REEB 18.11 Non-depositable items. A broker firm shall not hold any instrument, equity or thing of value which is not depositable in a real estate trust account. Non-depositable items shall be held by one of the parties to a transaction or some other party, subject to an escrow agreement prepared by the parties or an attorney.
Section 30. REEB 18.13 (intro), (1) (intro), (2), (3), (4), (5), and (6) (intro) and (e) are amended to read:
REEB 18.13 Bookkeeping system. Each broker firm shall maintain and be responsible for a bookkeeping system in the broker’s firm’s office consisting of at least the following:
(1) Cash journal. A broker firm shall maintain a record, called a journal showing the chronological sequence in which real estate trust funds are received and disbursed as follows:
(2) Ledger. A broker firm shall maintain a record including the receipts and the disbursements as they affect each particular transaction, including transactions between buyer and seller, landlord and tenant, etc. The ledger entry shall include the names of all parties to a transaction, the dates and the amounts received and the name of the party or parties providing the money if different from the buyer. Ledger entries shall include at least the date, payee, number of the check, share draft or draft and amount when funds are disbursed. The ledger shall include a running balance and segregate each transaction. The broker firm shall maintain a separate ledger or separate section of the ledger for each of the various kinds of real estate transactions, including sales, rental collections, or mortgage and land contract collections.
(3) Account reconciliation. The broker firm or a person designated by the broker firm shall reconcile the real estate trust account or accounts in writing each month except in the case where there has been no activity during the month. The written reconciliation shall include at least the ending account statement balance, the date and amounts of the deposits in transit, the number of the check, share draft, or draft, and amount of checks, share drafts, or drafts written but not paid by the depository institution as of the ending date shown on the account statement to be reconciled, and the reconciled account statement ending balance.
(4) Trial balance. The broker firm shall prepare or have prepared, in conjunction with sub. (3), a written listing of all open items in the real estate trust account. The written listing shall be referred to as the “trial balance”. The listing shall include at least the names of all parties to the transaction and the amount held in trust for the parties at the time corresponding to the account reconciliation. The broker firm may in lieu of the names of the parties to the transaction substitute the ledger page number or other means of identification from the ledger to label the funds in the trial balance.
(5) Validation. The broker firm or a person designated by the broker firm shall review the reconciled account statement balance, the open ledger account listing, and the journal running balance to ensure that all of these records are valid and in agreement as of the date the account statement has been reconciled.
(6) Use of computers. A computerized system may be used to maintain the broker’s firm’s bookkeeping system if:
(e) All records which are not maintained as written paper records are capable of being immediately converted to written paper records and immediately shall be made available for inspection and copying by the department and exact and completed copies promptly sent to the department upon the request of the department without charge to the department or board for the purposes of an audit or investigation.
Section 31. REEB 18.14 is amended to read:
REEB 18.14 Violation of rules. A broker firm who fails to comply with the rules in this chapter shall be considered to have demonstrated incompetency to act as a licensed individual broker or a licensed broker business entity in a manner as to safeguard the interests of the public, as specified in s. 452.14 (3), Stats. Section 32. REEB 23.03 and 23.04 are amended to read:
REEB 23.03 Trade name. (1) Definition. “Trade name” means the name other than the name appearing on the broker’s license, under which the broker licensed individual broker or a licensed broker business entity advertises or does business.
(2) Notification. A licensed broker licensee, before doing business under any trade name, shall notify the department in writing of the trade name.
REEB 23.04 Change of form of business organization. (1) Application. A licensed broker business entity who intends to conduct business under a different form of business entity type, shall apply for a new license. Upon payment of the fee specified in s. 440.05 (1), Stats., the department board shall issue to the applicant, without examination, a license under the new form of entity business type. (2) New license required. A broker business entity shall not engage in real estate activities under a different form of business entity type until a new license is issued.
Section 33. REEB 24.01 (3) is amended to read:
REEB 24.01 (3) If a licensee violates rules in this chapter, the licensee has demonstrated incompetency to act as a broker, salesperson or time-share salesperson in such manner as to safeguard the interests of the public under s. 452.14 (3) (i), Stats. However, the term “incompetency” is not limited in its meaning to violations of this chapter. Section 34. REEB 24.02 (2) is repealed.
Section 35. REEB 24.02 (3), (5), (6), (9) and (13m) are amended to read:
REEB 24.02 (3) “Brokerage service” means any service described under s. 452.01 (2), Stats., provided by a broker to another a person by a firm and any licensees associated with the firm. (5) “Buyer’s broker firm” means a licensee firm who has an agency agreement with a buyer.
