WISCONSIN Legal Update 98.04 REALTORS® ASSOCIATION 4801 Forest Run Road, Suite 201 Madison, WI 53704-7337

PLEASE ROUTE TO: Relocation Company Sales ______

The information contained herein is relocation company that generally believed accurate as of April 27, 1998. The also has a contract with the employer. information is of a general nature and The employee/homeowner may try to should not be considered by any member Introduction sell the residence on his or her own or subscriber as advice on a particular fact before or after entering into the situation. Members should contact the contract with the relocation company. Wisconsin REALTORS® Association Legal Relocation company sale transactions Hotline with specific questions or for are an important part of The homeowner may list the current developments. practice but occasionally frustrate with a broker at this time. REALTORS®. Many relocation Approximately 60 days after entering companies, relocation divisions of into the relocation company contract, real estate firms, and relocation the homeowner signs a blank (a Reproduction of this material may be divisions of large corporate deed that does not name a buyer) for done without further permission if it is employers (“relocation companies”) the residence and gives it to the reproduced in its entirety. Partial provide wonderful services for relocation company in exchange for a reproduction may be done with written employees transferring into an area. check in the amount of the owner’s permission of the Wisconsin ® equity in the home less certain ® Wisconsin REALTORS may have REALTORS Association Legal expenses. At this time, the employee/ Department. questions and concerns, however, when relocation companies are homeowner generally moves out, and the relocation company often takes EDITORIAL STAFF involved in the sale of a property for Authors Debbi Conrad a homeowner/employee who has been the home subject to existing Tom Larson transferred out of an area. mortgages, debts, and . Production Mark A. Klossner Rick Staff In many relocation company sale At this juncture, the relocation Debbie McNelly transactions, the employee/ company takes over the marketing of homeowner works for a large company the home. The relocation company that offers a relocation program for its may continue with the same listing employees. When theemployee/ broker that the employee/homeowner ASSOCIATION MANAGEMENT used, or it may list the home with a President Dave Stark homeowner is transferred and has to sell his or her and move away, different local broker. When the Executive VP William E. Malkasian, the employer provides the employee relocation company sells the home to CAE with a guaranteed buyout for his or her a third party buyer, it pays off any home. debts remaining on the home (if not already paid), and presumably enjoys While each program varies, the whatever profit was realized after © 1997 Wisconsin employee/homeowner typically payment of the commission and other REALTORS® enters into a contract with the expenses. Association

Wisconsin REALTORS® Association 1 Legal Update 98.04 Liaison Committee developed a position paper entitled: “Wisconsin Table of Contents Real Estate and License Laws Which Impact Relocation Transactions.” This Introduction ...... 1 Legal Update is based upon that Who is Really the Seller? ...... 3 position paper. Legal Title ...... 3 This Update discusses five issues that can be a source of concern for Equitable Title ...... 4 REALTORS® in sale transactions If The Relocation Company is the Seller ...... 5 involving relocation companies: 1) Who is really the seller?; 2) May If The Relocation Company is not the Seller ...... 6 relocation companies engage in binding verbal acceptances?; 3) Must The Bottom Line ...... 6 buyers agree to amend accepted offers to add a “relocation addendum?”; 4) May Relocation Companies Engage in Who gets paid if both the transferred Binding Verbal Acceptances? ...... 7 homeowner and the relocation Must Buyers Add Relocation Company Addenda company have the home listed?; and to Accepted Offers? ...... 7 5) Can licensees complete relocation company forms? The answers to some Who Gets Paid? ...... 8 of these questions are not at all clear, but hopefully this Legal Update will Can Licensees Legally Complete Relocation alert Wisconsin REALTORS® to the Company Forms? ...... 8 issues involved, and may assist the relocation company industry in Conclusion ...... 9 modifying some of their practices to better comply with Wisconsin law. This process sometimes causes used, even though they are not DRL- problems. Relocation companies are approved forms. These forms and Note that practices and procedures will often national companies that operate addenda tend to be inconsistent with vary significantly from one relocation in several, if not all, states. the standard provisions found in the company to another. Not every Consequently, they are not always WB-11 Residential Offer to Purchase, relocation company working in familiar with Wisconsin law and may and may prompt buyers to forego Wisconsin necessarily engages in all inadvertently suggest that the broker rights and safeguards they would of the questionable practices described act in a manner contrary to Wisconsin otherwise enjoy in the DRL-approved in the following sections. Based upon law. It can be hard to identify the real forms. The result is that Wisconsin members' calls to the Legal Hotline, seller when there is an offer signed by brokers may find themselves trying to