REEB 24.02(12)(12) “Material adverse fact” means an adverse fact that a party indicates is of such significance, or that is generally recognized by a competent licensee as being of such significance to a reasonable party, that it affects or would affect the party’s decision to enter into a contract or agreement concerning a transaction or affects or would affect the party’s decision about the terms of such a contract or agreement. REEB 24.02(13)(13) “Party” means a person seeking to engage in a transaction. REEB 24.02(13m)(13m) “Principal firm” means a firm that engages a subagent to provide brokerage services in a transaction. REEB 24.02(14)(14) “Qualified third party” means a federal, state or local governmental agency, or any person whom the 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. REEB 24.02(15)(15) “Secured lender” means an individual or organization originating a loan in a real estate or business opportunity transaction secured by real estate or by the assets of a business or a business opportunity. REEB 24.02(16)(16) “Real estate practice” means engaging in conduct that requires a license under ch. 452, Stats. REEB 24.02(16m)(16m) “Right of first refusal” means the right of a person to have the first opportunity to purchase or lease real property. REEB 24.02(18)(18) “Transaction” means the sale, exchange, purchase or rental of, or the granting or acceptance of an option, exchange, purchase or rent, an interest in real estate, a business, or a business opportunity. REEB 24.02(19)(19) “Written proposal” means any written document provided by one party to another during the course of a transaction, including notices, offers, counteroffers, options, exchanges, rental agreements, and amendments. REEB 24.02 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; renum. (1) to be (5), renum. (2) to be REB 15.01 (3), cr. (1) to (4) and (6), Register, December, 1980, No. 300, eff. 1-1-81; renum. from REB 15.02, Register, February, 1983, No. 326, eff. 3-1-83; renum. (4) to (6) to be (7) to (9) under s. 13.93 (2m) (b) 1., Stats., Register, September, 1990, No. 417; renum. (1) to (3) to be (2), (4) and (6), cr. (1), (3) and (5), Register, September, 1990, No. 417, eff. 10-1-90; am. (1), Register, January, 1992, No. 433, eff. 2-1-92; am. (1), Register, July, 1993, No. 451, eff. 8-1-93; r. and recr. (1), renum. (2) to (4) to be (4), (5), (7), (6) and (7) to be (8) and (10), (8) to be (11) and am., (a) to be (17), r. (5), cr. (2), (3), (6), (9), (12) to (16), (18), Register, April, 1995, No. 472, eff. 5-1-95; am. (7), r. (11), Register, July, 1998, No. 511, eff. 8-1-98; correction in (3) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; CR 10-136: am. (2) to (5), r. (8), am. (13), cr. (13m), r. (17), cr. (19) Register April 2012 No. 676, eff. 7-1-12; EmR1620: emerg. r. (2), am. (3), (5), (6), (9), (13m), eff. 7-1-16; CR 16-042: r. (2), am. (3), (5), renum. (6), (9) to REEB 11.02 (3m), (4m), am. (13m) February 2017 No. 734, eff. 3-1-17; CR 21-043: am. (13m), (14), (16), cr. (16m), am. (18), (19) Register March 2022 No. 795, eff. 4-1-22. REEB 24.03(1)(1) Discrimination prohibited. Licensees may not discriminate against, nor deny equal services to, nor be a party to any plan or agreement to discriminate against any person in any manner unlawful under applicable federal, state or local fair housing law. REEB 24.03 NoteNote: The primary references for federal and state fair housing laws are the 1988 amendments to the Federal Housing Act (Title VII of the Civil Rights Act of 1968) and Chapter 106, Subchapter II, Stats. REEB 24.03(2)(a)(a) Licensees shall not provide services that the licensee is not competent to provide unless the licensee engages the assistance of 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(2)(b)(b) Licensees shall act to protect the public against fraud, misrepresentation and unethical practices. REEB 24.03(2)(c)(c) A licensee shall be knowledgeable regarding laws, public policies and current market conditions on real estate matters and shall assist, guide, and advise the parties on these factors. REEB 24.03(2)(d)(d) Licensees are not required to have the technical knowledge, skills or training possessed by competent third party inspectors and investigators of real estate and related areas. REEB 24.03 NoteNote: Paragraph (d) recognizes that licensees are not required to have the knowledge, skills or training possessed by, for example, persons such as home inspectors, plumbers, electricians or land surveyors.
