A Massachusetts real estate broker, Edward, operates a large brokerage with 20 salespersons. Edward wants to implement a 'desk fee' model where salespersons pay a flat monthly fee to Edward and keep 100% of their commissions. Under Massachusetts law, which of the following statements is most accurate regarding this arrangement?
Correct Answer
C) This arrangement is permissible provided that Edward maintains supervisory responsibility over the salespersons' licensed activities
Massachusetts law does not mandate a specific commission split structure between brokers and salespersons. Brokers may structure compensation arrangements in various ways, including desk fee models where salespersons pay a flat fee and retain 100% of commissions. However, regardless of the compensation structure, the broker must maintain supervisory responsibility over all licensed activities of affiliated salespersons. The broker remains legally responsible for the salespersons' real estate activities under Chapter 112, and this supervisory obligation cannot be waived by the compensation arrangement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
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