(6) “Client” means a party to a transaction who has an agency agreement with a broker firm for brokerage services.
(9) “Customer” means a party to a transaction who is provided brokerage services by a broker firm but who is not a client.
(13m) “Principal broker firm” means a broker firm who engages a subagent to provide brokerage services in a transaction.
Section 36. REEB 24.04 (2) (a) and (b), (3) and (4) are amended to read:
REEB 24.04 (2) Disclosure of name. (a) Except for advertisements for the rental of real estate owned by the broker licensee, a broker licensee shall in all advertising disclose the broker’s firm name exactly as printed on the broker’s licensed individual broker or a licensed broker business entity’s license or disclose a trade name previously filed with the department, as required by s. REEB 23.03, and in either case clearly indicate that the broker firm is a business concern and not a private party. (b) Except for advertisements for the rental of real estate owned by the licensee, a licensee employed by a broker associated with a firm shall advertise under the supervision of and in the name of the employing broker firm.
(3) Advertising without authority prohibited. Brokers Licensees shall not advertise property without the consent of the owner.
(4) Advertised price. Brokers Licensees shall not advertise property at a price other than that agreed upon with the owner; however, the price may be stated as a range or in general terms if it reflects the agreed upon price.
Section 37. REEB 24.05 (1) (a), (2), (4) and (5) (a) 3. is amended to read:
REEB 24.05 (1) Compensation. (a) A licensee acting as an agent in a real estate or business opportunity transaction may not accept any fee or compensation related to the transaction from any person, other than the licensee’s client, principal broker firm, or broker-employer firm the licensee is associated with without prior written consent from all parties to the transaction.
(2) Disclosure of interest. A licensee acting as an agent in a real estate or business opportunity transaction on the licensee’s own behalf, on behalf of the licensee’s immediate family or firm, on behalf of any member of the licensee’s immediate family or any combination of members of the licensee’s immediate family, or on behalf of any other organization or business entity in which the licensee has an interest without the prior written consent of all parties to the transaction. For the purpose of this subsection, a licensee shall obtain the written consent in the offer to purchase, option, lease or other transaction contract.
(4) Disclosure to seller. A listing broker firm may not pay any compensation or incentive to a licensee who is acting as a buyer in a transaction without prior written consent from the seller.
(5)(a)3. Any other negotiation with the seller or the listing broker firm.
Section 38. REEB 24.07 (1) (b) (title) and (c), (3), (8) (a) 1., 1g., 1r., and 2 (intro), a. and c., and (8) (b), (d) and (e) are amended to read:
REEB 24.07 (1) (b) Listing broker firm. When listing real estate and prior to execution of the listing contract, a licensee shall inspect the real estate as required by sub. (1), and shall make inquiries of the seller on the condition of the structure, mechanical systems and other relevant aspects of the property as applicable. The licensee shall request that the seller provide a written response to the licensee’s inquiry.
(c) Other licensees. Licensees, other than listing brokers firm, shall inspect the real estate as required by sub. (1) prior to or during the showing of the property, unless the licensee is not given access for a showing.
(3) Disclosure of information suggesting material adverse facts. A licensee, when engaging in real estate practice, who becomes aware of information suggesting the possibility of material adverse facts to the transaction, shall be practicing competently if the licensee discloses to the parties the information suggesting the possibility of material adverse facts to the transaction in writing and in a timely fashion, recommends the parties obtain expert assistance to inspect or investigate for possible material adverse facts to the transaction, and, if directed by the parties, drafts appropriate inspection or investigation contingencies. This provision is not limited to the condition of the property, but includes other material adverse facts to the transaction, including but not limited to defects and conditions included within the report form under s. ss. 703.33 and 709.03, Stats. A licensee is not required to retain third party inspectors or investigators to perform investigations of information suggesting the possibility of a material adverse fact to the transaction. (8) Disclosure of agency. (a) General requirements. 1. A broker firm may not negotiate on behalf of a party who is not the broker’s firm’s client unless the broker firm provides to the party a copy of the broker disclosure to customers required under s. 452.135 (1), Stats. If the brokerage services are related to real estate primarily intended for use as a residential property containing one to 4 dwelling units, the broker firm shall request the party’s signed acknowledgement that the party has received a copy of the written disclosure statement. 1g. A broker firm may not negotiate on behalf of a client unless the broker firm gives the client a copy of the broker disclosure required under s. 452.135 (2), Stats. 1r. If a client enters into an agency agreement with a broker firm to receive brokerage services related to real estate primarily intended for use as a residential property containing one to 4 dwelling units, and the broker disclosure to clients is not incorporated into the agency agreement, the broker firm shall request the client’s signed acknowledgement that the client has received a copy of the written disclosure statement required in s. 452.135 (2), Stats. 2. Licensees acting as agents of potential buyers of real estate that is used or intended to be used principally for one to 4 family residential purposes, who are negotiating directly with the seller or who are aware that the owner of the real estate has granted a listing broker firm the exclusive right to sell, shall notify the seller or the listing broker firm, as applicable, of the licensee’s buyer agency relationship at the earlier of all of the following:
a. The first contact with the seller or the listing broker firm where information regarding the seller or transaction is being exchanged.
