Bay State Realtor® Magazine – May/June 2020 by BayStateRealtor

THE

LEGAL ISSUE

LEGAL SOCIAL MEDIA RISKS FOR REALTORS® p 4 ENFORCEABILITY OF NONCOMPETITION AND NON-SOLICITATION AGREEMENTS p10 DON'T FALL FOR PHISHY STORIES – PROTECTING YOURSELF FROM CYBER CRIMINALS p18

THE

LEGAL ISSUE

LEGAL SOCIAL MEDIA RISKS FOR REALTORS® p 4 ENFORCEABILITY OF NONCOMPETITION AND NON-SOLICITATION AGREEMENTS p10 DON'T FALL FOR PHISHY STORIES – PROTECTING YOURSELF FROM CYBER CRIMINALS p18

Inside this issue of Bay State REALTOR®

More from MAR » www.marealtor.com/news

2 Message from the CEO Stay Unified REAL ESTATE @ WORK 4 3 Investments in Opportunity Zones Zack Ryan 4 Real Social Legal Social Media Risks for Realtors® Teah Hopper

6 COVID-19 Updates MAR Legal Team 7 Lead-Based Paint in Homes MAR Legal Team 8 Fair Housing Concerns: Steering 9 Five Questions With Katie Johnson

» Massachusetts Association of Realtors® Facebook

LEGAL NOTES 10 10

Legal Realtor® Enforceability of Noncompetition and Non-Solicitation Agreements Stephen M. Perry, ESQ.

12 Notes from the MAR Legal Hotline 14 Driving Homelessness Away Sabrina Lapointe

17 Private Property Rights and the 'Taking Clause' Justin Davidson

FEATURE 18 18 Don't Fall for Phishy Stories: Protecting Yourself from Cyber Criminals Michael Krone

» Twitter.com/MARealtors

MEMBER VOICES 20 20 President's Message Moving Forward Kurt Thompson 21 22

Infographic How a Bill Becomes a Law 35th Annual Margaret C. Carlson Realtor® Day on Beacon Hill Calendar; Realtor® Party Training; Calendar; Participate in the 2020 Census; Have You Subscribed To Our Sidebar Podcast Yet?

24 Member Benefit Spotlight Sabrina Lapointe 25 Enhancing Commercial Aspects of MLSPIN Paul Yorkis ADVERTISER DIRECTORY MLS PIN...... ........................................IFC RMS................................................5 Osterman Propane..................................7 Weichert.......................................16

A to Z Moving & Storage.......................22 MassHousing.....................................24 Pearl Insurance......................................24 MARAnnualConference & Trade Show....BC

May/June 2020

Message from the CEO THE OFFICIAL PUBLICATION OF THE MASSACHUSETTS ASSOCIATION OF REALTORS®

Stay Unified

MAY/JUNE 2020 VOL. 67, NO.3

BY THERESA HATTON

PRESIDENT

For those of you who haven’t met me yet, my name is Theresa Hatton I am the CEO/EVP here at the Massachusetts Association of Realtors®. I began my role as MAR’s 7th fulltime association executive on June 3, 2019. I will be taking over this column as a bimonthly ‘Message From The CEO’ to shed light on important issues going on within the industry as well as share some inspiring tidbits along the way. I want each and every member of this association to know that their voice matters. If we all work towards a collective goal, we will accomplish great things we can be proud of. It is my goal to help strengthen MAR and build on its reputation of success. All of us have been impacted by the COVID-19 outbreak. In a lot of ways, society as we know it came to an eerie halt. For many, this outbreak caused a change in the way we do our jobs. With health and safety as the utmost priorities, many transactions have been delayed or cancelled. This type of national shut down is something I have never seen or experienced in my lifetime, as I’m sure is the case with many of you. What I do know about this whole pandemic is that it has taught me a lot about how to stand with others in times of uncertainty. Reacting to something of this magnitude has been challenging. Times have been very uncertain and we don’t know what tomorrow will bring. However, this is making the association stronger to react to anything that may happen in the future. Please know that MAR and NAR alike are working to give relief to all those impacted by COVID-19. The many federal stimulus and relief packages passed provide small business loans and unemployment for independent contractors. Our advocacy and communications teams have been working to be proactive and reactive to the many changes in regulations at the Federal, State, and local levels. For all information related to COVID-19 go to www.marcovid19.com This has been a moving target for us all as we navigate through this new way of operating. One thing is certain: we will all come out of this stronger!

Kurt Thompson, CBR, CRS, LMC PRESIDENT-ELECT

Stephen Medeiros, CRS, SRES, e-Pro TREASURER

Dawn Ruffini, CHMS, CNS IMMEDIATE PAST PRESIDENT

Anne Meczywor, ARS CBR, CRS, AHWD CEO

Theresa Hatton, RCE, CAE PRODUCTION COORDINATOR

Sabrina Lapointe ART DIRECTOR

Sharon Womble ADVERTISING SALES

Julie Lewis (508) 612-4841 (Publication No. 703-610) ISSN: 0891-5539 Published by the Massachusetts Association of Realtors®, Mailing Address: 333 Wyman Street, Waltham, MA 02451-1139 (781) 890-3700 The Bay State REALTOR® magazine is published bi-monthly (Jan./Feb., March/April, May/June, July/August, Sept./Oct., Nov./Dec.), as a member service. Subscriptions are $2.50 per year for members and are paid out of member dues. Non-member subscription rate is $40 per year. The comments and opinions expressed herein are those of the authors and do not necessarily reflect the opinions, views, or policies of the Massachusetts Association of Realtors®. Copyright 2020. All rights reserved. Periodical postage paid at Boston, MA. POSTMASTER: Send address changes to: Massachusetts Association of Realtors® 333 Wyman Street, Waltham, MA 02451-1139

Bay State REALTOR®

INVESTMENTS IN OPPORTUNITY ZONES BY ZACH RYAN – Political Affairs Coordinator

The Opportunity Zone Program, created by the U.S. Tax Cut and Jobs Act of 2017, is meant to provide incentives for investment in low income communities. An Opportunity Zone is a designated area, in which individuals can gain favorable tax treatment on their capital gains by investing those funds through a privately created Qualified Opportunity Fund (QOF). QOFs are managed entirely in the private market with the administration of the funds falling solely on the shoulders of fund managers rather than government agencies or investors.

How Opportunity Zones are Established The Governors of each state can nominate up to twentyfive percent of their state’s low-income census tracts (LICs) to be designated as Opportunity Zones (OZ). In Massachusetts there are 138 designated opportunity zones, including 137 lowincome communities, plus 1 non-low-income contiguous tract. Forty-eight percent of the tracts are in “gateway cities,” which are municipalities with populations of 35,000 to 250,000, with median household incomes below the Massachusetts average, and average education attainment levels of a bachelor’s degree or above lower than the Commonwealth’s average. Rural communities make up eighteen percent of the communities with designated tracts.

Opportunity Zone Incentive Options There are three incentive options for investors, which accumulate over the life of the investment. All three are federal incentives, and are non-competitive, so all qualified investors may claim them. 1. Temporary Deferral: Investors may defer capital gains on income reinvested into QOFs. The deferred gain must be recognized when the investor exits the fund, or on Dec. 31, 2026, whichever comes earlier. 2. Step-Up in Basis: Investors can exclude 10 percent capital gains tax for money invested in 2020 or 2021 and there are no exclusions for later investments. 3. Permanent Exclusion of Fund Gains: If an investor keeps their investment in a QOF for 10 years, any gains from the QOF are exempt from taxation.

