So much for all the senior vice presidents, vice presidents, executive vice presidents, managing directors and all the other clunky important-sounding titles that real estate brokerages love to parcel out to their top-sellers. For a long time, brokerages have crowned their best and brightest with meaningless titular appendages that brokers are only too happy to slap on their business cards. Now the satisfaction of a job well done, big fat commission checks and the money and power that come with selling millions of dollars in real estate will have to be reward enough.
As the Wall Street Journal reported, New York State is putting the kibosh on all the fake fancy titles because, as it happens, most people who sell real estate are actually prohibited from holding them.
In a kind of weird catch-22 outlined in a letter that the state recently sent to the Real Estate Board of New York’s attorney in response to a question about the use of titles, brokers can’t hold or promote themselves using titles unless they are actually officers of the corporation. Brokerages can’t just dole out the ultimately empty titles to reward top-producing salespeople. The titles, the state’s decision concludes, cannot be used for marketing purposes.
But as it turns out, the titles also can’t be legitimately bestowed on any agents or associate brokers, because real property law prohibits a real estate salesperson, a.k.a. anyone selling real estate—including associate brokers—under another broker, from holding a corporate management position.
“These provisions prohibit a real estate salesperson from holding voting stock or being appointed an officer in a corporate brokerage, a manager or membership of a limited liability corporation or a member of a partnership,” the decision states.
In other words, all those SVPs, EVPs and VPs out there are prohibited from calling themselves such unless they are elected or appointed to a corporate management position, but most people who sell real estate can’t legally be appointed.
It appears that only brokers can legitimately take fancy titles, if their brokerages actually appoint them. It’s unclear how many New York City brokers will be affected by the ego-deflating decision, but it’s almost certain to cause tumult in the status-obsessed industry.
As one brokerage spokesman griped to The Journal. “How would you present yourself in the industry without a title? People would be very upset.”
But while the decision is sure to ruffle a lot of feathers (and require more than a few business card reprintings), given that the city’s real estate community came through the mortgage crisis relatively unscathed, we’re sure that it can manage to carry on with a few less SVPs.