REEB 24.03 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; am. (1), Register, March, 1981, No. 303, eff. 4-1-81; renum. from REB 15.03, Register, February, 1983, No. 326, eff. 3-1-83; am. (1), renum. (2) to be (2) (a), (2) (b) and (c) renum. from RL 24.01 (5) (b) and (c) and am., Register, January, 1987, No. 373, eff. 2-1-87; am. (1), cr. (2) (d), Register, July, 1993, No. 451, eff. 8-1-93; CR 21-043: am. (2) (a), (c) Register March 2022 No. 795, eff. 4-1-22. REEB 24.04REEB 24.04 Advertising. A licensee shall follow the requirements for advertising as specified under s. 452.136, Stats. REEB 24.04 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; am. (4), Register, March, 1981, No. 303, eff. 4-1-81; renum. from REB 15.04 and am. (2), Register, February, 1983, No. 326, eff. 3-1-83; renum. (2) to be (2) (a) and am., cr. (2) (b) and (c), Register, January, 1987, No. 373, eff. 2-1-87; am. (2) (c), Register, April, 1995, No. 472, eff. 5-1-95; correction in (2) (a) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; EmR1620: emerg. am. (2) (a), (b), (3), (4), eff. 7-1-16; CR 16-042: am. (2) (a), (b), (3), (4) Register February 2017 No. 734, eff. 3-1-17; CR 21-043: r. and recr. Register March 2022 No. 795, eff. 4-1-22. REEB 24.05REEB 24.05 Disclosure of compensation and interests. REEB 24.05(2)(2) Disclosure of interest. A licensee shall follow the requirements for disclosure of interest as specified under s. 452.133 (3) (b), Stats. REEB 24.05(4)(4) Disclosure to seller. A listing firm may not pay any compensation or incentive to a licensee who is acting as a buyer in a transaction without prior written consent from the seller. REEB 24.05(5)(a)(a) A licensee acting as a principal in a real estate or business opportunity transaction shall disclose his, her, or its license status and intent to act in the transaction as a principal at the earliest of all of the following: REEB 24.05(5)(a)1.1. The first contact with the other party or an agent representing the other party where information regarding the other party or the transaction is being exchanged. REEB 24.05(5)(a)3.3. Any other negotiation with the seller, the listing firm, or other party or firm representing the other party. REEB 24.05(5)(b)(b) The disclosure under this subsection shall be made in writing to the other party in a transaction or to an agent representing the other party. REEB 24.05 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; renum. (3) and (4) to be (4) and (5), cr. (3), Register, December, 1980, No. 300, eff. 1-1-81; am. (5), Register, March, 1981, No. 303, eff. 4-1-81; renum. from REB 15.05, Register, February, 1983, No. 326, eff. 3-1-83; am. (1) and (5), Register, June, 1988, No. 390, eff. 7-1-88; r. and recr. Register, July, 1993, No. 451, eff. 8-1-93; am. (1), (2), (3), (5), Register, April, 1995, No. 472, eff. 5-1-95; renum. (5) to be (5) (a) (intro.), cr. (5) (a) 1. to 3., and (b), Register, January, 2001, No. 541, eff. 2-1-01; CR 10-136: am. (title), (1) (title), renum. (1) to be (1) (a) and am., am. (2), r. (3) (title), renum. (3) to be (1) (b) and am., r. and recr. (4), am. (5) (b) Register April 2012 No. 676, eff. 7-1-12; EmR1620: emerg. am. (1) (a), (2), (4), (5) (a) 3., eff. 7-1-16; CR 16-042: am. (1) (a), (2), (4), (5) (a) 3. Register February 2017 No. 734, eff. 3-1-17; CR 21-043: r. and recr. (1), (2), am. (5) (a) 3. Register March 2022 No. 795, eff. 4-1-22. REEB 24.06REEB 24.06 Unauthorized practice of law. REEB 24.06(1)(1) Unauthorized practice of law prohibited. Licensees shall not engage in activities that constitute the unauthorized practice of law. REEB 24.06(2)(2) Legal counsel not to be discouraged. Licensees shall not discourage any person from retaining an attorney. REEB 24.06 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; renum. from REB 15.06, Register, February, 1983, No. 326, eff. 3-1-83. REEB 24.07REEB 24.07 Inspection and disclosure duties. REEB 24.07(1)(a)(a) General requirement. A licensee, when engaging in real estate practice 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 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. REEB 24.07(1)(b)(b) Listing firm. When listing real estate and prior to execution of the listing contract, a licensee shall inspect the real estate as required by sub. (1), and shall make inquiries of the seller on the condition of the structure, mechanical systems and other relevant aspects of the property as applicable. The licensee shall request that the seller provide a written response to the licensee’s inquiry. REEB 24.07(1)(c)(c) Other licensees. Licensees, other than listing firms, shall inspect the real estate as required by sub. (1) prior to or during a showing of the property, unless the licensee is not given access for a showing. REEB 24.07(1)(d)(d) Specific conduct regarding inspections. A reasonably competent and diligent inspection of real estate improved with a structure does not require the operation of mechanical equipment; the opening of panels, doors or covers for access to mechanical systems; or the moving of furniture, boxes or other property; nor does it require a licensee to observe areas of the property for which entry presents an unreasonable risk of injury or areas accessible only by ladder, by crawling or other equivalent means of access. A licensee is not required to retain third party inspectors or investigators to complete a reasonably competent and diligent inspection. A reasonably competent and diligent inspection of vacant land does not require an observation of the entire property, but shall include, if given access, an observation of the property from at least one point on or adjacent to the property. REEB 24.07(2)(2) Disclosure of material adverse facts. A licensee may not exaggerate or misrepresent facts in the practice of real estate. A licensee, when engaging in real estate practice, shall disclose to each party, in writing and in a timely fashion, all material adverse facts that the licensee knows and that the party does not know or cannot discover through a reasonably vigilant observation, unless the disclosure of the material adverse fact is prohibited by law. This provision is not limited to the condition of the property, but includes other material adverse facts in the transaction. REEB 24.07 NoteNote: Certain “material adverse facts”, as defined in s. REEB 24.02 (12), may not be disclosed by law. For example, unless specifically authorized by a seller, a licensee may not disclose to a potential buyer the actual minimum sales price the seller will accept. See s. 452.133 (1) (d), Stats. REEB 24.07(3)(3) Disclosure of information suggesting material adverse facts. A licensee, when engaging in real estate practice, who becomes aware of information suggesting the possibility of material adverse facts to the transaction, is practicing competently if the licensee discloses to the parties the information suggesting the possibility of material adverse facts to the transaction in writing and in a timely fashion, recommends the parties obtain expert assistance to inspect or investigate for possible material adverse facts to the transaction, and, if directed by the parties, drafts appropriate inspection or investigation contingencies. This provision is not limited to the condition of the property, but includes other material adverse facts to the transaction, including defects and conditions included within the report form under ss. 709.03 and 709.033, Stats. A licensee is not required to retain third party inspectors or investigators to perform investigations of information suggesting the possibility of a material adverse fact to the transaction. REEB 24.07(4)(4) Disclosure of side agreements. A licensee, when engaging in real estate practice, who becomes aware of the fact that a party to the transaction has not disclosed that party’s entire agreement regarding the transaction to that party’s secured lender, shall disclose this fact, in writing and in a timely manner, to the party’s secured lender. REEB 24.07(5)(5) Reliance upon third party inspections and investigations. If a licensee or a party in a transaction engages the services of a qualified third party to conduct a property inspection or investigation of material facts, the licensee may rely on the results of the inspection or investigation providing the licensee obtains a written report of the inspection or investigation and delivers a copy of the report to all parties in a timely manner. REEB 24.07(6)(6) Inconsistencies. If a licensee’s reasonably competent and diligent inspection reveals facts materially inconsistent with or materially contradictory to the seller’s statements provided under sub. (1) (a), or the inspection or investigation report of a third party, the inconsistency shall be disclosed in writing and in a timely manner to the parties. REEB 24.07(7)(7) False information. Licensees shall not knowingly give false information about another licensee or property listed with another licensee. REEB 24.07(8)(a)1r.1r. If a firm is negotiating on behalf of a party who is not the client of another firm and the negotiations are related to real estate primarily intended for use as a residential property containing one to 4 dwelling units, the firm shall request the party’s signed acknowledgement that the party has received a copy of the written disclosure statement. REEB 24.07(8)(a)2.2. Licensees