Summary of, and comparison with, existing or proposed federal regulation
There are no existing or proposed federal regulations addressing real estate trust accounts with respect to licensees.
Comparison with rules in adjacent states
An Internet-based search revealed the following:
Illinois: In Illinois, the Bureau of Real Estate Professions administers and enforces the Illinois Real Estate License Act of 2000, the Real Estate Timeshare Act, the Land Sales Registration Act, the Real Estate Appraiser Licensing Act of 2002, Provisions and Rules of the Uniform Standards of Professional Appraisal Practice, the Auction License Act, and the Home Inspector License Act. The Bureau has responsibility for licensing and regulating real estate brokers, managing brokers, leasing agents, real estate firms, real estate appraisers, auctioneers, auction firms, home inspectors, and home inspector entities. An internet search did not reveal details relating to any Illinois codes and statues pertaining to real estate trust accounts.
Iowa: In Iowa, the Professional Licensing Division (IPLD) oversees the real estate industry through the following rules: Iowa Code ch.
543B, Real Estate Brokers and Salespersons; ch.
543C, Sales of Subdivided Land Outside of Iowa; and ch.
557A, Iowa Time-Share Act. These rules are published in the Iowa Administrative Code ch. 193E. Under the jurisdiction of the IPLD, the Iowa Real Estate Commission regulates and administers the real estate laws in Iowa. Notification of opening, closing and transferring accounts, naming the accounts, as well as submitting interest to a designated state agency is similar to rules and statutes in Wisconsin.
Michigan: In Michigan, Article 25 of Public Act 299 of 1980, licenses and regulates the real estate industry through the Board of Real Estate Brokers and Salespersons. In Michigan, R339.22313, rule 313,
real estate trust accounts are held in non-interest bearing, demand-checking accounts. Received funds must be deposited within two banking days, with some exceptions. A third party may manage the funds if interest is being sought. Disbursement, co-mingling and recordkeeping are detailed in the state guidelines for trust accounts. [
http://www.rentupm.com/wp-content/uploads/2011/11/Michigan-Trust-Account-Guidelines.pdf].
Minnesota: The Minnesota statutes are similar to Wisconsin and require all real estate trust accounts to pool interest from interest bearing accounts. The commissioner of management and budget shall deposit such funds into the housing trust fund account. Chapter 82.75, subd. 5, Trust accounts, outlines the state requirements, which include: maintaining and retaining records, timeliness of transaction including deposits within three business days. [
https://www.revisor.mn.gov/statutes/?id=82.75].
Summary of factual data and analytical methodologies
The Board relied upon their knowledge of processes and procedures currently in place in the industry and made determinations on modifying or eliminating out-dated practices and terms when found in their review. Practices relating to bookkeeping and keeping ledgers have changed with the introduction of computer software, for example.
Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis
Data was obtained from the Division of Professional Credential Processing regarding the number of licensees that would be affected by this regulatory change. As of 4/15/2013, there are 6,139 active licensed real estate salespersons and 10,373 active licensed real estate brokers. There are 1,051 licensed real estate business entities. The majority of real estate licensees work in small business environments; however, the proposed rules do not include any policy changes that would impact licensees or small business.
Fiscal Estimate and Economic Impact Analysis
The Fiscal Estimate and Economic Impact Analysis is attached.
Initial Regulatory Flexibility Analysis or Summary
This rule will not have a significant adverse effect on “small business."
Agency Contact Person
Jean MacCubbin, Program Manager
Department of Safety and Professional Services, Division of Policy Development
1400 East Washington Avenue, Room 151
P.O. Box 8935
Madison, WI 53708
Telephone: (608) 266-0955
Telecommunications relay services: at 711
STATE OF WISCONSIN
DEPARTMENT OF ADMINISTRATION
DOA-2049 (R03/2012)
|
Division of Executive Budget and Finance
101 East Wilson Street, 10th Floor
P.O. Box 7864
Madison, WI 53707-7864
FAX: (608) 267-0372
|
ADMINISTRATIVE RULES
Fiscal Estimate & Economic Impact Analysis
|
1. Type of Estimate and Analysis
|
X Original
⍽ Updated
⍽ Corrected
|
2. Administrative Rule Chapter, Title and Number
|
Chapter REEB 18, Trust Accounts.
