General Questions
Why do I need a Real Estate Broker Bond?
Above all, an individual applying for a real estate broker license is required by the state of Massachusetts to get a real estate broker bond first. In addition, this bond acts as a signal to clients that you are trustworthy, with a promise and obligation to the state and individual that you will adhere to all Massachusetts real estate standards, statutes, and regulations.
This surety bond is an important tool for real estate brokers and salespersons, because it creates a second level of trust between the broker and client. Given that real estate brokers are trusted to manage large amounts of money in escrow, mitigating risks and avoiding fraud, this bond adds security to the professional relationship.
How do I know if I need a Real Estate Broker Bond?
Massachusetts requires that any real estate agent applying for a license must obtain a real estate broker bond before licensure.
What should I do in the event of a claim against my Real Estate Broker Bond?
We advise that you explore all options to resolve any issue that could result in a claim before it is filed. If you are unable to do so, the surety will handle any remittance of damages to your client, at which point you will be liable for full repayment to the surety. In addition, a claim is a mark against the broker and could interfere with license renewals, not to mention the outward reputation of the broker and associated agency. Read more about wrongful claims below.
What if I have a false claim against my bond?
If you feel the claim is false or exaggerated, your surety will complete all due diligence and deny the claim. In this case, you can continue your business as usual. Claims that are found to be invalid against your bond will have no effect on your licensure, bond, or business operations.
How can I avoid claims filed against my Real Estate Broker Bond?
It should be a top priority to avoid claims against your real estate broker bond at all costs. If a claim is filed, the principal is obligated to reimburse the surety for the entire amount that was paid out. If there is an issue that may result in a claim, it is advised that the bond-holder do whatever they can to resolve the issue before this becomes the case. Your surety bond is a promise to fulfill your obligations and duties, as well as follow the law. A claim against this bond indicates that the bond-holder knowingly and intentionally violated this agreement. If you are operating in compliance with this agreement, the potential claim may stem from a miscommunication with a client. It is very important to clear up this miscommunication before the claim is submitted.