however, it is clear that some the relocation company and a deed cope with a “seller” which insists on relocation companies have behaved in from the transferred homeowner. A operating outside of Wisconsin law or this way. long time may elapse before the broker standards of practice. receives a signed copy of the offer. The following discussion also includes Relocation companies are often big All of this frustration and confusion Legal Practice Tips and REALTOR® bureaucracies located hundreds of led the Wisconsin REALTORS® Practice Tips. The Legal Practice Tips miles away, so it takes a long time to Association to join forces with the are points a REALTOR® may want to get a response in writing from them. In Wisconsin State Bar to study share with legal counsel or a buyer on the meantime, they may insist that a relocation company sale transactions. his or her way to see an attorney. The verbal acceptance is sufficient to bind Specifically, the group looked at those REALTOR® Practice Tips may be a contract or they may refuse to put practices that occur in relocation helpful to REALTOR® members any counter-offer in writing. company sale transactions that appear involved in relocation company sale to conflict with Wisconsin law. The transactions. Relocation companies also may insist State Bar of Wisconsin/Wisconsin that their own forms or addenda be REALTORS® Association Joint

® Wisconsin REALTORS Association 2 Legal Update 98.04 the vendee then has a fee simple specified on the face of the deed. A interest in the property. party may hold legal title even if the Who is Really title document is not recorded, for Transactions involving relocation instance, an unrecorded land contract the Seller? companies are usually structured or an unrecorded deed. differently than the typical Wisconsin In the typical Wisconsin residential residential . It is the position of the relocation real estate transaction, the owner of the Relocation companies ordinarily do industry that legal title passes from the property enters into an offer to not take record title to the transferred employee/homeowner to purchase with the buyer. When this homeowner’s real estate. In most the relocation company when the offer becomes a binding contract, relocation transactions, the transferred homeowner delivers the blank deed to equitable title to the property passes to employee/homeowner enters into a the relocation company. This is often the buyer. Equitable title is the contract with the relocation company. done in exchange for the relocation beneficial rights and interests of the After any conditions or contigencies company’s payment to the transferred person regarded in equity as the are met, the homeowner signs a blank employee/homeowner of his or her owner. A buyer with equitable title deed (no buyer is named) and delivers equity in the house and after the has the right to demand that legal it to the relocation company. The homeowner has vacated the house. At title be transferred upon payment in relocation company holds the blank this time, the relocation company also full of the purchase price. deed until the property is sold to a will typically pay-off or assume any buyer. At that time, the relocation mortgage and other liens. The At the time of , legal title company will have the buyer’s name relocation companies contend that the transfers to the buyer upon delivery of typed on the deed. At closing, the deed blank deed, when read together with a valid deed exchanged for buyer’s signed by the transferred employee/ the contract between the transferred payment of the purchase price. Legal homeowner, and naming the buyer as employee/homeowner and the title is the opposite of equitable title - grantee, is delivered to the buyer and relocation company, is enough to it generally refers to the apparent recorded. produce a legal conveyance. right of ownership but without the beneficial rights and interests of The use of the blank deed makes it Under Wisconsin law, a legal equitable title.A person with both hard to determine who is the seller. The conveyance of real estate must meet equitable title and legal title has relocation company would appear to the requirements of Wis. Stat. §706.02. absolute ownership. The buyer be “the seller” if legal and equitable If the relocation company has become obtains record title when the seller’s title have transferred from the the owner of the home, there would deed is recorded at the Register of homeowner to the relocation company. have to have been a conveyance. office for the county in which In fact, there are different ways to §706.02 provides that: the property is located. analyze this process, and there is no clear-cut answer. (1) [Real estate transactions subject to The distinction between equitable title Chapter 706] shall not be valid and legal title can most readily be unless evidenced by a conveyance which: understood when the example of a Legal Title land contract is examined. The land (a) Identifies the parties; and contract vendee or purchaser has A party who is the grantee of a (b) Identifies the land; and equitable title. This gives the conveyance of real estate is viewed as (c) Identifies the interest conveyed, purchaser the right to possession and having legal title to whatever interest and any material term, , to make improvements, is described in the conveyance. A condition, reservation, and to lawfully use the property as the conveyance is a transfer of title or an exception or contingency upon purchaser desires. The equitable owner interest in by means of a which the interest is to arise, is basically considered the owner for written instrument. Under Wisconsin continue or be extinguished, most purposes. These rights, however, law, conveyances include documents limited or encumbered; and are subject to the rights of the legal such as offers to purchase, land (d) Is signed by or on behalf of titleholder, the land contract vendor. contracts, and deeds that meet the each of the grantors; and The vendor basically has a security requirements of Wis. Stat. § 706.02. (e) Is signed by or on behalf of all interest in the property. When the Deeds generally convey a fee simple parties, if a or contract to vendor deeds legal title to the vendee, interest, unless a different interest is convey; and