|
3. Subject
|
Modernize the rules to reflect best practices by removing antiquated provisions, and repeal sections deleted by 2001 Act 18.
|
4. Fund Sources Affected
|
5. Chapter 20, Stats. Appropriations Affected
|
⍽ GPR
⍽ FED X PRO ⍽ PRS
⍽ SEG ⍽ SEG-S
|
s. 20.165 (1) (g), Stats.
|
6. Fiscal Effect of Implementing the Rule
|
X No Fiscal Effect
⍽ Indeterminate
|
⍽ Increase Existing Revenues
⍽ Decrease Existing Revenues
|
⍽ Increase Costs
⍽ Could Absorb Within Agency's Budget
⍽ Decrease Cost
|
7. The Rule Will Impact the Following (Check All That Apply)
|
⍽ State's Economy
⍽ Local Government Units
|
⍽ Specific Businesses/Sectors
⍽ Public Utility Rate Payers
⍽ Small Businesses (if checked, complete Attachment A)
|
8. Would Implementation and Compliance Costs Be Greater Than $20 million?
⍽ Yes
X No
|
9. Policy Problem Addressed by the Rule
|
With the exception of renumbering the chapter, this chapter has not been updated since 1983; the board has indicated various practices which are outdated.
|
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
|
Licensees, real estate brokers, and salespersons.
|
11. Identify the local governmental units that participated in the development of this EIA.
|
None known.
|
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
There are no new or increased costs associated with the promulgation of these rules on any of the business sectors listed.
|
13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
|
For new applicants for licenses, the rules will reflect contemporary practices specific to the real estate industry.
|
14. Long Range Implications of Implementing the Rule
|
The rule is not expected to need further revisions in the long-term.
|
15. Compare With Approaches Being Used by Federal Government
|
There is no existing or proposed legislation regarding real estate (investment) accounts.
|
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
|
IA and MN have similar rules and require the interest to be forwarded to the state; MI has similar rules on the establishment and operation of trust accounts; IL has no state-level rules or laws pertaining to real estate trust accounts.
|
17. Contact Name
|
18. Contact Phone Number
|
Jean MacCubbin
|
(608) 266-0955
|
This document can be made available in alternate formats to individuals with disabilities upon request.
Notice of Hearing
Safety and Professional Services —
Real Estate Examining Board
NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Real Estate Examining Board in ss.
15.405 (11),
227.11 (2),
452.07 (1m),
452.05 (1) (b), and
452.07 (1m), Stats., and interpreting ss.
452.07 (1m),
452.05 (1) (b), and
452.07, Stats., the Real Estate Examining Board will hold a public hearing at the time and place indicated below to consider an order of the Real Estate Examining Board to repeal s.
REEB 16.03 (2) Note; to renumber s.
REEB 16.02 (1) to s.
REEB 16.02 (1e); to amend ss.
REEB 16.03 (1), (intro.),
(a),
(b), and
(e) and
(2),
16.05 (1) and
(2),
16.06 (1) (intro.),
(a),
(b),
(e), and
(f),
(4) (intro.) and
(a) to
(b),
(5) (intro.) and
(a) to
(c),
(6) and
(7); to repeal and recreate s.
REEB 16.03 (2) Note, and to create ss.
REEB 16.02 (intro.),
(1) and Note, (1m), (2e), (2m), (2r), (3m), and (4m), and 16.03 (2) Note, relating to use of approved forms and legal advice.
Hearing Information
Date: Thursday, October 31, 2013
Time: 10:00 a.m.
Locations: 1400 East Washington Ave.
(Enter through 55 N. Dickinson St.)
Room 121A
Madison, WI
Appearances at the Hearing
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions, and arguments in writing as well. Facts, opinions, and arguments may also be submitted in writing without a personal appearance by mail addressed to the Department of Safety and Professional Services, Division of Policy Development, P.O. Box 8935, Madison, Wisconsin 53708-8935. Written comments must be received at or before the public hearing to be included in the record of rule-making proceedings.
Place Where Comments are to be Submitted and Deadline for Submission
Comments may be submitted to Jean MacCubbin, Program Manager, Department of Safety and Professional Services, Department of Safety and Professional Services, Division of Policy Development, 1400 East Washington Avenue, Room 151, P.O. Box 8935, Madison, WI 53708-8935, or by email to
jean.maccubbin@wisconsin.gov. Comments must be received on or before the public hearing to be held
October 31, 2013, to be included in the record of rule-making proceedings.
