§440. Definitions +8New York · Real Estate · English

A real estate broker is any person, firm, LLC or corporation who, for another and for a fee, commission or other valuable consideration, lists, sells, exchanges, buys, rents, or negotiates the sale/rental of real estate, collects rent, negotiates loans (other than residential mortgage loans), or is engaged as a tenant relocator. Also includes performing such functions in condominium resales from real estate syndication offerings.

• ✓Broker acts 'for another and for a fee, commission or other valuable consideration'
• ✓Interest in real estate includes sale of a business where real estate value is not merely incidental
• ✓Excludes assignment of a lease and securities transactions under Article 23-A GBL
• ✓Excludes residential mortgage loans as defined in section 590 of banking law

An associate real estate broker is a licensed real estate broker who elects to work under the name and supervision of another individual broker or broker licensed under a partnership, trade name, LLC or corporation. Their practice is governed exclusively by the provisions pertaining to salespersons.

• ✓Must be a licensed broker who chooses to work under another broker's supervision
• ✓Practice governed exclusively by provisions pertaining to salespersons
• ✓May retain a separate broker's license under an individual, partnership, LLC or corporation

A salesperson is a person associated with a licensed real estate broker to list, sell, buy, negotiate purchase/sale/exchange of real estate, negotiate loans (other than mortgage loans), lease/rent property, or collect rent on behalf of the broker.

• ✓Must be associated with a licensed real estate broker
• ✓Performs functions on behalf of the broker
• ✓Cannot negotiate a mortgage loan as defined in section 590 of banking law

A real estate broker is any person, firm, LLC, or corporation who, for another and for a fee, commission or other valuable consideration, lists, sells, exchanges, buys, or rents real estate, or negotiates such transactions, collects rent, negotiates non-residential mortgage loans, or acts as a tenant relocator. It includes resale of condominium property from syndication offerings and sale of a business where real estate value is not merely incidental.

• ✓Broker must act 'for another' and 'for a fee, commission or other valuable consideration'
• ✓Interest in real estate includes sale of a business where real estate is not merely incidental, but excludes lease assignments
• ✓Excludes persons registered under GBL article 23-A or federal securities laws for business sales

A salesperson is a person associated with a licensed broker to list, sell, buy, negotiate purchase/sale/exchange of real estate, negotiate non-mortgage loans, lease/rent property, or collect rent on behalf of the broker.

• ✓Salesperson must be associated with a licensed broker
• ✓Performs brokerage functions on behalf of the broker
• ✓Includes condominium resale from syndication offerings

A tenant relocator supervises/organizes/coordinates the relocation of commercial or residential tenants from buildings to be demolished, rehabilitated or altered, for a fee. An office manager is a licensed associate broker who elects to work as office manager and must have been active as a licensed associate broker for at least two of the four years preceding appointment.

• ✓Office manager must have been active as associate broker at least 2 of the 4 years preceding appointment
• ✓Office manager exercises same duty of supervision over salespersons as a broker
• ✓Tenant relocator handles relocation for a fee, commission or valuable consideration

An associate real estate broker is a licensed broker who elects to work under the name and supervision of another individual broker or firm. Their practice is governed by the provisions applicable to salespersons, though they retain their broker's license.

• ✓Associate broker works under supervision of another broker
• ✓Practice governed by rules pertaining to salespersons
• ✓May also retain a separate individual broker's license

A tenant relocator supervises/coordinates the relocation of commercial or residential tenants from buildings to be demolished, rehabilitated, or altered. An office manager is a licensed associate broker who elects to manage an office and must have been active for at least 2 of the 4 years preceding appointment.

• ✓Office manager must have 2 of 4 preceding years active as associate broker
• ✓Office manager exercises same duty of supervision as a licensed broker
• ✓Tenant relocator handles relocation for demolished/altered buildings

To qualify for a real estate broker license based on salesperson activity, an applicant must accumulate 3,500 experience points, which equate to two years of full-time experience. Points are credited according to a defined schedule of transaction categories.

• ✓3,500 points equals two years of full-time experience
• ✓3,500 total points are needed to qualify for a broker license based on salesperson activity

Upon request by the department, either before or after licensure, an applicant must promptly provide documentation or proof to substantiate any experience claimed. Failure to provide requested proof, or making a false claim of experience, is grounds to deny, suspend, or revoke a license.

