From left: Gary Malin, president of Citi Habitats, David Maundrell, president of aptsandlofts.com, Elliman executives Steven James, Kenneth Haber and Wilber Gonzalez and Corcoran agents Sarah Bond and Dario Mannarino

For years, when a licensed New York state real estate broker or salesperson admitted to violating state licensing law, few people would ever know about it.

Each year, dozens of the so-called consent orders were quietly negotiated between the state Department of State, which licenses and regulates New York real estate brokers and agents. While technically public information, the admissions of guilt were not published online and were difficult for the public to obtain. [more]

From left: Kenneth Krasnow of CB Richard Ellis and Daniel Hagan, Cory Rosenthal, Michael Wlody, Robert Knakal and Paul Massey, all of Massey Knakal

The New York State agency tasked with overseeing real estate licenses, the
Department of State, served commercial real estate firm Massey Knakal Realty
Services this week with a complaint alleging violations including failure to
supervise a former managing director of the Brooklyn office and for failing to
properly license three corporate officers as real estate brokers, according to the
complaint provided by the agency (see complaint below).

The complaint seeks penalties including the revocation or suspension of the
company’s licenses held by Paul Massey, the CEO, and Robert Knakal, the chairman, as well as fines, although
an amount was not stated. Insiders noted that despite the complaint stating a
demand for a revocation or suspension of licenses, the actual penalties often
wind up being far less severe.

Massey Knakal, founded in 1988 by Massey and Knakal, has one of the largest
investment sales forces in the city with 76 brokers, agents and associates and
earlier this year branched into retail leasing and commercial mortgage brokerage, with additional personnel.

The complaint follows an investigation opened after a February 2011
article in The Real Deal reported that Kenneth Krasnow, then the company’s
managing director of the Brooklyn office, did not hold a real estate license in New
York.

The complaint, dated May 9, 2011, but served Aug. 1 alleges that Krasnow was
managing director of the Brooklyn and Queens offices despite not holding a
license between Oct. 6, 2008 and Feb. 14, 2011. An individual who supervises
agents in brokerage matters is required to have a real estate license, according
to the DOS.

In addition, the state’s inquiry discovered that three individuals — Daniel Hagan,
vice president of special assets; Cory Rosenthal, vice president of executive
operations; and Michael Wlody, CFO — held corporate offices at Massey Knakal
with salesperson’s licenses, not brokers’ licenses, as required. Hagan, Rosenthal and Wlody weren’t immediately available for comment.

“By allowing respondent Krasnow to act as a broker in a supervisory role without
being properly licensed, respondent Knakal and respondent Massey have…
demonstrated untrustworthiness and/or incompetency,” the agency complaint
said, following standard language used in such documents.

The next step in the process is a hearing, but a spokesperson for the state did
not immediately know if a date had been set.

Knakal referred questions to Massey, who declined to comment. Krasnow did not
immediately respond to a request for comment.

In June 2010, the DOS fined the Corcoran Group $70,000 for allowing 79 brokers and agents to work despite licensing irregularities. Since
2009, the state has fined firms more than $200,000.

In May, CB Richard Ellis announced that Krasnow was tapped to lead its offices
in Palm Beach and Fort Lauderdale. CBRE did not immediately
respond to a request for comment.

Massey Knakal DOS complaint [more]

The New York State Department of State opened an investigation yesterday into allegations that individuals were improperly engaging in real estate activities without proper licensing.

The probe was prompted by an article on The Real Deal’s website that revealed that individuals at firms such as Massey Knakal Realty Services and Eastern Consolidated were not properly licensed.

“The department’s investigation will determine the merits of the allegations and if there is a sufficient basis to commence disciplinary proceedings against the relevant real estate brokerage licensees,” agency spokesperson Daniel Shapiro said. [more]

After years of litigation, New York City’s attempts to collect property taxes from foreign missions to the United Nations has been dealt a major setback, according to the New York Law Journal. The U.S. Court of Appeals has decided to exempt the Permanent Mission of India to the United Nations and as well as the representative of the Mongolian People’s Republic from property taxes as a benefit under the Foreign Missions Act. The designation renders the missions exempt from all property taxes and clears all outstanding liens against them. The State Department issued its notice on the exemption in June 2009. The notice applies to taxes on property owned by foreign governments used to house the staff of permanent missions to the United Nations or the Organization of American States. [New York Law Journal]

[more]

Homestate Properties office at 102-104 Fulton Street

A new sales and rental brokerage with ties to embattled developer Yair Levy has opened at 102-104 Fulton Street, the former home of now-defunct firm Homestead New York. And with a remarkably similar name — Homestate Properties — the new firm may be trying to piggyback on the success of its predecessor, which ceased operations in 2008 in the midst of the real estate downturn. The new firm is being run by Daniel Deutsch, Levy’s son-in-law and onetime business associate, and is headquartered in office space owned by Levy in the Fulton Chambers building, a nine-story building that Levy and partners converted to 14 condo units in 2004. After selling out Fulton Chambers, Levy retained ownership of commercial condos in the building, according to city documents, and leased space to sales and rental firm Homestead, founded by Eli Adahan and Danny Shamooil. Homestead had about 35 agents and three offices by the time it closed. Its co-founders, who are not involved in Homestate, have now moved on to other ventures. Levy himself may not be involved in the new venture, either. Homestate filed for incorporation with the Department of State in November 2009, according to the agency’s Web site, listing as its address Park Columbus at 101 West 87th Street — a stalled condo conversion, owned by Levy, which is now in foreclosure. But Homestate’s real estate license lists 102-104 Fulton Street as its headquarters, naming Deutsch as a salesperson and attorney Lior Aldad as the broker. [more]

According to the Post, AIG may have signed a contract to sell its two
buildings in Lower Manhattan, 70 Pine Street and 72 Wall Street, which
are connected by a skywalk. Sources said a foreign buyer will pay about
$100 million for the 1.05 million square feet of space. The buyers are
expected to create a mixed-use development that could include
residential and retail space, and will have to put down at least a $10
million deposit at the contract signing. Because of anti-terror
legislation, the Department of State will have to approve the overseas
buyer. [more]