acting as agents of potential buyers of real estate that is used or intended to be used principally for one to 4 family residential purposes, who are negotiating directly with the seller or who are aware that the owner of the real estate has granted a listing firm the exclusive right to sell, shall notify the seller or the listing firm, as applicable, of the licensee’s buyer agency relationship at the earlier of all of the following: REEB 24.07(8)(a)2.a.a. The first contact with the seller or the listing firm where information regarding the seller or transaction is being exchanged. REEB 24.07(8)(a)3.3. When the nature of a licensee’s representation of a client or customer changes such that it makes the initial disclosure that was provided under s. 452.135, Stats., incomplete, misleading, or inaccurate, the licensee shall provide the customer or client with a new disclosure, as required in s. 452.135, Stats. REEB 24.07(8)(b)1.1. Firms and the licensees associated with the firm shall explain to their clients the responsibilities of listing agents, buyer’s agents, and subagents before entering into an agency agreement. REEB 24.07(8)(b)2.2. No firm or licensees associated with the firm may permit other firms to act as subagents in a transaction unless the firm’s client has authorized the use of a subagent in the agency agreement. REEB 24.07(8)(c)(c) Written proposals. Licensees shall state, in the offer to purchase, the lease, the option to purchase, or the exchange agreement, whom the licensee represents as an agent in a transaction. REEB 24.07(8)(d)1.1. A listing firm shall provide a disclosure statement to a customer as required in s. 452.135 (1), Stats., to the buyer if negotiations are being conducted directly with the buyer and not through a buyer’s firm. This requirement may be waived if the buyer’s firm has an exclusive right to locate buyer agency agreement that includes a provision removing the exclusive right to negotiate. REEB 24.07(8)(d)2.2. A buyer’s firm shall provide a disclosure statement to a customer as required in s. 452.135 (1), Stats., to a seller if negotiations are being conducted directly with the seller and not through a seller’s firm, unless the seller has waived the firm’s duty to negotiate under s. 452.133(6), Stats. REEB 24.07(8)(d)3.3. A subagent shall provide a disclosure statement to a customer as required in s. 452.135 (1), Stats., with whom the subagent is working but not to the principal firm’s client. REEB 24.07(8)(d)4.4. A principal firm is not required to provide a disclosure statement to a customer as required in s. 452.135 (1), Stats., to a customer of their subagents. REEB 24.07(8)(e)(e) Agency agreements for lease and property management contracts. REEB 24.07(8)(e)1.1. A licensee who is entering into agency agreements for lease or property management contracts shall provide to the client the disclosure statement as required in s. 452.135 (2), Stats. REEB 24.07(8)(e)2.2. A licensee shall provide to prospective tenants a disclosure statement as required in s. 452.135 (1), Stats., when negotiating the terms of a lease on behalf of the client. REEB 24.07 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; emerg. r. (2), eff. 10-14-80; cr. (3), Register, December, 1980, No. 300, eff. 1-1-81; r. (2), Register, March, 1981, No. 303, eff. 4-1-81; renum. from REB 15.07, Register, February, 1983, No. 326, eff. 3-1-83; cr. (2), Register, January, 1987, No. 373, eff. 2-1-87; am. (1), r. and recr. (2), cr. (4), Register, June, 1988, No. 390, eff. 7-1-88; am. (1), cr. (1) (a) to (c) and (4) (d), r. and recr. (2), Register, September, 1990, No. 417, eff. 10-1-90; r. and recr. (1), renum. (2), (3), (4) to be (5), (6), (7), cr. (2), (3), (4), Register, July, 1993, No. 451, eff. 8-1-93; am. (1) (a), (d), (2), (3), (5), renum. (1) (a), (b) to be (1) (b), (c) and am., (6) to be (7), r. (1) (c), (7), r. and recr. (4), cr. (6), (8), Register, April, 1995, No. 472, eff. 5-1-95; am. (8) (a) 2. (intro.), a. and c., Register, January, 2001, No. 541, eff. 2-1-01; CR-136: r. and recr. (8) (a) 1., cr. (8) (a) 1g., 1r., am. (8) (a) 2. (intro.), 3., r. (8) (a) 4., am. (8) (b) (title), 1., 2., (c), r. and recr. (8) (d), (e) Register April 2012 No. 676, eff. 7-1-12; EmR1620: emerg. am. (1) (b) (title), (c), (3), (8) (a) 1. to 1r., 2. (intro.), a., c., (b), (d), (e), eff. 7-1-16; CR 16-042: am. (1) (b) (title), (c), (3), (8) (a) 1. to 1r., 2. (intro.), a., c., (b), (d), (e) Register February 2017 No. 734, eff. 3-1-17; CR 21-043: am. (1) (a), (c), (3), (5), r. and recr. (8) (a) 1., r. (8) (a) 1g., am. (8) (a) 1r., (d) (title), 1. to 3., (e) 1. Register March 