Wisconsin REALTORS® Association - Legal Hotline Hottips
Legal Hottips - April 28,
2008 IMPACT OF DRL FORMS EMERGENCY RULE Effective April 16, 2008 a new emergency rule from the Department of Regulation and Licensing regulates the use of approved forms for real estate practice. The purpose of the emergency rule is to prohibit the altering of Department-approved forms in a manner such that blank lines containing inserted provisions are placed between provisions of the approved form text in such a manner as to create the appearance and implication that they are approved by the Department. In other words, extra provisions or extra blank lines may not be inserted between the numbered lines of the Department-approved forms. The end result is that Department-approved forms may not be substantively altered and that additional lines may not be added to the forms. The emergency rule does not change the ability to use the blank lines provided in the approved forms or to attach an addendum as authorized under § RL 16.06(4) and (5). This new rule does impact some of the WRA's DRL forms, specifically the WB3, WB4, WB5, WB6 and the old WB36. These forms have the sex offender language added on the last page as unnumbered lines. The new revised WB-36 forms are currently available and many of the others are currently being revised by the Department and are expected to be available in the upcoming months. All of the forms revised by the Department have the sex offender registry notice included in the numbered lines.
1.) Disclosure - Real Estate Condition Report QUESTION: Re: Foreclosure properties. When working with banks, they are always "as-is" sales. What is done about a RECR? If there is no RECR, is there some type of waiver that needs to be signed? ANSWER: All sellers subject to Wis. Stat. Chapter 709, whether broker assisted or FSBO, must complete a Chapter 709 Real Estate Condition Report (RECR) or risk rescission of the offer to purchase. Chapter 709 generally applies to all persons who transfer real estate containing one to four dwelling units, including condominium units, time share property, living quarters in a commercial property, etc. Chapter 709 does not apply to (1) personal representatives, trustees, conservators and other fiduciaries appointed by or subject to supervision by the court, but only if those persons have never occupied the property (Note this does not include powers of attorneys); (2) real estate which has not been inhabited, e.g. new construction; and (3) transfers exempt from the real estate transfer fee, e.g. between spouses, foreclosures, probate transfers, etc. (Note: this does not include sales of foreclosed properties). A seller can either (a) complete the RECR to the best of his or her knowledge, (b) retain a professional to provide an inspection report to be used as the basis for completing the RECR, (c) refuse to complete the RECR and sell "as is," risking buyer rescission, or (d) refuse to complete the RECR and sell "as is," refusing to accept any offers from buyers who do not waive their Chapter 709 rescission rights. Wis. Stat. § 709.08 allows a buyer to waive the right to receive a RECR and the right to rescind the offer based upon the content of the RECR. Buyers should be advised to confer with legal counsel before waiving any legal rights - REALTORS® cannot provide legal advice of this sort. However, even with those waivers, a seller may be obligated in certain situations, under common law, to disclose material defects that the buyer may not be able to discover (see the discussion of the Green Springs Farm v. Spring Green Associates Ltd Partnership case on page 9 of www.wra.org/LU0207). READ MORE ABOUT IT: 2.) Disclosure - Megan's Law QUESTION: Re: Broker's obligation to disclose to a buyer that there is a sex offender in the neighborhood where the listed home is located. ANSWER: Under Wis. Stat. §§ 452.24, 704.50 & 706.20, real estate licensees, landlords, property managers, and sellers all will have a duty, if asked by a person in connection with a real estate transaction, to disclose any actually known information concerning any sex offenders. Specifically, if asked whether a particular person is required to register as a sex offender, about the location of sex offenders in a neighborhood, or for any other information about the sex offender registry, the licensee, owner or property manager must disclose whatever actual knowledge he or she has on the subject. However, the real estate licensee, owner or property manager will have immunity relating to the disclosure of such information if he or she promptly gives the person requesting the information a written notice indicating that the person may obtain the sex offender/registry information by contacting the Department of Corrections via either the Internet or by a toll-free telephone number. In other words, even if the licensee, owner or property manager knows something about sex offenders in the neighborhood, the licensee, owner or property manager will have immunity if the person asking the question is referred to the Department of Corrections. Instead of answering based upon what they have heard or read, the licensee, owner or property