Copies of Rule
Analysis Prepared by the Department
Statutes interpreted
Statutory authority
Explanation of agency authority
Examining boards are generally authorized by ss.
15.08 (5) (b) and
227.11 (2) (a), Stats., to promulgate rules for its own guidance and for guidance within the profession and to promulgate rules interpreting any statute enforced or administered by it. Under s.
452.05 (1) (b), Stats., the board shall approve forms for real estate practice. Under s.
452.07 (1m), Stats., the board shall promulgate rules for the guidance of the real estate profession and define professional conduct and unethical practice.
Related statute or rule
There are no other statutes or rules other than those listed above.
Plain language analysis
With the exception of renumbering to reflect the Real Estate Examining Board, this rule has not been updated since 1986. The Board's intent is to update the rule to reflect current practice, update references to approved forms, and define terms. Specifically, this proposed rule-making order clarifies the rules relating to the use of approved forms and legal advice.
SECTIONS 1 to 4: These proposed changes clarify and create various terms used in the industry not previously defined in this rule or in chs.
REEB 11 to
26. The terms relate primarily to types of agreements, contracts and listings.
SECTIONS 5 to 7 and 9: These proposed changes relate to board-approved forms for use by licensees. The listing previously was in a Note; the listing will now be maintained on-line for downloading and will reflect the most current titles, numbering and forms. A Note is created to provide information on how to obtain board-approved forms.
SECTION 8. This section merely substitutes the term “provides" for “gives" when referring to legal advice.
SECTIONS 10 to 13: These proposed changes relate to the authority provided to the board in s.
452.05 (1) (b), Stats., regarding approving forms as well as the conditions of use and amending such forms. In addition, rule format changes enacted since the last revision are proposed.
SECTION 14. An effective date is stated as the July 1, 2014, date will be timely for training and examination purposes.
Summary of, and comparison with, existing or proposed federal regulation
Under the Real Estate Settlement Procedures Act (RESPA) various federally-created forms are required for use in all states, particularly for settlement transactions and closings. An example is a form FmHA, or its successor agency, requires under Public Law 103-354 1940-59, Settlement Statement. [
http://www.law.cornell.edu/cfr/text/7/1940.406]. There is no indication that current Federal laws dictate the use of approved forms for state use other than those related to federally-backed mortgages, HUD property transactions and radon disclosure.
Comparison with rules in adjacent states
An Internet-based search revealed the following:
Illinois: In Illinois, the Bureau of Real Estate Professions administers and enforces the Illinois Real Estate License Act of 2000, the Real Estate Timeshare Act, the Land Sales Registration Act, the Real Estate Appraiser Licensing Act of 2002, Provisions and Rules of the Uniform Standards of Professional Appraisal Practice, the Auction License Act, and the Home Inspector License Act. The Bureau has responsibility for the licensing and regulating real estate brokers, managing brokers, leasing agents, real estate firms, real estate appraisers, auctioneers, auction firms, home inspectors, and home inspector entities. In Illinois there are `standard' forms for various real estate transactions; these forms were not found to be state-approved forms, but available from various sources such as legal firms and professional groups. The Internet-based search did not reveal any details relating to Illinois codes and statues pertaining to state- or board- approved forms or any provisions for relating to legal advice provided by licensees.
Iowa: In Iowa, the Professional Licensing Division (IPLD) oversees the real estate industry through the following rules: Iowa Code ch.
543B, Real Estate Brokers and Salespersons; ch.
543C, Sales of Subdivided Land Outside of Iowa; and ch.
557A, Iowa Time-Share Act. These rules are published in the Iowa Administrative Code ch. 193E. Under the jurisdiction of the IPLD, the Iowa Real Estate Commission regulates and administers the real estate laws in Iowa. An index of state-approved forms used in the real estate industry is found at:
http://www.state.ia.us/government/com/prof/sales/forms_indexNew.html. Other than recommending buyers to obtain the advice of an attorney prior to signing contracts or offers, the rules were silent regarding allowing or prohibiting licensees providing legal advice.
Summary of factual data and analytical methodologies
The primary purpose of the proposed rule is to update and clarify rule provisions to reflect current practice. Other than the Board undertaking a review of their rules, no specific data or analytical methodology was used.