Opportunity Zones in Massachusetts Governor Baker and his administration recommend communities ensure that local permitting and zoning is conducive to the kinds of investments they aim to attract. In addition, communities may want to think about how to market the OZ to private investors within Massachusetts and beyond. This program comes with little oversight and bundles well with other programs, which is good in Massachusetts because of the housing shortage. Some of the additional programs the Commonwealth has that complement OZ development, such as MassWorks, Housing Development

incentive Program (HDIP), and the Smart Growth Zoning Overlay District Act. Multi-family developments have accounted for 65% of all opportunity zone transactions in Massachusetts since the beginning of 2018, according to Reonomy data. Multifamily transactions were nearly 67% of all Fall River transactions in the same time frame and the figure was nearly 73% in New Bedford. The Wall Street Journal also reported that based on data for the first three quarters of 2018, property sales in the zones have spiked 80 percent, and land prices have risen around 50 percent over the same period.

Are the Rewards Worth the Risks? While the benefits of OZs sound impressive, many investors and fund managers believe that the risk to stay in an OZ for over 5 years in order to get the minimum gain is not worth the reward. Some potential investors are concerned over the uncertainty of what a fund would invest in and the long 10-year period in order to leverage the maximum gain of tax-free returns. One of the biggest risks is the potential for a fund to become disqualified so that the investor no longer merits the tax break. One such disqualifier is the potential for an OZ property undergo foreclosure. This would shift ownership of the property away from the QOF, meaning the QOF no longer meets the requirement of holding an OZ property. In summary, a troubled project can’t be recapitalized in a way that shifts equity ownership away from the QOF. It is hard to read about Opportunity Zones without hearing both benefits and risks, and this can lead to some confusion. The National Association of Realtors®, CPAs, and many tax consultants are great resources to use in order to gain more information about Opportunity Zones.

Updates to Filing Deadlines If an investor who sold a capital asset planned to roll over the capital asset gain into an Opportunity Fund and the 180-day deadline to do so falls between April 1 and July 15, they can now make the investment as late as July 15. May/June 2020

real estate @ work

N E W S , T R E N D S , & T O O L S F O R R E A LT O R S ®

{real social}

Legal Social Media Risks for Realtors® BY TEAH HOPPER Social media is a revolutionary, life-changing tool with so many benefits. In just a few years it has completely changed the way that we communicate, interact, keep in touch with old friends and connect with new ones. Social media is great in business and in real estate. It provides easy exposure, increases your reach and audience, offers a source of referrals and it is free! But social media can be risky. Technology is outpacing the law and the rules are shades of gray rather than black and white.

Be Aware of these Risks We have all heard the stories. The smart, well-respected business professional that should have known better, but made a bonehead mistake on Facebook, costing them their job and self-dignity. It all seems like common sense, but people keep doing it. The thing about social media is that when you make a mistake – it is there for the world to see. Even when you delete it – it doesn’t go away. When it comes to real estate, there are some serious legal risks to be considered. Here are a few of which you should be aware: 1. Code of Ethics – As a Realtor®, you are subject to the Code of Ethics, and the Code applies to the digital world. Review the Code with your social media strategy in mind. 2. Online Advertising – All the rules that apply to traditional advertising apply to online advertising. Remember this the next time you create a Facebook campaign. 3. Plagiarism – If you copy or share someone else’s work (whether ideas, text or images) be sure to give them credit and properly attribute the author. 4. Fair Housing – Be careful that what you post doesn’t violate Fair Housing laws or it could be interpreted as discrimination. In the world of 140 characters it is much easier to miscommunicate. 5. Anti-trust – Any activity that amounts to an unreasonable restraint of competition is a violation of antitrust law. 6. Disclosure Issues – Be careful not to share or disclose private or confidential information entrusted to you as a Realtor®. Oversharing is a true temptation of social media. 7. Defamation – Everyone is braver behind a keyboard. Making an insulting or libelous statement or comment online is still considered defamation. 8. Intellectual Property Infringement (including copyright and trademark issues and DMCA) - When you post or share anything online that is protected by 4

Bay State REALTOR®

copyright or trademark without the permission of the creator, you could be guilty of copyright infringement. When it comes to avoiding risks, it is best to play it safe. If you are unsure how it could be interpreted, don’t post it.

Do’s and Don’ts Here are some guiding principles to keep in mind when writing your own personal social media policy and to help you keep it legal.

Do: Be yourself. Share what you are passionate about and what makes you uniquely you. This is how people will connect with you. People do business with you because they like you and have something in common with you. At the same time, allow others to be who they are. Be thoughtful and have a filter. ■ Be transparent. Be you but be forthcoming about your job, connections, associations, and ties. If you do mess up, own up to it. ■ Comment cautiously. It’s not just your posts that other people see but the comments you make on others posts are viewable by anyone and show up in feeds. Offer solid points and represent yourself in discussions – without arguing, disagreeing with, or insulting others. Don’t risk looking like a bully to win an online argument. Your reputation and your brand is worth more than that. ■ Be open-minded to others' points of view. Again, it is social media – if you are going to engage, be open and accepting of others ideas and realize that not everyone thinks like you. This is the point – to share and learn from one another. You don’t have to agree, but do be respectful. ■ Educate buyers and sellers of the risks involved. You are not the only one at risk. Remind your clients that posting details about prices and purchases could be detrimental. ■ Be neutral on controversial topics. Politics, religion, race, ■

and other sensitive topics are considered taboo so be cautious when discussing them on public platforms. When the conversation gets heated, it is best to stay away. Remember, it all comes back to you, your brand, and your business. Don’t give your clients a reason to not use you or refer you. ■ Maintain your profiles proactively. Use a current profile picture that looks like you and be sure your bio represents who you are. Your online profiles are often the first impression someone has of you. And we all know the importance of first impressions.

Don't: ■

■

Don’t friend everyone. Be selective about who you accept as a friend or connect with. When you determine your purpose for each page, think about your audience. If you intend to keep your personal page personal, then don’t accept requests from people you don’t know. Manage your online world wisely. Don’t spam or sell. Be human and be real. Use social media to connect with people and form relationships. Posting nothing but automated listings will just annoy people. Being too “salesy” is a turn off too. People use social media for the human interaction – not to be sold to. Don’t vent. Do not use social media as your personal journal.

