A state agency is looking into whether dozens of Nest Seekers International agents with expired licenses were presenting themselves as properly documented, which would be a violation of the state’s real property law, agency officials told The Real Deal.
In a review shared with TRD on April 20, the New York State’s Department of State, which oversees real estate broker and agent licensing, found that 81 individuals that the firm claimed were licensed in Manhattan were not in fact properly licensed.
Following that analysis, DOS spokesperson Laz Benitez told TRD in an email that the state is “in the process of opening up an investigation.”
TRD discovered the potential licensing violations while conducting an annual review of residential brokerage firms. TRD reviewed nearly 50 residential firms, comparing the count of agents on the state’s website with what the firms reported on their sites and through the listing portal On-Line Residential.
Nest Seekers was the only firm that had dozens more individuals listed on its own website as agents and brokers than on the state’s website. That prompted TRD to take a closer look and make the inquiry with the DOS, which conducted its own preliminary analysis and made a decision to start the process into launching an investigation. The agency has not yet launched the investigation, Benitez said.
Nest Seekers, founded and run by CEO Eddie Shapiro, is Manhattan’s seventh-largest firm, and has seen its brand garner national exposure through “Million Dollar Listing New York” star Ryan Serhant.
The firm would not be the first major brokerage in New York City to trip up over the state’s licensing law.
TRD reported in 2011 that Corcoran Group, Manhattan’s second-largest residential brokerage firm, paid $70,000 in fines after an investigation found that 79 agents had licensing “irregularities.”
And in September that year, Massey Knakal Realty Services paid a $4,000 penalty to resolve several allegations including that one of its managing directors, who led the Brooklyn office, was not licensed.
Of the 81 individuals allegedly improperly licensed at Nest Seekers’ Manhattan offices, the state found that 73 were expired, seven fell within a 30-day grace period and one was void.
On April 29, TRD reviewed the 81 individuals and found that 51 of them were identified as “licensed” on the Nest Seekers website. Among those with expired licenses who were identified as licensed agents on the website, was Ravi Gulivindala, a managing director and senior vice president. Gulivindala was identified yesterday as an “associate broker” on the Nest Seekers’ site.
Presenting oneself as a licensed agent, when one is currently not, violates the state’s licensing law, the agency said.
“The Real Property Law prohibits misleading advertising,” Benitez said in an email. “Company websites are a form of advertising. In general, posting an agent as ‘licensed’ when the license has, in fact, expired is a form of misleading advertising.”
A real estate attorney familiar with the state’s licensing law, said companies need to stay on top of the law.
“It’s the firm’s obligation to know when [an agent’s license] is expiring, not up to the consumer to figure it out,” Alfred Fazio, a partner at Capuder Fazio Giacovia, said. He was not involved with this potential investigation.
In response to a request for comment for this story from TRD, Nest Seekers removed the words “licensed” from several agent pages, and removed several pages altogether.
“We spent the morning going through our website and all other assets to make sure we are 100% in compliance with DOS licensing law,” Shapiro said in an email to TRD. “We reminded every agent of how the regulations work with regards to grace period and such.”