Recently, we have received a number of questions relating to a practice that raises both eyebrows and concerns. Frankly, this is a lesson that has become lost on some and a lesson that every child learns from his or her parents: asking for permission.

On occasion, we as adults need to be reminded of the lessons from our past. The practice of going into listed properties without permission from either the owner or listing broker is unacceptable. In addition, a cooperating agent giving an unaccompanied buyer access to the property is inexcusable.

I am told this practice is not limited to one community but rather is occuring throughout the state. Also I have learned that this practice is most common in bank-owned properties (REOs), foreclosures where the owners have vacated the home, vacant homes and new construction - basically, in properties where no one lives. The fact that no one lives in the property provides an opportunity for individuals to accommodate their own schedules as opposed to following protocol, and they are thus breaking the rules and potentially the law.

It has come to light that a majority of consumers, real estate licensees and owners believe REO properties and homes in foreclosure are excluded from rules and laws surrounding licensees and owners. They are mistaken because the applicable rules and laws are not suspended just because the property is vacant or bank-owned. In general, REOs and foreclosures are treated the same as any other transaction. The only difference is who owns them (REO) and a legal process (foreclosure); beyond that, all of the same rules and laws apply as if it were any other type of transaction or owner.

Let me highlight some examples of the most common misconceptions. REO properties are exempt from completing a real estate condition report; unless some other exemption applies, that statement is wrong. Also, the assumption that sellers of properties in foreclosure are not required to follow the federal lead-based paint law is incorrect. And, another example: short sale sellers do not have to make any disclosures if they are selling “as-is;” this is also incorrect as sellers must still disclose certain defects even if they are selling “as-is.” However, the most common misstatement I have heard is, “if it’s an REO or vacant foreclosure listing, agents can take buyers in at any time without permission of the listing company or seller.”

All real estate licensees must follow Wisconsin statutes and administrative rules. A company may place additional internal rules, also known as company policy, that agents are required to follow if they choose to work for that company. As a member of the Multiple Listing Service (MLS), you also agree to follow the rules and parameters set forth by the MLS. Lastly those that have chosen to be REALTOR^® members must also follow the REALTOR^® Code of Ethics.

MLS

Review the MLS rules to determine the rules regarding authorization. Often there are MLS rules in place that offer the opportunity to file an action if the rule is violated.

Code of Ethics

Beyond the Articles dictating the ethical standards REALTORS^® must follow, the Code of Ethics provides Standards of Practice. While a REALTOR^® cannot violate a Standard of Practice, a complaint may cite a Standard of Practice to support a claim that the REALTOR^® violated an Article of the Code of Ethics.

Article 3: REALTORS^® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. (Amended 1/95)

If a REALTOR^® chooses to provide access to the listed property on terms other than those created by the owner or the listing broker, arguably Standard of Practice 3-9 can also be cited to support a violation of Article 1.

Standard of Practice 3-9 : REALTORS^® shall not provide access to listed property on terms other than those established by the owner or the listing broker. (Adopted 1/10)

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. This obligation to the client is primary, but it does not relieve REALTORS^® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS^® remain obligated to treat all parties honestly. (Amended 1/01)

Statutes and Administrative Rules

Wis. Stat. § 452.133 (1)(b) Duties to all persons in a transaction - Licensees are required to provide specific duties to all persons in a transaction, regardless if there is a client or customer relationship. While there are seven duties owed to all parties in a transaction, “[the] duty to provide brokerage services with reasonable skill and care” clearly would be violated by the act of showing a property without permission or providing the buyer access to the property without accompanying them.

Wis. Stat. § 943.13 Trespass to land - Yes, going onto the property of another without permission is technically trespassing. The fact that the property is a foreclosure or REO does not create a different outcome.

Wis. Stat. § 943.15 (1) Entry onto a construction site or into a locked building, dwelling or room - Whoever enters the locked or posted construction site or the locked and enclosed building, dwelling or room of another without the consent of the owner or person in lawful possession of the premises is guilty of a Class A misdemeanor.

Wis. Admin. Code RL § 24.03 (2)(b) - Licensees shall act to protect the public against fraud, misrepresentation and unethical practices. Such acts are a violation of RL § 24.03 (2)(b). Providing buyers access to property without the permission of the owner or listing broker is unethical practice.

Lastly, remember when you go into these properties, you may not be alone. Safety should be concern whenever viewing a property. Unoccupied properties often provide a place for opportunistic individuals to take residency. Other established houseguests may include wildlife, squatters, impromptu visitors searching for treasure wishing to explore the property to collect goodies - for example, copper wiring - and finally environmental hazards, such as mold, wildlife deposits or methamphetamine residue from a short-lived meth lab.

Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.