Say good-bye to real estate VPs, SVPs and EVPs?

The New York Department of State says in a stunning opinion letter distributed Monday by the Real Estate Board of New York (REBNY) that many of us real estate salespersons and associate real estate brokers, including me, are violating the law.

Associate Attorney Whitney A. Clark states in the letter that those of us who adopt or receive corporate titles such as vice president on upward are in violation of the real property law if we are not actually officers of the corporation — for example, any incorporated brokerage.

In the one-and-a-half-page missive, which amounts to a bombshell, Clark declared:

. . . [B]rokerages may not provide corporate titles to agents for marketing or other purposes.  Agents would similarly be prohibited from falsely advertising that they hold such a position within the brokerage.”

The views expressed in the letter, dated April 26, threaten to undermine a key way that brokerage reward their independent contractors for bringing in the big bucks.  Designations are thought to elevate licensed associate real estate brokers and other agents above the masses: Wouldn’t a prospective seller or buyer prefer an executive vice president to a mere mortal?

Clark bases the opinion on a prohibition in the Real Property Law — (Section 441-c(1)(a) — against “dishonest or misleading advertising.”  Although the phrase is not defined by the state, the lawyer refers to “common meaning” on Merriam-Webster.com.

A section of the letter considers state statutes that prohibit the ownership of voting stock by real estate salespersons and also proscribe issuance of a real estate salesperson’s license to “any officer of a licensed, corporate real estate broker, a manager or member of a limited liability company or to a member of a co-partnership licensed as a real estate broker. “

The letter is a response to correspondence transmitted electronically on March 12 from Matthew Meisel of the Abrams Garfinkel Margolis Bergson law firm.  I spoke briefly to Meisel, who referred me to Garfinkel when I asked what prompted the correspondence to the Department of State.

My voice message mid-afternoon on Monday to the firm’s Neil Garfinkel, who is REBNY’s residential counsel, was not answered. 

“We are currently requesting clarification from the Department of State on certain issues relating to the opinion letter,” Garfinkel and REBNY President Steven Spinola wrote in an e-mail to members.  “We will continue to notify the membership as we obtain additional information relating to this matter.”

If the opinion letter will be guiding us from now on, as apparently it will, printers of business cards and Web site managers will be busy indeed.

Tomorrow: Hear here

To take your own bite out of the Big Apple, you have the option here to search all available properties privately.

Subscribe by Email

Facebook
Twitter
More...

Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
Web site

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s