AB456: Bill Text

AB456,74 Section 74. 452.12 (5) (bm) of the statutes is created to read:

AB456,21,17 452.12 (5) (bm) If an application for renewal of a license issued to a firm is not filed with the board on or before the renewal date or if the renewal is not granted, all of the following apply:

AB456,21,19 1. The firm may not engage in any of the activities covered by the license until the license is renewed or a new license is issued.

AB456,21,22 2. Any licensees associated with the firm may not engage in any of the activities covered by the firm's license on behalf of the firm until the firm's license is renewed or a new license is issued.

AB456,22,2 3. A licensed individual broker or licensed broker business entity who is serving as a business representative for the firm shall notify each licensee associated with the firm that the firm's license was not renewed and, within 10 days after notifying a licensee, file with the department a notice of termination for each such licensee on a form prescribed by the department.

AB456,75 Section 75. 452.12 (5) (c) of the statutes is amended to read:

AB456,22,6 452.12 (5) (c) At the time of renewal, each broker or salesperson who is an individual shall submit proof of attendance at and successful completion of continuing education programs or courses approved under s. 452.05 (1) (g).

AB456,76 Section 76. 452.12 (6) of the statutes is repealed.

AB456,77 Section 77. 452.13 (1) (a) of the statutes is amended to read:

AB456,22,13 452.13 (1) (a) "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 licensee on behalf of the broker's, salesperson's or time-share salesperson's principal a firm or any other person. "Client funds" does not include promissory notes.

AB456,78 Section 78. 452.13 (2) (a) of the statutes is amended to read:

AB456,22,20 452.13 (2) (a) A broker who firm that holds client funds shall establish an interest-bearing common trust account in a depository institution. The interest-bearing common trust account shall earn interest at a rate not less than that applicable to individual accounts of the same type, size, and duration and for which withdrawals or transfers can be made without delay, subject to any notice period that the depository institution is required to observe by law or regulation.

AB456,79 Section 79. 452.13 (2) (b) of the statutes is amended to read:

AB456,22,23 452.13 (2) (b) Any broker who firm that maintains an interest-bearing common trust account shall do all of the following:

AB456,23,3 1. Register with the department of safety and professional services the name and address of the depository institution and the number of the interest-bearing common trust account.

AB456,23,5 2. Notify the department of safety and professional services when any of the information required under subd. 1. is changed.

AB456,23,10 3. Furnish the department of safety and professional services with a letter authorizing the department of safety and professional services and the department of administration to examine and audit the interest-bearing common trust account whenever the either department of safety and professional services or the department of administration considers it necessary.

AB456,80 Section 80. 452.13 (2) (bm) of the statutes is amended to read:

AB456,23,14 452.13 (2) (bm) The department of safety and professional services shall forward to the department of administration the information and documents furnished under par. (b).

AB456,81 Section 81. 452.13 (2) (c) of the statutes is amended to read:

AB456,23,17 452.13 (2) (c) A broker firm shall deposit all client funds in the interest-bearing common trust account.

AB456,82 Section 82. 452.13 (2) (e) (intro.) of the statutes is amended to read:

AB456,23,20 452.13 (2) (e) (intro.) For each interest-bearing common trust account, the broker firm shall direct the depository institution to do all of the following:

AB456,83 Section 83. 452.13 (2) (e) 2. of the statutes is amended to read:

AB456,24,2 452.13 (2) (e) 2. When the interest remittance is sent, furnish to the department of administration and to the broker firm maintaining the interest-bearing common trust account a statement that includes the name of the broker firm for whose account the remittance is made, the rate of interest applied, the amount of service charges or fees deducted, if any, and the account balance for the period that the statement covers.

AB456,84 Section 84. 452.13 (2) (f) 1. of the statutes is amended to read:

AB456,24,7 452.13 (2) (f) 1. May not assess a service charge or fee that is due on an interest-bearing common trust account against any broker firm or, except as provided in subd. 3., against any other account, regardless of whether the same broker firm maintains the other account.

