DOS-11-15-00001-P Real Estate Brokers and Salespersons

3/18/15 N.Y. St. Reg. DOS-11-15-00001-P

NEW YORK STATE REGISTER

VOLUME XXXVII, ISSUE 11

March 18, 2015

RULE MAKING ACTIVITIES

DEPARTMENT OF STATE

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. DOS-11-15-00001-P

Real Estate Brokers and Salespersons

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

This is a consensus rule making to amend sections 175.12, 175.20 175.24(a), 177.2, 179.1, 179.2(b) and 179.3(a) of Title 19 NYCRR.

Statutory authority:

Real Property Law, section 442-k

Subject:

Real estate brokers and salespersons.

Purpose:

To update obsolete and outdated regulations.

Text of proposed rule:

Section 175.12 of Title 19 NYCRR is amended to read as follows:

175.12 Delivering [duplicate original] copy of instrument

A real estate broker shall immediately deliver a [duplicate original] copy of any instrument to any party or parties executing the same, where such instrument has been prepared by such broker or under his supervision and where such instrument relates to the employment of the broker or to any matters pertaining to the consummation of a lease, or the purchase, sale or exchange of real property or any other type of real estate transaction in which he may participate as a broker.

Subdivision (b) of section 175.20 of Title 19 NYCRR is amended to read as follows:

(b) Every branch office shall be under the direct supervision of the broker to whom the license is issued, or a representative broker of a corporation or partnership holding such license. [A salesperson licensed as such for a period of not less than two years and who has successfully completed a course of study in real estate approved by the Secretary of State, may be permitted to operate such a branch office only under the direct supervision of the broker provided the names of such salesperson and supervising broker shall have been filed and recorded in the division of licenses of the Department of State.]

Subdivision (c) of section 175.20 of Title 19 NYCRR is repealed.

Subdivision (a) of section 175.24 of Title 19 NYCRR is amended to read as follows:

(a) [Residential property as used in this section shall not include condominiums or cooperatives but shall be limited to one, two or three family dwellings.] Residential real property as used in this section shall mean real property used or occupied, or intended to be used or occupied, wholly or partly, as a home or residence of one or more persons improved by: (i) a one to four family dwelling or (ii) condominium or cooperative apartments but shall not refer to unimproved real property upon which such dwellings are to be constructed.

Section 177.2 of Title 19 NYCRR is amended to read as follows:

177.2 Approved Entities

Continuing education real estate courses and offerings may be given by any college or university accredited by the Commissioner of Education of the State of New York or by a regional accrediting agency approved by said Commissioner of Education; public or private vocational schools; real estate boards; and real estate related professional societies and organizations. Courses, including sales or technology, that increase the competency of the licensee as it relates to the real estate transaction shall be acceptable as meeting continuing education requirements subject to the restrictions set forth in paragraph (d) of this section. No real estate course of study seeking approval may be affiliated with or controlled by a real estate broker, salesperson, firm or company or real estate franchise, or controlled by a subsidiary of any real estate broker or real estate franchise. The following types of instruction shall not be acceptable as meeting continuing education requirements:

(a) General training or education to prepare a student for passing a real estate broker’s or salespersons’ examination which is not part of an approved course under Part 176 of this Title;

(b) Offerings in mechanical office and business skills, such as typing, basis computer skills training, instructional navigation of the world wide web, instructional use of generic computer software, speed reading, memory improvement, report writing, personal motivation,, salesmanship and sales psychology; [and]

(c) Sales promotion meetings [.] ; and

(d) Subjects that are not real estate related.

Section 179.1 of Title 19 NYCRR is amended to read as follows:

179.1 Qualifying experience

An applicant for licensure as a real estate broker must possess [one] two years of full-time experience as a licensed real estate salesperson under the supervision of a licensed real estate broker or the equivalent full-time experience in general real estate business for a period of at least [two] three years.

Subdivision (b) of section 179.2 of Title 19 NYCRR is amended to read as follows:

(b) [1700] 3500 points shall equate to [a] two years of full-time experience.

