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452.13(2) (2)Interest-bearing common trust account.
452.13(2)(a)(a) A broker who 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.
452.13(2)(b) (b) Any broker who maintains an interest-bearing common trust account shall do all of the following:
452.13(2)(b)1. 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.
452.13(2)(b)2. 2. Notify the department of safety and professional services when any of the information required under subd. 1. is changed.
452.13(2)(b)3. 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 department of safety and professional services or the department of administration considers it necessary.
452.13(2)(bm) (bm) The department of safety and professional services shall forward to the department of administration the information and documents furnished under par. (b).
452.13(2)(c) (c) A broker shall deposit all client funds in the interest-bearing common trust account.
452.13(2)(d) (d) The department of administration is the beneficial owner of the interest accruing to the interest-bearing common trust account, minus any service charges or fees.
452.13(2)(e) (e) For each interest-bearing common trust account, the broker shall direct the depository institution to do all of the following:
452.13(2)(e)1. 1. Annually, before February 1, remit to the department of administration the total interest or dividends, minus service charges or fees, earned on the average daily balance in the interest-bearing common trust account during the 12 months ending on the previous December 31. A depository institution is not required to remit any amount if the total interest or dividends for that period is less than $10 before any deduction for service charges or fees.
452.13(2)(e)2. 2. When the interest remittance is sent, furnish to the department of administration and to the broker maintaining the interest-bearing common trust account a statement that includes the name of the broker 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.
452.13(2)(f) (f) A depository institution:
452.13(2)(f)1. 1. May not assess a service charge or fee that is due on an interest-bearing common trust account against any broker or, except as provided in subd. 3., against any other account, regardless of whether the same broker maintains the other account.
452.13(2)(f)2. 2. May not assess a service charge or fee for an interest-bearing common trust account against the department of administration.
452.13(2)(f)3. 3. May deduct a service charge or fee from the interest earned by an interest-bearing common trust account, and if a balance remains, may deduct the remaining charge or fee from the interest earned on any other interest-bearing common trust account maintained in that depository institution, before remitting interest to the department of administration.
452.13(2)(f)4. 4. May not deduct a service charge or fee from the principal of an interest-bearing common trust account.
452.13(3) (3)Deposit provisions. A broker who 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 deposits client funds in an interest-bearing common trust account in compliance with this section 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.
452.13(4) (4)Trust account optional. This section does not require a broker to hold client funds or require a person to transfer client funds to a broker.
452.13(5) (5)Rules. In consultation with the department of safety and professional services, the department of administration shall promulgate rules necessary to administer this section.
452.13 Cross-reference Cross-reference: See also chs. Adm 91 and REEB 18, Wis. adm. code.
452.13 Annotation Security deposits by a tenant usually create a debtor-creditor relationship. A broker retaining a deposit should deposit it in his or her trust account. 60 Atty. Gen. 1.
452.13 Annotation The Federal National Mortgage Association is exempt from the requirements of this section, but private mortgage bankers or mortgage brokers licensed as real estate brokers under ch. 452, and servicing mortgages for FNMA must deposit loan, insurance and tax escrow moneys in authorized trust account in a bank located in Wisconsin, subject to audit by the board. 60 Atty. Gen. 514.
452.133 452.133 Duties of brokers.
452.133(1)(1) Broker's duties to all persons in a transaction. A broker who is providing brokerage services to a person in a transaction owes all of the following duties to the person:
452.133(1)(a) (a) The duty to provide brokerage services honestly and fairly.
452.133(1)(b) (b) The duty to provide brokerage services with reasonable skill and care.
452.133(1)(c) (c) The duty to timely disclose in writing all material adverse facts that the broker knows and that the person does not know or cannot discover through reasonably vigilant observation, unless the disclosure of a material adverse fact is prohibited by law.
452.133(1)(d) (d) The duty to keep confidential any information given to the broker in confidence, or any information obtained by the broker that he or she 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 shall continue to keep the information confidential after the transaction is complete and after the broker is no longer providing brokerage services to the person.
