Effective July 7, 2013, Wisconsin Act 25 created Wis. Stat. § 196.137, 185 words that changed how a municipal utility can provide a customer’s account information.
How does this affect the real estate transaction? Typically the customer’s usage is needed for a real estate closing.
Act 25 was created to help protect a customer’s information and avoid the ability of a third party to request information via the open records law and then use that information to either contact the customer for sales purposes, sell the information to third parties, or mislead the customer to believe that their information would be sold unless the customer took necessary action otherwise.
The legislation defines customer information as meaning any information serving to identify the customer individually by usage or account status. The language basically requires a municipal utility to obtain consent from the customer for any of the customer’s information to be released. There are a few noted exceptions included, such as (a) agents and vendors of the municipal utility engaged to perform services or functions for or on behalf of the municipal utility; (b) transmission and distribution utilities that service the customer’s geographic territory; (c) anyone the commission permits by rule or order; (cm) an owner of a rental dwelling unit to whom the commission provides notice of past-due charges; and (d) any person authorized by law to receive the customer information.
Obtaining the authorization
Title companies and/or attorneys: According to Wis. Stat. § 196.137, to successfully obtain this information from the municipal utility, there needs to be authorization from the seller.
Since the title company or an attorney is conducting the closing, the most appropriate and logical process is for the title company or the attorney to receive the authorization from the seller. For instance, in order for the title company to successfully obtain this information from the municipal utility, the title company needs authorization from the seller. Due to this law change, title companies should be creating or have created a seller authorization form relating to the municipal utility information.
The real estate broker: If the title company, attorney or municipal utility has not created such a form for use, as a last resort, the real estate company could obtain the seller’s authorization.
However, there are a couple of concerns to note if a broker chooses to include the language in the additional provisions of the listing contract. Obtaining the authorization is one part of the process; the other part is providing the evidence of the authorization to the municipal utility. Meaning, if the broker includes the authorization in the listing contract, then the broker has to be careful about how to show the municipal utility that the proper authorization was provided by the seller. Since the broker should not and probably does not want to provide a copy of the listing contract because it’s confidential information, the broker would have to redact, or black out, all of the information other than the seller’s name, property information and the authorization. Adding it to the listing contract is probably the least desirable.
If the broker chooses to take the path of obtaining the seller’s authorization rather than the preferred process of deferring to the title company or attorney, a prudent broker would provide a draft of the authorization language to the title company prior to implementation to ensure it meets the needed authority in order for the title company to obtain the necessary information for the closing. See the sample language below:
Within the listing contract:
Seller authorizes Broker, _________ [insert the name of the specific title company, if known], and/or the title company closing the transaction (or its authorized agent) for the sale of the Property, to obtain any municipal utility customer information relating to the Property, including but not limited to customer usage or account information as to the property located at _________________________ (insert property tax key number or address.
-or-
Freestanding authorization:
The undersigned Seller authorizes _____________________________, [insert the name of the specific title company, if known], and/or the title company closing the transaction (or its authorized agent) for the sale of __________________________ [insert property address or property tax key number] (the Property), to obtain any municipal utility customer information relating to the Property including, but not limited to, customer usage or account information.
At the time of publication, the WRA was working with the League of Municipalities and Municipal Utilities to create uniformity by utilizing one form provided by the municipalities to be given to the title companies or to provide uniform language for the title companies, attorneys and brokers to ensure proper authority is given and thus alleviate any future issues.
Read more about it
196.137 Municipal utility customer information. (1) DEFINITIONS. In this section:
(a) “Customer information” means any information received from customers which serves to identify customers individually by usage or account status.
(b) “Municipal utility” has the meaning given in s. 196.377 (2) (a) 3.
(2) PROHIBITION. A municipal utility may not release customer information to any person except with the consent of the customer, or except to any of the following:
(a) Agents, vendors, partners, or affiliates of the municipal utility that are engaged to perform any services or functions for or on behalf of the municipal utility.
(b) Transmission and distribution utilities and operators within whose geographic service territory the customer is located.
(c) The commission or any person whom the commission authorizes by order or rule to receive the customer information.
(cm) An owner of a rental dwelling unit to whom the municipal utility provides notice of past-due charges pursuant to s. 66.0809 (5).
(d) Any person who is otherwise authorized by law to receive the customer information.
(3) PUBLIC RECORD EXCEPTION. Customer information is not subject to inspection or copying under s. 19.35.
We will continue to monitor the effects of Act 25. If you experience closing delays forward of this required authorization, or if you experience functionality issues affecting your practice, please share them with me at CoriL@wra.org.
Cori Lamont is Director of Regulatory Affairs for the WRA.