CR 16-042 Rule Text

The board shall promulgate rules for the guidance of the real estate profession and define professional conduct and unethical practice.

The board may promulgate rules regarding the supervisory responsibilities of brokers under s. 452.132, Stats.

The board may promulgate rules establishing a procedure that allows an individual who does not possess a broker’s or salesperson’s license to, without submitting a full application and without paying the fees applicable to applicants, apply to the board for a determination of whether the individual would be disqualified from obtaining a license due to his or her criminal record…The board may require a fee to be paid to the department for a determination issued under this subsection of an amount necessary to cover the cost of making the determination. [s. 452.07, Stats.]

Related statute or rule: N/A

Plain language analysis:

This rule updates the real estate code chapters to reflect current real estate practice as provided in 2015 Act 258 including: terminology, provisions relating to independent contractor relationship, duties of licensees, supervision of licensees, use of unlicensed personal assistants, business representations, inactive license references, fees for predeterminations on criminal records, electronic records retention, use of forms and elimination of timeshare credential references.

Sections 1 to 7 create definitions for three new terms defined in statute: “associated with a firm”, “associated with a subagent”, and “firm” by referring to the same definition as the statute. These sections also create definitions for “agency agreement” referring to the statutory definition, client and customer. The sections create a definition for “member of the licensee’s immediate family” which clarifies a previous definition for “immediate family”. Lastly the sections update to current drafting language, specifically remove “under” and replace with “given in”.

Sections 8 and 9 remove the reference to timeshare salespersons due to Act 258 removing the requirement for credentialing of timeshare salespersons. These sections also create a $68.00 fee for the binding determination as to whether the individual’s criminal record would disqualify the individual from obtaining a license prior to the individual submitting an application for the license. This provision allows an applicant who receives a favorable determination to credit the amount toward the application fee if the person applies within 1 year of the determination. Act 258 permits the Real Estate Examining Board (Board) to charge a fee for the cost of making this determination.

Sections 10, 18, 20, 29, 30, 31, 32, 33, 34, 35, 36, 37, 39, 40, 42, 43, 45, and 46 update terminology.

Section 11 clarifies any documents prepared or received by the licensee in addition to utilized shall be promptly provided to any person who signed the document. The section also includes rental agreements and clarifies the lease or rental agreement shall be provided upon execution of the lease or rental agreement.

Sections 12 clarifies a broker or salesperson shall promptly distribute a copy of an agency agreement that has been accepted and signed by all parties to the client when the client signs an agency agreement.

Section 13 repeals the obsolete provision relating to closing statements. Closing statements are no longer prepared by the broker.

Section 14 updates terminology and clarifies the record retention period in transactions without a date of closing or consummation begins from the date the listing contract or agency agreement is terminated. In addition, this section clarifies electronic or digital record retention may be utilized.

Section 15 creates a provision requiring brokers and salespersons to submit documents to the firm in a timely manner so that the firm can be in compliance with the record retention requirements.

Sections 16 and 19 update terminology and requires forms to be filled out based upon a party’s instruction rather than a party’s intent.

Section 17 updates terminology and adds quasi-governmental and tribal agencies to the form exception in order to provide clarification to the profession.

Section 21 repeals the definitions which are no longer necessary. It also repeals the section which states for the purposes of this chapter a business representative is not an employee of the business entity because it no longer applies with the new business structure.

Sections 22, 23, 24, 25, and 26 update terminology in provisions for persons associated with a firm and change the references from code references to statutory references.

Section 27 repeals the obsolete sections relating to notice of employment requirements and unlicensed personal assistants.

Section 28 repeals the obsolete definition of “cooperating broker”.

Section 38 repeals the “agency agreement” definition.

Section 41 updates terminology and clarifies family member language in order to be clear the code means a member of the family and not family as a unit.

Section 44 updates terminology and clarifies a pending written proposal or offer is one being negotiated.

Summary of, and comparison with, existing or proposed federal regulation: None

Comparison with rules in adjacent states:

Illinois: Illinois does not have a predetermination process regarding criminal convictions. Illinois also does not use terminology relating to firm.

Iowa: Iowa does not have a predetermination process regarding criminal convictions. Iowa also does not use terminology relating to firm.

Michigan: Michigan does not have a predetermination process regarding criminal convictions. Michigan also does not use terminology relating to firm.

Minnesota: Minnesota does not have a predetermination process regarding criminal convictions. Minnesota also does not use terminology relating to firm.

Summary of factual data and analytical methodologies:

The Board reviewed all of the REEB chapters to implement the 2015 Act 258 changes.

Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis:

This rule was posted for economic comments for 14 days and none were received.

Fiscal Estimate and Economic Impact Analysis:

The Fiscal Estimate and Economic Impact Analysis is attached.

Effect on small business:

These proposed rules do not have an economic impact on small businesses, as defined in s. 227.114 (1), Stats. The Department’s Regulatory Review Coordinator may be contacted by email at [e-mail], or by calling [phone].

Agency contact person:

Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, Wisconsin 53708; telephone [phone]; email at [e-mail].

Place where comments are to be submitted and deadline for submission:

Comments may be submitted to Sharon Henes, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Board Services, 1400 East Washington Avenue, Room 151, P.O. Box 8366, Madison, WI 53708-8366, or by email to [e-mail]. Comments must be received at or before the hearing to be held on August 18, 2016 to be included in the record of rule-making proceedings.

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TEXT OF RULE

Section 1. REEB 11.02 (1) is renumbered to 11.02 (1t)

Section 2. REEB 11.02 (1d), (1h), and (1p) are created to read:

REEB 11.02 (1d) “Agency agreement” has the meaning given in s. 452.01 (1m), Stats.

(1h) “Associated with a firm” has the meaning given in s. 452.01 (1o), Stats.