Wisconsin REALTORS® Association 3 Legal Update 98.04 (f) Is signed, or joined in by separate Wis. Stat. § 706.02(2)(c), the restaurant and bar licenses to the buyer, conveyance, by or on behalf of requirements for a valid conveyance and a provision stating that if any each spouse, if the conveyance arguably may be satisfied. That contingencies were not fulfilled, the alienates any interest of a married would mean that the relocation offer would be of no effect and all person in a homestead under s. company has legal title to the home. earnest money would be returned to the 706.01 (7) except conveyances However, to be considered the buyer. The court found that this between spouses, but on a “seller,” as that term is used in the contingency was a condition precedent. purchase money mortgage Wisconsin approved residential offer pledging that property as security to purchase, the relocation company In determining that equitable title does only the purchaser need sign the also would need to have equitable not pass until all conditions precedent mortgage; and title. are satisfied, the Kubly court indicated (g) Is delivered. Except under s. that “a condition precedent in a 706.09, a conveyance delivered contract does not render the same void upon a parol limitation or Equitable Title but only delays the enforceability of condition shall be subject thereto the contract until the condition only if the issue arises in an action Another issue is whether the contract precedent has taken place.” To or proceeding commenced within between the transferred employee/ determine whether a particular clause or 5 years following the date of such homeowner and the relocation contingency is a condition precedent, conditional delivery; however, company transfers equitable title to the court must look at the intent of the when death or survival of a the relocation company. Under the parties when the contract was executed grantor is made such a limiting or legal doctrine of “equitable and examine the purpose they had in conditioning circumstance, the conversion,” a transfer of equitable mind at that time. conveyance shall be subject title to real estate occurs when the thereto only if the issue arises in parties have entered into an Therefore, if the contract between the an action or proceeding enforceable binding contract for sale homeowner and the relocation commenced within such 5-year of an interest in real estate (offer, land company is contingency free, period and commenced prior to contract, option, etc.). A party who acceptance of the contract causes such death. has equitable title has the ability to equitable title to transfer at the time of (2) A conveyance may satisfy any of resell a property even before the party acceptance. If the contract between the the foregoing requirements of closes the transaction and receives owner and the relocation company is this section: legal title. That party may list the subject to contingencies that are (a) By specific reference, in a property for sale and enter into an conditions precedent, equitable title writing signed as required, to offer to purchase, provided that these does not transfer until such time as the extrinsic writings in existence contracts are conditioned upon the conditions are satisfied. when the conveyance is party closing on the property before executed; or closing on the resale. Relocation industry representatives (b) By physical annexation of have submitted “standard form” buyout several writings to one another, In Kubly v. Department of Revenue purchase agreements for review. These with the mutual consent of the (1975), the Wisconsin Supreme Court contracts contain a variety of parties; or addressed the question of whether conditions and contingencies, both (c) By several writings which show equitable title transfers at the time of preprinted and fill-in-the-blank. If the expressly on their faces that acceptance if the offer is contingent contract contains a contingency for they refer to the same upon the occurrence of certain events. radon testing or a condition that the transaction, and which the Specifically, the court in Kubly was agreement isn’t binding until the parties have mutually dealing with the question of when the transferred employee/homeowner acknowledged by conduct or seller’s equitable title in the vacates the home, these arguably are agreement as evidences of the restaurant property would transfer in conditions precedent. Accordingly, transaction. order to determine when the seller’s equitable title does not transfer to the liability ended for the tax obligations relocation company until all such If the contract between the transferred being generated by the seller’s former contingencies/conditions are satisfied. employee/homeowner and the restaurant business. In Kubly, the offer relocation company is read together to purchase contained a contingency with the blank deed, as allowed by for the transfer of the seller’s

