April brings change for commercial real estate brokers on the East Coast

Real estate brokers on east coast get a name change, and a new law.

According to The Wall Street Journal, state regulators in New York want to prohibit real estate brokers from using business titles they haven't earned.

The Real Estate Board of New York received a letter from regulators on Friday expressing concerns over the use of false titles such as "vice president or executive vice president," expressing outright these titles cannot be used unless brokers have officially been elected to those positions. Many brokers using these titles have not received official promotions, and, according to the letter, are "being misleading," and "dishonest."

"Agents [are] prohibited from falsely advertising that they hold such a position within the brokerage," Whitney Clark, an attorney with the department, stated in the letter.

There are three different licenses a broker can have. The first is a real-estate broker; the second, associate real estate broker; the third, licensed salesperson. The state can suspend or revoke these licenses if a broker uses an illegal title.

"It is an opinion that affects the industry in a widespread way," Neil Garfinkel, a member of the board's legal counsel, told The Wall Street Journal. "I think there are some agents who are going to be upset but, at the end of the day, the law is the law."

Delaware lawmakers target commercial mortgage liens
A name change is not the only shake-up East Coast real estate brokers need to worry about.  

According to Mondaq.com, Delaware Legislature recently passed the Commercial Real Estate Brokers Lien Act. The legislation applies to brokers who are licensed by the Delaware Real Estate Commission regarding the sale or lease of commercial real estate property within Delaware state lines, and pertains to the language of brokerage agreements.

The act empowers brokers with the ability to place a lien upon the commercial real estate relating to a brokerage agreement for the unpaid compensation due the broker as it is outlined in the brokerage agreement, provided that the brokerage agreement states the following clauses:

  • The amount, or method of determining the amount, of compensation for the services of the broker.
  • That the brokerage agreement is a binding contract under state law.
  • The identity of the real estate covered by the brokerage agreement via description or tax parcel number.

The lien shall be recorded within 90 days of the failure to pay upon completion of all duties required under the Brokerage Agreement. The Affidavit and Notice of Brokers' Lien shall be effective for one year following the date of filing and while any litigation concerning it is pending.

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