The Problem with Titles-Revisited

The problem with titles—revisited

Since the widespread distribution of articles concerning the prohibition against salespersons and associate brokers using titles in advertising, our office has been inundated with phone calls and emails from disgruntled agents who believe that their business will be adversely affected. While I am sure that the designations of Super Executive Vice-President, Really High-Level Manager in Charge of International Relations, Top Flight Corporate Executive, and other similar monikers may make for an improvement to one’s self-esteem, the New York State Department of State (DOS) has clearly stated its position that a title or corporate office to anyone other than the firm’s real estate broker will be subject to disciplinary action. For those of you who simply refuse to part with your title on the firm’s website, your email signature, or business cards, please note that the fine imposed on the firm will be twice as severe as that imposed upon the agent since the firm is fined for the actual violation and a second time for the failure to supervise the licensee.

On April 26, 2013, the DOS responded to an inquiry from the Real Estate Board of New York concerning the ability of licensees to use titles and to hold corporate office. The DOS response has caused such an outcry that my colleague Neil Garfinkel, Esq. sought further clarification, and on August 20, 2013, a response was issued by the DOS which addressed specific questions I would like to bring to your attention:

Q. Does a mechanism exist whereby an associate broker can become an officer in a corporate brokerage, a manager or member of a limited liability company, or a member of a partnership?
A. No, an associate broker or salesperson cannot run the daily operations of the brokerage or hold shares of voting stock and therefore cannot hold such titles.

Q. Can an associate broker or salesperson be appointed as a director of a brokerage corporation?
A. No

Q. Can an associate broker hold a corporate officer position if he or she is an employee of the brokerage firm as opposed to an independent contractor?
A. No, Article 12-A of the Real Property Law does not recognize this distinction.

Q. Does Article 12-A prohibit the issuance of all titles to associate brokers and real estate salespeople?
A. Yes, any title which implies that an associate broker or real estate salesperson is involved in the management, supervision, and control of the brokerage company would be prohibited.

I am sure questions will arise concerning the ability of associate brokers to be designated as office managers of a branch office. In July of 2008, Article 12-A of the Real Property Law was amended, more specifically, Section 440(6), to define an Office Manager as an associate broker who manages the office or branch office under the direct supervision of a real estate broker. In this specific and limited instance, an associate broker would be able to designate himself or herself as Office Manager of that specific location. Any inference that the associate broker is acting in a corporate management capacity or position is clearly in violation of the statute and subject to disciplinary action. Hopefully, the most recent DOS response puts to rest any remaining questions on this issue. To remove all potential issues, just remove the titles!!!

Submitted by Alfred M. Fazio, Esq. of Capuder Fazio Giacoia LLP. Visit our website at for copies of recent articles as well as other areas of interest to the real estate community. If you would like to be added to our mailing list and receive future articles, please click the link below.