From left: Kenneth Krasnow of CB Richard Ellis and Daniel Hagan, Cory Rosenthal, Michael Wlody, Robert Knakal and Paul Massey, all of Massey Knakal
Massey Knakal Realty Services paid a $4,000 penalty to resolve a complaint brought by the New York State Department of State that alleges that the influential commercial brokerage firm violated the state’s real estate licensing laws.
In the agreement finalized last Thursday, Massey Knakal CEO Paul Massey and chairman Robert Knakal each agreed to pay $2,000 in fines after admitting that Kenneth Krasnow, former managing director of the Brooklyn office, was not licensed while managing real estate agents, and that three other company officers were licensed as salespersons, not brokers, as required by the law.
The agreement, known as a consent order, says, in part: “By allowing respondent Krasnow to act as a broker in a supervisory role without insuring that he was property licensed, [Massey and Knakal] failed to properly supervise respondent Krasnow, and [has] violated [state law].” The fines have been paid, the document says.
Massey Knakal, founded in 1988, has grown to be one of the largest commercial firms in the city covering investment sales, retail leasing and mortgage brokerage, with nearly 100 licensed brokers and agents in offices in Manhattan, Brooklyn, Queens and New Jersey. The sanction, while not a financial burden, is unusual among the city’s larger commercial firms, a review of consent orders by The Real Deal earlier this year shows. Most of the violations were concentrated in residential firms or smaller commercial firms.
The agreement concludes an investigation opened in February by the Department of State’s division of licensing services, which regulates and enforces the state’s real estate licensing laws, after The Real Deal reported that month that Krasnow and another real estate agent were not licensed.
The state’s complaint was drafted in May, and served to Massey Knakal Aug. 1. It alleged that Krasnow did not have a license from Oct. 6, 2008 to Feb. 14, 2011.
In May, Krasnow left Massey Knakal to lead the Palm Beach and Fort Lauderdale offices at the commercial firm CB Richard Ellis in Florida.
To conform to New York state law, which requires officers, if licensed, to have a broker’s license and not a salesperson’s license, Michael Wlody, company CFO, surrendered his salesperson’s license. Two other officers, Cory Rosenthal, executive of operations and Daniel Hagan, special assets, have temporarily stepped down from supervising agents and have dropped “vice president” from their titles until they obtain their broker’s licenses, which they have applied for.
Massey, speaking on behalf of the company this past Friday, declined to comment beyond saying, “We have not seen nor have we received a copy of the [final consent order].”
Massey is a well-respected member of New York’s real estate community and the chairman of the Ethics and Business Practice subcommittee for the influential Real Estate Board of New York. The subcommittee hears cases of brokers violating the trade group’s ethics code, which requires members to abide by, “all applicable federal, state and municipal laws and regulations.” The bulk of the city’s largest brokerages belong to REBNY.
REBNY issued a statement to The Real Deal supporting the firm, in response to a request for comment on a settlement.
“The Massey Knakal firm has always had and continues to have an exceptional reputation within the industry,” Steven Spinola, president of REBNY, wrote in a statement.
“Unfortunately, occasionally agents and firms inadvertently fail to file proper papers and to keep totally up-to-date with their records or to make other unintended mistakes. This happens in government, business and the media.”