What Is a Massachusetts Real Estate Broker Bond?
Real estate brokers in Massachusetts need to get licensed with the state Office of Consumer Affairs & Business Regulation (OCABR). One of the main requirements to obtain your MA real estate broker license is to post a real estate broker bond before you start your operations.
Surety bonds aim to safeguard the interests of your customers and the state. Their purpose is to guarantee you will comply with the law. More specifically, they ensure that you will manage properly all monies and property that you handle. Bond claims can provide a compensation to a harmed party if you transgress from the rules.
As all Massachusetts surety bonds, this bond is a contract between three entities. The principal is your real estate business. The state Registration is the obligee which requires you to get the bond. Finally, the surety is the party that provides the bond and guarantees for you.
Questions about Real Estate Agentbroker Bonds in Massachusetts
Who needs to obtain a bond?
The MA real estate broker bond has to be posted by all brokers who want to operate in the state. It is a part of their licensing process with the Board of Registration of Real Estate Brokers and Salesmen at the Office of Consumer Affairs & Business Regulation. You have to use the official MA real estate broker bond form.
The bond guarantees your compliance with Section 87AAA3/4, Chapter 112, Title XVI in Part I of the state’s General Laws. It is continuous and should be kept active at all times during your licensing.
What is the price of the bond?
The bond amount that Massachusetts real estate brokers have to post is $5,000. Your bond premium is only a fraction of this amount, which is often between 1%-5%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Massachusetts real estate broker bond||$5,000||$100||$100-$150||$125-$250||$250-$500|
Besides the bond amount, your surety bond cost depends on your financial stats. Your surety will examine factors such as your personal credit score, business finances, as well as any assets and liquidity that you can showcase. On this basis, it will measure the level of risk involved in bonding you. You can expect a lower price if your overall profile is trustworthy.
Can I get the bond with bad credit?
Struggling with problematic finances? We run our Bad Credit Surety Bonds program for applicants with low credit score, tax liens, bankruptcies, and civil judgements.
The bond premium you can expect is about 5% and 10% to compensate for the increased risk. You can still get a great bonding rate with us, as we work with a number of A-rated, T-listed surety companies. We can select the best bonding option for your particular case.
How do I get a Massachusetts real estate broker bond?
For more details, check out our How to Get Bonded page. If you’d like to speak to our bonding experts, just call us at (877) 514-5146.
How are bond claims handled for Massachusetts real estate brokers?
The purpose of your bond is to guarantee that every licensed broker will “faithfully account for all funds entrusted to him in his capacity of Real Estate Broker,” as set in the bond language. In this sense, it does not protect your business.
In case you do not abide by state laws and your obligations under the bond, a harmed party can file a bond claim against you for a violation of Chapter 112. If the claim is proven, you have to provide a financial compensation up to the bond amount, which is $5,000. Bond claims can also prevent you from getting bonded in the future, so they are to be avoided as much as possible.