Do not vent about clients, coworkers, or other agents. Don’t talk about clients or deals. You may be excited about that deal you just closed but don’t risk ruining it by oversharing on social. Even if you are vague about the details, be very cautious. ■ Don’t assume your friends, family, or clients have the same views as you on religion, politics, or social issues. We all know what assuming does. ■ Don’t assume anything on social media is private – this includes private groups and direct messages. It is way too easy for someone to take a screen shot of your “behind closed doors” comment and use it against you. Be cautious of anything you put in writing. ■ Don’t let social media take the place of face-to-face interaction. Your online presence should augment who you are in person. Use it to connect but don’t let it take the place of the real thing. Social media is fun, exciting, and, when used correctly, rewarding. However, it takes work to make it work. Put the time in up front. Practice strategy and discipline and be aware of the risks. Remember that you are representing yourself, your business, and the real estate industry as a whole. Represent well! ■

May/June 2020

COVID-19 Updates BY THE MAR LEGAL TEAM The COVID-19 global pandemic has caused massive disruptions to the real estate industry. MAR has been working diligently throughout the crisis to ensure that our members have the latest information and the resources they need to successfully navigate through these uncertain times. MAR has been advocating on behalf of Realtors® and producing much needed forms updates. Three new forms have been added to our library that specifically address COVID-19-related transactional issues.

Smoke and Carbon Monoxide Inspection Addendum The inability to obtain a smoke certificate during the pandemic does not mean transactions are stuck in limbo indefinitely. MAR advocated to secure a solution to this issue. On March 20, 2020, Governor Baker issued an emergency order that permits home buyers and sellers to defer the smoke and carbon monoxide detector inspection requirements that are otherwise required under the General Laws of Massachusetts. MAR is now working with the Fire Prevention Association of Massachusetts to ensure that all required deferred inspections are completed within 90 days of closing. During the current COVID-19 State of Emergency, a Smoke Inspection may be deferred so long as the following conditions are met: 1. The parties to the sale or transfer have agreed, in writing, that the buyer assumes responsibility for equipping the property with approved smoke detectors and carbon monoxide alarms. 2. T he buyer agrees as a condition of taking title to equip the property with approved smoke detectors and carbon monoxide alarms immediately upon taking title. 3. A n inspection as otherwise required under Massachusetts General Laws Chapter 148, Sections 26F and 26F1 ⁄ 2 occurs no more than 90 days after the state of emergency is lifted.

MAR has developed an addendum that addresses the requirements of the emergency order. The addendum can be found through the MAR Forms Library or may be accessed on www.MARCOVID19.com.

COVID-19 Addendum In addition to the Smoke and Carbon Monoxide Inspection Addendum mentioned above, MAR also developed a COVID-19 Addendum to address any delays that may occur as a direct result of COVID-19. This addendum may be attached to a contract to purchase to provide protection to the parties in the event a transaction is disrupted during this uncertain time. This form is also available through the MAR Forms Library or www.MARCOVID19.COM.

Short-Term Rental Cancellation Addendum On March 31, 2020, the Department of Public Health (DPH) issued guidance for one of the Governor’s emergency orders prohibiting the use of hotels, motels, inns, bed and breakfasts, and short-term rentals for vacation or recreational purposes through May 4, 2020. To assist our members brokering short-term rental contracts for stays beginning after May 4, MAR has developed a short-term rental cancellation addendum that may be attached to those lease agreements. This addendum addresses deposits placed on those rentals, and what happens in the event the landlord is unable to provide occupancy or the tenant is unable to travel to the property to take tenancy as a direct result of the coronavirus/COVID-19 pandemic. The addendum can be found through the MAR Forms Library or may be accessed on www.MARCOVID19.com. Any additional forms developed for use by a brokerage should be done so with the guidance of legal counsel. Additionally, any “screening” type questions, such as questions about where a person has traveled or whether they are experiencing any symptoms of illness, must be asked equally to avoid any fair housing issues.

Bay State REALTOR®

Lead Paint in Homes

BY THE MAR LEGAL TEAM

Massachusetts has some of the oldest housing stock in the country, and although the federal government banned the use of lead-based paint in homes more than forty years ago, lead poisoning is still a significant issue in Massachusetts real estate. A recent Massachusetts settlement in a lead poisoning case highlights the importance of compliance with the lead laws. In this case, the child lived in a rental property that was owned by two separate landlords during the term of the rental. The child suffered from lead poisoning after the property was sold to the second landlord. Prior to going to trial, the parties agreed to settle for $375,000. The original landlord paid $175,000 of the settlement, with the remaining $200,000 paid by the second landlord. As this case demonstrates, failure to comply with the requirements of the lead law can result in significant damages. While the requirements for the law are very similar for residential sales and leases, there are very specific obligations under each transaction type. Residential Sales: For homes built prior to 1978, sellers must provide prospective buyers with the Property Transfer Lead Paint Notification prior to entering into a contract to purchase. ■ The seller must provide the prospective buyer with copies of any documentation related to lead testing or remediation. ■ The seller must provide the buyer at least a 10-day period to have a lead inspection. ■ If a child under the age of six will live in the home, the owner is required by law to have lead hazards remediated entirely, or have the property brought into interim control, within 90 days of taking title.

Residential Leases: ■ For homes built prior to 1978, owners must provide prospective tenants with the Tenant Lead Law Notification prior to entering into a rental agreement. ■ The owner must provide the tenant with copies of any documentation related to lead testing or remediation. ■ An owner may not refuse to rent to a family with children under the age of 6 to avoid the requirements of the lead law. ■ An owner may delay the start of a tenancy up to 30-days to bring the property into compliance. ■ If a child under the age of six comes to reside in the property during an existing tenancy, the owner of the property is required to provide temporary housing for the tenants while the lead hazards are remediated. The Landlord is responsible for reasonable moving costs, but the tenant is still required to pay the agreedupon rent during this period. Failure to comply with the requirements of the lead law may result in a civil penalty up to $1,000 under Massachusetts law, and both criminal and civil penalties up to $10,000 under federal law, as well as damages for injuries caused by non-compliance. Owners are subject to strict liability for injuries caused by lead poisoning, regardless of whether the owner had knowledge of the lead hazard. Real estate agents may also be subject to penalties for failing to ensure that their seller and landlord clients properly completed the Lead Notification Form.

May/June 2020

Fair Housing Concerns: Steering Housing discrimination continues to be a concern throughout the nation. Federal law prohibits agents in a real estate transaction from discriminating on the basis of race, color, religion, sex, handicap, familial status, or national origin. Article 10 of the Realtor® Code of Ethics prohibits Realtors® from denying equal professional services to any person in those classes as well as on the basis of gender identity or sexual orientation. Massachusetts, which has some of the strongest anti-discrimination laws in the country, has expanded the list of protected classes beyond the requirements of the federal law and the Code of Ethics to also include gender, ancestry, genetic information, marital status, veteran or active military status, age (i.e., children), and source of income (i.e., Section 8 voucher).

Federal

REALTOR® Code of Ethics

Massachusetts

Race



Color



Religion



Sex



Handicap



Familial Status



National Origin



Protected Class

Gender



Gender Identity



Sexual Orientation



Ancestry



Genetic Information



Marital Status



Veteran or Active Military Status



Age (i.e. children)



Source of Income (i.e. Section 8)



Steering is an illegal practice in which prospective buyers are guided to or away from certain neighborhoods based on their identity as a member of a protected class. This practice is a violation of the Fair Housing Act and Massachusetts General Laws Chapter 151B. Regardless of whether steering is inadvertent, deliberate, or in response to questions from a client, it is unethical and illegal, because it limits the housing opportunities available to that buyer.

What the buyer asks

The information they actually want

Where to refer them

Is this a nice neighborhood?

Neighborhood demographics

U.S. Census Bureau, Local Government

Is this a good school district?

