During the 2021-22 legislative session, the WRA passed 14 top legislative priorities that touch all sectors of the real estate industry. WRA legislative accomplishments are achieved through REALTOR® support, including participation at REALTOR® & Government Day. The following discussions from the WRA Legal Hotline are some of the shared successes passed during the last legislative session by the WRA and REALTORS® like you.
40-year access easements
An agent is listing a house that has a right-of-way that was recorded in the 1970s. The right-of-way is still on the title. Is this still a valid easement?
On March 11, 2022, Gov. Tony Evers signed one of the WRA’s legislative priorities addressing this very issue, creating 2021 Wis. Act 174, which can be found at docs.legis.wisconsin.gov/2021/related/acts/174.pdf.
The law eliminated the 40-year “expiration” on access easements unless the easement itself includes an end date. Access easements are commonly executed on commercial, residential and agricultural parcels to provide access to landlocked parcels, hunting land and waterways.
Prior to Act 174, Wisconsin law provided that if an access easement wasn’t re-recorded at the register of deeds within the 40 years, the easement was extinguished and unenforceable, even if the original easement agreement provides it goes forever.
Act 174 allows recorded private access easement agreements recorded on or after January 1, 1960, to run in perpetuity, while also allowing access easements recorded before that date to run in perpetuity if certain events occur, such as a re-recording or proof of physical evidence.
To read about the law guarding against access easements becoming invalid when not re-recorded every 40 years, see “Wisconsin’s New Access Easement Law,” in the May 2022 Wisconsin Real Estate Magazine at www.wra.org/WREM/May22/AccessEasementLaw.
Inspection reports
A home inspector provided an inspection report with items but did not mark the items as defects. Instead, the inspector wrote “recommend repair” next to the items. The listing agent believes that the items that need to be repaired should be labeled as defects. Does the home inspector have to label items that need repair as defects?
2021 Wis. Act 17 requires a home inspector to label in the inspection report items identified as a “defect” during the home inspection and to provide a summary page as part of the report.
Wis. Stat. § 440.97(2m) of the home inspector statute defines “defect” as:
“… a condition of any component of an improvement that a home inspector determines, on the basis of the home inspector’s judgment on the day of an inspection, would significantly impair the health or safety of occupants of a property or that, if not repaired, removed, or replaced, would significantly shorten or adversely affect the expected normal life of the component of the improvement.”
See the following resources for further discussion about home inspections and home inspection reports:
Homeowners associations
An agent has a listing that is part of a homeowners association (HOA). The buyers want to temporarily rent out the property after closing, but the HOA is planning to restrict rental properties in the neighborhood. The agent has requested a copy of the HOA’s rules and regulations to review the rules regarding rentals in the neighborhood. The HOA, however, does not have any written bylaws. Does the HOA have to provide the HOA rules and regulations to the agent?
In the last legislative session, one of the WRA’s legislative priorities that helped to create transparency for Wisconsin homeowners associations was signed into law as 2021 Wis. Act 199 (Act 199). Act 199 allows residents living in or purchasing properties within an HOA to have access to the rules and regulations impacting the property.
Under the new Wis. Stat. § 710.18, Wisconsin HOAs must annually file public notices that include both general information and contact information. This information will be searchable on the Wisconsin Department of Financial Institutions (DFI) website and thus will help owners, sellers, buyers and licensees learn how to contact an HOA representative and how to find any applicable HOA rules and regulations affecting the use of the property and the liability of owners for fees and any penalties.
The DFI has established forms for HOA notices found at www.wdfi.org. HOAs must pay a $25 fee to register. The HOA online notice form requires the following information:
- The name and mailing address of the association and, if applicable, the name and mailing address of any management company for the association.
- The name of the county and the city, village or town in which the residential planned community is located.
- The name, mailing address, and electronic mail address or daytime telephone number for an individual who is authorized to respond on behalf of the association to requests for copies of the covenants and restrictions as well as other information and documentation related to the subdivision or development.
- If the association posts information related to the subdivision or development on a website, the address of the website.
See these additional resources
- “What’s That? There’s HOA Confusion?” in the January 2023 Wisconsin Real Estate Magazine: www.wra.org/WREM/Jan23/HOA.
- August 2022 Legal Update, “The Regulation of Homeowners Associations”: www.wra.org/LU2208.
- WRA consumer brochure, “Homeowners Associations: What You Need to Know Before You Buy”: www.wra.org/consumerbrochures.
- “Notice of Homeowners Associations” notice form can be found in Transactions (zipForm Edition) as well as the WRA’s subscription-based PDF forms library.
- Addendum HOA to the Offer to Purchase can be found in Transactions (zipForm Edition) as well as the WRA’s subscription-based PDF forms library.
Condition report
An agent is listing a single-family home and asks the seller to complete a real estate condition report (RECR). The agent always reminds sellers that all questions must be answered, and questions answered with a “yes” response must be explained with a written response. The seller completed most of the questions on the RECR, but has left multiple questions blank and has not provided an explanation for any “yes” responses. Does the seller need to fill out every question on the real estate condition report?
In all transactions, the licensee is to inspect the property prior to listing it and to ask the seller for a written statement of the property condition, generally by using the RECR. The seller completes the RECR according to Wis. Stat. Ch. 709, the directions and definitions in the RECR, and advice of legal counsel as needed.
If a seller leaves questions blank, a licensee cannot advise the seller how to complete those questions but may suggest the seller speak with a real estate attorney regarding their obligations to disclose under Wis. Stat. Chapter 709.
Wis. Stat. § 709.01 requires a residential seller to complete a § 709.03 RECR, whether they are firm-assisted or For Sale By Owner (FSBO), or risk rescission of the offer to purchase. Wis. Stat. § 709.03 generally applies to all persons who transfer real estate containing one to four dwelling units, including condominium units, timeshare property and living quarters in a commercial property.
Wis. Stat. § 709.02 says:
“A report under Wis. Stat. § 709.03 or § 709.033 is considered complete only if the owner answered, or supplied information under § 709.035 for, each item on the report. A prospective buyer who does not receive a report within the 10 days may, within 2 business days after the end of that 10-day period, rescind the contract of sale or option contract by delivering a written notice of rescission to the owner or to the owner’s agent and is entitled to the return of any deposits or option fees paid in the transaction.”
See the following for further discussion about condition reports and seller disclosure
Your voice matters
The WRA’s legislative successes were made possible by REALTOR® advocacy and enthusiasm for the real estate industry. REALTORS® across the state have the opportunity to be a part of the legislative process that passed these laws by attending REALTOR® & Government Day (RDG) on April 26, 2023. At RDG, members can meet with state lawmakers and advocate for issues that impact the real estate industry, homeownership and property rights in Wisconsin. Be a part of our next legislative victory!