• ✓Failure to promptly provide requested documentation is grounds to deny, suspend, or revoke a license
• ✓Any false claim of experience is grounds to deny, suspend, or revoke a license
• ✓The applicant bears the burden of establishing that they actually performed the claimed work

To qualify for a real estate broker license based on salesperson activity, an applicant must accumulate 3,500 experience points. These 3,500 points equate to two years of full-time experience. Points are credited according to the official experience point schedule based on the type of transaction performed.

• ✓3,500 points equate to two years of full-time experience
• ✓3,500 total points are needed to qualify for a broker license based on salesperson activity

Upon request by the department, either before or after licensure, an applicant must provide documentation or other proof to substantiate any or all of the experience claimed. The applicant bears the burden of establishing to the satisfaction of the department that they actually performed the work associated with the claimed real estate transaction.

• ✓Failure to promptly provide requested documentation is grounds to deny the application, or suspend/revoke a license
• ✓Any false claim of experience is grounds to deny the application, or suspend/revoke a license
• ✓The applicant has the burden of proving they actually performed the claimed work

No person, co-partnership, LLC or corporation may act as a real estate broker or salesperson without first procuring a license. Broker applicants must be 20 years or over; salesperson applicants must be over age 18.

• ✓Broker must be twenty (20) years of age or over
• ✓Salesperson must be over the age of eighteen (18) years
• ✓No license without first procuring it as provided in the article
• ✓Tenant associations and NYC-authorized not-for-profits managing city property are exempt

No person convicted of a crime in this state or elsewhere is entitled to a license unless the secretary makes a finding in conformance with all applicable statutory requirements including Article 23-A of the correction law that convictions do not constitute a bar to licensure. Must also meet requirements of section 3-503 of general obligations law.

• ✓Conviction requires secretary's finding under Article 23-A of correction law that it is not a bar
• ✓Applicant must meet requirements of section 3-503 of the general obligations law
• ✓Applies to convictions in this state or elsewhere

No person may act as a real estate broker or salesperson without first procuring a license. Brokers must be 20 years or older; salespersons must be over 18 years of age.

• ✓Broker applicants must be 20 years of age or over
• ✓Salesperson applicants must be over 18 years of age
• ✓No one may hold themselves out as a broker/salesperson without a license

A person convicted of a crime cannot be licensed unless the secretary finds the conviction does not bar licensure (per Correction Law article 23-A). Tenant associations and authorized not-for-profit corporations managing NYC residential property are exempt.

• ✓Criminal conviction may bar licensure unless secretary finds otherwise under Correction Law article 23-A
• ✓Must meet requirements of GOL section 3-503
• ✓Tenant associations/not-for-profits managing NYC property are exempt

The point schedule assigns specific values to residential sales activity. A single family, condo, co-op unit, multi-family (2 to 8-unit), or farm (with residence, under 100 acres) sale earns 250 points. Exclusive listings earn 10 points, open listings earn 1 point, binders effected earn 25 points, and a co-op transaction approved by seller and buyer that fails to win Board of Directors approval earns 100 points.

• ✓Single family, condo, co-op, or 2-8 unit multi-family sale = 250 points
• ✓Residential exclusive listing = 10 points; open listing = 1 point
• ✓Binders effected = 25 points; failed co-op board approval = 100 points

Rentals or subleases effected earn 25 points, exclusive rental listings earn 5 points, and open rental listings earn 1 point. Property management activity credits 2 points per lease renewal and 1 point per rent collection per tenant per year.

• ✓Rentals or subleases effected = 25 points
• ✓Rental exclusive listing = 5 points; open listing = 1 point
• ✓Property management: lease renewal = 2 points; rent collection per tenant/year = 1 point

Most commercial sale categories earn 400 points each, including taxpayer, office building, apartment building (9+ units), shopping center, factory/industrial warehouse, hotel/motel, transient garage/parking lot, multi-unit commercial condominium, urban commercial development site, and alternative sale type transactions. A single-tenant commercial condo earns 250 points and commercial listings earn 10 points.