School ratings

MA Department of Education, Online ratings

Is the neighborhood safe?

Crime statistics

Local Police Department

Buyers may place their Realtor® at risk of steering when they request insight into neighborhoods. One way steering can occur is through comments by an agent, either positive or negative, about a community. Realtors® faced with inquisitive buyers should provide their clients with the resources to discover the information that is important to them. Rather than providing buyers with the answers to their questions or your own personal opinions about neighborhoods, be the source of the source. By providing access to objective information, Realtors® can help buyers make their own decisions about communities, schools, and the homes they choose without violating the Fair Housing Act.

Bay State REALTOR®

5QW

Five Questions With Katie Johnson

Talking Legal with NAR General Counsel Katie Johnson Katie Johnson is the General Counsel and Chief Member Experience Officer of NAR.

Katie joined NAR in 2007 and was appointed as General Counsel in 2014. As General Counsel, she is responsible for assuring that the programs, policies, and activities of NAR are in compliance with the law. She also is responsible for defending the association against legal challenges and initiating litigation to protect and preserve association assets and policies. As NAR’s Chief Member Experience Officer, she leads initiatives to enhance member engagement and satisfaction through delivery of trusted knowledge, resources, and experiences that elevate member success and professionalism. Katie has earned a juris doctorate and a master’s degree for Information Technology and Privacy Law. She lives in Chicago with her husband and three children. As general counsel of NAR, Q1. what does your typical day look like? A. I imagine that my typical day looks familiar to many working parents. It includes getting my two, five, and eight-year-olds dressed and ready for their days ahead, dropping my twoyear-old off at daycare, making the commute to work, drinking coffee, working at my standup desk, more coffee, calls, emails, Slack, meetings, more coffee, picking up my 2-yearold from daycare, eating the delicious dinner my husband has prepared for the family, doing homework and reading with the kids before their bedtime routines, and then it’s finally time to rest. What are some of the areas you Q2. and your legal staff work on?

A. I appreciate the great diversity of issues our legal team gets to address each day – it’s challenging and rewarding. Right now, we’re swamped with the effects of the COVID-19 outbreak and how that has impacted members’ and associations’ business plans. We are also focused on enhancing our members’ compliance with the Fair Housing Act and delivering useful risk management guidance regarding disaster preparedness, wire fraud, texting and calling consumers, website accessibility, independent contractor classification, copyright infringement, campaign finance compliance, board governance, and more. How has technology changed

Q3.

legal risks for Realtors®?

A. Technology has positively enhanced the ability for our members to deliver a superior consumer experience. Technology makes it easier to do almost anything – including violating the law. So, keeping up-todate on laws and regulations that impact your business is the best way for members to avoid risk online and off. That’s what we’re here for! What do you see as the biggest Q4. legal/legislative issue Realtor® members across the country should be concerned about? A. The biggest issue right now for our members boils down to their value proposition. From class action lawyers to consumer advocates and even fellow brokers and agents, the value Realtors® bring to consumers is

not just being taken for granted, but it’s being trivialized and degraded. NAR is currently defending two class action lawsuits alleging that our members are overpaid. We need members to take notice, talk with consumers about their role in the transaction, what services they provide, what they get paid and how, and why the MLS system benefits consumers. A great way to get started is to leverage all the communication assets available in our consumer awareness campaign at ThatsWhoWeR.com. What are some of the legal risks Q5. you see for Realtors® and NAR in the future? A. From public health to the economy and politics, this coronavirus pandemic will have longterm implications for all individuals and businesses. NAR is committed to staying on top of the legal risks and advocating for favorable policies that will help our members be successful.

Bonus Question

Q6.

Is there anything else we should have asked?

A. I am also honored to serve as NAR’s Chief Member Experience Officer. In this role, I work with a superbly competent and dedicated team of individuals focused on engaging and empowering the Realtor® community by delivering trusted knowledge, resources, and experiences that elevate members’ professionalism and success.

May/June 2020

legal notes T R A N S L AT I N G T H E L A W F O R Y O U

{legal Realtor ®}

Enforceability of Noncompetition and Non-Solicitation Agreements BY STEPHEN M. PERRY, ESQ ., Casner & Edwards, LLP In today’s tight employment market, competition is intense for highly skilled professionals. Real estate brokerage firms, seeking to grow, actively recruit licensed agents at other firms. In turn, many businesses that have invested time and money hiring and training agents and supporting their growth have tried to protect themselves by including non-competition or non-solicitation provisions in their employment or independent contractor agreements. In today’s column we look at the enforceability of these provisions under Massachusetts law, as well as the ethical rules that may restrict the competitive activities of Realtors® who change their brokerage affiliations.

How it Works Under a noncompetition agreement, individuals agree that within a certain geographic area and for a certain period of time following their disassociation with their firm, they will not go to work for a competitor. Under a nonsolicitation agreement, agents are allowed to join a competitor but are barred from soliciting or in some cases from doing business with those that were clients of the prior firm. Many agreements also contain so-called anti-raiding provisions in which an agent agrees to refrain from hiring away a firm’s other agents after leaving the firm. As an aside, please note that mutual non-raiding agreements between two firms, where each agrees not to solicit or hire the other’s employees, should be avoided. These agreements are generally unlawful under the civil and criminal provisions of the antitrust laws and could lead to substantial penalties. Historically, depending on the facts of the case, the Massachusetts 10

Bay State REALTOR®

courts enforced non-competition agreements if they were reasonable in time and geographic scope and were determined to be necessary to protect a legitimate business interest, such as the employing firm’s good will with its customers. A significant change took place in 2018, when the legislature enacted the Massachusetts Noncompetition Agreement Act, M.G.L. c. 149 § 24B. This statute is applicable only to non-competition clauses entered into on or after October 1, 2018. Also, it does not affect nonsolicitation clauses or non-raiding clauses. The Noncompetition Agreement Act applies to both those who are employees and those who are independent contractors under the terms of M.G.L. c. 149 § 148B. This statutory definition is technically flawed when applied to the real estate brokerage industry because under Monell v. Boston Pads, LLC, real estate agents are not governed at all by c. 149 § 148B. Nonetheless, a court would

likely conclude that the legislature intended to include real estate agents under the Act along with everyone else. The Act makes noncompetition agreements entered into after October 1, 2018 unenforceable unless certain procedural and substantive requirements are met. The most important of these requirements is that non-compete agreements entered into after October 1, 2018 must provide the restricted individual with something in return for the restriction. This can be either “garden leave,” which the Act defines as pay at the rate of 50% for not working during the restricted period, or it can be “other mutually agreed upon consideration.” As real estate agents are typically paid on a commission basis, paying them garden leave at 50% pay of their regular compensation, in return for not joining a competitor, is likely to be a non-starter. The statute provides no guidance on what type of “other

