Code of Massachusetts Regulations 254 CMR - BOARD OF REGISTRATION OF REAL ESTATE BROKERS AND SALESMEN
254 CMR — Board of Registration of Real Estate Brokers and Salesmen
1. Overview
254 CMR is the part of the Massachusetts Code of Regulations that governs the licensure, conduct, education, and discipline of:
Real estate brokers
Real estate salespersons
in the Commonwealth of Massachusetts.
The regulations implement the Massachusetts real estate licensing law, establish professional standards, and ensure consumer protection in real estate transactions.
2. Purpose of 254 CMR
The goals of 254 CMR include:
✔ Protecting the public’s interests in real estate transactions
✔ Ensuring licensees are competent, ethical, and accountable
✔ Defining the scope of acceptable real estate practice
✔ Governing licensing requirements, education, and discipline
✔ Providing due process and enforcement mechanisms
These regulations carry the force of law and are enforced by the Board of Registration of Real Estate Brokers and Salesmen.
3. Structure of 254 CMR
254 CMR is organized into major sections covering:
Definitions and general provisions
Licensing requirements
Business practices and conduct standards
Continuing education rules
Discipline and enforcement procedures
Fees and administrative requirements
4. Key Definitions
Before applying any rules, 254 CMR defines important terms such as:
Broker: A person licensed to operate independently or employ others in real estate sales activities.
Salesperson: A person licensed to work under the supervision of a real estate broker.
Principal broker: A broker responsible for the supervision of salespersons and the compliance of a real estate firm.
Real estate: Any interest in land or buildings.
Agency relationship: The legal duties between licensee and client.
These definitions determine who must be licensed and what activities require a license.
5. Licensing Requirements
A. General Requirements
To be licensed as a broker or salesperson, an applicant must:
Be at least 18 years old
Be of good moral character
Meet educational requirements
Pass the Massachusetts real estate examination
Submit a complete application with required fees
These standards ensure minimum competency and integrity.
B. Education Requirements
Before taking the licensing exam, applicants must complete:
Approved pre‑licensing courses
— Salespersons usually require fewer hours than brokers
— Content covers real estate law, contracts, finance, ethics, and practices
Documentation of course completion is required with the license application.
C. Examination
Applicants must pass the official Massachusetts real estate exam:
A written or computer‑based multiple choice format
Separate sections on law, practice, and math
A passing score is required before licensure
Exam results are valid for a specified period.
D. License Issuance, Renewal & Status
Once licensed:
Licenses are issued for a set term
Licenses must be renewed periodically
Failure to renew timely may require late fees, re‑examination, or reinstatement procedures
License status (active, inactive, suspended, revoked) affects the ability to practice.
6. Business Practices and Professional Conduct
254 CMR sets clear expectations for ethical and legal conduct by brokers and salespersons.
A. Fiduciary Duties
Licensees owe duties to clients, including:
Loyalty
Disclosure
Confidentiality
Reasonable care
Obedience to lawful instructions
Violations of these duties can result in discipline.
B. Required Written Agreements
Before providing certain services, licensees must:
Execute a written agency agreement when acting on behalf of a client
Clearly disclose the type of agency relationship
Provide required statutory agency disclosure forms
This protects consumer understanding and consent.
C. Trust Funds and Accounting
When holding client funds (like deposits), licensees must:
Maintain them in designated trust accounts
Keep accurate records
Avoid commingling with personal funds
Improper handling of money is a serious violation.
D. Advertising and Business Names
Licensees must:
Ensure advertising is truthful
Identify the brokerage’s name
Avoid misleading statements
All advertising must clearly show the broker’s identity.
E. Prohibited Conduct
Examples of prohibited activities include:
Misrepresentation or fraud
Unlicensed practice
Dual agency without disclosure
Commingling funds
False advertising
These acts subject a licensee to discipline.
7. Continuing Education (CE)
To renew a license, most licensees must complete continuing education courses:
Certain number of hours per renewal cycle
Approved subjects (e.g., law updates, ethics)
Records must be maintained and presented upon request
CE helps licensees stay current with changes in law and practice.
8. Disciplinary Proceedings and Enforcement
A. Grounds for Discipline
Licensees may be disciplined for:
Violating 254 CMR rules
Violating the Massachusetts real estate statute
Unethical or dishonest conduct
Incompetence or negligence
Misuse of client funds
These acts put the public at risk and justify Board action.
B. Complaints and Investigation
Complaints are filed with the Board or its designee
Investigations are conducted
Allegations may lead to formal charges
C. Hearings and Due Process
Licensees are entitled to:
Notice of charges
Opportunity for hearing before an administrative law judge
Rights to counsel and to present evidence
Decisions based on the record and law
Due process protects both the public and the licensee’s rights.
D. Sanctions
If violations are proven, sanctions may include:
License suspension
License revocation
Probation
Fines
CE or remedial requirements
Restitution in some cases
The Board imposes sanctions to protect the public and enforce standards.
9. Fees and Administrative Requirements
254 CMR sets amounts for:
Licensing fees
Exam fees
Renewal and reinstatement fees
Late fees
These amounts are part of the regulatory framework and may change periodically.
10. Summary
254 CMR establishes the legal framework for real estate brokers and salespersons in Massachusetts by:
✔ Defining who must be licensed
✔ Setting education and exam requirements
✔ Regulating professional conduct
✔ Requiring continuing education
✔ Providing enforcement and discipline authority
These regulations protect consumers, standardize the industry, and promote ethical real estate practices throughout the Commonwealth.
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