® Wisconsin REALTORS Association 4 Legal Update 98.04 ✎ Legal Practice Tip – 4)Should title searches be broadened obligations that need to be met (i.e., Conditions Precedent to search for potential liens incurred giving the lender proper notification Legal counsel for owners, buyers, and by both the employee/homeowner of the transfer). relocation companies may need to and the relocation company? carefully scrutinize the contract 5)Does the buyer have the right to Homeowner's Listing Broker between the transferred employee/ receive a warranty deed from the Another issue to consider is whether homeowner and the relocation relocation company, not from the the transferred employee/homeowner company to determine if the contract employee/homeowner, which is obligated to pay a listing broker’s is subject to conditions precedent. includes the warranties of title commission under the terms of any This will be a key issue in determining called for in the buyer’s offer to signed by the owner whether or not the relocation company purchase? prior to transfer to the relocation has acquired equitable title. If the offer company. It is ordinarily the intent of is subject to conditions precedent, ✎ Legal Practice Tip – relocation service providers to have there is no equitable title in the Transfer Fee any transferred employee/homeowner relocation company until such The Wisconsin Department of who will be utilizing their services conditions precedent are satisfied. Revenue has taken the position that insert a clause into any listing contract the owner will only be obligated to that the homeowner may sign which pay the real estate transfer fee imposed excepts from the listing contract any If the Relocation by Wis. Stat. § 77.22(1) if the transfer from the transferred employee/ relocation company records a deed homeowner to the relocation Company is the Seller transferring legal title to the relocation company. However, on occasion, the transferred employee/homeowner fails If the contract between the owner and company. If the relocation company to insert the exclusion clause in the the relocation company does result in holds a blank deed until the time the listing contract. If there is no exclusion a transfer of legal and equitable title to property is sold to a buyer, only one clause, the listing broker is in a good the property, there would appear to be transfer fee is due when the deed is position to argue that the commission two sales transactions involved in recorded. The transfer fee will be is due upon the sale of the property to every relocation company transaction. calculated on the basis of the sales the relocation company. The first is the sale of the home from price paid by the buyer. This would generally occur when all the transferred employee/homeowner conditions precedent in the contract to the relocation company, and the Mortgage Balances between the transferred employee/ second transaction is the sale of the If legal and equitable title transfer to homeowner and the relocation home from the relocation company to the relocation company, legal counsel company have been satisfied and the buyer. If there are really two for the transferred employee/ equitable title has passed to the transactions, a new set of issues need homeowner may wish to consider the relocation company, see page 8 of to be addressed: homeowner’s obligations under any due-on-sale clauses in any mortgages this Update for further discussions of commissions. 1)Is the transferred employee/ or other lien’s on the home. Under homeowner obligated to pay a real current practices, mortgage balances ✓ REALTOR® Practice Tip – estate transfer fee at the time of sale are often not paid off upon transfer to Homeowner's Listing Broker to the relocation company? the relocation company, as is arguably If the contract between the transferred 2)Is the employee/homeowner required under most due-on-sale employee/homeowner and the obligated to pay any mortgage clauses. Rather, the relocation relocation company is contingency balances under any applicable due- company will make the monthly free and equitable title has been on-sale clauses found in the mortgage payments on behalf of the transferred, the listing broker would be employee/homeowner’s mortgages transferred employee/homeowner. entitled to a commission based upon or other liens? When interest rates are low, this may the sale, if the listing contract did not 3)Is the employee/homeowner not be an issue of great concern to contain an exception for sales to the obligated to pay the listing broker’s lenders. relocation company. commission under the terms of any ✎ listing contract the employee/ Legal Practice Tip – homeowner had in effect prior to the Mortgage Balances transfer of title to the relocation The provisions of the homeowner’s company? mortgage should be reviewed by legal counsel to determine if he or she has