mutually agreed upon consideration” in return for a non-compete would suffice. While some would argue that this “other consideration” could be just about anything that is agreed to in the contract, this does not seem to comport with the statutory intent. In order for the statute to have any teeth, the alternative “agreed upon consideration” would likely have to be something significant and not just part of the standard compensation package. Non-competition agreements that were signed before the Act’s October 1, 2018 effective date are theoretically still enforceable under Massachusetts common law, but however, in view of the public policy statement made by the new legislation, opposing these provisions, older agreements are likely to be examined more closely than ever. The Supreme Judicial Court signaled the changing tide earlier this year, in Automile Holdings, LLC v McGovern, when it addressed an anti-raiding clause that arose in the context of the sale of a business. This is a context where restrictive covenants are freely enforced, and the Court upheld the provision. Yet the Court went out of its way to state that restrictive covenants that affect an individual’s ability to make a living are “strongly disfavored” and emphasized that courts will pare back not only noncompetition clauses,

but also non-solicitation and non-raiding clauses, if they are any broader than what is necessary to protect a legitimate interest. In view of this guidance, a court confronted with a non-compete that predates the new Noncompetition Agreement Act may elect not to enforce it, or to pare it down, for example by allowing the agent to join a new firm, but barring the agent from soliciting the brokerage firm’s clients. As noted above, the Noncompetition Agreement Act exempts from its scope agreements that an agent will not solicit the firm’s clients after leaving. An issue that can arise here is that the clients the firm is seeking to protect may frequently have a stronger relationship with the agent than with the brokerage firm. A court will be more likely to enforce a non-solicitation of clients provision as to clients and contacts that were developed during the agents’ affiliation with the firm than it would with respect to those that were already doing business with the agent prior to becoming affiliated with the broker. Finally, regardless of whether a brokerage firm utilizes restrictive covenants in its agency agreements, the NAR Code of Ethics imposes limitations on what a departing agent can do after the agency relationship ends. Standard of Practice 16-4 prohibits Realtors® from

soliciting a listing that is currently listed exclusively with another broker. As all listing agreements are made in the name of the principal broker, departing agents are accordingly barred from seeking, without the firm’s consent, to take away even those listings that they themselves brought in through their own contacts and efforts. A similar rule applies under Standard of Practice 16-5 with respect to buyer agreements between the firm and the agent’s customers. Standard of Practice 16-20 is most explicit of all in stating the restrictions that apply to agents whose relationship with the brokerage firm is terminated: “Realtors®, prior to or after their relationship with their current firm is terminated, shall not induce clients of their current firm to cancel exclusive contractual agreements between the client and that firm.” Or course, these provisions of the Code of Ethics only prevent a departing agent from soliciting business that is the subject of an existing and active exclusive representation agreement. A brokerage firm that wishes to protect its business relationship with recent clients, or potential new business from current clients, would need to have in place an enforceable non-solicitation provision in its agency agreement.

May/June 2020

Notes from the MAR Legal Hotline BY JUSTIN DAVIDSON, ESQ., Government Affairs Director & General Counsel CATHERINE TAYLOR, ESQ., Associate Counsel JONATHAN SCHREIBER, ESQ., Legislative & Regulatory Counsel Attorney

Q. Is a landlord required to screen prospective tenants? A: No, Landlords have no affirmative duty requiring them to screen prospective tenants. However, it is in a landlord’s and their other tenants’ best interests to do so. Landlords may be liable for tenant violations of local bylaws and ordinances regarding noise or other disturbances, as well as for damages or injuries to other tenants and neighbors caused by problem tenants. A landlord may face legal liability if: s/he failed to discharge a duty of care owed to the victim, the harm was reasonably foreseeable, and the negligence was the proximate or legal cause of the victim’s injury. A best practice is to begin the rental process by having prospective tenants complete a rental application containing basic, non-discriminatory personal information. This form can be found in the MAR Forms Library. Landlords may also choose to complete other screenings such as credit, criminal background, and sex offender registry checks, as well as requesting references from past landlords. A landlord should make sure to get the appropriate consent from a prospective tenant prior to performing any screening. When all screenings are complete, a landlord must assess each prospective tenant individually. For example, a landlord cannot automatically disqualify all applicants with criminal records. If a landlord intends to deny a prospective tenant because of their criminal record, they must provide them with certain information about the denial and an opportunity to correct errors in their record. Prior to undertaking any policy regarding tenant screening, it is advisable that the landlord and/or property manager consult with an attorney to mitigate the risk of liability. Q. A tenant has offered to pay a full year’s worth of rent at the time the lease is signed – is this legal? A. No, pre-paid rent is a violation of Massachusetts General Laws Chapter 186, Section 15B. The statute states that a lessor may not require a tenant to pay any amount in excess of the following: 1. First month’s rent; 2. Last month’s rent at the same rate as first month’s rent; 3. Security deposit equal to first month’s rent; and 12

Bay State REALTOR®

4. The cost to change the lock and key. The question hinges on the word “require.” If the tenant offers to pre-pay rent, the landlord is not requiring the tenant to pay any sums in excess of what is statutorily permitted. However, you must look at why the prospective tenant is making such an offer. Generally, the reason is that the tenant would not otherwise be accepted as an applicant for the unit. In this situation, although the landlord is not asking for the rent to be pre-paid, the end result is the same if the prospective tenant’s application would not be approved but for the offer of pre-paid rent. To stay within the parameters of the law, Massachusetts landlords should never accept rent in advance, regardless of whether the tenant offers or the landlord demands it. Q. What are some of the main concerns to be aware of with escrow accounts? A: Three of the most common escrow account pitfalls our members encounter are: 1. C ommingling of Funds. Funds cannot be transferred from the escrow account to an operating account until the transaction has closed. We often hear of members who preemptively transfer funds from their escrow to their operating account so that they can bring a check for the co-broker at closing. Even if it is a near certainty that the transaction will close as scheduled, this is an impermissible commingling of funds. There is nothing in 254 CMR 3.10(a) that would prohibit the disbursement of funds directly from the escrow account after the closing has occurred. 2. H aving Non-Broker Signatories. The Board interprets 254 CMR 3.10(a) as allowing for only brokers to keep and maintain escrow accounts. Neither salespeople nor unlicensed individuals, such as a bookkeeper, may have check signing authority. A broker may give escrow check signing authority to associate brokers within the same brokerage. 3. E scrow Accounting: The broker is responsible for keeping a proper account of the escrow account. This requires not only tracking all deposits and distributions, but also maintaining copies of each check deposited into and withdrawn from the escrow account for a period of

three (3) years from the date of issuance. The check register must be kept for a period of ten (10) years. Q. Am I permitted to pay a referral fee to someone with an “inactive” license? A: Yes, you may pay a referral fee to someone with an inactive salesperson’s license. Massachusetts General Laws Chapter 112, Section 87XX ½ created an “inactive” license status for those licensees who have not completed the required continuing education credits. As inactive licensees are prohibited from affiliating with a broker, a referral fee may be paid to them directly. This is the only instance where a salesperson can receive a referral fee directly. Massachusetts General Laws Chapter 112, Section 87RR requires that an active salesperson’s referral fee must be paid to the broker with which they are affiliated. Q. There is a discrepancy between the town’s field card and the septic rating for my listing. What number of bedrooms can I use in my advertisements? A. As a best practice, any advertisements should state the smaller of the two numbers when listing the number of bedrooms in the property. The property description may include language that highlights the discrepancy between the two sources, and note the potential for additional bedrooms. Including the smaller number in the field that will be used for search purposes protects the listing agent from potential claims of misrepresenting the property. Both Article 12 of the Realtor® Code of Ethics and Massachusetts regulations (254 CMR 3) prohibit false or misleading advertisements. A listing that uses the larger number of bedrooms likely runs afoul of both the Code of Ethics and Massachusetts regulations because it is not presenting a true picture. Q. I am selling a home that has a failed Title 5 inspection. What are my seller’s options?