AB456,85 Section 85. 452.13 (3) of the statutes is amended to read:

AB456,24,16 452.13 (3) Deposit provisions. A broker who firm that deposits client funds in an interest-bearing common trust account in compliance with this section may not be held liable to the owner or beneficial owner of the client funds for damages due to compliance with this section. A broker, salesperson or time-share salesperson who licensee that deposits client funds in an interest-bearing common trust account in compliance with this section on behalf of a firm is not required to disclose alternative depository arrangements that could be made by the parties or to disclose that a deposit will be made under this section.

AB456,86 Section 86. 452.13 (4) of the statutes is amended to read:

AB456,24,19 452.13 (4) Trust account optional. This section does not require a broker firm to hold client funds or require a person to transfer client funds to a broker firm.

AB456,87 Section 87. 452.13 (5) of the statutes is amended to read:

AB456,24,23 452.13 (5) Rules. In consultation with the department of safety and professional services, the department of administration shall promulgate rules necessary to administer this section.

AB456,88 Section 88. 452.132 of the statutes is created to read:

AB456,25,3 452.132 Responsibilities of firms and licensees. (1) A firm shall supervise the brokerage service activities of each licensee associated with the firm, including by doing all of the following:

AB456,25,4 (a) Ensuring that a supervising broker for the firm complies with sub. (4).

AB456,25,6 (b) Providing a licensee with reasonable access to a supervising broker for the purpose of consultation regarding real estate practice issues.

AB456,25,7 (2) A firm shall do all of the following:

AB456,25,11 (a) Provide each licensee associated with the firm with a written statement of the procedures under which the firm and licensees associated with the firm must operate with respect to handling leases, agency agreements, offers to purchase, and other documents and records relating to transactions.

AB456,25,14 (b) Notify each licensee associated with the firm where a copy of the rules promulgated by the board related to the conduct, ethical practices, and responsibilities of licensees may be obtained.

AB456,25,17 (c) Before a licensee becomes associated with the firm and at the beginning of each biennial licensure period, ensure that the licensee holds a valid license or registration.

AB456,25,19 (3) A firm shall be responsible for the custody and safety of all documents and records relating to transactions submitted to the firm as required under sub. (6) (b).

AB456,25,22 (4) (a) A supervising broker for a firm, as determined under sub. (5), shall review all of the following prior to the closing of a transaction in accordance with par. (b):

AB456,26,2 1. All agency agreements, offers to purchase, leases, and other documents that are executed by the parties and records relating to the transaction that are used by a licensee associated with the firm and submitted to the firm as required under sub. (6) (b).

AB456,26,3 2. All trust account records relating to the transaction.

AB456,26,11 (b) The review under par. (a) shall be limited to confirming that a written disclosure statement to a customer or client has been provided by a licensee associated with the firm in accordance with s. 452.135, confirming that any applicable form approved by the board has been used and the forms have been completed by filling in the blanks in a manner consistent with the structure of the form, and communicating to the licensee any errors in how the forms were completed that are apparent on the face of the document and known to the person reviewing the document.

AB456,26,14 (5) (a) A firm that is a licensed broker business entity shall delegate the performance of the duty to supervise licensees associated with the firm to a supervising broker who is a licensed individual broker.

AB456,26,18 (b) A firm that is not a licensed broker business entity may delegate the duty to supervise licensees associated with the firm to a supervising broker who is a licensed individual broker, but in the absence of a specific supervising broker delegation, the firm itself is deemed to be the supervising broker for that firm.

AB456,26,21 (c) A delegation under par. (a) or (b) shall be written and signed by or on behalf of the delegating firm, identify the duty delegated, and be signed by the broker to whom the delegation is made.

AB456,26,23 (d) A firm may delegate the duty to supervise licensees to more than one supervising broker.

AB456,27,2 (6) (a) A licensee associated with a firm shall be responsible for discussing with the party with whom the licensee is working with or representing any error communicated to the licensee as provided in sub. (4) (b), and the party shall determine whether to request any changes to address the error.

