Wisconsin Lawyer: Broker Disclosures:

State Bar of Wisconsin

Sign In

Top Link Bar

    WisBar.org may be unavailable October 23rd from 5:00PM until 10:00PM for system maintenance.

    Wisconsin LawyerWisconsin Lawyer

News & Pubs Search

Advanced

    Broker Disclosures

    Robert C. Leibsle

    Share This:

    Figure 1

    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.

    [Excerpt from Wis. Stat. section 452.135(1)(a) (2006).]

    Figure 2

    Broker Disclosure to Clients

    Because you have entered into an agency agreement with a broker, you are the broker's client. A broker owes additional duties to a client.

    The broker will provide, at your request, information and advice on real estate matters that affect your transaction, unless you release the broker from this duty. The broker must provide you with all material facts affecting the transaction, not just adverse facts.

    The broker will fulfill the broker's obligations under the agency agreement and fulfill your lawful requests that are within the scope of the agency agreement.

    The broker will negotiate for you, unless you release the broker from this duty.

    The broker will not place the broker's interests ahead of your interests. The broker will not, unless required by law, give information or advice to other parties who are not the broker's clients, if giving the information or advice is contrary to your interests.

    [Excerpt from Wis. Stat. section 452.135(2)(a) (2006).]

    Glossary

    Wis. Stat. chapter 452 defines the following terms:

    Client: A party to a real estate transaction who has an agency agreement with a broker for brokerage services.

    Customer: A party to a real estate transaction who is provided brokerage services by a broker but who is not a client.

    Party: A person seeking to engage in a real estate transaction.

    Broker: Persons not excluded by ch. 452 sub. (3) who do any of the following:

    • For another person, and for commission, money, or other thing of value, negotiates or offers or attempts to negotiate a sale, exchange, purchase, or rental of, or the granting or acceptance of an option to sell, exchange, purchase, or rent, an interest or estate in real estate, a time share, or a business or its goodwill, inventory, or fixtures, whether or not the business includes real property.

    • Is engaged wholly or in part in the business of selling or exchanging interests or estates in real estate or businesses, including businesses' goodwill, inventory, or fixtures, whether or not the business includes real property, to the extent that a pattern of sales or exchanges is established, whether or not the person owns the real estate or businesses. Five sales or exchanges in one year or 10 sales or exchanges in five years is presumptive evidence of a pattern of sales or exchanges.

    • For another person, and for commission, money, or other thing of value shows real estate or a business or its inventory or fixtures, whether or not the business includes real property, except that this paragraph does not include showing a property that is offered exclusively for rent.

    • For another person, and for commission, money, or other thing of value, promotes the sale, exchange, purchase, option, rental, or leasing of real estate, a time share, or a business or its goodwill, inventory, or fixtures, whether or not the business includes real property. This paragraph does not apply to a person who only publishes or disseminates verbatim information provided by another person.

    Brokerage service: Any service described above provided by a broker to another person.

    Negotiate: To provide to a party assistance within the scope of the knowledge, skills, and training required under chapter 452 in developing a proposal or agreement relating to a transaction, including doing any of the following:

    • Acting as an intermediary by facilitating or participating in communications between parties related to the parties' interests in a transaction. In this paragraph, providing advice or opinions on matters that are material to a transaction in which a person is engaged or intends to engage or showing a party real estate does not, in and of itself, constitute acting as an intermediary by facilitating or participating in communications between parties.
    • Completing when requested by a party, appropriate department-approved forms or other writings to document the party's proposal consistent with the party's intent.
    • Presenting to a party the proposals of other parties to the transaction and giving the party a general explanation of the provisions of the proposal.

    Designated agency: A multiple representation relationship in which each client of the broker in the multiple representation relationship receives negotiation services from the broker or only from employees of the broker who are not providing negotiation services to any other client of the broker in the transaction.

    Subagent: A broker who is engaged by another broker to provide brokerage services in a transaction, but who is not the other broker's employee.

    Figure 3

    Multiple Representation Relationships and Designated Agency

    A multiple representation relationship exists if a broker has an agency agreement with more than one client who is a party in the same transaction. In a multiple representation relationship, if all of the broker's clients in the transaction consent, the broker may provide services to the clients through designated agency.

    Designated agency means that different salespersons employed by the broker will negotiate on behalf of you and the other client or clients in the transaction, and the broker's duties will remain the same. Each salesperson will provide information, opinions, and advice to the client for whom the salesperson is negotiating, to assist the client in the negotiations. Each client will be able to receive information, opinions, and advice that will assist the client, even if the information, opinions, or advice gives the client advantages in the negotiations over the broker's other clients.

    A salesperson will not reveal any of your confidential information to another party unless required to do so by law.

    If a designated agency relationship is not in effect you may authorize or reject a multiple representation relationship. If you authorize a multiple representation relationship the broker may provide brokerage services to more than one client in a transaction but neither the broker nor any of the broker's salespersons may assist any client with information, opinions, and advice which may favor the interests of one client over any other client. If you do not consent to a multiple representation relationship the broker will not be allowed to provide brokerage services to more than one client in the transaction.

    [Excerpt from Wis. Stat. section 452.135(2)(a) (2006).]

    Figure 4

    Subagency

    The broker may, with your authorization in the agency agreement, engage other brokers who assist your broker by providing brokerage services for your benefit. A subagent will not put the subagent's own interests ahead of your interests. A subagent will not, unless required by law, provide advice or opinions to other parties if doing so is contrary to your interests.

    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.

    [Excerpt from Wis. Stat. section 452.135(2)(a) (2006).]




To view or add comment, Login