repaired or replaced within 2 years. The current owner or buyer of a property with a failed inspection may enter into an enforceable agreement with the Board of Health requiring them to upgrade the system or connect to the public sewer within 2 years following the transfer of title. If a property owner has entered into this type of agreement, they must disclose it to prospective buyers, and it must be binding on subsequent owners. The most straightforward option available to sellers with a failed Title 5 inspection is to repair or replace the system prior to transfer as a failed Title 5 can make conventional financing very difficult. However, this may not be a viable option for all sellers because of the expense involved. In these situations, the seller and buyer may negotiate a resolution that satisfies both the requirements of the law as well as the financial well-being of all parties involved. Written by: by Justin Davidson, General Counsel; Catherine Taylor, Associate Counsel; and Jonathan Schreiber, Legislative & Regulatory Counsel. Service provided through the Massachusetts Association of Realtors® is intended for informational purposes and does not constitute legal advice, nor does it establish an attorneyclient relationship. The Massachusetts Association of Realtors®, by providing this service, assumes no actual or implied responsibility for any improper use of responses to questions through this service. The Massachusetts Association of Realtors® will not be legally responsible for any potential misrepresentations or errors made by providing this service. For more information regarding these topics, authorized callers should contact the MAR legal hotline at 800-370-5342 or e-mail at legalhotline@marealtor.com.

A. Aside from very limited circumstances, a property must have a passing Title 5 inspection within 2 years before a transfer takes place. An inspection is not required before a transfer in the following situations: 1. Refinancing or any situation where no new parties are introduced; 2. a transfer between spouses; 3. a transfer between parents and child(ren); 4. a transfer between full siblings; and 5. where the property is held in a trust. If a property has a failed inspection, the system must be May/June 2020

Driving Homelessness Away BY SABRINA LAPOINTE, Senior Communications Coordinator

If you see a new license plate around Medway that says, ‘Welcome Home’ you will see that the proud owner of that car is President of Patriot Real Estate, Paul Yorkis. What you won’t see is the blood sweat and tears it took to bring that vanity plate to life.

The Idea It was at the National Association of Realtors® midyear meeting several years ago when Yorkis saw a license plate with the Realtor® ‘R’ on it. He then asked around to find out that the plate was a fundraiser. His next step was to dig up information on the process of charity plates in Massachusetts. Yorkis collaborated with people like broker/owner of The North Shore Realty Group, Frank Bertolino. Bertolino became a member of the Charitable Foundation around 2015 and immediately began working with Yorkis visiting associations, attending Board of Directors meetings, attending trade shows encouraging members to purchase license plates. “We all worked diligently. We also sold bracelets and pins while chasing commitments for plates,” said Bertolino. Once his homework was done and he had enough information, he presented the idea to the MAR Charitable Foundation Board of Trustees explaining that it would serve as a sustainable source of income for the foundation. At a May 18, 2011 Board of Directors meeting, it was moved, seconded, and voted to develop the Charitable Foundation’s Realtor® Vanity License Plate Fundraiser. Yorkis and other Realtors® were given permission to fully explore the idea and ran with it.

Meeting with Representatives “The late Steve Ryan, MAR Counsel and Director of Government Affairs [at the time] and I met with representatives of the Registry of Motor Vehicles to discuss the idea and how the program would really work.” They learned that it was a lengthy process and that they weren’t alone. Several other organizations were trying to establish charity plates. The biggest roadblock they faced was the minimum resale requirement of 1,500 plates. 14

Bay State REALTOR®

“I thought since MAR had at the time, about 23,000 members we should be able to sell 1,500 plates pretty quickly. Boy, was I mistaken. People in Massachusetts love their license plates and are very hesitant to give up a plate they have had for a long time. Some Realtors® have commercial plates and since a charity plate cannot also be a commercial plate, we lost that group of potential buyers. We had a good initial response but getting past 500 applications was a real challenge,” said Yorkis. Realizing that they would not meet the required number of 1,500 plates as quickly as they would like, Yorkis met with State Representative Jeff Roy, his State Representative, and State Senator Karen Spilka (now President of the Senate). They eventually came to the agreement of introducing legislation to lower the required number of plates to 500. Yorkis and Ryan then met with members of the House and Senate Transportation Committees, RMV officials where they came to the 750 plate compromise. “Unfortunately, the bill did not get out of the committee, so Senator Spilka who was chair of the Senate Ways and Means Committee added the provision to a state budget bill and the budget bill passed with the provision and it was signed into law by the governor,” said Yorkis.

Applications Reach the RMV Fast forward to November 2019 and there were approximately 800 applications and checks sitting at the RMV. Two months later, after dealing with issues with the application forms, the RMV was finally able to process and verify each application. The next step was for the RMV to order the materials for the plates to be manufactured. Delaying the process even further, the ‘Welcome Home’ went to the end of the production line, as other charity plates were being made first. Finally, the manufacturing was complete, and the plates needed to be distributed to each full service RMV office ready for their long-awaited pick up. 875 letters now

needed to be prepared and mailed out to each individual who ordered a plate. RMV regulations required that the Charitable Foundation post a bond with the RMV to guarantee that 3,000 plates be purchased. Some Realtors® like Yorkis himself are getting creative in their efforts to increase the number of plates. Yorkis is offering ‘Welcome Home’ plates as closing gifts which he shares have been very well-received.

Who it Benefits The Charitable Foundation provides funding for housing, homelessness, hunger and disaster relief in Massachusetts. Purchasing a ‘Welcome Home’ plate is just one of the many ways to get involved and make a difference in the life of someone in need of help. Realtors® and members of the general public alike who have an interest in helping the less fortunate can purchase a plate for the small price of an extra $40 paid every two years. Their contributions will benefit Massachusetts charities located all over the state that provide services for homeless individuals, veterans, and hungry families among other deserving people. To apply for a plate, visit your nearest full-service RMV, after obtaining a registration and title application from your current insurance carrier. Bring both the form from your insurance carrier, and your current registration with you when you apply in person. The plate typically becomes available in five to ten business days and you will receive a letter with instructions to pick up the plate. Coming around July 2020, folks will be able to apply online. “I cannot speak for Paul but I am sure he feels just as strongly as I do. We would do it again," said Bertolino.

Medway Realtor® Paul Yorkis poses in front of his 'Welcome Home' License Plate

To apply for a plate, visit your nearest full service RMV, after obtaining a registration and title application from your current insurance carrier. This could not have been possible without the help from companies like MLS Pin, Wells Fargo, and Landy Insurance who all made contributions to the foundation. “It took a long time as there were many steps but with the support of many Realtors®, members of the general public, RMV staff, individuals, and organizations that donated funds for plates so they could be given away, we reached the goal. I was honored to be given plate number 1 by the foundation trustees and for that act of kindness I will be forever grateful,” Yorkis said. May/June 2020

Private Property Rights and the 'Taking Clause' BY JUSTIN DAVIDSON – MAR General Counsel What happens when a town converts a once buildable lot to a non-buildable lot but allows for the property owner to at least put up a swing set? Is that a taking that requires the town to compensate the landowner?