Wisconsin REALTORS® Association 5 Legal Update 98.04 ✎ Legal/REALTOR® Practice Tip – which constitutes merchantable title for Title Search purposes of this transaction. Seller The Bottom Line Title companies, attorneys, and further agrees to complete and execute REALTORS® involved in closing the documents necessary to record the In many relocation company sale preparations may wish to insure that conveyance.” transactions, the relocation company any relocation company that takes Either the offer to purchase needs to be will not list the property until all equitable title to the home be included drafted to call for a warranty deed from contingencies in the contract with the in the title search. This would protect the transferred employee/homeowner, transferred employee/homeowner have the buyer against any relocation or legal counsel for the buyers will been satisfied, the transferred company obligations becoming liens need to consider whether the employee/homeowner has moved out against the home. relocation company must itself be the of the home, and the transferred grantor in the warranty deed to the employee/homeowner has given the Deed From “Seller” buyer. relocation company a blank deed in The use of blank deeds raises exchange for payment of the buyout significant issues for the buyer who will price. At this point, legal and equitable be given the blank deed signed by the If the Relocation title have likely passed to the transferred employee/homeowner at relocation company and the closing. This conflicts with the fact that Company is Not relocation company will be the seller. the buyer entered into an offer to the Seller purchase with the relocation company ✓ REALTOR® Practice Tip – which typically calls for the relocation If the transferred employee/homeowner Relocation Company as Seller company, as seller, to deliver a is the real seller and the relocation REALTORS® generally may assume warranty deed. company is not the seller, can the that the relocation company is the relocation company really represent seller unless there is a sign to the ✎Legal/REALTOR® Practice Tip – itself as the “seller” in the offer to contrary such as a transferred Deed From Seller purchase with the buyer? employee/homeowner who still lives Persons preparing closing documents in the home or who has not received must carefully review the offer to If an analysis of the transaction his or her buyout payment. purchase between the relocation between the relocation company and REALTORS® should be aware of the company and the buyer to insure that a the owner indicates that no legal or Practice Tips given on pages 5-6 warranty deed and all title warranties equitable title has transferred to the regarding the transfer fee, mortgage promised in that offer are being relocation company, there is a concern balances, commissions to brokers, title provided by the “seller” who agreed to that the relocation company and the search, and deed from seller. provide them. This will be the licensees in the transaction may be relocation company in a relocation misrepresenting the status of the company sale transaction. Lines 66-71 relocation company if the relocation of the WB-11 Residential Offer To company is identified as the “seller.” If Purchase provide that: the relocation company does not have “CONVEYANCE OF TITLE: Upon equitable title is not the "seller," the payment of the purchase price, Seller relocation company may instead be an shall convey the Property by warranty agent of the transferred employee/ deed (or other conveyance as provided homeowner or the contract owner. The herein) free and clear of all liens and term “contractual owner” is favored by encumbrances, except: municipal and many relocation companies and would ordinances and agreements appear to be accurate at such point as entered under them, recorded legal and equitable title have passed to easements for the distribution of utility the relocation company. This concern and municipal services, recorded stems from Wis. Adm. Code RL building and use restrictions and §24.085, which states: “No licensee covenants, general taxes levied in the shall draft or use any document which year of closing and ______. the licensee knows falsely portrays an (provided none of the foregoing interest in real estate.” prohibit present use of the Property),

® Wisconsin REALTORS Association 6 Legal Update 98.04 for damages resulting from that after the buyer’s offer has been misrepresentation. accepted. This might occur if the offer was accepted without inclusion of the May Relocation ✓ ® REALTOR Practice Tip – relocation company’s addendum, Verbal Acceptances either because acceptance occurred Companies ® REALTORS in these transactions prior to the relocation company’s Engage in may need to have new offers drafted or participation in the transaction or have the offer’s acceptance period because of an oversight. The terms of Binding Verbal extended by amendment. If a buyer these addenda typically are intended ® tells a REALTOR that a relocation to modify the legal and contractual Acceptances? company has “verbally accepted” an rights of the buyer to the benefit of the offer, that licensee should inform the relocation company. The addition of It is a general principle of Wisconsin buyer that Wisconsin law requires that the addendum to an accepted offer is real estate practice that a seller’s an offer to purchase be signed and essentially an amendment to the offer. acceptance must be in writing to delivered before it is valid. ® satisfy the requirements for a written REALTORS should monitor A related issue arises when a relocation contract conveying an interest in real acceptance deadlines and refer the company takes an offer or a counter- estate per Wis. Stat. § 706.02. parties to legal counsel if these offer from a buyer and “accepts” the Nonetheless, relocation companies deadlines are not met. A licensee may offer contingent upon the buyer often assert that “verbal” acceptance