The tribunal found a designer could be described as an architect even if they were unregistered or did not have a degree in architecture.
It said the test was whether the designer had the necessary knowledge and skills to carry out the work.
But the tribunal also cautioned against misrepresentation.
"It is very disturbing that people who are no more than architectural designers or draftspeople are being held out as prominent architects," it said.
"Such a misconception in the mind of a purchaser could lead to the purchaser paying a much higher price ... That type of possibility must be eliminated."
Registered Architects Board chief executive Paul Jackman said the tribunal's decision was "dangerous and illogical".
"Strangely, they've gone and flipped around and said, 'You're an architect unless your building falls down' - and that's crackpot.
"The plain fact is that misrepresenting the designer of a house as an architect is fraudulent and is done to talk up the price of a house in order to enrich the real estate agent and the vendor at the expense of a buyer."
Since 2009, the REAA has referred 41 complaints about the issue to its complaints assessment committee.