Most people have a general understanding that the government cannot take an individual’s property without paying compensation for the taking. But what happens when a taking is not a complete and total taking? What happens when the government only takes 91.5% of the value of the property? Massachusetts and federal courts seemed to be headed in different directions when it comes to private property rights. In Massachusetts the courts ruled that leaving a property owner with land valued at 8.5% of its previous value does not constitute a taking. Meanwhile, the federal courts flung open the once locked doors of federal court just a bit to private property claims that used to require state court action.

The Takings Clause The Fifth Amendment to the US Constitution contains what is referred to as the Takings Clause. The Clause provides, “nor shall private property be taken for public use without just compensation.” It further requires the payment of compensation whenever the government acquires private property for a public purpose. Courts at both the state and federal level have struggled with applying the Takings Clause and inconsistent court holdings have made it difficult for property owners to know when a taking is really a taking.

The Massachusetts Case: In 1975, Janice Smyth’s parents purchased oceanfront property in Falmouth, Massachusetts. They hoped to one day build a retirement home on the lot. Although the lot was considered buildable in 1975, the town of Falmouth passed a “no disturbance zone” zoning bylaw amendment in 2008 that reduced the developable part of the lot to a small 115 square foot section. By this time Janice

Smyth had inherited the lot from her parents and applied for the necessary variances to build a home on the lot. The town denied her application, which resulted the assessed value of her lot dropping from $700,000 to just $60,000—a 91.5 percent drop in value Mrs. Smyth took her appeal to the Massachusetts trial court and argued that the 2008 bylaw change and the resulting decrease in the value of her property effected a taking. After trial, a jury found that the bylaw did result in a regulatory taking of Mrs. Smyth’s property, and awarded damages in the amount of $640,000. The Town of Falmouth appealed the trial court’s decision to the Massachusetts Court of Appeals, which ruled in favor of the town, reversing the trial court’s judgment for Mrs. Smyth. The appellate court found that even though Mrs. Smyth’s lot was no longer buildable, it could still possibly be used for something like a “park or playground” and therefore the property still had value. In this way, the Massachusetts appellate court brought further confusion to the Takings Clause analysis in Massachusetts.

The Federal Case It is not very often that private property cases make their way to the US Supreme Court, but in 2019 the Court ruled on a case, Knick v township of Scott, Pennsylvania, that might just provide a glimmer of hope for property owners such as Mrs. Smyth. The Knick case centers on a 2012 ordinance affecting private properties that contained cemeteries. The ordinance required that all cemeteries within the Township be kept open and accessible to the general public during daylight hours and no owner could unreasonably restrict access to the cemetery. Rose Mary Knick

owns property in the Township of Scott, and, in 2013, a Township officer entered her property and identified certain stones as grave markers. Knick was then cited for violating the ordinance and filed a lawsuit to challenge the ordinance. Knick appealed the district court decision denying her claims to the United States Court of Appeals for the Third Circuit. The Third Circuit held that Knick’s Fifth Amendment claims were not proper because she had not sought and been denied just compensation using state procedures as required by previous Court rulings. The US Supreme Court ultimately found that a government violates the Takings Clause when it takes property without compensation, and specifically, that a property owner may bring a Fifth Amendment claim to federal court at that time, overruling the state litigation requirement previously set forth. This is important for property owners because prior to Knick, a property owner was barred from federal court unless he had exhausted all claims at the state level. Many also view the more removed federal court as potentially friendlier to private property rights claims than state courts. Smyth began her legal journey in Falmouth in 2016, three years before Knick sprung opened the doors of federal court to private property claims. Had Knick been decided three years earlier, Janice Smyth would have had the option to bring her claim in federal court where she may have encountered a different application of the Takings Clause test. At the close of 2019, The US Supreme Court declined to hear Smyth’s appeal so we will need to wait for another aggrieved property owner to take a claim to federal court to see whether or not federal courts are going to continue in a private property rights-friendly direction. May/June 2020

Don't Fall for Phishy Stories – Protecting Yourself from Cyber Criminals BY MICHAEL KRONE, ESQ.

When “Shark Tank” star Barbara Corcoran, one of the most accomplished businesswomen in the country, revealed that her business almost lost $388,000 to an email scam, it became obvious that even the most business savvy amongst us are at risk. With over 85% of all cybercrime throughout the world coming through email, it is now more important than ever that every sector of business be aware of the dangers and risks in transmitting data through that medium. However, it’s not just email we need to be concerned with – it's voice phishing (“Vishing”) and text phishing (“Smishing”) as well as fax scams that cause us to worry that every form of communication is vulnerable. In the real estate sales industry, it is most acute because hundreds of thousands of Realtors® and attorneys transact trillions of dollars in real estate sales per year. Most Realtors® and attorneys are small businesspeople without the sophisticated tools to catch these scams that large businesses can afford. Yet, even the credit bureau giant Equifax was hacked, which just goes to show that any business is vulnerable no matter how sophisticated their systems are. What are we as an industry looking to protect from these online hackers? Primarily it is our customer’s personal identifiable financial information (PIFI) as well as our own and that of our firm. This includes credit account information, social security numbers, bank account/check information, driver’s license numbers, and pictures. Protection of this information means securing our business future and our viability in the industry. Allowing this data to be unprotected and available to be hacked or stolen leaves us liable for the consequential damages that such theft can create. 18

Bay State REALTOR®

The major hurdle we face in our industry today in dealing with Cyber Crime and the constant attacks on our technology and data bases is our struggle to establish identity theft prevention protocols designed to detect warning signs or “Red Flags.” In Massachusetts, we are mandated to have a WISP (Written Information Security Program) policy to protect PIFI. We must also be sure that any other parties we bring into the transaction (attorneys, lenders, etc.) are also following standard security measures. First and foremost, you need to have secure email. Hotmail, AOL, or other consumer email platforms do not carry the security protections that business-grade email systems, such as Microsoft 365, can provide. You must be able to send data in an encrypted format so that it can’t be viewed if a hacker captures your email. Such things as emailing a deposit check without encryption can lead to hackers obtaining the valuable information contained on that check. By encrypting the check as an attachment to the

email, the data on the check is protected. Adobe and other companies have software to easily encrypt a document with password protection. Your laptop and computer must have business-grade spam filters, antivirus and malware protection. We must all have secure and constant backup systems. Ransomware, a type of malicious software designed to block access to a computer system until a sum of money is paid, cannot debilitate you if your data is backed up securely outside of your computer. Providers such as Carbonite and iCloud can provide constant backup each time your computer, laptop or phone is connected to the Internet. If you backup constantly and a ransomware or virus attack should befall you, your data is generally safe and can be downloaded onto a new computer from the Cloud. There is no way to protect your data and systems from every kind of attack. However, that doesn’t mean you should give up. To the contrary, install and engage business-grade protection and establish simple rules

to protect your data and your business. Set up email rules that will alert you that an email may be fraudulent. Establish protocols to verify the legitimacy of wiring instructions. Put in place rules that can protect you from Vishing and Smishing – such as never totally trusting a text or phone call from someone you do not know or from someone seeking protected data or claiming to be from the IRS or a credit card company. As Ronald Regan once said “trust but verify.” That is the rule we all need to follow today – trust to some degree that what you are receiving is from a legitimate source, but verify if there is any inkling that it might not be. Think twice before clicking on a link or attachment in an email. Verify by phone all wiring instructions and bank account information given to you. Finally, be smart – understand that our industry is under attack and that you could be next.

