New Zealand Institute of Architects' Auckland chairman Richard Goldie said the decision was of great concern to architects and home buyers.
"We're really sick of this. The use of the word architect has been eroded," he said.
"The public I think should be quite alarmed by the real estate agents' position."
Mr Goldie said ethically, the use of the term 'architect' was clear.
"Despite these complexities of the use of the word architect in law, we still commonly understand that the word 'architect' means a registered architect - a professional, a person who has been educated and has gone through a pretty rigorous registration process," he said.
"To then have a body really downgrading all of that I think is outrageous, as far as architects are concerned."
Mr Goldie encouraged home buyers to ask agents who promote houses as architect-designed to demonstrate the designer was a registered architect.
The tribunal's decision comes after an appeal by eight Barfoot & Thompson agents who had described houses as architect-designed.
The authority's complaints assessment committee had found the agents of guilty of unsatisfactory conduct, but the tribunal overturned the findings on appeal.
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 the authority was set up in 2009, it has referred 41 complaints about the issue to its complaints assessment committee.
One resulted in a decision not to inquire, 12 resulted in no further action and 28 resulted in findings of unsatisfactory conduct - including eight complaints which have now been overturned on appeal.
A further four complaints were withdrawn and seven were handled by issuing compliance advice to the real estate agents in question.
Authority chief executive Kevin Lampen-Smith said agents should be very careful about advertising properties as architect-designed, including checking whether the architect was registered with the board before making representations about a building's design.
Barfoot & Thompson did not return calls.