2022 No. 795, eff. 4-1-22; correction in (3) made under s. 13.92 (4) (b) 7., Stats., Register March 2022 No. 795. REEB 24.075REEB 24.075 Tie-in arrangements. Licensees shall not: REEB 24.075(1)(1) Condition the sale of real estate owned by the licensee or whose sale is effectively controlled by the licensee to a buyer upon the buyer’s agreement to purchase another parcel or real estate. REEB 24.075(2)(2) Condition the sale of real estate owned by the licensee or whose sale is effectively controlled by the licensee upon the buyer’s agreement to list the real estate or other real estate owned by the buyer with the licensee. REEB 24.075 NoteNote: The following are 2 common examples of activities which would violate this subsection: (1) requiring a builder to list a speculation home with the licensee; and (2) requiring a buyer to list a present home with the licensee.
REEB 24.075(3)(3) Condition the sale of vacant real estate owned by the licensee or whose sale is effectively controlled by the licensee upon the buyer’s agreement to employ one or more specific builders to make improvements on the real estate unless: REEB 24.075(3)(b)(b) The builder and the licensee or the builder and the owner of the real estate are the same person or are commonly controlled corporations and whose business is selling improved property and not vacant land; and there is full disclosure as specified in s. 452.133 (3) (c), Stats. REEB 24.075(3)(c)(c) The agreement is a bona fide effort to maintain development quality or architectural uniformity and no consideration passes from a builder to a licensee for soliciting this agreement. REEB 24.075 HistoryHistory: Cr. Register, December, 1980, No. 300, eff. 1-1-81; renum. from REB 15.075 and am. (3) (a) and (b), Register, February, 1983, No. 326, eff. 3-1-83; correction in (3) (a), (b) made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; correction in (3) (a), (b) made under s. 13.92 (4) (b) 7. Stats., Register April 2012 No. 676; CR 21-043: am. (3) (a) to (c) Register March 2022 No. 795, eff. 4-1-22. REEB 24.08REEB 24.08 Agreements to be in writing. A licensee shall put in writing all listing contracts, guaranteed sales agreements, buyer agency agreements, offers to purchase, property management agreements, options, financial obligations and any other written proposals regarding transactions, expressing the exact agreement of the parties. This section does not apply if the writing is completed by the parties or their attorneys or the writing is outside the scope of the licensee’s authority under ch. REEB 16. REEB 24.08 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; renum. from REB 15.08, Register, February, 1983, No. 326, eff. 3-1-83; am. Register, January, 1987, No. 373, eff. 2-1-87; am. Register, June, 1988, No. 390, eff. 7-1-88; am. 24.08, Register, July, 1993, No. 451, eff. 8-1-93; correction made under s. 13.92 (4) (b) 7., Stats., Register November 2011 No. 671; CR 21-043: am. Register March 2022 No. 795, eff. 4-1-22. REEB 24.085REEB 24.085 False portrayal of interest, prohibited. No licensee shall draft or use any document that the licensee knows falsely portrays an interest in real estate. REEB 24.085 HistoryHistory: Cr. Register, December, 1980, No. 300, eff. 1-1-81; renum. from REB 15.085, Register, February, 1983, No. 326, eff. 3-1-83; CR 21-043: am. Register March 2022 No. 795, eff. 4-1-22. REEB 24.09REEB 24.09 Securing agency agreements. A licensee may not mislead a potential client regarding the benefits that might be realized by using the licensee’s services. A licensee also may not mislead a potential client regarding the market value of real estate or a business opportunity to be leased, rented, purchased, optioned, or sold under an agency agreement. REEB 24.09 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; renum. from REB 15.09, Register, February, 1983, No. 326, eff. 3-1-83; r. and recr. Register, April, 1995, No. 472, eff. 5-1-95; CR 10-136: am. Register April 2012 No. 676, eff. 7-1-12; CR 21-043: am. Register March 2022 No. 795, eff. 4-1-22. REEB 24.10REEB 24.10 Net listing prohibited. Licensees shall not obtain, negotiate or attempt to obtain or negotiate any listing contract providing for a stipulated net price to the owner with the excess over the stipulated net price to be received by the firm as commission. REEB 24.10 HistoryHistory: Cr. Register, February, 1980, No. 290, eff. 3-1-80; renum. from REB 15.10, Register, February, 1983, No. 326, eff. 3-1-83; EmR1620: emerg. am., eff. 7-1-16; CR 16-042: am. Register February 2017 No. 734, eff. 3-1-17.
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