May/June 2020

member voices R E A LT O R ® V I E W S

{president’s message}

Moving Forward BY KURT THOMPSON Homeownership is a dream for many people. The idea of owning something that is entirely yours that YOU earned is a rewarding feeling. Realtors® get the privilege of helping make that dream become a reality for many people. No matter where you are at in your career as a Realtor®, I challenge you to work with the same excitement and passion that you did when you first started your career. Now that we are just about halfway through the year, it is a good time to assess where you are currently and set goals for the second half of the year. Maybe you created goals at the beginning of 2020. Take the time now to reflect on those goals. What have you achieved? What would you like to continue working towards? I find it is helpful to handwrite my goals and to take the time to really consider what they mean to me and what it’s going to take to accomplish them. The first half of 2020 proved to be difficult, battling COVID-19 pushed us all into uncharted waters, but we did what we know best and persevered. If this pandemic taught us one thing, it’s to continue moving forward. Here are three steps you can take to keep yourself on track and continue moving forward.

1.Continue being there for each other. There comes a point in each of our lives where we will need help. Seeking help from others is not a sign of weakness, in fact I think it is the opposite and shows great strength. I encourage you all to lean on each other when necessary.

Bay State REALTOR®

The Realtor® community is unique as we truly are a group of people willing to go above and beyond, not only for our clients, but also for our fellow Realtors®.

2. Challenge yourself to learn new things. No matter how long you have been a Realtor®, there is always more to learn. If you’re a new Realtor®, look to more experienced Realtors® for advice, tips and tricks. If you’re an older Realtor®, look to the younger, newer Realtors® for what’s new in the industry. None of us were quite prepared for COVID-19 and what it would mean for us as Realtors®. It is experiences like these that make us stronger, they teach us how to think outside the box and work towards common goals.

3. Go the extra mile The impression you leave on your clients can mean a lot for your career. If you leave a good impression, they’re more likely to refer you to their friends and family, or better yet, use you as their Realtor® for a second time when it comes time to buy or sell again. For many people, buying a home

is the biggest purchase they will ever make. It’s important that your client feels comfortable with you. Small gestures, such as sending out birthday or holiday cards, can go a long way. Add a personal touch like sending flowers on closing day. These types of small touches can leave a lasting impression. I encourage you all to reflect on what this difficult time may have taught you. Many of us developed skills we never had before. Our communication had to be better than ever before, and we had to put the safety and well-being of others above our own. These are small sacrifices that made a big impact and they are things we can carry with us into the second half of the year. I hope we can all say we have learned something from this and in the end, we can say it has made our Realtor® community that much stronger!

HOW A BILL BECOMES A LAW

Introduction

Committee

The bill is introduced in one of the houses of Congress, the Senate or the House of Representatives.

The bill is referred to committee.

If there are differences in the two houses' bills, those differences must be worked out for the final bill.

If the vote passes, it goes to the other house where the process is repeated.

If not approved, the house can send the bill back to committee or abandon it.

If approved, it's debated and voted upon by the entire house.

If the bill is approved, it goes to the president. The president may veto the bill.

â&#x20AC;˘ Vote to override the president's veto. â&#x20AC;˘ Modify the bill to the president's liking. â&#x20AC;˘ Let the bill die. If vetoed, both houses have three options.

If signed by the president, it now becomes a law. May/June 2020

35th Annual Margaret C. Carlson Realtor® Day on Beacon Hill For the past 34 years, hundreds of people gather annually at the State House on Beacon Hill to lobby for increased housing production. Join us on June 16, 2020 to participate in the 35th annual Margaret C. Carlson Realtor® Day on Beacon Hill. This annual event gives Realtors® the opportunity to have conversations with their legislators about important issues impacting housing. The event is an effort to discuss ways to increase housing production to help combat the on-going low inventory issue in the state. Realtors® will meet with their elected officials to discuss several issues. MAR is in support of the following: Housing Production: An Act to promote housing choices provides incentives, rewards, and technical assistance to cities and towns to encourage and empower municipalities to plan and build the additional housing that the Commonwealth needs to continue to thrive. Expanding Homeownership Opportunities: An Act authorizing the establishment of first-time homebuyer savings accounts permits future home buyers to deposit up to $5,000 per year into a First -Time Homebuyer Savings Account and then claim that contribution as a deduction on their income tax. Continuing Education: An Act further regulating the continuing education requirements for real estate brokers and salespersons enhances the Real Estate Board’s ability to self-govern Realtor® continuing education. Climate Resiliency: An Act relative to GreenWorks creates a bonding program to fund climate resiliency programs in the Commonwealth. On the other end, MAR will be opposing the following issues: Real Estate Transfer Taxes: A tax which would authorize the creation of a new transfer tax on the sale of property in a municipality. Mandatory Energy Scoring and Audits: These bills seek to require sellers or their agents to perform a mandatory energy audit prior to listing a home for sale and disclose to any prospective buyer the information in the audit at the time of the listing. We look forward to seeing you on Beacon Hill on the 16th! *Please note: The information above is accurate at the time of printing and events are subject to changes or cancellations related to COVID-19.*

Realtor® Party Training On March 4, roughly 50 current and future Realtor® Party leaders met at the Hilton Garden Inn in Waltham to discuss ideas about the Realtor® Party. Keynote Speaker, 2020 Realtor® Party Member Involvement Liasion Sara Lipnitz of Birmingham, Michigan, spoke about the importance of getting involved and why every investment matters. Those in attendance discussed future RPAC events, how to increase participation, political fundraising compliance in Massachusetts, and grants, among other things. The event wrapped up with interactive roundtables covering topics such as making the “ask” and overcoming objections, RPAC disbursements, increasing RPAC participation, becoming a major investor, and NAR grants and community advocacy. The Realtor® Party is an alliance of Realtors® and their Realtor® Associations working to protect and promote homeownership and property investment. The Realtor® Party speaks with one voice to advance candidates and public policies that build strong communities and promote a vibrant business environment. For more information, go to: https://www.nar.realtor/political-advocacy

Realtor® members gather at Realtor® Party Training at the Hilton Garden Inn in Waltham, MA.

CALENDAR June 10 & 17 GRI 101: Skills for Success (CE-2) MAR HQ, 333 Wyman Street, Waltham, MA Students learn to build a real estate business, acquire and service a listing, and market with technology.

HAVE YOU SUBSCRIBED TO OUR SIDEBAR PODCAST YET? List of Sidebar Episodes: ■

HUD Update on Assistance Animals

■

Smart Homes & Wiretapping

■

Short Term Rentals

■

Real Estate Business Entities

■

Agency

■

Bay State Realtor® Magazine – May/June 2020

Articles inside

LEGAL SOCIAL MEDIA RISKS FOR REALTORS p

YOURSELF FROM CYBER CRIMINALS p

NON-SOLICITATION AGREEMENTS p