By Holly Dutton
Sifting through a directory of agents can be confusing — some are part of a team or group within the firm, many are “senior vice presidents” or “associate brokers” while others are “licensed salesperson” or just “agent.”
So what’s the difference?
The New York State Board of Real Estate is aiming to answer that question with a new set of regulations just passed that should curb what they’ve called false advertising and increase transparency in the brokerage business.
The 14-member Board voted April 24 to approve a new set of regulations that would replace the nearly 20-year-old regulations the industry currently follows.
The new rules come on the heels of a 2011 law that requires agents and brokers to inform buyers and sellers about who represents whom, especially in dual agency cases where a broker represents both the buyer and the seller, in writing.
The rules aim to cut down on brokers identifying themselves with titles they have not received.
There are three licenses an agent can have; real estate broker, associate real estate broker and licensed salesperson.
The new regulations will also outlaw the use of “agent,” “sales associate” and “broker” in advertisements, which must include the actual license held by the broker.
In addition, the new guidelines prohibit the use of “group,” “associate” and “realty” when describing a grouping of associates. Instead, “team” is the only term allowed.
Those who use titles illegally run the risk of being fined or having their licenses revoked or suspended.
Citi Habitats President Gary Malin sees the new regulations as another push to make the industry more transparent.
“They’re trying to get clarity on how people represent themselves,” said Malin. “In the long haul, it’s to give consumer consistency. Other than short-term frustration, I don’t see long-term problems.
“People were a little frustrated at broker disclosure, too, but in the end, you need to make the changes you need to make.”
Many brokerage firms have already begun the process of ordering new business cards and changing titles on their websites, a process that Neil Binder, co-founder of Bellmarc, finds challenging.
“We have to re-configure, create new business cards — this is a big deal,” said Binder, adding that his 550-agent firm has held meetings with brokers and managers to discuss the new regulations and has also asked the Real Estate Board of New York for guidance through the process.
Though he praised the State for the broker disclosure forms instituted in 2011, Binder believes the new title regulations go a little too far, especially in regard to team names.
“The state has a legitimate desire to ensure there is a clarity of presentation by the broker in the marketplace,” said Binder. “I think they’re appropriately handling that concern.”
However, Binder feels that titles like “senior vice president” often awarded to brokers are important in “distinguishing” them in the industry.
“I would rather use ‘group’ than ‘team,” said Binder. “But I’ll use the term they want us to use.”
J.D. Parker, northeast regional director at the commercial brokerage Marcus & Millichap, said confusion over broker titles is nothing new.
“We had a problem here several years ago with titles, but the company introduced guidelines so that there would be no confusion and now all titles here have to comply with internal practices,” said Parker.
“There is a lot of confusion in the market. People call themselves what they want and think no one cares, but you do have to have your license status on your business car.”
Maxwell Jacobs president, Max Kozower, agreed that the problem has been around for a while — and is happy to see the changes instituted.
“I’m not surprised, and if anything, it should’ve happened sooner,” he said. “I think it’s in the interest of the public community.”
Talk of more stringent regulations on broker titles started five years ago, said Kozower, when Neil Garfinkel, residential counsel to REBNY, suggested brokers should have an associate broker’s license before being awarded a “senior vice president”-type title.
“I was a big proponent of the agency disclosure form,” said Kozower. “It was a contentious issue and now it’s a non-issue.
“I think New York State is doing a good job. They are moving in the right direction.”