated settlement. Those meetings are not open meetings (G.L. c. 112, § 65C). A DOL board may discipline a licensee after a consent agreement or after an opportunity for an adjudicatory hearing under Chapter 30A (G.L. c. 112, § 61).
4. Order to Show Cause and hearing
No license may be suspended, revoked or refused renewal except after a hearing. You must receive at least ten days’ written notice stating the grounds, and you have the right to appear personally and with counsel, cross-examine witnesses, and present evidence (G.L. c. 112, § 87BBB). Formal proceedings usually begin with an Order to Show Cause. Under the Standard Adjudicatory Rules, unless a statute or agency rule provides otherwise, an answer is due within 21 days of receipt (801 CMR 1.01(6)(d)). The notice must say which set of rules applies. An attorney appears by filing a written notice of appearance (801 CMR 1.01(3)(b)). Licensees who do not answer risk a decision by default. Board decisions must be in writing, with reasons, and must be made by at least a majority of the Board (G.L. c. 112, § 87BBB).
5. Possible outcomes
Section 87AAA allows suspension, revocation, or refusal to renew. Under G.L. c. 112, § 61, a DOL board may also place a license on probation, reprimand or censure, assess a civil administrative penalty of up to $100 for a first violation, $500 for a second, $1,500 for a third, and $2,500 for a fourth or later violation, and require additional education or supervised practice. Revocation is not necessarily the end. The Board may reconsider its decisions, reinstate a suspended license, and reissue a revoked one (§ 87AAA). A licensee whose license is suspended or revoked must deliver it to the Board within seven days of receiving notice (254 CMR 3.00(14)(i)).
6. Appeal to the Superior Court, on a short deadline
The real estate statute has its own appeal provision. A person aggrieved by a Board decision, made after a hearing, that suspends, revokes or refuses to renew a license may appeal to the Superior Court. The appeal may be filed in the county where the person lives or has a principal place of business, or in Suffolk County. It must be filed within 20 days after receiving notice of the decision, and filing it does not stay the suspension or revocation (G.L. c. 112, § 87BBB(C)). Twenty days goes quickly. Call counsel the day a decision arrives.
What to do if you receive a complaint
- Note the deadline in the Board’s letter and call a lawyer the same day.
- Do not ignore the Board. Respond on time, through counsel.
- Pull the complete file: agency disclosure and dual agency forms, listing and offer documents, the purchase and sale agreement, disclosures, and all communications.
- Reconcile the escrow account for the transaction with your attorney before anything is produced.
- Tell your managing broker if you are a salesperson, and check your brokerage’s policies.
- Do not contact the complainant to argue or negotiate.
Frequently Asked Questions
Does the Board enforce a code of ethics?
The Board enforces the statute, G.L. c. 112, §§ 87PP–87DDD½, and its regulations, especially the Professional Standards of Practice in 254 CMR 3.00. A trade association’s code of ethics is a separate set of rules for that association’s members.
Do I have 10 days to tell the Board I hired a lawyer?
We have found no statute or regulation that creates that rule. No regulation requires it, but many Board letters ask you to tell the Board within 10 days whether you will be represented by an attorney. If your letter does, follow it. Follow the deadline in the Board’s letter, and have your attorney prepare and file the response on time. If you receive an Order to Show Cause, the answer under the formal adjudicatory rules is generally due within 21 days of receipt.
What are the rules for dual agency in Massachusetts?
For one-to-four family residential transactions, a licensee may act as a dual agent only with the informed written consent of both buyer and seller, on the form prescribed by the Board, signed and dated. Acting for more than one party without the knowledge and consent of all of them is a ground for discipline.
What happens if escrow funds are mishandled?
Commingling client money and failing to account for or remit money belonging to others are both grounds for suspension or revocation. Deposits must go immediately into a bank escrow account unless the parties agree otherwise in writing, and brokers must keep detailed records.
How do I appeal a Board decision?
A decision made after a hearing that suspends, revokes or refuses to renew a license may be appealed to the Superior Court within 20 days after you receive notice of it. The appeal does not stay the Board’s decision while it is pending.
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About the Author
Richard Alan Gaudet, Esq. is an experienced administrative law practitioner in Massachusetts who represents licensed professionals in board investigations, responses and hearings. He has been a respiratory therapist since 2005 and a registered nurse since 2010. He earned his J.D. in 2020 and was admitted to the Massachusetts bar in January 2021 and to the U.S. District Court for the District of Massachusetts in 2021. He is a member of the Massachusetts Bar Association. Law Offices of Richard Alan Gaudet, LLC, 35 Village Rd., Ste 100, Middleton, MA 01949. Reach him at 978-273-8337 or rgaudet@gaudetlawoffice.com.
ABOUT THIS ARTICLE
This article was prepared by a Massachusetts attorney and is provided solely for general informational and educational purposes directed to members of the general public. It does not constitute legal advice and does not create an attorney-client relationship. The law applicable to any particular situation depends on the specific facts and circumstances of that matter. Readers are encouraged to seek the advice of a licensed Massachusetts attorney before taking any action.