Vol. 83, No. 4, April 2010
An article by Richard Staff in the March 2010 Wisconsin Lawyer, entitled “Using the New, Flawed Residential Offer Form,” certainly has a lot of people talking about the new form WB-11, the Residential Offer to Purchase form. Unfortunately the article is neither accurate nor fair to the many people who worked to develop this form. I am taking this opportunity to set the record straight and help everyone better understand the role of the Department of Regulation and Licensing (DRL) and my role as Secretary.
The DRL is governed by Wis. Stat. chapter 440, which sets out the DRL’s duties and responsibilities. Laws concerning the real estate profession are in Wis. Stat. chapter 452. This chapter was updated in 2006 to address issues of agency and subagency and to ensure that the statutes were in conformity with practice around the state. As a result, it was necessary to modify many of the real estate forms. I appointed an advisory committee, the Real Estate Contractual Forms Committee (the committee), to assist the DRL in revising these forms. It was my intention to structure the committee to ensure as much experience and diversity as possible. The members include attorneys in large and small firms, an attorney from the professional association, the chair of the real estate board, a buyer’s agent, an attorney practicing in commercial real estate, an instructor, and others. The committee works closely with the DRL’s legal counsel and bureau director, both of whom have been attorneys. There is no shortage of lawyers or experience in the field of real estate.
Celia M. Jackson, U.W. 1980, is Secretary of the Wisconsin Department of Regulation and Licensing. She can be reached at firstname.lastname@example.org.
Each form is meticulously reviewed by the committee and goes through intense scrutiny before it comes to me for final approval. The WB-11, the Residential Offer to Purchase, was no different. In fact, the committee worked on revisions to this form for more than a year at meetings for which notice was provided and that were open to the public. The end product was a WB-11 form that provided more information and protection to participants in residential real estate transactions.
It is important to point out that before working on WB-11, the committee worked on WB-1, the listing contract, WB-36, regarding buyer agency, and several other forms. Not once was there an outcry about the formatting, the experts working on the form, or the fact that the State Bar of Wisconsin Real Property, Probate & Trust Law Section was not at the table. Mr. Staff previously served on the committee and worked with the original group appointed by me. He is certainly aware of the process and how things work at the DRL. If the true concern were consumer protection, a call or an inquiry to me or any members of the committee about the form during the process or when it first came out would have been a reasonable approach.
I invite you to consider the following about the form:
- Extensive thought and consideration went into addressing prorations at the time of closing, an issue of concern identified by the DRL, as well as by practitioners. The new WB-11 increases the information and options available to consumers. For example, by specifically alerting parties of the potential for significant changes in the property tax bill, consumers are better able to make decisions that will result in more fair and equitable proration at the front end, thereby reducing the likelihood of surprise and dispute after the transaction has been finalized. This is a win-win for all sides.
- The offer-not-contingent-on-financing provision addresses a different type of problem. I’m sure all will agree that it is crucial that consumers have a sense of security and comfort whenever possible while participating in a real estate transaction. In that regard, it is very reasonable for a consumer in a transaction in which there is no financing contingency to want some sort of evidence that sufficient funds to complete that transaction are available. This provision in the new WB-11 allows for that.
- Both buyers and sellers benefit when there is a transaction based on open and honest communication and full disclosure. It is particularly important to buyers in a residential real estate transaction that the property they obtain is free of encumbrances and other detriments that may surface on a title between the dates of the title commitment and the closing. The gap-endorsement provision protects both by addressing the issue and giving the parties options by which to address the issue, whether gap insurance is available or not.
- As with any form, it is impossible to have one document that captures every single issue that may arise in a real estate transaction, and the WB-11 is no different and does not purport to do that. What the new WB-11 does is include the most pertinent provisions in a way that better protects and informs the consumer in areas that often cause confusion or result in complaints to the DRL.
- The new WB-11 is a perfectly workable and useable form, and as drafted, will go a long way in ensuring that consumers, whether or not represented by an attorney, are better informed and protected.
In conclusion, I just want to set the record straight that at the DRL, our mission is to protect Wisconsin consumers. We welcome and seek out input and constructive criticism aimed at helping the DRL achieve its mission, but we strongly object to input and commentary designed to undermine or misrepresent the hard work and sound recommendations that have come about from this process.