452.133(1)(e) (e) The duty to provide accurate information about market conditions that affect the person's transaction, within a reasonable time after the person's request, unless disclosure of the information is prohibited by law.
452.133(1)(f) (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).
452.133(1)(g) (g) When the broker 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.
452.133(2) (2)Broker's duties to a client. A broker providing brokerage services to his or her client owes the client the duties that the broker owes to a person under sub. (1) and all of the following additional duties:
452.133(2)(a) (a) The duty to loyally represent the client's interests by doing all of the following:
452.133(2)(a)1. 1. Placing the client's interests ahead of the broker's interests.
452.133(2)(a)2. 2. Placing the client's interests ahead of the interests of persons in the transaction who are not the broker's clients by not disclosing to persons in the transaction other than the broker's clients information or advice the disclosure of which is contrary to the interests of a client of the broker, unless the disclosure is required by law.
452.133(2)(am) (am) The duty to provide, when requested by the client, information and advice to the client on matters that are material to the client's transaction and that are within the scope of the knowledge, skills, and training required under this chapter.
452.133(2)(b) (b) The duty to disclose to the client all information known by the broker 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.
452.133(2)(c) (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 has under this chapter or any other law.
452.133(2)(d) (d) The duty to negotiate on behalf of the client.
452.133(3) (3)Prohibited conduct. In providing brokerage services, a broker may not do any of the following:
452.133(3)(a) (a) Accept any fee or compensation related to the transaction from any person other than the broker's client, unless the broker has the written consent of all parties to the transaction.
452.133(3)(b) (b) Act in a transaction on the broker's own behalf, on behalf of the broker's immediate family, or on behalf of any organization or business entity in which the broker has an interest, unless the broker has the written consent of all parties to the transaction.
452.133(3)(c) (c) Except as provided in s. 452.19, refer, recommend or suggest to a party to the transaction the services of an individual or entity from which the broker may receive compensation for a referral or in which the broker has an interest, unless the broker has disclosed the fact that he or she may receive compensation or has disclosed his or her interest in the individual or entity providing the services.
452.133(4) (4)Subagent's duties.
452.133(4)(a)(a) A subagent owes all persons to whom a broker is providing brokerage services in a transaction the duties specified in sub. (1) but does not owe the clients of the principal broker the duties under sub. (2).
452.133(4)(b) (b) A subagent may not do any of the following:
452.133(4)(b)1. 1. Place the subagent's interests ahead of the interests of the clients of the principal broker in the transaction in which the subagent has been engaged by the principal broker.
452.133(4)(b)2. 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 in the transaction in which the subagent has been engaged by the principal broker, unless required by law.
452.133(5) (5)Duties without agency or subagency relationship. If a broker is providing brokerage services to a person who is a party or a prospective party to a transaction, and the broker does not have an agency agreement with the person and is not a subagent of another broker in the transaction, then the broker owes 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.
452.133(6) (6)Waiver of duties. 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 provides to the client a written disclosure containing all of the following:
452.133(6)(a) (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 will have no legal duty to perform the duty imposed by sub. (2) (d).
452.133(6)(b) (b) A statement that as a consequence of the client's waiver, the client may require the assistance of an attorney or another service provider to fulfill the client's goals and contractual duties in the transaction.
452.133 History History: 1993 a. 127; 1995 a. 400; 2005 a. 87.
452.133 Cross-reference Cross-reference: See also ch. REEB 24, Wis. adm. code.
452.133 Annotation The New Real Estate Agency Law: Redefining the Role of Real Estate Brokers. Smith and Staff. Wis. Law. Oct. 1994.
452.133 Annotation The `New' Chapter 452: Defining Real Estate Broker Practice. Leibsle. Wis. Law. June 2006.
452.134 452.134 Agency relationships; multiple representation relationships.
452.134(1)(1) Agency relationship not required.
452.134(1)(a)(a) Subject to par. (b), a broker may provide brokerage services to any person in a transaction, whether or not the broker has entered into an agency agreement with a party to the transaction or the broker has been engaged to provide brokerage services in the transaction as a subagent.