Analysis and supporting documents used to determine effect on small business or in preparation of economic impact analysis
Data was obtained from the Division of Professional Credential Processing regarding the number of licensees that would be affected by this regulatory change. As of 4/15/2013, there were 6,139 active licensed real estate salespersons and 10,373 active licensed real estate brokers. There were 1,051 licensed real estate business entities. The majority of real estate licensees work in small business environments; however, the proposed rules do not include any policy changes which would impact licensees or small business.
Fiscal Estimate and Economic Impact Analysis
The Fiscal Estimate and Economic Impact Analysis is attached.
Initial Regulatory Flexibility Analysis or Summary
This rule will not have a significant adverse effect on small business.
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
greg.gasper@wisconsin.gov, or by calling (608) 266-8608.
Agency Contact Person
Jean MacCubbin, Program Manager
Department of Safety and Professional Services, Division of Policy Development
1400 East Washington Avenue, Room 151
P.O. Box 8935
Madison, WI 53708-8935
Telephone: (608) 266-0955
Telecommunications relay services: at 711
STATE OF WISCONSIN
DEPARTMENT OF ADMINISTRATION
DOA-2049 (R03/2012)
|
Division of Executive Budget and Finance
101 East Wilson Street, 10th Floor
P.O. Box 7864
Madison, WI 53707-7864
FAX: (608) 267-0372
|
ADMINISTRATIVE RULES
Fiscal Estimate & Economic Impact Analysis
|
1. Type of Estimate and Analysis
|
X Original
⍽ Updated
⍽ Corrected
|
2. Administrative Rule Chapter, Title and Number
|
Chapter REEB 16, Approved Forms and Legal Advice.
|
3. Subject
|
Update definitions, clarify use of forms, update forms listing, and make minor corrections.
|
4. Fund Sources Affected
|
5. Chapter 20, Stats. Appropriations Affected
|
⍽ GPR
⍽ FED X PRO ⍽ PRS
⍽ SEG ⍽ SEG-S
|
s. 20.165 (1) (g), Stats.
|
6. Fiscal Effect of Implementing the Rule
|
X No Fiscal Effect
⍽ Indeterminate
|
⍽ Increase Existing Revenues
⍽ Decrease Existing Revenues
|
⍽ Increase Costs
⍽ Could Absorb Within Agency's Budget
⍽ Decrease Cost
|
7. The Rule Will Impact the Following (Check All That Apply)
|
⍽ State's Economy
⍽ Local Government Units
|
⍽ Specific Businesses/Sectors
⍽ Public Utility Rate Payers
⍽ Small Businesses (if checked, complete Attachment A)
|
8. Would Implementation and Compliance Costs Be Greater Than $20 million?
⍽ Yes
X No
|
9. Policy Problem Addressed by the Rule
|
With the exception of renumbering the chapter to REEB 16, the chapter had not been revised since 1986. Numerous terms are being added and clarity is proposed where needed.
|
10. Summary of the businesses, business sectors, associations representing business, local governmental units, and individuals that may be affected by the proposed rule that were contacted for comments.
|
Licensees, real estate brokers, and salespersons.
|
11. Identify the local governmental units that participated in the development of this EIA.
|
None known.
|
12. Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
|
There are no new or increased costs associated with the promulgation of these rules on any of the business sectors listed.
|
13. Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
|
The proposed rule will use common terminology and contemporary practices specific to the real estate industry.
|
14. Long Range Implications of Implementing the Rule
|
By promulgating these proposed revisions, the rule is not expected to need further revisions in the long-term.
|
15. Compare With Approaches Being Used by Federal Government
|
Few Federal forms are mandated for use by the states; exceptions being HUD-transactions, federally-backed mortgages, and radon disclosure.
|
16. Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
|
IL, MI, and MN regulate and license the real estate industry through a board or a commission that approves forms for real estate licensees to use; IA does not.
|
17. Contact Name
|
18. Contact Phone Number
|
Jean MacCubbin
|
(608) 266-0955
|
This document can be made available in alternate formats to individuals with disabilities upon request.
Notice of Hearing
Workforce Development
The Wisconsin Department of Workforce Development (DWD) announces that it will hold joint public hearings on an emergency rule and permanent rule relating to unemployment insurance work registration, work search, and benefit claiming procedures.
Hearing Information