c. Any other negotiation with the seller or the listing broker firm.
(b) Agency agreements. 1. Brokers or their salespeople Firms and the licensees associated with the firm shall explain to their clients the responsibilities of seller’s listing agents, buyer’s agents, and subagents before entering into an agency agreement.
2. No broker or broker’s salesperson firm or licensees associated with the firm may permit other brokers firms to act as subagents in a transaction unless the broker’s firm’s client has authorized the use of a subagent in the agency agreement.
(d) Subagency arrangements. 1. A listing broker firm shall provide a broker disclosure statement to a customer as required in s. 452.135 (1), Stats., to the buyer if negotiations are being conducted directly with the buyer and not through a buyer’s broker firm. 2. A buyer’s broker firm shall provide a broker disclosure statement to a customer as required in s. 452.135 (1), Stats., to a seller if negotiations are being conducted directly with the seller and not through a seller’s broker firm. 3. A subagent shall provide a broker disclosure statement to a customer as required in s. 452.135 (1), Stats., with whom he or she is working but not to the principal broker’s firm’s client. 4. A principal broker firm is not required to provide a broker disclosure statement to a customer as required in s. 452.135 (1), Stats., to a customer of their subagents. (e) Agency agreements for lease and property management contracts. 1. A licensee who is entering into agency agreements for lease or property management contracts shall provide to his or her clients the broker disclosure statement as required in s. 452.135 (2), Stats. 2. A licensee shall provide to prospective tenants a broker disclosure statement as required in s. 452.135 (1), Stats., when negotiating the terms of a lease on behalf of the client. Section 39. REEB 24.10 is amended to read:
REEB 24.10 Net listing prohibited. Licensees shall not obtain, negotiate or attempt to obtain or negotiate any listing contract providing for a stipulated net price to the owner with the excess over the stipulated net price to be received by the broker firm as commission.
Section 40. REEB 24.13 (2) (a), (3) (b), (4) and (5) are amended to read:
REEB 24.13 (2) (a) Listing brokers firms shall permit access to listed property for showing purposes, to all buyers and persons assisting or advising buyers, without unreasonable delay, unless the buyer’s or other person’s access is contrary to specific written instructions of the seller.
(3) (b) A listing individual licensed broker acting as a sole proprieter or the listing broker’s employee licensee associated with a listing firm may not submit his or her own personal written proposal or offer to purchase a property which the broker firm has listed if the broker or broker’s employee licensee has knowledge of the terms of any pending offer, except that a broker firm may arrange for a guaranteed sale at the time of listing.
(4) Notification of action on written proposal. Licensees shall promptly inform their clients and customers whether the other party has accepted, rejected, or countered their written proposal. A licensee shall immediately provide a written statement to the other party’s broker firm that includes the date and time when the written proposal was presented when such a statement is requested by the other party or the other party’s broker firm. A licensee shall immediately provide a written statement to the other party’s broker firm that includes the date and time when the written proposal was rejected or had expired without acceptance when such a statement is requested by the other party or the other party’s broker firm.
(5) Negotiation through broker firm. A licensee may not negotiate a sale or lease of real estate directly with a party if the licensee knows that the party has an unexpired written contract in connection with the real estate which grants to another licensee an exclusive right to sell, lease, or negotiate. All negotiations shall be conducted with the broker firm holding the exclusive right to sell, lease, or negotiate, and not with the party, except with the consent of the broker firm or where the absence of the broker firm, or other similar circumstances, reasonably compels direct negotiation with the party. A listing broker firm has no duty to investigate whether a buyer has granted a buyer’s agent an exclusive right to negotiate.
Section 41. REEB 24.16 is amended to read:
REEB 24.16 Availability of rules. Brokers Firms shall have the rules of the department readily available in all offices for the use of all licensees.
Section 42. REEB 24.17 (1) is amended to read:
