REEB 18.02 Note Note: See also definitions in s. REEB 11.02.
REEB 18.02(1) (1) "Business day" means any day excluding Saturdays, Sundays, any legal public holiday under Wisconsin or Federal law, and any other day designated by the President of the United States such that the U.S. postal service does not receive registered mail or make regular deliveries on that day.
REEB 18.02(1e) (1e) "Client funds" has that meaning given in s. 452.13 (1) (a), Stats.
REEB 18.02 Note Note: Section 452.13 (1) (a), Stats., reads: `"Client funds" means all downpayments, earnest money deposits or other money related to a conveyance of real estate that is received by a broker, salesperson or time-share salesperson on behalf of the broker's, salesperson's or time-share salesperson's principal or any other person. "Client funds" does not include promissory notes.'
REEB 18.02(2) (2) "Cooperating broker" means a broker who is assisting a buyer or a tenant in negotiations with a seller or landlord who is represented by a listing broker. A "cooperating broker" may be the agent of the buyer, the tenant, the seller, or the landlord.
REEB 18.02(4) (4) "Depository institution" has that meaning given in s. 452.13 (1) (b), Stats.
REEB 18.02 Note Note: Section 452.13 (1) (b), Stats., reads: `"Depository institution" means a bank, savings bank, savings and loan association or credit union that is authorized by federal or state law to do business in this state and that is insured by the federal deposit insurance corporation or by the national credit union share insurance fund.'
REEB 18.02(5) (5) "Real estate trust account" means an account for real estate trust funds maintained at a depository institution from which withdrawals or transfers can be made without delay, subject to any notice period that the depository institution is required to observe by law, and includes all of the following:
REEB 18.02(5)(a) (a) Interest-bearing common trust accounts established for client funds.
REEB 18.02(5)(b) (b) Non-interest bearing real estate trust accounts maintained for real estate trust funds other than client funds.
REEB 18.02(5)(c) (c) Interest-bearing real estate trust accounts maintained for real estate trust funds other than client funds.
REEB 18.02(6) (6) "Real estate trust funds" means any cash, checks, share drafts, drafts, or notes received by a broker or a broker's salesperson or time-share salespersons on behalf of a principal or any other person including any of the following:
REEB 18.02(6)(a) (a) Payments on land contracts, mortgage payments and any other receipts pertaining to mortgages.
REEB 18.02(6)(b) (b) Tax and insurance payments held in escrow.
REEB 18.02(6)(c) (c) Advance fees and finder's fees, unless non-refundable.
REEB 18.02(6)(d) (d) Rental application deposits and rents, but only when received while acting as an agent for another.
REEB 18.02(6)(e) (e) Payments received for subsequent repayment to a third party.
REEB 18.02(6)(f) (f) Security deposits on rental property, except as provided in s. REEB 18.031 (4).
REEB 18.02(6)(g) (g) Initial and additional earnest money downpayments and other funds received in connection with offers to purchase, options, and exchanges, even if the broker, salesperson, or time-share salesperson receives the downpayments or funds when negotiating the sale of real estate or a business opportunity which the broker, salesperson, or time-share salesperson owns in whole or in part, or when negotiating the purchase of real estate or a business opportunity for ownership in whole or in part by the broker, salesperson, or time-share salesperson.
REEB 18.02 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; r. and recr. (3), Register, April, 1982, No. 316, eff. 5-1-82; renum. from REB 9.02 and am. (1), Register, February, 1983, No. 326, eff. 3-1-83; cr. (2m), am. (3) (a) (intro.), renum. (3) (c) and (d) to be (3) (a) 4. and 5. and am. 5., Register, June, 1984, No. 342, eff. 7-1-84; r. and recr. Register, August, 1994, No. 464, eff. 9-1-94; r. (3), am. (5) (intro.), Register, July, 1998, No. 511, eff. 8-1-98; correction in (6) (f) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; CR 13-072: renum. (1) to (1e), cr. (1), am. (5) (intro.) to (b), (6) Register May 2014 No. 701, eff. 7-1-14.
REEB 18.031 REEB 18.031 Deposits and types of accounts.
REEB 18.031(1)(1) Time of deposit. A broker shall deposit all real estate trust funds received by the broker or broker's salespersons or time-share salespersons in a real estate trust account within 48 hours of receipt of the trust funds. If funds are received on a day prior to a holiday or other day when the depository institution is closed, the broker shall deposit the funds within the next 2 business days. If a broker receives funds which cannot be deposited by the broker, the broker shall, no later than one business day after receipt, either:
REEB 18.031(1)(a) (a) Forward the funds to the payee, if someone other than the broker.
REEB 18.031(1)(b) (b) Return the funds to the payer.
REEB 18.031(2) (2)Duty of salesperson. A salesperson or time-share salesperson who receives real estate trust funds shall promptly submit the funds to the employer-broker of the salesperson or time-share salesperson.
REEB 18.031(3) (3)Interest-bearing accounts.
REEB 18.031(3)(a)(a) Client funds shall be deposited in an interest-bearing common trust account and the department of administration shall be the beneficial owner of the interest accruing to the account, minus any service charges. At no time may the broker remove or use the interest earned on such accounts.
REEB 18.031(3)(b) (b) Real estate trust funds, other than client funds, may be deposited in an interest-bearing account if the broker obtains from the persons for whom the funds are being held written authorization to deposit the funds in an interest-bearing account and if the authorization specifies how and to whom the interest will be disbursed. None of the interest earned on the funds deposited into an interest-bearing account may inure to the benefit of the broker.
REEB 18.031(4) (4)Security deposits. A licensee having an ownership interest in a rental property shall either place security deposits related to that property in a real estate trust account or shall provide in a lease for security deposits to be held in an account maintained in the name of the owner or owners.
REEB 18.031(5) (5)Rental owner's account.
REEB 18.031(5)(a)(a) In this subsection, "owner's account" means an account maintained by an owner of rental property for depositing and disbursing any funds payable to or by the owner.
REEB 18.031(5)(b) (b) A broker may directly deposit into an owner's account rental application deposits, rents and security deposits which may have been made payable to one or more owners. The broker may be designated as a signatory on the owner's account and may make disbursements from that account to the extent authorized by the owner in writing.
REEB 18.031 History History: Cr. Register, August, 1994, No. 464, eff. 9-1-94; correction made in (title) under s. 13.92 (4) (b) 2., Stats., Register November 2011 No. 671; CR 13-072: am. (1) Register May 2014 No. 701, eff. 7-1-14.
REEB 18.032 REEB 18.032 Number of real estate trust accounts. A broker may maintain more than one real estate trust account, including more than one interest-bearing common trust account for client funds, if the broker notifies the department of these accounts, as required in s. REEB 18.035.
REEB 18.032 History History: Cr. Register, August, 1994, No. 464, eff. 9-1-94; correction made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671.
REEB 18.033 REEB 18.033 Opening and closing real estate trust accounts.
REEB 18.033(1)(1) Opening an account. A broker shall open a real estate trust account if the broker receives real estate trust funds.
REEB 18.033(2) (2)Closing an account. A broker may close a real estate trust account if no real estate trust funds remain in the account or for reasons specified in s. REEB 18.035.
REEB 18.033 History History: Cr. Register, August, 1994, No. 464, eff. 9-1-94; CR 13-072: am. (title), (2) Register May 2014 No. 701, eff. 7-1-14.
REEB 18.034 REEB 18.034 Account designation.
REEB 18.034(1)(1) Name on trust account. A broker shall name the broker's real estate trust account with the name appearing on the broker's license or with a trade name submitted to the department under s. REEB 23.03 and shall include the words "trust account" in the name of the account.
REEB 18.034(2) (2)Name on checks. A broker shall imprint the name of the real estate trust account on real estate trust account checks, share drafts or drafts.
REEB 18.034 History History: Cr. Register, August, 1994, No. 464, eff. 9-1-94; correction in (1) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; CR 13-072: cr. (1) (title) Register May 2014 No. 701, eff. 7-1-14.
REEB 18.035 REEB 18.035 Duty to notify the department.
REEB 18.035(1)(1) Opening an account. No later than 10 days after opening any real estate trust account a broker shall provide the department with the name and number of the account, with the name of the depository institution in which the broker holds the account and with information concerning whether the account is for client funds or for real estate trust funds other than client funds. The information shall be provided on a form, as required in s. REEB 18.037.
REEB 18.035(2) (2)Changing or closing an account. A broker shall notify the department no later than 10 days after a broker changes a real estate trust account name or number, changes the real estate trust account from one depository institution to another, closes a real estate trust account or changes a real estate trust account to or from an interest-bearing common trust account established for client's funds. The notification shall be provided on a form, as required in s. REEB 18.037. When closing a real estate trust account, a broker may inform the board by letter.
REEB 18.035 History History: Cr. Register, August, 1994, No. 464, eff. 9-1-94; correction in (1), (2) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; CR 13-072: am. (2) Register May 2014 No. 701, eff. 7-1-14.
REEB 18.036 REEB 18.036 Authorization to examine real estate trust accounts and records.
REEB 18.036(1) (1) Broker's authorization. No later than 10 days after opening a real estate trust account a broker shall furnish the department authorization for the department to examine and audit all of the broker's real estate trust account records and authorization for the department of administration to examine all of the broker's interest-bearing common trust accounts maintained for client funds. The authorization shall be provided on a form, as required in s. REEB 18.037.
REEB 18.036(2) (2)Depository institution's certification. No later than 10 days after opening a real estate trust account a broker shall obtain the certification of every depository institution in which the broker maintains a real estate trust account attesting to the existence of the account and consenting to the examination and audit of the account by a duly authorized representative of the department or, in the case of interest-bearing common trust accounts maintained for client funds, the department of administration. The certification shall be provided to the department on a form, as required in s. REEB 18.037.
REEB 18.036 History History: Cr. Register, August, 1994, No. 464, eff. 9-1-94; correction in (1), (2) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671.
REEB 18.037 REEB 18.037 Form for notification and authorization. A broker shall provide the information and authorization as specified in ss. REEB 18.035 and 18.036 on a form provided by the department. This form shall be designated "consent to examine and audit trust account."
REEB 18.037 Note Note: A copy of this form may be obtained from the Department of Safety and Professional Services, Division of Professional Credential Processing, 1400 East Washington Avenue, P.O. Box 8935, Madison, Wisconsin 53708-8935 or downloading from the department's webpage: http://dsps.wi.gov.
REEB 18.037 History History: Cr. Register, August, 1994, No. 464, eff. 9-1-94; correction made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; CR 13-072: am. Register May 2014 No. 701, eff. 7-1-14.
REEB 18.04 REEB 18.04 Authorization to sign trust account checks. A broker may authorize other persons to sign real estate trust account checks, share drafts or drafts drawn on the broker's real estate trust account if the person is at least 18 years of age.
REEB 18.04 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; renum. from REB 9.04 and am. (1), (2), (4) and (5), Register, February, 1983, No. 326, eff. 3-1-83; am. (1), (2), (3) (intro.) and (4), Register, June, 1984, No. 342, eff. 7-1-84; am. (1), r. (2) (a), renum. (2) (b) to be (2) (a) and am., Register, June, 1988, No. 390, eff. 7-1-88; am. (1), r. (2) to (5), Register, August, 1994, No. 464, eff. 9-1-94.
REEB 18.05 REEB 18.05 Receipt for earnest money received by the broker. A broker shall indicate on the offer to purchase the receipt of earnest money received from a buyer at the time the offer is drafted.
REEB 18.05 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; renum. from REB 9.05, Register, February, 1983, No. 326, eff. 3-1-83; am. Register, August, 1994, No. 464, eff. 9-1-94.
REEB 18.06 REEB 18.06 Escrow agreement for earnest money not held by the broker. If the parties to a transaction do not desire that the broker hold the earnest money in the broker's real estate trust account, and wish to designate an escrow agent other than the broker, the broker may not draft the escrow agreement. The escrow agreement shall be drafted by the parties or an attorney. The broker may not hold the funds in the broker's real estate trust account, nor may the broker act in any way as custodian of the funds for the parties. The funds, pursuant to the escrow agreement, shall be held by a party other than the broker, such as: a bank, a savings and loan association, a credit union, or an attorney.
REEB 18.06 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; renum. from REB 9.06, Register, February, 1983, No. 326, eff. 3-1-83; am. Register, June, 1984, No. 342, eff. 7-1-84; am. Register, August, 1994, No. 464, eff. 9-1-94; CR 13-072: am. Register May 2014 No. 701, eff. 7-1-14.
REEB 18.07 REEB 18.07 After closing escrow agreements.
REEB 18.07(1)(1) By separate agreement. If the parties to a contract wish, or are required, to place funds in escrow which are to be held after closing by the broker in the broker's trust account or by another person until some future occurrence, an agreement to that effect shall be prepared by the parties or an attorney. If the broker holds these funds, the broker shall place them in the broker's real estate trust account. The broker may draft the escrow agreement if a form for this purpose has been approved by the board for use by licensees pursuant to s. REEB 16.03.
REEB 18.07(2) (2)On closing statement. A broker may hold in the broker's trust account without a separate escrow agreement occupancy or possession escrows, escrows for final proration of taxes, and escrows for charges incurred by a seller but not yet billed, provided that the closing statement shows that the broker is holding the funds.
REEB 18.07 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; am., Register, April, 1982, No. 316, eff. 5-1-82; renum. from REB 9.07, Register, February, 1983, No. 326, eff. 3-1-83; renum. to be (1) and am., cr. (2), Register, June, 1984, No. 342, eff. 7-1-84; am. Register, August, 1994, No. 464, eff. 9-1-94; correction in (1) made under s. 13.92 (4) (b) 6., Stats., Register November 2011 No. 671.
REEB 18.09 REEB 18.09 Disbursement of trust funds.
REEB 18.09(1)(1) Proper disbursement. A broker who disburses trust funds from the broker's real estate trust account under any of the following circumstances shall not be deemed to have violated s. 452.14 (3) (i), Stats.:
REEB 18.09(1)(a) (a) To the payer upon the rejection, expiration or withdrawal prior to binding acceptance of an offer to purchase, lease, exchange agreement or option on real estate or a business opportunity.
REEB 18.09(1)(b) (b) As directed in a written earnest money disbursement agreement signed by all parties having an interest in the trust funds. For the purposes of this subsection, a closing statement is a written earnest money disbursement agreement.
REEB 18.09(1)(c) (c) To a court having jurisdiction over a civil action involving all parties having an interest in the trust funds.
REEB 18.09(1)(d) (d) As directed by order of a court.
REEB 18.09(1)(e) (e) Upon a good faith decision based upon advice of an attorney not representing any party to the contract.
REEB 18.09(1)(f) (f) Upon authorization granted within the contract.
REEB 18.09(1)(g) (g) As otherwise provided by law.
REEB 18.09(2) (2)Notification of disbursement. Prior to making a disbursement of trust funds under sub. (1) (a) where the broker has knowledge that not all parties agree that the rejection or withdrawal occurred prior to binding acceptance, and prior to making a disbursement under sub. (1) (e), (f) and (g) where the broker has knowledge that either party disagrees with the disbursement, the broker shall attempt to notify all parties in writing of the intent to disburse. The notice shall be delivered by certified mail to the parties' last known addresses and shall state to whom and when the disbursement will be made. The disbursement may not occur until 30 days after the date on which the notice is sent.
REEB 18.09(3) (3)Withdrawal of commissions.
REEB 18.09(3)(a)(a) A broker shall withdraw commissions or fees earned by the broker from real estate trust accounts maintained by the broker within 24 hours after transactions are consummated or terminated, or after the commissions or fees are earned in accordance with the contract involved.
REEB 18.09(3)(b) (b) A broker providing property management services shall disburse the fee earned for providing property management services as a regular monthly basis unless otherwise agreed in a written property management agreement signed by the parties to that agreement.
REEB 18.09 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; renum. from REB 9.09 and am. (3) (intro.), Register, February, 1983, No. 326, eff. 3-1-83; am. (2), (3) (a) and (b) and (4), Register, June, 1984, No. 342, eff. 7-1-84; r. and recr., Register, July, 1993, No. 451, eff. 8-1-93; renum. (3) to be (3) (a), cr. (3) (b), Register, August, 1994, No. 464, eff. 9-1-94; CR 13-072: am. (1) (intro.), (a) to (f) Register May 2014 No. 701, eff. 7-1-14.
REEB 18.10 REEB 18.10 Comingling funds prohibited.
REEB 18.10(1)(1) Depositable funds. A broker shall deposit only real estate trust funds in the broker's real estate trust account.
REEB 18.10(1)(a) (a) Except for sub. (b), a broker shall not commingle the broker's personal funds or other funds in the real estate trust account.
REEB 18.10(1)(b) (b) A broker may deposit and maintain a sum not to exceed $300.00 from the broker's personal funds in any real estate trust account. Such sum shall be specifically identified and deposited to cover service charges relating to the real estate trust account.
REEB 18.10(2) (2)Additional funds. A broker shall deposit additional personal funds in sums consistent with sub. (1) (b) in the broker's real estate trust account within 10 business days following receipt of a statement or other notification from a depository institution that a service charge has been made against the account for which insufficient personal funds are available in the real estate account.
REEB 18.10 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; renum. from REB 9.10, Register, February, 1983, No. 326, eff. 3-1-83; am. Register, July, 1984, No. 342, eff. 7-1-84; am. Register, January, 1992, No. 433, eff. 2-1-92; am. Register, August, 1994, No. 464, eff. 9-1-94; CR 13-072: r. and recr. Register May 2014 No. 701, eff. 7-1-14.
REEB 18.11 REEB 18.11 Non-depositable items. A broker shall not hold any instrument, equity or thing of value which is not depositable in a real estate trust account. Non-depositable items shall be held by one of the parties to a transaction or some other party, subject to an escrow agreement prepared by the parties or an attorney.
REEB 18.11 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; renum. from REB 9.11, Register, February, 1983, No. 326, eff. 3-1-83; am. Register, August, 1994, No. 464, eff. 9-1-94; correction in (2) (a) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; CR 13-072: (1) renum. REEB 18.11, r. (2) Register May 2014 No. 701, eff. 7-1-14.
REEB 18.13 REEB 18.13 Bookkeeping system. Each broker shall maintain and be responsible for a bookkeeping system in the broker's office consisting of at least the following:
REEB 18.13(1) (1)Cash journal. A broker shall maintain a record, called a journal showing the chronological sequence in which real estate trust funds are received and disbursed as follows:
REEB 18.13(1)(a) (a) For funds received, the journal shall include at least the date, the name of the party providing the money, and the amount.
Loading...
Loading...
Published under s. 35.93, Stats. Updated on the first day of each month. Entire code is always current. The Register date on each page is the date the chapter was last published. Report errors (608) 266-3151.