Massachusetts Real Estate Broker Bonds
Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Massachusetts real estate broker bond needs.
What Are They?
The Commonwealth of Massachusetts requires bonding of real estate brokers to account for the large sums of money they collect and disburse during the course of a real estate transaction. Any money a broker receives must be deposited into an escrow account and held there until the closing of the real estate transaction or the deal is canceled. At that point, the escrowed funds must be transmitted to the buyer or seller.
A broker’s mishandling of those funds, intentionally or through error or negligence, can cause financial harm to the parties involved in a transaction and ultimately cause the public to lose confidence in the real estate industry.
In purchasing the required $5,000 Massachusetts real estate broker bond, a broker is guaranteeing to properly account for all funds entrusted to them in their professional capacity in accordance with applicable Massachusetts law, specifically Chapter 112 of the Commonwealth’s General Laws. The bond also provides a source of funds for compensating consumers who have suffered a financial loss due to the broker’s failure to live up to their legal and ethical responsibilities in this respect.
Who Needs Them?
You will need to purchase a six-year Massachusetts real estate broker bond when you first apply for licensure by the Massachusetts Board of Real Estate Brokers and Salespersons. It must be renewed every six years thereafter.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
There are three parties to a Massachusetts real estate broker bond agreement, which is a legally binding contract:
- The Massachusetts Board of Real Estate Brokers and Salespersons is the “obligee” requiring the purchase of the bond
- The real estate broker is the “principal” required to purchase the bond
- The surety company providing the bond is the “surety”
If a consumer is harmed financially by your failure as the principal to properly handle and account for funds entrusted to you—for example, a check given to you as a deposit on a property—that consumer has the right to file a claim against your real estate broker’s bond and be compensated if the loss proves to be valid. That’s a determination that will be made by the surety after investigating the claim.
Normally, the surety will go ahead and pay a valid claim on the principal’s behalf, even though the surety bond agreement makes the principal solely responsible for paying all claims. That’s because the bond essentially serves as a $5,000 line of credit that you can draw upon to pay claims. The surety pays the claim, which draws down that line of credit, and then you reimburse the surety, typically in installments.
What Do They Cost?
Massachusetts real estate broker bonds are issued for a flat cost of $50.
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Our surety bond professionals will get you the Massachusetts real estate broker bond you need at a competitive rate.