manager can instead just refer the person to the Department of Corrections' sex offender registry for factual and accurate information. The following notice, which may be inserted into any existing form or a WB-41 notice form, is what must be given to satisfy the sex offender disclosure requirements. This notice is included in many WRA real estate forms. Notice: You may obtain information about the sex offender registry and persons registered with the registry by contacting the Wisconsin Department of Corrections on the Internet at www.widocoffenders.org or by phone at 608-240-5830 or 877-234-0085. READ MORE ABOUT IT: 3.) Agency - Disclosure QUESTION: Are brokers required to have a Broker Disclosure to Clients signed with foreclosure companies? They provide us with all the listing contracts, which do not contain disclosure information in most cases, and do not fill out any of our forms. ANSWER: Real estate licensees in Wisconsin must provide clients a written agency disclosure statement. As a reminder, real estate licensees must use the state-approved forms unless one is not available. If a seller is requiring a licensee to use a listing contract other than the state-approved form, the licensee may not "use" the form, which includes filling-in the blank lines. In this situation, the licensee is only permitted to help negotiate the terms of the unapproved form and only the seller or an attorney may actually fill-in the blanks. A licensee can sign such a contract as a party to the listing. The licensee is not exempt from providing a written disclosure statement to the client. At this time the agent may use the WRA Broker Disclosure to Client form that will help the agent meet this requirement under the law. The licensee should carefully document the delivery of this form and the licensee's request that it be signed - just in case the foreclosure company does not sign it. READ MORE ABOUT IT: 4.) Office Management - Telephone Solicitation Rules & the No Call List QUESTION: Re: Exemption under the Do Not Call laws. If a broker runs an 800 number and a consumer calls the number for information, is the broker allowed to contact that person? The consumer's telephone number is "captured" when he or she makes the call to the 800 number. ANSWER: The federal law permits you to call the consumer following an inquiry for up to three months after the inquiry or until the consumer requests to be placed on your company's do-not-call list. Where the consumer's telephone is captured versus where the consumer requests to be contacted is different, however. The test under federal law is whether the consumer has a reasonable expectation of receiving a return call. Therefore, in the recorded message that the consumer receives when dialing the 800 number, you should consider creating this expectation by informing the consumer that he/she can expect a return call. Offering the consumer the ability to opt of the return call is also recommended. Under Wisconsin law, a return call may be made to the consumer if it is in response to the consumer's affirmative request for that call. The test here becomes whether the consumer is making an affirmative request for a return call when contacting the 800 number. READ MORE ABOUT IT: 5.) Listing Contracts - Miscellaneous Listing Issues QUESTION: The owners of a listed property require that someone from the listing office be present at all showings. If a licensee from another sales office is showing the property can a staff member from the listing office, who is not licensed, open the door for the other licensee and let them in and just stay in the property until the showing is over? ANSWER: The terms of the listing contract will control. The listing may simply require that a licensee or any staff person from the listing company be present at all showings. Note, however, a non-licensee may not provide any services which would require a real estate license and would ideally be limited to safeguarding the property. The listing contract should strictly limit the duties of any non-licensee present at a showing, given that Wis. Admin. Code § RL 17.12(2) prohibits non-licensees from hosting open houses without a licensee being present. SAFETY FIRST: Please do not let your guard down
- your safety is primary! View individual segments of the video: Sales Pre-License Course - Madison To register, call 800-279-1972 or visit http://www.wra.org/Education/Pre-license/Sales_Pre-license.asp.
This Wisconsin REALTORS® Association Best of the Legal Hotline service is provided for you by the WRA's Legal Affairs Department. The service should be considered a general statement of applicable legal principles. Given this format, it is impossible to fully address all potential legal issues which might apply in any particular situation. A determination of any individual's legal rights in a transaction can only be obtained after complete analysis of the law and its applicability to the particular fact situation. Please contact the WRA Legal Hotline if additional information is needed, or private counsel, if legal advice is needed. Thank you for using the Wisconsin REALTORS® Association Best of the Legal Hotline service. Debbi Conrad |