In recent months, the WRA has been fielding questions and concerns about out-of-state, non-Wisconsin licensees practicing real estate in Wisconsin. The examples include out-of-state licensees (OSLs) listing Wisconsin properties, conducting showings, representing buyers and writing offers. Apparently there has been a wave of individuals, both in Wisconsin and out of state, who believe that the law doesn’t apply to them.  

However, just because that is how someone wants the world to work, does not make it so. This article breaks down the top eight things to know about Wisconsin’s OSL law. 

1. Wisconsin law prohibits providing brokerage services without:
a. Having a Wisconsin broker’s license.
b. Having a Wisconsin salesperson license and being associated with a Wisconsin firm.
c. Being an OSL who has entered into a cooperative agreement with a Wisconsin firm. See Wis. Stat. § 452.137 for further details.

2. Under Wisconsin law, an OSL can provide brokerage services in two different ways.  Both ways require a Wisconsin firm and the OSL to enter into a cooperative agreement using a Wisconsin state-approved (WB) form. Cooperation by a Wisconsin firm is voluntary, and the Wisconsin firm’s broker — not its agents — makes the decision to cooperate with an OSL. 

3. The following provides guidance for when each WB form should be utilized:  

• WB-28 Cooperative Agreement: This is executed when a Wisconsin firm has the property listed and agrees to cooperate with an OSL. This option is currently available for all types of transactions. A separate WB-28 must be entered into for each listing for which the Wisconsin firm wants to cooperate with an OSL.
• WB-29 Commercial Cooperative Agreement: This is executed when a Wisconsin firm does not have a property listed but agrees to cooperate with an OSL who has a buyer or tenant who wants to purchase or rent Wisconsin commercial property. This option is available for commercial transactions only. A separate WB-29 must be entered into for each “project” for which the OSL’s buyer/tenant wishes to purchase or rent property.

4. If the Wisconsin firm will not agree to enter into a cooperative agreement with an OSL, the Wisconsin firm and the OSL may choose to enter into a referral arrangement.

5. Under all circumstances, Wisconsin law prohibits an OSL from:

• Listing Wisconsin property.
• Posting signs or otherwise promoting a Wisconsin property for sale or rent in Wisconsin.
• Entering a cooperative agreement with a person who is not licensed in Wisconsin.

See Wis. Stat. § 452.137(2)(b) for more information about these restrictions. 

6. Under Wis. Stat. § 452.137(5)(b), any person who violates the OSL law or any OSL rule promulgated by the Real Estate Examining Board may be fined, for each violation, not more than the greater of the following:
a. $5,000.
b. For a sales transaction, 1% of the purchase price of the property subject to the cooperative agreement.
c. For a lease or rental transaction, 1% of the total lease or rental value of the property subject to the cooperative agreement.

7. Further, Wis. Stat. § 452.137(2)(f) states that “no person may pay an out-of-state broker a commission, money, or other thing of value for brokerage services unless the out-of-state broker is a party to a cooperative agreement with a firm.” Arguably, “no person” may include a Wisconsin firm and its agents, a seller, a title company or a closing attorney, therefore, any of those entities or individuals would be violating the law unless the OSL has entered into a cooperative agreement with a Wisconsin firm.

8. In addition, Wis. Stat. § 452.17(1) states that “any person who engages in or follows the business or occupation of, or advertises or holds himself or herself out as or acts temporarily or otherwise as a broker or salesperson in this state without a license under this chapter shall be prosecuted by the district attorney in the county where the violation occurs or by the attorney general and may be fined not more than $1,000 or imprisoned not more than 6 months or both.” Just because an OSL wants to practice real estate in Wisconsin does not automatically allow them to do so; they must follow the law.

Additional information

See the full statute: www.wra.org/OSLStatute

See the WRA OSL cooperation resource webpage for more information: www.wra.org/OSLResources