Wisconsin REALTORS® Association - Legal Hotline Hottips
Legal Hottips - May 19, 2008 1.) Commissions - Miscellaneous Commission Issues Wis. Stat. § 452.14 (3)(f) prohibits a salesperson from accepting payment for services in a real estate transaction from anyone but the salesperson's broker. Accepting a bonus directly from another broker could place the salesperson's license in jeopardy. Therefore, the payment must be through the salesperson's broker and may be subject to any commission arrangements between them. This will include any payment of an "advertising fee." READ MORE ABOUT IT: 2.) Landlord/Tenants - Showing Rental Properties QUESTION: An agent has a tenant-occupied listing. The tenants are very uncooperative about showings. They state that their lease mentions the "right to quiet enjoyment." However, they failed to notice in their lease the item that mentions access by landlord or landlord's agent, which specifically states, "Show the property to prospective tenants, prospective purchasers, inspectors, fire marshals, lenders, appraisers, or insurance agents." They have refused showings and state that the property can be shown when they move out, which will be November 30, when the lease expires. How can this property be shown? Can agent just set the appointment and show up? Obviously they can change the locks or simply refuse to allow agent to go in. Can agent give the 12-hour notice and go in even if no one is home (assuming that they haven't changed the locks)? ANSWER: Once a tenant moves into an apartment, landlords have limited rights to enter the apartment. State law (Wis. Stats. § 704.05(2)) establishes the tenant's "right to exclusive possession of the premises." This statute requires landlords to give advance notice of entry which may then be conducted at reasonable times to inspect the premises, make repairs, or show the property to prospective tenants or purchasers. In the City of Madison and City of Fitchburg, landlords must give notice of entry at least 24 hours in advance. In those communities without applicable ordinances, landlords must give notice of entry at least 12 hours in advance per Wis. Adm. Code § ATCP 134.09(2). The notice may be verbal or written, but it is arguably preferable to give written notice to tenants and keep a copy of all entry notices for the file. Landlords may enter a rented apartment only at reasonable times. Early morning and late evening entry arguably is not reasonable. Entry during normal business hours - 8 a.m. to 5 p.m. should usually be reasonable. It may be best to spend a few minutes trying to work out an entry time that both the landlord and the tenant agree is reasonable. No landlord may enter a dwelling without first announcing his or her presence (by knocking or ringing the doorbell) and identifying himself or herself to anyone present in the dwelling. The agent should advise the seller to have the lease
reviewed by an attorney to determine what notification is required
under the lease to gain access. If the tenants refuse access, the owner
should seek legal counsel as to their rights and options under the
lease at that point. 3.) Agency - Miscellaneous Agency QUESTION: Re: Sending out comps and information without having a buyer agency agreement. A property owned by a relative of the agent's broker is going to be listed with that broker, but currently there is no listing contract in place. The agent was contacted by a potential buyer from California and was told that she could provide information to that buyer about the afore-mentioned property. The agent did that and then the potential buyer asked for comps. The agent was instructed to obtain a buyer agency agreement with the potential buyer, but the potential buyer does not wish to sign that agreement. Are comps and information that could be used for
negotiations only to be given to buyer clients under a buyer agency
agreement? If so, what is the statute or rule? A customer has asked
what statute prevents an agent form sending the information without a
buyer agency agreement. Wis. Stat. § 452.135(1)(a) provides that a broker may not negotiate on behalf of a party who is not the broker's client, that is, a customer, without first providing the party with a Broker Disclosure to Customers form. In other words, a broker must have a client relationship or be acting as a subagent of the listing broker before negotiation services may be provided. There would have to be at least one broker involved in a transaction who has a written listing or a written buyer agency agreement. In this case, the agent may send comps and accurate
market information, upon request. The agent also may provide other
property information to the potential buyer as a neutral
information-provider. In this pre-agency stage, the agent may not enter
into any negotiations or give any advice or opinions contrary to the
interests of any other person in the prospective transaction without
either the listing contract having been signed by the seller or a buyer
agency agreement having been signed by the potential buyer. If the
buyer ends up being a customer, the Broker Disclosure to Customers form
must be provided before any negotiations. 4.) Advertising - Miscellaneous Advertising Issues QUESTION: Can the list price of a property be put on the yard sign? ANSWER: A yard sign is a form of advertising and, as such, must
comply with Wis. Admin. Code § RL 24.04 and Article 12 of the Code
of Ethics. Printed materials, i.e., brochures, data sheets and fliers,
are also forms of advertising and many people indicate list prices on
those forms. So long as the figure is clearly identified as a "list
price" and doesn't misinform, misrepresent or mislead the public, a
list price may be put on a yard sign. The agent should make sure,
however, there is no office policy prohibiting this practice. 5.) Commissions - Miscellaneous Commission Issues QUESTION: An agent had a restaurant listed and was working with an interested buyer who viewed the property. There were verbal negotiations on price. The buyer was offering low prices and the seller finally told the listing agent to give up on the buyer. The seller lowered the price the week before it expired. The listing agent informed the interested buyer, but he did not write an offer. After the listing expired, someone called to tell the broker that the buyer made an offer. Please advise. ANSWER: Assuming that the agent properly delivered that buyer's name as a protected buyer and those discussions of price amounted to what the agent's broker believes is a "discussing term," then the agent has a few options. The agent can file a Notice of Intent to File Broker Lien at the office of the Register of Deeds and deliver a copy to the seller at least 30 days prior to the conveyance (closing). Next, the agent would have to file the Notice of Broker Lien at the Register of Deeds at least three days before the closing and a copy of the form must be mailed to the seller within 72 hours of it being recorded. If the time to do those things has already passed, then the agent's broker may consult an attorney about suing the seller for the commission. The Wisconsin Court of Appeals case, Fryer v. Conant, 159 Wis.2d 739, 465 N.W.2d 517 (Ct.App. 1990) (copy at https://www.wra.org/Legal/pdf/fryer_vs_conant.pdf), may prove to be helpful. Safety Tips for Showing Property 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 |