Subdivision (a) of section 179.3 of Title 19 NYCRR is amended to read as follows:

(a) Experience points shall be credited an applicant in accordance with the following schedule:

REAL ESTATE BROKER POINT SYSTEM FOR LICENSED SALESPERSON ACTIVITY ONLY
Category	Point Value
RESIDENTIAL SALES:
1. Single Family, condo, co-op unit, multi- family (2 to 8-unit), farm (with residence, under 100 acres)	250
2. Exclusive listings	10
3. Open listings	1
4. Binders effected	25
5. Co-op unit transaction approved by seller and buyer that fails to win Board of Directors approval	100
RESIDENTIAL RENTALS:
6. Rentals or subleases effected	25
7. Exclusive Listings	5
8. Open Listings	1
9. Property Management
- Lease renewal	2
- Rent collections per tenant/per year	1
COMMERCIAL SALES:
10. Taxpayer/Storefront	400
11. Office Building	400
12. Apartment Building (9 units or more)	400
13. Shopping Center	400
14. Factory/Industrial warehouse	400
15. Hotel/Motel	400
16. Transient garage/parking lot	400
17. Multi-unit commercial condominium	400
18. Urban commercial development site	400
19. Alternative sale type transaction	400
20. Single-tenant commercial condo	250
21. Listings	10
COMMERCIAL LEASING:
22. New Lease-aggregate rental $1 to $200,000	150
23. New Lease-aggregate rental $200,000 to $1 million	250
24. New Lease-aggregate rental over $1 million	400
25. Renewal-aggregate renewal $1 to $200,000	75
26. Renewal-aggregate rental $200,000 to $1 million	125
27. Renewal-aggregate rental over $1 million	200
28. Listings	10
COMMERCIAL FINANCING:
(includes residential properties of more than four units):
29. $1 to $500,000	200
30. $500,000 to $5,000,000	300
31. Over $5,000,000	400
MISCELLANEOUS:
32. Sale vacant lots, land (under 100 acres)	50
33. Sale vacant land (more than 100 acres)	150
34. Other must be fully explained. —
TOTAL POINTS NEEDED:	[1750] 3500

Text of proposed rule and any required statements and analyses may be obtained from:

David A. Mossberg, NYS Dept. of State, 123 William Street, 20th FL., New York, NY 10038, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Consensus Rule Making Determination

It is unlikely that anybody will object to the proposed rule because it merely seeks to repeal obsolete regulations, conform existing regulations with non-discretionary statutory provisions and is otherwise non-controversial.

The rule proposes to amend 19 NYCRR 175.12, which currently requires licensees to provide duplicate originals of certain instruments signed by a party to a real estate transaction. Technology has advanced since the regulation was promulgated and licensees now utilize photocopies for reproducing transaction documents, as opposed to carbon paper. If adopted, the rule will maintain the regulatory intent that parties be copied on relevant documents, while eliminating the obsolete requirement that this copy be a duplicate original.

The rule also proposes to amend 19 NYCRR 175.20(b) and repeal 19 NYCRR 175.20(c). The regulation currently permits real estate salespersons to manage brokerage branch offices. Article 12-A of the Real Property Law has been amended to restrict management of branch offices to a ‘branch office manager.’ Pursuant to this statutory amendment, only associate real estate brokers may manage branch offices. Accordingly, 19 NYCRR 175.20(b) and (c) are obsolete and must be amended to conform to a non-discretionary statutory provision.

19 NYCRR 175.24(a) must also be amended to comport the regulation with a statutory amendment. The regulation currently defines ‘residential property’ as one, two or three family dwellings and expressly excludes condominium and cooperative apartments. Article 12-A of the Real Property Law has been amended to include condominium and cooperative apartments in the definition of ‘residential property.’ As such, 19 NYCRR 175.24(a) must be similarly amended.

19 NYCRR 177.2 provides guidance to schools and other providers on the types of courses which will and will not be approved by the Department of State for continuing education credit. As the market and technology have evolved, licensees are increasingly relying on technology to assist with marketing and real estate transactions. The proposed revision to 19 NYCRR 177.2 will permit licensees to receive credit for continuing education classes, such as instruction in relevant technology, provided that the subjects are related to real estate.

Article 12-A of the Real Property Law has been amended to increase the qualifying experience required for licensure as a real estate broker or salesperson. Several regulations refer to the old experience requirements, which have been rendered obsolete by reason of the amendment to Article 12-A of the Real Property Law. 19 NYCRR sections 179.1, 179.2(b) and 179.3(a) must be amended to reflect current experience requirements.

Job Impact Statement

The Department of State has concluded that the proposed rule making will not adversely impact jobs and employment opportunities for real estate licensees. The proposed rule making merely repeals obsolete provisions, conforms existing regulations to non-discretionary statutory provisions and makes other amendments which are non-controversial, such as increasing topics permitted for continuing education and permitting the retention of photocopies of certain transaction documents rather than duplicate originals.