On December 30, 2019, the Department of Safety and Professional Services (DSPS) report was provided to the WRA membership in email. This report provided a summary of the recent disciplinary actions taken by the Real Estate Examining Board (REEB) regarding Wisconsin real estate licensees; akin to what many of you may recall as the DSPS’ “Regulatory Digest.” The Regulatory Digest was a document previously published by the department summarizing all the disciplinary actions taken within a certain time frame for licensees regulated by the state, including real estate licensees. Unfortunately, the Regulatory Digest has not been produced by the state for more than a decade. Therefore, the WRA decided to help provide this information. 

The DSPS report provides a summary of all the disciplinary actions taken by the REEB in 2019 and can be found at www.wra.org/DSPSReport. 

This article, however, offers insight into a few of the disciplinary actions taken in 2019 by the REEB relating 
to practice issues. 

Letting unauthorized person in home and not using the WB form

Facts

• Salesperson license was first issued 5/18/01 and expired 12/15/18.
• On 7/3/17, the department received a complaint regarding the sale of a property located in Hudson, Wisconsin.
• The salesperson worked with a co-worker, J.B., who does not hold a Wisconsin real estate credential, for the purchase of the subject property.
• The only buyer agency agreement for this transaction was between the buyers and J.B.
• On 6/3/17, the salesperson allowed J.B., who does not hold a Wisconsin real estate credential, to show the subject property to the buyers.
• The salesperson did not attend the showing.
• On 6/3/17, the salesperson drafted an offer to purchase (OTP) on behalf of the buyers.
• The salesperson errantly included a Minnesota inspection contingency form with the OTP, despite it being an out-of-state form, and despite the OTP already containing an inspection contingency.
• On 6/3/17, the salesperson incorrectly drafted a personal property agreement form, which is used for Minnesota real estate transactions, rather than the Wisconsin-approved WB-25 Bill of Sale form. 

Violated

• Wis. Stat. § 452.133(1)(a) by failing to provide brokerage services with reasonable skill and care pursuant to Wis. Stat. § 452.133(4m)(a)
• Wis. Admin. Code § REEB 16.06(8) by failing to use approved forms. 

Discipline

The salesperson agreed by stipulation that the right to renew the salesperson license is limited as follows: the salesperson shall successfully complete a course on offers to purchase and other approved forms, and within 90 days, pay costs in the amount of $586.00.

Failure to complete CE

Facts

• The salesperson’s license was first issued on 7/11/89 and current through 12/14/20.
• On 4/6/18, the department received a complaint regarding the salesperson.
• During the investigation, the division requested the salesperson to provide proof of completion of continuing education (CE) for the 2014-16 biennium.
• The salesperson informed the division investigator the salesperson did not possess any CE certificates for the 2014-16 biennium and had paid for the courses but never completed them.

Violated

Wis. Admin. Code § REEB 25.065(1) by failing to satisfy the continuing education requirements for the 2014-16 biennium. 

Discipline

The salesperson agreed by stipulation within 60 days to successfully complete 18 hours of CE, in accordance with the requirements specified in Wis. Admin. Code § REEB 25.065 and within 90 days to pay one-half of the costs in the amount of $365.00.

Withholding property damage information 

Facts

• The broker’s license was first issued on 2/1/07 and current through 12/14/20.
• On 12/7/16, the department received a complaint alleging the broker improperly advertised the sale of a motel after a fire damaged the property.
• On 1/30/15, the broker listed the motel property before the fire occurred, which is around the time when the broker inspected the property and took pictures for the listing.
• The property was listed at $399,998.
• Interior and exterior photos taken by the broker were included in the listing.
• On 8/17/15, the motel sustained fire damage.
• On 2/2/16, the listing contract expired.
• No modification was made to the listing description, listing price or listing photos between 8/17/15 and 2/2/16.
• On 6/1/16, the seller engaged the broker to relist the property at $149,987.
• When the broker re-listed the property, the fire damage had not been repaired and the interior was inaccessible for photos.
• The new listing identified the fire, however, it included the original photos taken prior to the fire without identifying the photos as pre-dating the fire.
• On 12/1/16, the broker had a showing on the property.
• At the time of the showing, the listing continued to display old photos without identifying the photos as predating the fire, and the listing instead stated this: “Property Sold as is due to fire damage. Long established Motel business in ideal central location offers great INVESTMENT OPPORTUNITY. Motel (6,448 sq. ft. approx.) has 18 living units, including 2-BR apartment & an efficiency. Central A/C w/Ducts Zoned Business sits on large comer lot with high visibility & traffic count. Conveniently close to downtown & major highway. Property has 25+ assigned paved parking spots & handicap access. Sale includes business name, office and inventory. This 0.41 acre corner lot could also be perfect site for a new business. This is an AUCTION listing. Agents can submit offers until 11/15/16. Seller will respond to the best and highest offers. Property is being sold as-is, where-is."
• On 12/2/16, after the showing, the broker updated the listing to include additional information, stating that, “there was a fire damage on property, City of Wausau has ordered property demolition, please contact inspection department of City of Wausau for more information,” and added exterior photos to the listing to show the fire damage. 

Violated

Wis. § 452.133(1)(b) by failing to provide brokerage services with reasonable skill and care. 

Discipline

The broker agreed by stipulation in 90 days to successfully complete a course on the topic of consumer protection and shall pay a $500 forfeiture and one-half of the costs in the amount of $1,118.00.

