Prestige titles for real estate brokers will be a thing of past under recent enforcement actions by New York state regulators. In a decision which could travel to other states, New York says fancy titles for most real estate licensees are out. No longer will you see a salesperson or associate broker claiming such honorific titles as vice president, director, managing director, senior vice president or anything similar.
Handing out fancy titles, says Malcolm Carter, an associate broker with the Manhattan firm of Charles Rutenberg Realty, is one way that brokers “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?”
The logic behind the state’s decision goes to the heart of real estate brokerage: In most states there is a “broker” licensed to do business with the public. Working under the broker’s authority are salespeople and associate brokers. An associate broker is someone who holds a broker’s license but works for another broker.
Real Estate Brokers & Status
Most states have laws on the books which vigorously limit the rights of salespeople and associate brokers.
In a letter to attorney Neil Garfinkel, the NY Department of State explains that the rules prohibit salespeople and associate brokers “from holding voting stock in a corporate brokerage and from being appointed as an officer in a corporate brokerage, a manager or member of a limited liability company, or a member of a partnership. As such, a licensee cannot use any title that is false or misleading, such as one that would indicate falsely that the licensee is a corporate officer with the brokerage company. The statute and implementing regulations require brokers to guide, instruct, oversee and supervise the actions of associated salespeople and associate brokers (19 NYCRR 175.21). Consistent with this principle, any title which implies that an associate broker or real estate salesperson in involved in the management, supervision and control of the brokerage company would be prohibited.”
The rules for brokers are different. They can be shareholders, corporate officers and partners. And those who are now salespeople can become “brokers” by completing required educational work and testing while associate brokers can change their status by becoming, well, brokers. As the letter to Mr. Garfinkel explains, the rules do not “limit the number of real estate brokers who may be licensed to represent a particular real estate brokerage.”
50+ Senior Designations
The effort by New York state to stamp out honorific designations should come as no surprise to anyone — nor is it likely to be limited to one state. At the federal level, the Consumer Financial Protection Bureau found that more than 50 designations had been developed by lenders to sell mortgage loans and related products to seniors. Some titles required significant study to obtain but others required no course work at all.
The same is true in real estate.
“Agents and brokers at various real estate firms were awarded corporate titles over the years for reaching sales benchmarks,” says the New York Times, “or for spending a certain number of years with the company — though at a few firms, one could become a vice president just by walking in the door.”
Oh well, at least the New York decision is good for one group…. Printers will now see a lot of new business as real estate salespeople and associate brokers come in to get new stationary and business cards.
Real Estate Brokers Losing Prestige Titles is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan
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