“Bust a deal, face the wheel” was a quote frequently used in my household growing up. For some of you, this is an obscure quote from the movie Mad Max Beyond Thunderdome. Between you and I, I’m not sure I have seen the whole movie, but I remember Tina Turner — yes, you read that right — declaring the law was broken and a penalty must be faced. So when a law is broken, a wheel is spun, and then the wheel determines the penalty. Thus bust a deal, face the wheel.
Breaking a deal in the post-apocalyptic town of Bartertown is one of the most serious crimes. And while the Real Estate Examining Board (REEB) disciplinary actions are much more refined than Bartertown’s — like being banished to the underworld — the concept still applies. If you break the law, there are consequences.
All real estate licensees are subject to discipline by the REEB as well as litigation. REALTOR® members, however, have chosen to hold themselves to a higher standard by agreeing to honor the REALTOR® Code of Ethics when they join the REALTOR® family.
As a REALTOR® member, you have agreed to abide by the National Association of REALTORS®’ Code of Ethics, which represents competency, fairness and integrity in the real estate industry. The Code of Ethics imposes duties upon each REALTOR® in relationships with customers and clients, the public and other REALTORS®.
The following are a few examples of recent Department of Safety and Professional Services (DSPS) disciplinary cases as well as the possible Code of Ethics violation that may have occurred based on the DSPS disciplinary facts.
REEB disciplinary actions
Facts: The individual’s salesperson license was first issued on May 31, 2013, and current through December 14, 2018. In December 2015, the department received a complaint and opened an investigation into allegations the salesperson was using a Facebook page to advertise information about a neighborhood project by a home builder that was not yet on the Multiple Listing Service (MLS), and was using the builder’s marketing materials when he was not authorized to do so. At all times, the salesperson was associated with a licensed business entity. The salesperson’s Facebook post indicated interested individuals could sign up to receive free pricing information for the new neighborhood in development. An employee of the builder responded to the Facebook advertisement. In response, the salesperson sent the employee a map of the new neighborhood, which was originally created by the builder and contained the builder’s logo and references to the new neighborhood. The salesperson added his contact information and website on the bottom the page. The salesperson did not have the builder’s consent to advertise the new neighborhood or use the builder’s marketing materials. The salesperson also failed to include the firm’s name that the salesperson is associated with.
Violations: Wis. Admin. Code § REEB 24.04(1) by advertising in a manner which is false, deceptive or misleading and Wis. Admin. Code § REEB 24.04(2)(b) by failing to advertise under the supervision of and in the name of the firm he is associated with. Note: This discipline occurred before the law was changed to include advertising in Wis. Stat. § 452.136.
Discipline: The salesperson agreed in stipulation to the following: Within 90 days, the salesperson shall complete and provide evidence to the DSPS of three hours of education on the topic of business ethics and pay costs of $213.
Possible REALTOR® Code of Ethics violation: Article 12. “REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.”
Facts: The individual’s salesperson license was first issued on July 26, 2012, and expired December 15, 2016. In December 2015, the department received a complaint from the local association of REALTORS® regarding a transaction handled by the salesperson and opened it for investigation. In May 2016, the salesperson pled guilty to and was convicted of Conversion of Social Security Payments, in violation of 42 U.S.C. § 408(a)(5), a felony, in United States District Court, Eastern District of Wisconsin.
Discipline: The salesperson agreed in stipulation to permanently surrender their license.
Possible REALTOR® Code of Ethics violations:
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Article 1: “When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client.”
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Article 11: “The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage …”
Reminder! Report criminal convictions within 48 hours
Real estate licensees must report a crime to the REEB within 48 hours of a conviction. The REEB then decides whether the circumstances of that crime are substantially related to the practice of real estate. A crime is conduct that is prohibited by state law and punishable by fine or imprisonment or both. A crime punishable by imprisonment in the Wisconsin state prisons is a felony; every other crime is a misdemeanor. Conduct punishable only by forfeiture is not a crime — for example, a no-call violation or several traffic offenses — according to Wis. Stat. § 939.12 & § 939.60. If there is a first offense OWI, for instance, check with legal counsel because it may be a forfeiture not subject to REEB reporting. See Wis. Admin. Code § REEB 24.17(1).
Licensees who do not report the conviction to the REEB within 48 hours will likely be treated more firmly by the REEB. The following are examples of two licensees who failed to disclose their convictions within 48 hours and the disciplinary action taken by the REEB.
Facts: The individual’s broker’s license was first issued on December 9, 2004, and current through December 14, 2018. In January 2017, the broker confronted a woman and her brother at a bar regarding their father’s previous property listing with another real estate agency. The woman recorded the interaction. During the conversation, the broker used derogatory and profane language regarding the woman and her father. The broker admitted to having too much to drink at the time of the incident. In January 2006, the broker was convicted of OWI (2nd), a misdemeanor, in Jefferson County Circuit Court. In August 2007, the broker was convicted of two misdemeanors in Dodge County Circuit Court: resisting or obstructing an officer and possession of drug paraphernalia. The broker did not report either conviction to the department.
Violations: The broker violated Wis. Admin. Code § REEB 24.03(2)(b) by failing to protect the public against fraud, misrepresentation and unethical practices regarding her 2017 confrontation at a bar. Additionally, the broker violated Wis. Admin. Code § REEB 24.17(1) by failing to report her 2006 and 2007 convictions within 48 hours after the judgment of conviction.
Discipline: The broker agreed in stipulation to the following: Within 90 days, the broker shall complete and provide evidence to the DSPS of an education course on the topic of business ethics and pay costs of $476.
Facts: The individual’s broker’s license was first issued October 4, 1976, and current through December 14, 2018. In June 2014, the board reprimanded the broker for violating Wis. Stat. §§ 452.13(2)(c); 452.13(2)(b)2.; Wis. Admin. Code §§ REEB 17.08(1); 18.031(1); 18.035(1), (2); 18.13(1)-(5) and 18.09(1). The board limited the broker’s license to require he submit monthly trust account reports and complete nine hours of education. This limitation was removed on February 8, 2017. In September 2015, the broker was convicted in Brown County Circuit Court of a misdemeanor OWI as well as possession of drug paraphernalia, which is considered a forfeiture. The broker was sentenced to 85 days in jail, revocation of driver's license for 36 months, and an alcohol or other drug abuse (AODA) assessment, among other things. In November 2016, the broker reported his conviction to the DSPS as a part of the renewal process.
Violations: The broker violated Wis. Admin. Code § REEB 24.17(1) by violating a law the circumstances of which substantially relate to the practices of a real estate licensee and Wis. Admin. Code § REEB 24.17(1) by failing to report his 2015 conviction within 48 hours after the judgment of conviction.
Discipline: The broker agreed in stipulation to the following: not to drive current or prospective clients in a motor vehicle and within 90 days pay costs of $786.
Resources
Cori Lamont is Director of Corporate and Regulatory Affairs for the WRA.