• ✓Most commercial sale types (office, shopping center, hotel, warehouse, 9+ unit apartment) = 400 points each
• ✓Single-tenant commercial condo = 250 points
• ✓Commercial sales listings = 10 points

Commercial leasing points scale with aggregate rental: new leases earn 150 ($1-$200K), 250 ($200K-$1M), or 400 (over $1M); renewals earn 75, 125, or 200 respectively. Commercial financing (including residential over four units) earns 200 ($1-$500K), 300 ($500K-$5M), or 400 (over $5M).

• ✓New commercial lease over $1M = 400 points; $200K-$1M = 250; $1-$200K = 150
• ✓Commercial financing over $5M = 400 points; $500K-$5M = 300; $1-$500K = 200
• ✓Commercial leasing listings = 10 points

The experience point schedule assigns specific point values for residential sales activity. A single family home, condo, co-op unit, multi-family (2 to 8-unit), or farm (with residence, under 100 acres) earns 250 points. Exclusive listings earn 10 points, open listings earn 1 point, binders effected earn 25 points, and a co-op transaction approved by seller and buyer that fails to win Board of Directors approval earns 100 points.

• ✓Single family, condo, co-op, multi-family (2-8 unit), farm sale = 250 points
• ✓Exclusive listing = 10 points; open listing = 1 point
• ✓Binder effected = 25 points; failed co-op board approval transaction = 100 points

Sale of vacant lots or land under 100 acres earns 50 points, while sale of vacant land more than 100 acres earns 150 points. An 'Other' category exists but must be fully explained to receive credit.

• ✓Sale of vacant lots/land under 100 acres = 50 points
• ✓Sale of vacant land more than 100 acres = 150 points
• ✓'Other' category must be fully explained to earn credit

Residential rental activity carries lower point values. Rentals or subleases effected earn 25 points each, exclusive rental listings earn 5 points, open rental listings earn 1 point. Property management earns 2 points per lease renewal and 1 point per rent collection per tenant per year.

• ✓Rentals or subleases effected = 25 points
• ✓Residential exclusive listing = 5 points; open listing = 1 point
• ✓Property management: lease renewal = 2 points; rent collection per tenant/year = 1 point

Most commercial sales transactions earn 400 points each, including taxpayer, office building, apartment building (9 units or more), shopping center, factory/industrial warehouse, hotel/motel, transient garage/parking lot, multi-unit commercial condominium, urban commercial development site, and alternative sale type transactions. A single-tenant commercial condo earns 250 points, and commercial listings earn 10 points.

• ✓Most commercial sales (office, apartment 9+ units, shopping center, hotel, etc.) = 400 points
• ✓Single-tenant commercial condo = 250 points
• ✓Commercial sales listing = 10 points

Commercial leasing points scale by aggregate rental amount. New leases: $1–$200,000 = 150 points; $200,000–$1 million = 250 points; over $1 million = 400 points. Renewals: $1–$200,000 = 75 points; $200,000–$1 million = 125 points; over $1 million = 200 points. Commercial leasing listings earn 10 points.

• ✓New lease points range from 150 to 400 based on aggregate rental value
• ✓Renewal points range from 75 to 200 based on aggregate rental value
• ✓Commercial leasing listing = 10 points

Commercial financing (including residential properties of more than four units) earns points by loan amount: $1–$500,000 = 200 points; $500,000–$5,000,000 = 300 points; over $5,000,000 = 400 points. Miscellaneous: sale of vacant lots/land under 100 acres = 50 points; vacant land more than 100 acres = 150 points; 'Other' categories must be fully explained.

• ✓Commercial financing points range 200 to 400 based on loan amount
• ✓Vacant land under 100 acres = 50 points; over 100 acres = 150 points
• ✓'Other' experience must be fully explained to receive credit

Broker applicants must complete at least 152 hours of approved real estate course(s) and either have actively participated as a licensed salesperson under broker supervision for at least two years OR have equivalent experience in general real estate for at least three years. The application requires proof of trustworthiness, competency, fair knowledge of English, and understanding of deeds, mortgages, contracts, agency and fair housing.