Practicing with expired license

Facts

• The broker’s license was first issued on 1/26/11 and current through 12/14/20.
• The business entity license was first issued on 3/18/14 and currently expired as of 12/15/18.
• The business entity license was expired from 12/15/14 to 2/16/15.
• Between 12/15/14 and 2/16/15, the broker performed at least one real estate transaction on behalf of the business entity.
• The business entity license was also expired from 12/15/16 to 1/2/18.
• Between 12/15/16 and 1/2/18, the broker listed at least 13 properties on behalf of the business entity.
• In July 2016, the broker listed a property in which her husband had an interest (the Property).
• In February 2017, the broker received an offer to purchase for the Property.
• On or about April 7, 2017, the sale of the Property closed.
• The broker did not obtain prior written consent of all the parties to the Property transaction to act on behalf of an immediate family member. 

Violated

• Wis. Admin. Code § REEB 24.05(2) by acting on behalf of a family member in a real estate transaction without obtaining the prior written consent of all the parties to the transaction.
• Wis. Stat. § 452.03(1) by engaging in the practice of real estate under the entity while the business entity’s license 
  was expired. 

Discipline

The broker agreed by stipulation in 180 days to pay a $500 forfeiture, and one-half of the costs in the amount of $1,129 and the business entity within 180 days shall pay one-half of the costs in the amount of $ 1,1295. 

Failure to use latest version of WB form 

Facts

• The broker’s license was first issued 2/14/17 and current through 12/14/20.
• The business entity license was first issued on 10/28/17 and current through 12/14/20.
• On 9/11/17, the department received a complaint alleging that the broker failed to file a real estate condition report (RECR) when he sold the seller’s residence at auction, which voided the sale.
• On 4/30/17, the broker and seller signed a WB-1 Listing Contract for the seller’s residence; the form was prepared by the broker and its entity.
• Line 244 of the WB-1 indicated the complainant’s residence was to be sold at auction in “as is condition."
• The WB-1 form was not the latest version approved by the board, and the completed form omitted the seller’s address from line 265.
• The broker did not have the complainant complete a RECR for the seller’s residence.
• On 5/16/17, the broker and complainant signed a WB-42 Amendment to Listing Contract for the seller’s residence; the form was prepared by the broker.
• The WB-42 form was not the latest version approved by the board.
• On 6/10/17, two individuals (buyers) submitted a WB-11 Offer to Purchase for the seller’s residence; the form was prepared by the broker.
• The WB-11 form was inadequate in the following ways: 
  • Line 2 did not indicate that the broker was “Agent of Seller / Listing Broker.”
  • Lines 10-11 of the WB-11 indicated that an unspecified amount of money would be provided “within closing (sic) days of acceptance.”
  • There were no inclusions or exclusions identified on line 14.
  • Lines 38-54 listed several methods of document delivery, but the boxes on lines 40, 42, 45 and 49 were not marked. 
  • On the copy of the WB-11 provided by the broker, lines 66-110 and lines 148-158, which respectively pertained to property defects and the RECR, were struck out. 
  • Lines 124-135 failed to indicate how taxes would 
    be prorated. 
  • Lines 159-164 regarding property conditions were 
    not completed. 
  • No contingencies were indicated.
• After the 6/10/17 Offer to Purchase was accepted by the seller, the brokers provided the buyers with a key to the seller’s residence so they could inspect the well and septic, although the broker was not authorized to do so. 

Violated

• Wis. Admin. Code § REEB 16.06(7) by failing to use the latest approved version of a board-approved form.
• Wis. Admin. Code § REEB 16.06(8) by failing to use approved forms and prepare addenda in such a manner as to adequately accomplish the contractual instruction of the person for whom the licensee uses the forms and prepares the addenda.
• Wis. Admin. Code § REEB 24.03(2)(b) by failing to act to protect the public against fraud, misrepresentation and unethical practices.
• Wis. Admin. Code § REEB 24.03(2)(c) by failing to be knowledgeable regarding laws, public policies and current market conditions on real estate matters and assist, guide and advise the buying or selling public based upon these factors.
• The business entity violated Wis. Admin. Code § REEB 24.17(3) by aiding and abetting the aforementioned violations. 

Discipline

The broker agreed by stipulation that the broker’s license was to be limited as follows: within 90 days, the broker shall complete education on the topics of approved forms, business ethics and consumer protection and pay one-half of the costs in the amount of $684.00, and the business entity shall pay one-half costs in the amount of $684.00.  

New DSPS Reports in the Future

At the January 2020 WRA board of directors meeting, the board voted to have the WRA publish in future DSPS Reports the names, license numbers and municipalities of real estate licensees and business entities disciplined by the REEB as well as the facts, license law violations and discipline.

Filing a Complaint with the DSPS and REEB

A complaint, including an anonymous complaint, can be filed by real estate licensees and members of the public against those licensed by the DSPS. Complaints can be filed online at dsps.wi.gov/Pages/SelfService/FileAComplaint.aspx. For questions frequently asked about filing complaints, visit dsps.wi.gov/Documents/FAQComplaints.pdf.

More Disciplinary Action Information

For more information about disciplinary actions and orders from the REEB, visit the REEB’s Lookup Orders and Disciplinary Actions page online at dsps.wi.gov/Pages/SelfService/OrdersDisciplinaryActions.aspx. A search may be conducted 
by board or by license.

Cori Lamont is Senior Director of Legal and Public Affairs for the WRA.