On December 1, 2017, Gov. Walker signed 2017 SB 455 into law. After the governor’s signature, the law became 2017 Wis. Act 110. Act 110 makes a number of changes to Wis. Stat. Chap. 452, which include clarifying that licensees may negotiate the sale, exchange, purchase or rental of personal property when related to the real estate transaction; updating statutory definitions; making a technical change that the three-year felony hold applies only to those applying for an initial real estate license and not those renewing a real estate license; and offering the Real Estate Examining Board (REEB) an opportunity to streamline the state-approved (WB) forms process. See the side bar on the next page for the Act 110 changes that affect a Wisconsin real estate licensee’s ability to cooperate with an out-of-state licensee. Future articles in Wisconsin Real Estate Magazine will provide more clarity regarding those changes.

This article focuses on the Act 110 changes that most directly impact the day-to-day practices of real estate licensees: advertising.

Effective date

The law changes, except for the out-of-state cooperating changes, went into effect December 2, 2017. 

The advertising rules of Wis. Admin. Code § REEB 24.04 are now in Chap. 452

All the rules related to advertising were previously housed in the administrative code. Placing the administrative rules in the statute as Wis. Stat. § 452.136 instead raises industry awareness as to advertising guidelines. The MLS provides the practical consent from the listing firm for the other firm to advertise the listing. However, keep in mind, if the information is obtained from the MLS, it may only be used with authority or consent per the MLS rules.

Unless noted otherwise, all of the advertising guidelines in Wis. Admin. Code § REEB 24.04 remain the same in Wis. Stat. § 452.136. Therefore, licensees still cannot advertise in a false, misleading or deceptive manner. See Wis. Stat. § 452.136(1). Licensees must still include the name of the firm in the advertising and under the firm’s supervision. See Wis. Stat. § 452.136(2). In addition, licensees must advertise a price that has been agreed to by the seller. See Wis. Stat. § 452.136(4). 

Firm name must be clear and conspicuous in advertising

The law has and continues to require a firm’s name to be included in all advertising. However, the law now requires the firm’s name to be clear and conspicuous in the advertising. If someone does not believe a firm’s name is included in a clear and conspicuous manner, a complaint can be filed with the REEB. The REEB has discretion to determine if the firm’s name is clear and conspicuous in the advertisement. 

A listing contract is required if the seller’s property is being advertised for sale or for lease

Under the previous statute, licensees could advertise or market a property without a listing contract as long as they had the owner’s consent. However, with the far reach of technology, consumers were often confused about the agent’s relationship with the seller when an agent was marketing a property. 

This scenario provides an example of the issues before the modification to the law: On social media, an agent advertised a property without a listing contract. A prospective buyer saw the post and reached out to the agent. The old law was murky as to what actions the agent could take, as well as discussions the agent was allowed to have, with the prospective buyer. Prospective buyers often became confused because they thought the agent was acting on the seller’s behalf. In reality, the agent in question was only promoting the property and was not the seller’s agent; therefore, the agent could not negotiate on the seller’s behalf. However, since many agents misunderstood their inability to represent a seller, agents began providing brokerage services on behalf of sellers without entering into a listing contract. 

Because the modified law requires a licensee to have a listing contract in order to advertise the sale or rental of a property, the law offers prospective buyers a better understanding about the relationship between the seller and the firm. Additionally, this requirement offers a clear understanding to sellers and agents as to when the licensee represents and may provide brokerage services on the seller’s behalf. 

Therefore, this new section of the law looks like this: 

Wis. Stat. 452.136(3) states,
ADVERTISING WITHOUT AGENCY AGREEMENT PROHIBITED. A firm and any licensees associated with the firm may not advertise a property unless one of the following applies:
(a) The firm is the listing firm for the property.
(b) The firm or a licensee associated with the firm has obtained consent to advertise the property from the listing firm for the property.

In order for a licensee to advertise a property for sale or lease, two stipulations must be met: (1) the listing firm must have the property listed; or (2) if an agent who does not have the listing wishes to advertise the property, the agent must first have consent to advertise the property from the listing firm. 

The second part of the revised law in subsection “(b)” addresses a very practical part of the process. This subsection allows a firm to advertise another firm’s listing with the listing firm’s consent. The MLS provides the practical consent from the listing firm for the other firm to advertise the listing. 

The law allows the REEB to promulgate advertising rules, if needed
Even though the advertising rules are now part of Chap. 452, the law does permit the REEB to create rules in the administrative code to further delineate the guidelines set forth in Wis. Stat. § 452.136. 

For instance, if the REEB found that further guidance is needed related to what is deemed clear and conspicuous, the REEB could go through the rulemaking process. Accordingly, the rule created by the REEB could further clarify what is meant by a firm’s name needing to be clear and conspicuous in advertisements. 

OSL cooperation modification

Act 110 modifies the cooperation with out-of-state (OSL) licensees to accommodate commercial transactions in situations in which an OSL is representing a buyer or tenant who wishes to work with a Wisconsin licensee who is not necessarily the listing agent. Effective March 1, 2018, OSL and Wisconsin firms will be permitted to cooperate in commercial transactions even though the Wisconsin firm does not have the listing. For more details, see “Recently Passed Legislation Opens Up OSL Commercial Cooperation,” in the December 2017 issue of Wisconsin Real Estate Magazine at www.wra.org/WREM/Dec17OSL for more details as to this change. 

452.136 Advertising by licensees. 

(1) FALSE ADVERTISING. A licensee may not advertise in a manner that is false, deceptive, or misleading.
(2) DISCLOSURE OF NAME.
(a) Except for advertisements for the rental of real estate owned by the licensee, a licensee shall in all advertising disclose the firm’s name exactly as printed on the license of the licensed individual broker or licensed broker business entity or disclose a trade name previously filed by the firm with the department and shall in either case clearly indicate that the firm is a business enterprise and not a private party.
(b) Except for advertisements for the rental of real estate owned by the licensee, a licensee associated with a firm shall advertise under the supervision of and in the name of the firm. The firm’s name as used in advertising shall be clear and conspicuous. This paragraph does not apply to a licensee engaged in independent practice as provided in s. 452.30 (6). (c) Notwithstanding pars. (a) and (b), a licensee may advertise the occasional sale of real estate owned by the licensee or may engage in the occasional solicitation of real estate for purchase by the licensee without complying with pars. (a) and (b), provided that the licensee clearly identifies himself, herself, or itself as a real estate licensee in the advertisement. (3) ADVERTISING WITHOUT AGENCY AGREEMENT PROHIBITED. A firm and any licensees associated with the firm may not advertise a property unless one of the following applies:
(a) The firm is the listing firm for the property.
(b) The firm or a licensee associated with the firm has obtained consent to advertise the property from the listing firm for the property.
(4) ADVERTISED PRICE. A licensee may not advertise property at a price other than that agreed upon with the owner, except that the price may be stated as a range or in general terms if it reflects the agreed upon price.