• ✓Broker education requires at least 152 hours of approved courses
• ✓Experience: 2 years as licensed salesperson OR 3 years equivalent general real estate experience
• ✓Must complete cultural competency training
• ✓Must pass a written examination administered by the department

No salesperson's license shall be issued unless the applicant has attended at least 77 hours and successfully completed an approved real estate course. Applicant must also take a written examination testing knowledge of contracts, real property, agency, fair housing and ethical obligations.

• ✓Salesperson education requires at least 77 hours of approved courses
• ✓Must pass written examination on contracts, real property, agency and fair housing
• ✓Application must set forth name of broker with whom to be associated

No renewal license is issued unless the licensee has completed at least 22.5 hours of continuing education within the two-year period, including at least 2 hours cultural competency, 3 hours fair housing/discrimination, 2 hours implicit bias, 2.5 hours ethical business practices, 1 hour recent legal matters, and 1 hour law of agency (2 hours agency for initial salesperson term).

• ✓22.5 total hours of continuing education required in two-year period
• ✓Includes: 2 hrs cultural competency, 3 hrs fair housing, 2 hrs implicit bias, 2.5 hrs ethics
• ✓At least 1 hour recent legal matters and 1 hour law of agency required
• ✓Initial salesperson term requires 2 hours of agency instruction
• ✓No CE course counts more than once in a two-year cycle

Broker applicants must complete at least 152 hours of approved real estate courses, pass a written exam, and either have 2 years active experience as a licensed salesperson or 3 years equivalent general real estate experience. A licensed salesperson may credit 77 completed hours (including 6 hours fair housing) toward the 152 hours if completed within 8 years.

• ✓Broker requires 152 hours of approved coursework
• ✓Broker requires 2 years as salesperson OR 3 years equivalent experience
• ✓Coursework must include fair housing/discrimination and broker supervision instruction

No salesperson's license shall be issued unless the applicant attended at least 77 hours and successfully completed an approved real estate course, plus passed a written examination testing knowledge of contracts, real property, agency, fair housing, and ethics.

• ✓Salesperson requires 77 hours of approved coursework
• ✓Must pass written examination on contracts, property, agency, and fair housing
• ✓Application must include GOL section 3-503 information

No renewal shall be issued unless the licensee completed at least 22.5 hours of CE within the preceding two years, including 2 hours cultural competency, 3 hours fair housing/discrimination, 2 hours implicit bias, 2.5 hours ethical business practices, 1 hour recent legal matters, and 1 hour law of agency (2 hours agency for initial term).

• ✓22.5 hours CE required every two-year renewal
• ✓Must include 3 hours fair housing, 2 hours implicit bias, 2 hours cultural competency
• ✓Initial salesperson term requires 2 hours of agency instruction

A license may be renewed upon application and payment of fee. A renewal period is two years from expiration of previous license. Applicants not renewing within the period may be required to pass the written examination. Fees are not refundable.

• ✓Renewal period is two years from expiration date
• ✓Failure to renew within the period may require passing the written examination
• ✓Persons in armed forces exempt from re-examination requirement
• ✓Fees provided by this section are not refundable

Licenses may be renewed upon application and fee payment. The renewal period is 2 years from expiration. Applicants who fail to renew within the period must pass the written examination. Applications contain an affirmation under penalty of perjury.

• ✓Renewal period is 2 years from date of expiration
• ✓Failure to renew within period requires re-taking the written exam
• ✓Armed forces members are exempt from re-examination

Fees provided for by this section shall not be refundable. No license continues in effect beyond its period if proof of attendance is not submitted and accepted prior to expiration, though a temporary renewal may be issued if failure was not the licensee's fault.

• ✓Fees are nonrefundable
• ✓License lapses if CE proof not submitted before expiration
• ✓Department may issue temporary renewal if delay is not licensee's fault

Agency is the relationship between principal and agent arising from contract (express or implied, written or oral) where an agent is employed to act on the principal's behalf with a third party. An agent transacts business for another by their authority. A fiduciary acts for the benefit of another with great confidence and trust. A principal is the employer/client of the agent or broker.

• ✓Agency arises from an express or implied contract, written or oral
• ✓A fiduciary handles money/property not their own with confidence and trust
• ✓A principal is the employer (client) of an agent or broker

Dual agency means representing both principals (seller and buyer) to a transaction. A subagent is an agent of a person who is already acting as an agent of a principal.