AB456,27,6 (b) A licensee associated with a firm shall submit to the firm in a timely manner all agency agreements, offers to purchase, leases, and other documents that are executed by the parties and records related to the brokerage services provided on behalf of the firm and transactions that are used or received by the licensee.

AB456,89 Section 89. 452.132 (2) (c) of the statutes, as created by 2015 Wisconsin Act .... (this act), is amended to read:

AB456,27,11 452.132 (2) (c) Before a licensee becomes associated with the firm and at the beginning of each biennial licensure period, ensure that the licensee holds a valid license or registration.

AB456,90 Section 90. 452.133 (title) of the statutes is amended to read:

AB456,27,13 452.133 (title) Duties of brokers licensees.

AB456,91 Section 91. 452.133 (1) (intro.), (c), (d), (e), (f) and (g) of the statutes are amended to read:

AB456,27,18 452.133 (1) Broker's duties Duties to all persons in parties to a transaction. (intro.) A broker who is firm providing brokerage services to a person in party to a transaction owes all of the following duties to the person party:

AB456,27,22 (c) The duty to timely disclose in writing all material adverse facts that the broker firm knows and that the person party does not know or cannot discover through reasonably vigilant observation, unless the disclosure of a material adverse fact is prohibited by law.

AB456,28,5 (d) The duty to keep confidential any information given to the broker firm in confidence, or any information obtained by the broker firm that he or she the firm knows a reasonable person would want to be kept confidential, unless the information must be disclosed by law or the person whose interests may be adversely affected by the disclosure specifically authorizes the disclosure of particular information. A broker The firm shall continue to keep the information confidential after the transaction is complete and after the broker firm is no longer providing brokerage services to the person party.

AB456,28,9 (e) The duty to provide accurate information about market conditions that affect the person's transaction, within a reasonable time after the person's a request for such information by the party, unless disclosure of the information is prohibited by law.

AB456,28,11 (f) The duty to safeguard trust funds and other property held by the broker as required by rules promulgated by the department under s. 452.13 (5).

AB456,28,14 (g) When the broker firm is negotiating on behalf of a party, the duty to present contract proposals in an objective and unbiased manner and disclose the advantages and disadvantages of the proposals.

AB456,92 Section 92. 452.133 (2) (intro.), (a) 1. and 2., (b) and (c) of the statutes are amended to read:

AB456,28,20 452.133 (2) Broker's duties to a client Duties to clients. (intro.) A broker firm providing brokerage services to his or her a client owes the client the duties that the broker firm owes to a person party under sub. (1) and all of the following additional duties:

AB456,28,21 (a) 1. Placing the client's interests ahead of the broker's interests of the firm.

AB456,29,2 2. Placing the client's interests ahead of the interests of persons in the transaction who are not the broker's firm's clients by not disclosing to persons in the transaction other than the broker's firm's clients information or advice the disclosure of which is contrary to the interests of a client of the broker firm, unless the disclosure is required by law.

AB456,29,7 (b) The duty to disclose to the client all information known by the broker firm that is material to the transaction and that is not known by the client or discoverable by the client through reasonably vigilant observation, except for confidential information under sub. (1) (d) and other information the disclosure of which is prohibited by law.

AB456,29,11 (c) The duty to fulfill any obligation required by the agency agreement, and any order of the client that is within the scope of the agency agreement, that is not inconsistent with another duty that the broker firm has under this chapter or any other law.

AB456,93 Section 93. 452.133 (3) of the statutes is amended to read:

AB456,29,14 452.133 (3) Prohibited conduct. In providing brokerage services, a broker licensee may not do any of the following:

AB456,29,17 (a) Accept any fee or compensation related to the transaction from any person other than the broker's licensee's client, unless the broker has principal firm, or firm, without the prior written consent of all parties to the transaction.

