Independent Contractor Agreement (Agent–Broker) — Massachusetts Edition Template

The agent–broker relationship in U.S. real estate runs on independent contractor status — and that status is legally fragile if the paperwork is wrong. Federal tax law provides a statutory safe harbor: under 26 U.S.C. § 3508, a licensed real estate agent is treated as a non-employee for federal tax purposes if substantially all compensation is tied to sales output rather than hours worked AND there is a written contract providing the agent will not be treated as an employee for federal tax purposes. No written agreement, no safe harbor. State-level classification (wage law, unemployment, workers' comp) adds another layer — many states have real-estate-specific carve-outs from tests like California's ABC test (see Cal. Bus. & Prof. Code § 10032), but those carve-outs typically also require a written independent contractor agreement.

This 7-page agreement is built to hold that status together. It covers: engagement and license status; the § 3508 written-contract language stating the agent will not be treated as an employee for federal tax purposes; commission-based compensation with a defined split schedule and changes-on-notice mechanics; broker supervision duties that coexist with contractor status (license law requires broker supervision — the agreement distinguishes regulatory supervision from employment-style control); expenses, fees, and chargebacks; E&O insurance; lead and listing ownership; conduct, compliance, and fair housing obligations; termination and post-termination commission treatment for pending deals; and dispute resolution.

The 50-state variation notes cover state contractor statutes, workers' comp election rules, and states requiring specific contract language. This is the single most important document in a brokerage's file cabinet — use this template as a strong starting point and have brokerage counsel adapt it to your state.

About this Massachusetts Edition: the template and its drafting notes are adapted for Massachusetts practice under M.G.L. c. 112, §§ 87PP–87DDD½ and the Board of Registration of Real Estate Brokers and Salespersons regulations at 254 CMR, including the Mandatory Licensee-Consumer Relationship Disclosure under 254 CMR 3.00. Massachusetts permits dual agency and designated agency only with informed written consent, so the consent document in this edition offers both elections. Massachusetts is a caveat emptor state with no statutory seller property-condition form; this edition's Seller Property Condition Disclosure is therefore drafted as a voluntary disclosure that reduces M.G.L. c. 93A exposure and is designed to sit alongside the Commonwealth's Property Transfer Lead Paint Notification, Title 5 septic inspection report, and smoke/CO detector certificate. The Independent Contractor Agreement is built around M.G.L. c. 112, § 87RR, which expressly permits salesperson affiliation as an independent contractor notwithstanding the c. 149, § 148B ABC test. Electronic signatures are addressed under the Massachusetts Uniform Electronic Transactions Act, M.G.L. c. 110G. Not legal advice; have a Massachusetts-licensed attorney review before use.