The common practice of commercial and residential real estate agents in New York using fancier titles such as “president,” “vice president,” “managing director,” and “executive vice president” is subject to heightened scrutiny as a result of two recent letters from the New York Department of State (DOS) that give notice that use of such titles may be dishonest or misleading advertising and subject to penalty. In response to these opinion letters, companies must exercise due care when giving titles to brokers, associate brokers, or salespersons (known collectively as “agents”), whether they are affiliated with their brokerage firms as independent contractors or employees, and in preparing marketing or advertising material, such as business cards, show sheets, press packets, deal sheets, web sites, email auto-signatures, and social media.
The April Opinion Letter
On April 26, 2013, the DOS opined that a brokerage may not permit an agent to use the titles president, vice president, senior vice president, executive vice president, or managing director for marketing purposes unless the agent is, in fact, an officer or director of the brokerage company. The department noted that Section 441-c(1)(a) of the New York Real Property Law subjects an agent to potential suspension or revocation of his or her license; a fine not exceeding $1,000; or reprimand, if the agent is found to have engaged in “dishonest or misleading advertising” and that the use of such titles by noncorporate officers violates this statute.