Massachusetts is a caveat emptor state for property condition, but a licensee must not actively misrepresent or conceal known defects.
Before you read
Test yourself first: 5 questions
Question 1 of 5
Which property-related disclosure is specifically mandated for residential transactions in Massachusetts involving target housing?
Answer: D. Massachusetts has a strict lead paint law. For housing built before 1978 where a child under six will or may reside, owners and agents must provide lead paint disclosure and the required notification materials. This is one of the few affirmative property-related disclosures the state mandates.
Question 2 of 5
Which of the following actions by a Massachusetts licensee would most likely be grounds for disciplinary action by the Board?
Answer: A. Substantial misrepresentation is a classic license-law violation subject to discipline. Recommending inspections, providing the mandatory agency disclosure, and keeping deposits in a separate escrow account are all proper, required, or recommended practices.
Question 3 of 5
When a Massachusetts broker holds a buyer's deposit pending closing, those funds must be:
Answer: B. Massachusetts brokers must hold client deposits in a separate escrow/trust account and may not commingle those funds with the broker's own money. Commingling and conversion of trust funds are serious license-law violations.
Question 4 of 5
A Massachusetts broker receives an earnest money deposit from a buyer. How must the broker handle those funds?
Answer: B. Massachusetts brokers must place client deposits in a separate escrow or trust account and may not commingle them with the broker's own funds. Commingling and conversion of client funds are serious license-law violations.
Question 5 of 5
Which of the following is a prohibited handling of client trust funds by a Massachusetts broker?
Answer: C. Commingling client trust funds with the broker's own money is prohibited. Brokers must segregate client funds in an escrow/trust account, keep records, and account for and disburse the funds per the agreement.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Lead paint: sellers and landlords of pre-1978 housing must provide the lead paint disclosure and notification to buyers and tenants.
- Massachusetts is a caveat emptor state for property condition, but a licensee must not actively misrepresent or conceal known defects.
- The licensee-consumer relationship disclosure must be given at the first in-person meeting about a specific property.
- Client and customer funds must be held in a separate escrow or trust account and never commingled with the broker's own funds.
- Deposits must be promptly deposited into the escrow account per the terms of the purchase agreement.
- Brokers must maintain accurate records of escrow funds and account for them on demand.
- Massachusetts is not a community property state; marital property is handled under equitable principles.
Massachusetts Required Disclosures & Escrow/Trust Timeframes: FAQs
Is Massachusetts Required Disclosures & Escrow/Trust Timeframes on the real estate exam?
Yes. State License Law is a scored domain on the Massachusetts real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Massachusetts test this differently?
Massachusetts applies its own license law on top of the national portion. This page covers the Massachusetts rules specifically, which is what the state section of your exam tests.
