“On December 21, 2021, the Real Property Law was changed to require that before appointment as an office manager, an associate broker shall have been active as a licensed associate broker for at least two of the four years preceding appointment. Additionally, office managers are required to exercise the same duty of supervision over salespersons and associate brokers as a licensed real estate broker.”[i] The purpose of this Amendment was: “[t]o mandate that licensed associate brokers, operating as office managers, have the same statutory obligations of oversight placed on brokers at their definite place of business.”[ii]
“In New York, real estate brokers are required to maintain and supervise a principal place of business. Additionally, brokers with numerous offices can appoint a licensed associate real estate broker as an office manager to oversee their branch offices. An associate real estate broker has the same licensing credentials as a broker and can work as an independent agent, but has chosen to work under the name and supervision of another broker.”[iii]
Notwithstanding, “unlike a broker, associate brokers acting as office managers are not held to the same statutory obligations of oversight placed on brokers at their principal place of business. Instead, office managers are held to the same standards as a real estate agent while maintaining their broker’s license. This lack of oversight over agents by office managers can manifest itself with agents who are not properly trained and supervised in their behavior, performance, and compliance with fair housing regulations.”[iv]
This amendment was designed to ensure that the office manager are held to the same standards as a licensed real estate broker.[v] As explained in the proposed Bill, “[t]his bill would require that associate brokers acting as office managers are held to the same standards as licensed real estate brokers, and ensures that proper oversight is given over real estate agents irrespective of whether they are working out of a broker’s principal place of business or branch office under an office manager.”[vi]
New York Real Property Law Section 440(6) now provides that:
“Office manager” means a licensed associate real estate broker who shall by choice elect to work as an office manager under the name and supervision of another individual broker or another broker who is licensed under a partnership, trade name, limited liability company or corporation. An associate real estate broker shall be required to have been active as a licensed associate broker for at least two of the four years preceding appointment as an office manager. Such individual shall retain his or her license as a real estate broker as provided for in this article and shall be required to exercise the same duty of supervision over salesmen and associate brokers as a licensed real estate broker; provided, however, that the practice of real estate sales and brokerage by such individual as an associate broker shall be governed exclusively by the provisions of this article as they pertain to real estate salesmen. Nothing contained in this subdivision shall preclude an individual who is licensed as an associate broker who elects to work as an office manager from also retaining a separate real estate broker’s license under an individual, partnership, trade name, limited liability company or corporation.
For further information, please contact Christopher E. Vatter at cvatter@jaspanllp.com.
[i] https://dos.ny.gov/important-updates-licensing
[ii] https://www.nysenate.gov/legislation/bills/2021/S2157
[iii] Id.
[iv] Id.
[v] Id.
[vi] Id.