indicate to the buyer that the approving modifications the has occurred prior to the time the relocation company is giving relocation company has made to the buyer’s offer has actually been signed favorable consideration to the buyer’s buyer’s offer or counter-offer. Under and delivered back to the buyer. offer, but that the offer cannot be valid contract law, any acceptance that Relocation companies may engage in until it is signed and delivered. If a includes a material change to the offer these “verbal acceptances” because buyer has any questions regarding the constitutes a counter-offer by the there can be a delay between verbal buyer’s legal rights or the status of the relocation company. The buyer is not communication of the terms of an offer buyer’s offer, the buyer should be obligated to accept this counter-offer to the distant relocation company and referred to legal counsel for and may accept it, reject it, or counter the relocation company’s actual appropriate advice. it as buyer may wish. receipt, written acceptance and delivery back of the written offer. It ✓ REALTOR® Practice Tip – also is the practice of some relocation Relocation Company Addendum companies to not sign offers until after REALTORS® must be very careful to the buyer has completed certain Must Buyers Add never suggest that the buyer must sign actions, such as satisfaction of the the relocation company’s addendum. inspection contingency. However, Relocation To do so likely would be a Wis. Stat. §§ 706.02(1)(d) & (g) misrepresentation and may constitute indicate that the offer is invalid until it Company the unauthorized practice of law. is signed by the grantors and Addenda to Licensees who have been told to get delivered. the buyer to sign a relocation Accepted Offers? addendum when the offer has already In addition to being non-binding due been accepted should deliver the to the lack of written acceptance, but addendum per the relocation Relocation companies often have many of the offers will expire if the company’s request, inform the buyer requirements that a particular relocation company does not sign and of the relocation company’s proposed addendum be used in conjunction deliver them, per the terms of the offer amendment to the offer, explain to the with residential offer to purchase form to purchase, by the stated deadline for buyer that he or she has the option of being used in the transaction. As a binding acceptance. In addition, the accepting or rejecting the proposed general rule, this type of requirement is United States Court of Appeals for the amendment, and refer the buyer to perfectly appropriate. On occasion, Seventh Circuit recently has indicated legal counsel for an analysis of the however, relocation companies may that persons (including licensees) buyer’s rights under the offer and the ask REALTORS® to obtain a buyer’s representing that the offer had been addendum. “verbally accepted,” could be liable signature on an addendum to the offer

Wisconsin REALTORS® Association 7 Legal Update 98.04 ✓REALTOR® Practice Tip – companies occasionally instruct the ✎ Legal Practice Tip – Contingent Acceptances as second listing Broker B to disregard Two Listing Contracts Counter-Offers Broker A’s protection rights arising Attorneys advising home owner clients REALTORS® who receive an offer under the first listing. While relocation should carefully monitor the actions of which has been countered by a companies are free to enter into a the owner’s listing agent, the relocation relocation company by means of a second listing contract under any company, and the relocation contingent “accepted” offer must lawful terms mutually agreed upon company’s listing agent to insure that disclose to the buyer that that the with Broker B, the relisting of the the rights of the homeowner are being relocation company appears to have property does not, in and of itself, protected. countered the offer and encourage the terminate any remaining rights listing buyer to consult with legal counsel protection or other arising under the regarding any questions the buyer has first listing contract entered into regarding the buyer’s legal rights. between the transferred employee/ Can Licensees homeowner and Broker A. This is not true if the first listing contract Legally Complete contains an exclusion clause for the sale of the home to the relocation Relocation Who Gets Paid? company or restricts or limits listing protection rights. Once the transferred Company Forms? Relocation companies may enter a employee/homeowner transfers legal transaction after the seller has signed and equitable title to the relocation Some relocation companies ask a listing contract with a listing broker company, the first listing contract licensees to “fill-in the blanks” on a (Broker A). If the listing contract is in would be terminated because the pre-printed offer provided by the place at the time all contingencies are transferred employee/homeowner relocation company. Wis. Adm. Code § removed from the contract between would no longer own the home. The RL 16.04, however, requires licensees the transferred employee/homeowner relocation company could enter into a to use Wisconsin approved forms if an and the relocation company, Broker A new listing contract without any approved form is available for that may be entitled to a commission listing protection rights from the first purpose. If an approved form is under the terms of the listing listing because the transferred available, but the parties do not wish to