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Legal Hottips -  January 21, 2008
This Legal Hottips article may be reprinted only if it is reprinted in its entirety, including the disclaimers above and below the Hotline questions and answers. The Wisconsin REALTORS® Association Best of the Legal Hotline Service is an educational resource intended to keep the Association abreast of legal developments and concerns involving real estate practice in Wisconsin. We look forward to your input regarding the service, especially regarding the types of topics you would like covered.

FORMS ADVISORY
At the January 17 meeting of the Department of Regulation and Licensing Real Estate Forms Advisory Committee, the Committee recommended that the Department move forward with an emergency administrative rule change that would remove the ability of real estate licensees to add blank, unnumbered lines to the DRL-approved forms under Wis. Admin. Code § RL 16.06(1)(d). The Department is considering such a change as new DRL-approved forms are making their way into the practice in an effort to avoid confusion and/or misunderstanding as to exactly what is a DRL-approved form. This change would not affect a licensee's ability to use addenda as authorized under § RL 16.06 (4) and (5). Before moving forward with a proposed change, the Department must first present its proposal to the Real Estate Board. Until this matter is resolved, we urge licensees to use addenda rather than incorporate additional lines into an approved form.

There are no modifications to the WB-1 Residential Listing Contract or WB-36 Buyer Agency/Tenant Representation Agreement approved by the Department of Regulation and Licensing with a mandatory use date of July 1,2008. Any rumor that the forms were going to be changed again is false. The final version of the forms is the one appearing in the WRA ZipForms and hard (paper) copies of those forms.

READ MORE ABOUT IT:
For more information on the form revisions, purchasing hardcopy forms and a line-by-line video presentation by Attorney Dave Sayas, visit www.wra.org/formsupdate. ZipFormDesktop users may download the updated forms from http://www.zipform.com/support/updates.asp (select Wisconsin and then the Wisconsin REALTORS Association library). ZipFormOnline users are automatically updated.

Lines 220 - 229 of the 2008 WB-1 form contain the definition of "Protected Buyer" and the requirement to provide the seller, in writing and within three days after the expiration of the contract, the names of certain buyers for whom the listing broker seeks protection. The new form does not substantively change the extension of listing requirements for buyer protection. What has changed in the new form is the repositioning of the definition of Protected Buyer and the procedures for protecting buyers on page four of the contract under Definitions.

READ MORE ABOUT IT:
See pages 8-9 of the October 2007 Legal Update, "WB-1 Listing Contract - 2008 Revisions," online at www.wra.org/LU0710.

Wis. Admin. Code § RL 16.06(4) and (5) (below) sets forth the applicable rules for use of addenda by Wisconsin real estate licensees:

Wis. Admin. Code § RL 16.06
(4) Except as provided in sub. (5), a licensee may use a pre−prepared addendum form and attach it to an approved form under the following circumstances:
  (a) The addendum has been prepared by the broker or the broker's attorney; and
  (b) The addendum is incorporated by reference into the approved form and the approved       form and the addendum are properly related to one another; and
  (c) The addendum relates to the blanks on an approved form; or alters or supplants optional provisions within an approved form.

(5) A licensee may use a pre−prepared addendum which supplants or alters the printed provisions of an approved form only if:
  (a) The addendum has been drafted by an attorney who is identified on the addendum;
  (b) There are no optional or multiple choice provisions in the addendum;
  (c) There are no blanks or fill−in provisions in the addendum except for spaces for the   signatures of the parties and those items required under par. (d); and,
  (d) The addendum is incorporated by reference into the approved form and the approved   form and the addendum are properly related to one another.

READ MORE ABOUT IT:
See pages 1-3 of the March 2005 Legal Update, "Customizing the Offer to Purchase" online at www.wra.org/LU0503.

The agent, as listing agent, wrote the offer for buyer under a buyer agency agreement. Both the listing contract and buyer agency agreement provided for designated agency. Designated agency requires two separate agents within the same company, one each to represent the buyer and the seller. Here, the agent wrote the offer without any other agent in the company in violation of the current agency law.

It is suggested that the current offer be voided and another agent in the company rewrite the offer on behalf of the buyer.

READ MORE ABOUT IT:
See pages 8-11 of the June 2006 Legal Update, "Revised Agency Law Implementation," online at www.wra.org/LU0606.    

Formerly the Wisconsin Administrative Code defined branch offices in chapter RL 17 as a location where a broker conducts activity which requires licensure and which is advertised or otherwise represented as a business location. Changes to the Wisconsin Administrative Code, broker supervision rules, and Wis. Stat. Chapter 452 made that definition of branch offices obsolete. Brokers are no longer required to have a full-time broker/manager at each of their branch offices. On-site supervision at branch offices is not presently required. However, the statutes continue to provide that each broker is responsible for supervising the activity of any licensee employed by the broker. The supervision rules in chapter RL 17 continue to apply (see www.legis.state.wi.us/rsb/code/rl/rl017.pdf ). Brokers should confer with their attorneys and implement procedures to ensure sufficient supervision, guidance and communication for all business locations.

READ MORE ABOUT IT:
For more information on broker supervision, see the Broker Supervision Newsletters, "Implementing the New Broker Supervision Rules Part I and Part II," online at www.wra.org/BSNnov05 and www.wra.org/BSNfeb06.

Debbi Conrad
Director of Legal Affairs
Wisconsin REALTORS® Association
4801 Forest Run Road Suite 201
Madison, WI 53704
Phone: 608-241-2047; 800-279-1972
Fax: 608-242-2279

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