AB456,29,24 (b) Act in a transaction on the broker's licensee's own behalf, on behalf of the broker's licensee's immediate family if the firm is an individual, on behalf of the licensee's firm, or on behalf of any organization or business entity in which the broker licensee has an interest, unless without the broker has the prior written consent of all parties to the transaction. For the purpose of complying with this paragraph, a licensee shall obtain the written consent in the offer to purchase, option, lease, or other transaction contract.

AB456,30,6 (c) Except as provided in s. 452.19 (1), refer, recommend, or suggest to a party to the transaction the services of an individual or entity from which the broker licensee may receive compensation for a referral or in which the broker licensee has an interest, unless the broker licensee has disclosed in writing the fact that he or she the licensee may receive compensation or has disclosed his or her in writing an interest in the individual or entity providing the services.

AB456,94 Section 94. 452.133 (4) (a) and (b) 1. and 2. of the statutes are amended to read:

AB456,30,10 452.133 (4) (a) A subagent owes all persons parties to whom a broker the subagent is providing brokerage services in a transaction the duties specified in sub. (1) but does not owe the clients of the principal broker firm the duties under sub. (2).

AB456,30,13 (b) 1. Place the subagent's interests ahead of the interests of the clients of the principal broker firm in the transaction in which the subagent has been engaged by the principal broker firm.

AB456,30,17 2. Provide advice or opinions to parties in the transaction if providing the advice or opinions is contrary to the interests of the clients of the principal broker firm in the transaction in which the subagent has been engaged by the principal broker firm, unless required by law.

AB456,95 Section 95. 452.133 (4m) of the statutes is created to read:

AB456,30,22 452.133 (4m) Duties and prohibitions; application to licensees. (a) A firm's duties under sub. (1) extend to each licensee associated with that firm, and each licensee associated with a firm owes the same duties to a party that the firm owes to that party under sub. (1).

AB456,31,2 (b) Except as provided in s. 452.134 (3) (b), a firm's duties under sub. (2) extend to each licensee associated with that firm, and each licensee associated with a firm owes the same duties to a client of the firm that the firm owes to that client under sub. (2).

AB456,31,5 (c) 1. A subagent's duties under sub. (4) (a) extend to each licensee associated with that subagent, and each licensee associated with a subagent owes the same duties to a party that the subagent owes to that party under sub. (4) (a).

AB456,31,8 2. The prohibitions that apply to a subagent under sub. (4) (b) extend to each licensee associated with that subagent, and no licensee associated with a subagent may take any action that the subagent is prohibited from taking under sub. (4) (b).

AB456,96 Section 96. 452.133 (5) of the statutes is amended to read:

AB456,31,19 452.133 (5) Duties without agency or subagency relationship. If a broker firm is providing brokerage services to a person who is a party or a prospective party to a current or prospective transaction, and the broker firm does not have an agency agreement with the person and is not a subagent of another broker firm in the transaction, then the broker owes firm and any licensees associated with the firm owe the person the duties under sub. (1) and may not, unless required by law, provide advice or opinions relating to the transaction in which the person is receiving brokerage services if providing the advice or opinions is contrary to the interests of a party to a current or prospective transaction with the person receiving the brokerage services.

AB456,97 Section 97. 452.133 (6) (intro.) and (a) of the statutes are amended to read:

AB456,31,25 452.133 (6) Waiver of duties. (intro.) The duties imposed by subs. (1), (2) (a), (am), (b), and (c), (4), and (5) may not be waived. A client may waive, in part or in full, the broker's duty under sub. (2) (d), except that a waiver under this subsection is not effective unless the broker firm or a licensee associated with the firm provides to the client a written disclosure containing all of the following:

AB456,32,3 (a) A copy of the text of sub. (2) (d) and s. 452.01 (5m), and a statement that, as a consequence of the client's waiver, the broker firm and any licensees associated with the firm will have no legal duty to perform the duty imposed by sub. (2) (d).

AB456,98 Section 98. 452.134 (1) (a) of the statutes is amended to read: