CR 21-043 Rule Text

Summary of, and comparison with, existing or proposed federal regulation:

None

Comparison with rules in adjacent states:

Illinois: Illinois provides criteria for unprofessional conduct for real estate brokers, salespersons, and other real estate professions as governed under the Illinois Real Estate License Act of 2000 and updated in 2019 under 225 ILCS 454/Art. 20. Further administrative rules outline additional direction for the provisions found under the laws.

https://www.ilga.gov/commission/jcar/admincode/068/068014500I09000R.html

Iowa: Iowa provides for unprofessional conduct for real estate brokers and salesperson under IC §543B. (https://www.legis.iowa.gov/DOCS/ACO/IC/LINC/Chapter.543b.pdf.)

Iowa’s Administrative Rules 193E.18 further detail disciplinary and investigatory review in matters such as grounds for discipline and sanctions. https://www.legis.iowa.gov/law/administrativeRules/rules?agency=193E&chapter=18&pubDate=01-13-2021

Michigan: Michigan Laws under 299-1980, Section 339.501-339.559 and Michigan Administrative Rule R 339 Article 5 outlines provisions concerning complaints, disciplinary procedures, and other related issues for real estate professions. Complaints on violations of the occupational codes in Michigan can be filed through the Bureau of Professional Licensing in the Department of Licensing and Regulatory Affairs. http://www.legislature.mi.gov/(S(1ikbjpybafgho5pahhxyzkcp))/mileg.aspx?page=getObject&objectName=mcl-299-1980-5

Minnesota: Minnesota has adopted standards of conduct for real estate professionals found under s. 82.73, MN Statutes. https://www.revisor.mn.gov/statutes/cite/82.73 and disciplinary procedures entitled “Denial, Suspension and Revocation of Licensure” under s. 82.82, Stats. https://www.revisor.mn.gov/statutes/cite/82.82

Summary of factual data and analytical methodologies:

The Board hears and reviews disciplinary cases related to conduct and ethical practices of real estate licensees under s. 452.14, Stats. This proposed order clarifies and updates professional conduct and ethical practices rule provisions to meet current practice and statutory changes.

Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis:

The proposed rules will be posted for a period of 14 days to solicit public comment on economic impact, including how the proposed rules may affect businesses, local government units, and individuals.

Fiscal Estimate and Economic Impact Analysis:

A fiscal estimate and economic impact analysis will be conducted.

Effect on small business:

These proposed rules do not have an economic impact on small businesses, as defined in s. 227.114 (1), Stats. The Department’s Regulatory Review Coordinator may be contacted by email at [e-mail], or by calling [phone].

Agency contact person:

Kassandra Walbrun, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8366, Madison, Wisconsin 53708; telephone [phone]; email at [e-mail].

Place where comments are to be submitted and deadline for submission:

Comments may be submitted to Kassandra Walbrun, Administrative Rules Coordinator, Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8366, Madison, WI 53708-8366, or by email to [e-mail]. Comments must be received at or before the public hearing to be held on a future date to be included in the record of rule-making proceedings.

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TEXT OF RULE

Section 1. REEB 24.01 (2) is amended to read:

REEB 24.01 (2) The intent of the board in adopting the rules in this chapter is to establish minimum standards of conduct for real estate licensees and to define that conduct which that may result in board discipline pursuant to s. 452.14, Stats.

Section 2. REEB 24.02 (13m) and (14) are amended to read:

REEB 24.02 (13m) “Principal firm” means a firm who that engages a subagent to provide brokerage services in a transaction.

REEB 24.02 (14) “Qualified third party” means a federal, state or local governmental agency, or any person whom the broker, salesperson licensee or a party to the real estate transaction reasonably believes has the expertise necessary to meet the industry standards of practice for the type of inspection or investigation that has been conducted by the third party in order to prepare the written report described in s. 452.23 (2) (b), Stats.

Section 3. REEB 24.02 (16) is amended to read:

REEB 24.02 (16) “Real estate practice" means engaging in conduct which that requires a license under ch. 452, Stats.

Section 4. REEB 24.02 (16m) is created to read:

REEB 24.02 (16m) “Right of first refusal” means the right of a person to have the first opportunity to purchase or lease real property.

Section 5. REEB 24.02 (18) and (19) are amended to read:

REEB 24.02 (18) “Transaction" means the sale, exchange, purchase or rental of, or the granting or acceptance of an option to sell, exchange, purchase or rent, an interest in real estate, a business, or a business opportunity.

REEB 24.02 (19) “Written proposal” means any written document provided by one party to another during the course of a transaction, including but not limited to notices, offers, counteroffers, options, exchanges, rental agreements, and amendments.

Section 6. REEB 24.03 (2) (a) and (c) are amended to read:

REEB 24.03 (2) (a) Licensees shall not provide services which that the licensee is not competent to provide unless the licensee engages the assistance of one another person who is competent. Any person engaged to provide such assistance shall be identified and that person’s contribution shall be described in the documents or records related to the transaction.

REEB 24.03 (c) Licensees shall be knowledgeable regarding laws, public policies and current market conditions on real estate matters and shall assist, guide, and advise the buying or selling public based upon parties on these factors.

Section 7. REEB 24.04 (1), (2), (3) and (4) are repealed and recreated to read:

REEB 24.04 Advertising. A licensee shall follow the requirements for advertising as specified under s. 452.136, Stats.

Section 8. REEB 24.05 (1) (a) and (b) is repealed and recreated to read:

REEB 24.05 (1) Compensation. A licensee shall follow the requirements for compensation as specified under s. 452.133 (3) (a) and (b), Stats.

Section 9. REEB 24.05 (5) (a) 3. is amended to read:

REEB 24.05 (5) (a) 3. Any other negotiation with the seller, or the listing firm or other party or firm representing the other party.

Section 10. REEB 24.07 (1) (a) and (c) are amended to read:

REEB 24.07 (1) (a) General requirement. A licensee, when engaging in real estate practice which that involves real estate improved with a structure, shall conduct a reasonably competent and diligent inspection of accessible areas of the structure and immediately surrounding areas of the property to detect observable, material adverse facts. A licensee, when engaging in real estate practice which that involves vacant land, shall, if the vacant land is accessible, conduct a reasonably competent and diligent inspection of the vacant land to detect observable material adverse facts.