• ✓Dual agency = representing both seller and buyer in one transaction
• ✓A subagent is an agent of the principal's agent

A commission is the sum due a real estate broker for services in that capacity. A client is the one by whom a broker is employed. Commingling means to mix a client's funds with the broker's personal or general account, which is prohibited.

• ✓Commission is compensation due a broker for brokerage services
• ✓Commingling of client funds with the broker's personal/general account is prohibited
• ✓A client is the party by whom the broker is employed

A listing is an employment contract authorizing an agent to perform services for the principal involving property. Exclusive Agency entitles the exclusive broker to commission unless the owner sells directly. Exclusive Right to Sell entitles the broker to compensation even if the owner or another broker sells. Open Listing compensates only the broker who first produces a ready, willing, and able buyer, and terminates automatically on sale. Net Listing (a price below which the owner won't sell, with the broker keeping the excess) is regulated under Rule 175.19.

• ✓Exclusive Right to Sell pays the broker even if the owner sells the property
• ✓Open Listing pays only the broker who first secures a ready, willing, and able buyer
• ✓Net Listing is regulated under Rule 175.19

Multiple Listing is an arrangement among Real Estate Board members whereby each broker shares listings so that if a sale results, the commission is divided between the listing broker and the selling broker. Governed by Rule 175.24.

• ✓Multiple Listing divides commission between listing broker and selling broker
• ✓Multiple Listing is governed by Rule 175.24

A Realtor is a coined trademarked word that may only be used by an active member of a local real estate board affiliated with the National Association of Real Estate Boards. A Real Estate Board is an organization whose members consist primarily of real estate brokers and salespersons.

• ✓'Realtor' may only be used by an active member of a local real estate board affiliated with NAR
• ✓A Real Estate Board consists primarily of brokers and salespersons

Agency is the relationship between principal and agent arising from a contract (expressed or implied, written or oral) where an agent is employed to act on the principal's behalf in dealing with a third party. An Agent is one who undertakes to transact business or manage affairs for another by the latter's authority.

• ✓Agency arises from a contract that may be expressed or implied, written or oral
• ✓An agent acts on the principal's behalf with third parties

Blockbusting is the illegal practice of inducing homeowners in a neighborhood to sell quickly, often below market price, by creating fear that entry of a minority group will cause property values to decline. A Binder is an agreement covering the down payment as evidence of good faith by the purchaser.

• ✓Blockbusting induces panic selling by exploiting fear of minority group entry — it is illegal
• ✓A binder evidences good faith and covers the down payment for a real estate purchase

Key terms defining property acquisition and title include: Abstract of Title (a summary of all recorded instruments affecting title, in recording order); Acquisition (process by which a person procures property); Adverse Possession (acquiring title through actual, open, notorious, exclusive, and continuous occupancy under a claim of right for the statutory period); and Alienation (transferring property to another).

• ✓Adverse possession requires occupancy that is actual, open, notorious, exclusive, and continuous under a claim of right for the statutory period
• ✓Abstract of Title lists recorded instruments in the order they were recorded
• ✓An Acre equals 43,560 square feet

Three appraisal methods are defined: Income Capitalization Approach (value by capitalization of productivity and income); Sale Comparison Approach (comparability with sale prices of similar properties); and Cost Approach (adding all separately appraised parts, i.e., land value as vacant plus reproduction cost of building, less depreciation). An Appraisal is an estimate of a property's value by an expert appraiser.

• ✓Cost Approach = land value (as vacant) + reproduction cost of building − depreciation
• ✓Sale Comparison Approach relies on comparability with sale prices of similar properties
• ✓Income Capitalization Approach estimates value from productivity and income

Alienation Clause (also called 'due on sale' clause) allows a lender to require the full loan balance if the collateral is sold. Amortization is the gradual paying off of debt by periodic installments. Assumption of Mortgage occurs when a grantee takes title and becomes personally liable for the existing mortgage debt. A Balloon Mortgage Payment is a large payment during the term, often at the end.

• ✓An alienation ('due on sale') clause lets the lender demand full payoff when the collateral is sold
• ✓In assumption of mortgage, the grantee becomes personally liable for the mortgage debt
• ✓A balloon payment is a large payment often occurring at the end of the mortgage term