452.134(1)(b) (b) A broker may not negotiate on behalf of a party to a transaction unless a party to the transaction is one of the following:
452.134(1)(b)1. 1. The broker's client.
452.134(1)(b)2. 2. A client of a principal broker who has engaged the broker as a subagent.
452.134(2) (2)Multiple representation relationships; consent required. A broker may not provide brokerage services in a multiple representation relationship unless all of the broker's clients in the multiple representation relationship have consented to a multiple representation relationship in writing.
452.134(3) (3)Designated agency; consent required.
452.134(3)(a)(a) A broker in a multiple representation relationship may not engage in designated agency unless all of the broker's clients in the relationship have consented to designated agency in writing. A client may withdraw consent to designated agency by written notice to the broker at any time.
452.134(3)(b) (b) If a broker is engaged in designated agency, the broker's employee who is negotiating on behalf of a client of the broker in the transaction may provide to the client on whose behalf the employee is negotiating information, opinions, and advice to assist the client in the negotiations, whether or not the information, opinions, and advice place the interests of one of the broker's clients ahead of the interests of another client of the broker.
452.134(4) (4)Multiple representations relationship without designated agency. If a broker's client in a multiple representation relationship does not consent to designated agency or withdraws consent to designated agency, the broker and the broker's employees may not place the interests of any client ahead of the interests of any other in the negotiations.
452.134 History History: 2005 a. 87.
452.134 Annotation The `New' Chapter 452: Defining Real Estate Broker Practice. Leibsle. Wis. Law. June 2006.
452.135 452.135 Disclosure of duties.
452.135(1) (1)
452.135(1)(a)(a) A broker may not negotiate on behalf of a party who is not the broker's client unless the broker provides to the party a copy of the following written disclosure statement:
BROKER DISCLOSURE TO CUSTOMERS
You are a customer of the broker. The broker is either an agent of another party in the transaction or a subagent of another broker who is the agent of another party in the transaction. The broker, or a salesperson acting on behalf of the broker, may provide brokerage services to you. Whenever the broker is providing brokerage services to you, the broker owes you, the customer, the following duties:
The duty to provide brokerage services to you fairly and honestly.
The duty to exercise reasonable skill and care in providing brokerage services to you.
The duty to provide you with accurate information about market conditions within a reasonable time if you request it, unless disclosure of the information is prohibited by law.
The duty to disclose to you in writing certain material adverse facts about a property, unless disclosure of the information is prohibited by law.
The duty to protect your confidentiality. Unless the law requires it, the broker will not disclose your confidential information or the confidential information of other parties.
The duty to safeguard trust funds and other property the broker holds.
The duty, when negotiating, to present contract proposals in an objective and unbiased manner and disclose the advantages and disadvantages of the proposals.
Please review this information carefully. A broker or salesperson can answer your questions about brokerage services, but if you need legal advice, tax advice, or a professional home inspection, contact an attorney, tax advisor, or home inspector.
This disclosure is required by section 452.135 of the Wisconsin statutes and is for information only. It is a plain-language summary of a broker's duties to a customer under section 452.133 (1) of the Wisconsin statutes.
452.135(1)(b) (b) If a broker is providing brokerage services as a subagent to a principal broker, the broker shall provide a copy of the written disclosure statement under par. (a) to any person who is not the principal broker's client and who receives brokerage services from the broker within the scope of the agreement between the broker and the principal broker.
452.135(2) (2)
452.135(2)(a)(a) Except as provided in par. (b), a broker shall provide to a client a copy of the following written disclosure statement not later than the time the broker enters into an agency agreement with the client:
BROKER DISCLOSURE TO CLIENTS
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2011-12 Wisconsin Statutes updated though 2013 Wis. Act 200 and all Supreme Court Orders entered before April 18, 2014. Published and certified under s. 35.18. Changes effective after April 18, 2014 are designated by NOTES. (Published 4-18-14)