agreement. Line 33 of the WB-1 employee/homeowner is no longer use it, licensees are permitted to Residential Listing Contract provides the seller. negotiate the terms of the offer but must that the broker’s commission is have the parties or an attorney draft the ✓ ® earned if the seller (transferred REALTOR Practice Tip – offer, including completion of all employee/homeowner) accepts an Two Listing Contracts blanks. Therefore, Wisconsin licensees offer (contract between the transferred Listing brokers taking listings with are not permitted to complete the employee/homeowner and the relocation companies while an blanks in an offer to purchase provided relocation company) which creates an ongoing exclusive relationship by a relocation company. enforceable contract (contingencies (including listing protection) exists ✓ ® removed to pass equitable title) for between an earlier listing broker and REALTOR Practice Tip – the owner, should take whatever steps Relocation Company Forms the sale of the property. If the owner ® had the listing broker insert a are appropriate to address those REALTORS requested to complete a provision into the listing contract that conflicts which may arise. For relocation company’s standard offer excluded any sale to the relocation example, real estate licensees taking form should negotiate the terms of the company, then no commission would second listings should exclude buyers transaction and present the terms to the be due. lawfully protected under the terms of a parties (or the attorneys representing prior listing unless the conflicts and the parties) for insertion into the form. A different issue arises if the commission issues are resolved. Licensees may use the pre-prepared relocation company enters into a offer addendum provided by relocation second listing contract with Broker B companies but only if the addendum during the protection period arising complies with Wis. Adm. Code § RL under listing contract signed by 16.06(4)& (5). Broker A and the transferred employee/homeowner. Relocation Section RL 16.06(4) provides that: “A

® Wisconsin REALTORS Association 8 Legal Update 98.04 licensee may use a pre-prepared addendum or otherwise set forth on This Legal Update and others attached pages provisions relating to Conclusion Updates beginning with 92.01 the blanks on an approved form or can be found in the Members which alters or supplants optional Section of the WRA website at The attorney/REALTOR® position secondary offer provisions or optional http://www.wra.org. contingencies for financing, sale of paper was prepared to identify buyer’s property or inspection which practices which may occur in are set forth in an offer, offer to relocation transactions and which may A subscription to the Legal Update is exchange or option prepared and conflict with Wisconsin real estate and included in all Association Desig- license laws. This examination was nated REALTOR® dues. Designated approved by the department, if the ® initiated because real estate REALTORS receive a monthly publication licensee properly incorporates the package including the Legal Update, and attachment by reference into the professionals such as brokers, title three rotating quarterlies (Technology, approved form and relates the companies, and attorneys perceived a Sales & Marketing Tips, The Manager). need for a comprehensive statement of approved form and the attached pages REALTORS® and Affiliate members may to one another. For purposes of this principles which, when incorporated subscribe to the Designated REALTOR® subsection a pre-prepared addendum into their practices, would insure that publication package for $30 annually. may be prepared by the broker or the transactions involving relocation Non-member subscription rate for the broker’s attorney.” companies are structured so that they package is $130 annually. Member comply with Wisconsin law and subscription price for the Legal Update is $25, non-member price is $75. Each Section RL 16.06(5) provides that: “A applicable standards of professional subscription includes 12 monthly issues. and ethical practice. Members of the licensee may use a pre-prepared ® Real Estate Board of the Wisconsin Contact the Wisconsin REALTORS addendum which supplants or alters Association at 1-800-279-1972 or the printed provisions of an approved Department of Regulation and (608) 241-2047 to subscribe. form only if: Licensing, the Wisconsin Department (a) The addendum has been drafted by of Regulation and Licensing, the an attorney who is identified on the Wisconsin Land Title Association, and addendum; representatives of the relocation (b) There are no optional or multiple industry, including the Employee choice provisions in the addendum; Relocation Council, have worked (c) There are no blanks or fill-in cooperatively with the State Bar of provisions in the addendum except for Wisconsin/ REALTOR® Joint Liaison spaces for the signatures of the parties Committee to develop the paper. and those items required under par. (d); and, The information in this Update is (d) The addendum is incorporated by general in nature and should not be reference into the approved form and relied upon as legal advice. the approved form and the addendum Homeowners, buyers, relocation are properly related to one another.” companies, and real estate professionals with questions regarding their legal rights or obligations in any specific transaction should consult with qualified legal counsel.

Wisconsin REALTORS® Association 9 Legal Update 98.04