​REAL ESTATE SALEPERSON

When Does a Person Need a Real Estate Salesperson License?
Wis. Stat. § 452.03 states that no person may engage in or follow the business or occupation of, or advertise as a real estate broker or salesperson without a license. The definition of a broker can be found in Wis. Stat. § 452.01(7).

Can a Real Estate Salesperson Licensed in Another State Conduct Business in Wisconsin?
Wis. Stat. § 452.03 prohibits the sale, rental, or negotiation of real estate without a Wisconsin real estate license. Furthermore, a real estate salesperson must work under a licensed Wisconsin broker. For more information on out-of-state applicants, please review Wis. Admin. Code REEB 25.025. For more information on the broker-salesperson relationship, please see Wis. Stat. § 452.01(2), § 452.01(7), and § 452.03.

Can a Real Estate Salesperson Licensed in Wisconsin Work in Wisconsin Under a Broker Licensed in Another State?
No. Wis. Stat. § 452.03 states that a licensed real estate salesperson must work under a broker licensed in Wisconsin.

Is a Real Estate Salesperson License Needed to Sell a Recreational Vehicle, Like a Mobile Home?
No. Wis. Stat. § 452.01(2)(a) gives a salesperson the power to sell for money or other things of value “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.” This does not include recreational vehicles.

Can a Real Estate Salesperson use a Nickname on Offers, Listings, and Other Documents if the Nickname is Different Than his or her Registered Name?
Except for advertisements for the rental of real estate owned by the licensee, Wis. Admin. Code § REEB 24.04(2)(b) prohibits a licensee employed by a broker from using a name or trade name other than the broker’s name as printed on the broker’s license or as previously filed with the Department in accordance with Wis. Admin. Code § REEB 23.03.

If a Licensed Real Estate Salesperson Facilitates the Sale of his or her own Property, or the Purchase of a new Property for his or her Personal use, can That Salesperson Receive a Portion of the Typical Sales Commission?
Wis. Admin. Code § REEB 24.05(2) states that a licensee acting on his own behalf for the sale or the purchase of real property may not collect a commission unless he or she obtains written consent of all the parties to the transaction. Wis. Admin. Code § REEB 24.05(5) states that the licensee must disclose his or her license status and intent to act in the transaction at the first showing of the property, the first contact with the other party or agent, or any other negotiation.

Can a Real Estate Salesperson or Timeshare Salesperson Offer a Finder's Fee to People who Make Successful Referrals to the Broker?
Wis. Stat. § 452.19 prohibits the payment of a finder’s fee or a commission to a person not licensed as a salesperson or broker. However, there are no restrictions on the licensee giving a gift or an incentive to a buyer or seller.

Does a Real Estate Salesperson Need to Disclose his or her Status as a Registered Sex Offender to a Client?
Wis. Stat. § 452.24(1) states that if in connection with a sale, purchase, rental, or exchange of real property, a licensee receives a request from a person to whom the licensee is providing brokerage services for information related to whether a particular person is required to register as a sex offender, the licensee has the duty to disclose such information, if the licensee has actual knowledge of the situation. Please see the statute for further information. If the licensed broker, salesperson, or time-share salesperson is a registered sex offender, he or she should see Wis. Stat. § 948.13 (Child Sex Offender Working with Children) and call the Department of Corrections for further information.

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REAL ESTATE BROKERS

When Does a Person Need a Real Estate Broker's License?
Wis. Stat. § 452.03 states that no person may engage in or follow the business or occupation of, or advertise as a real estate broker or salesperson without a license. The definition of a broker can be found in Wis. Stats. § 452.01(2). The definition includes, but is not limited to:

• Negotiating, promoting, or advertising the sale, exchange, purchase, or rental of real property, or the granting or acceptance of an option to sell, exchange, purchase, or rent an interest or estate in real estate or a time share.
• Selling or exchanging interest in real estate or businesses, including business’ goodwill, inventory, or fixtures.

Can a Real Estate Broker Offer a Finder's Fee to People who Make Successful Referrals to the Broker?
Wis. Stats. § 452.19 prohibits the payment of a finder’s fee or a commission to a person not licensed as a salesperson or broker. However, there are no restrictions on a licensee giving a gift or an incentive to a buyer or seller.

Can a Real Estate Broker use a Nickname on Offers, Listings, and Other Documents if the Nickname is Different Than his or her Registered Name?
Except for advertisements for the rental of real estate owned by the broker, Wis. Admin. Code REEB 24.04(2) prohibits a broker from using any other name in business or in advertisements other than the broker’s name exactly as printed on the broker’s license, or a trade name filed with the Department under Wis. Admin. Code REEB 23.03.

If a Licensed Real Estate Broker Facilitates the Sale of his or her own Property, or the Purchase of a new Property for his or her Personal use, can That Broker Receive a Portion of the Typical Sales Commission?
Wis. Admin. Code REEB 24.05(2) states that a licensee acting on his own behalf for the sale or the purchase of real property may not collect a commission unless he or she obtains written consent of all the parties to the transaction. Wis. Admin. Code REEB 24.05(5) states that the licensee must disclose his or her license status and intent to act in the transaction at the first showing of the property, the first contact with the other party or agent, or any other negotiation.

Is a Broker Obligated to Disclose a Material Adverse Fact About the Property?
Wis. Admin. Code REEB 24.07(2) states that a licensee may not exaggerate or misrepresent facts. Furthermore, the licensee shall disclose to all parties all materially adverse facts that the licensee knows and that the party does not know or cannot discover through a reasonably vigilant observation, unless the disclosure is prohibited by law. A licensee does not have to disclose that the property was the site of a specific occurrence such as death if the act or occurrence had no effect on the physical condition of the property or on any structures of the property.

What Type of Property Inspection is a Broker Required to Perform?
Wis. Admin. Code REEB 24.07(1)(a-b) states that in general, a licensee shall conduct a reasonably competent and diligent inspection of accessible areas of the structure and surrounding areas of the property to search for observable, materially adverse facts. If the licensee is the listing broker, the listing broker shall make inquiries of the seller as to the condition of the property and request that the seller provide a written response to the inquiries. Wis. Admin. Code REEB 24.07(1)(d) states that a reasonably competent and diligent inspection does not include moving of furniture or other mobile property, inspection of inaccessible areas or areas that present a risk of injury, or the requirement to retain third party inspectors or investigators. Furthermore, while a licensee must inspect vacant lots, he or she is not required to observe the entire property.

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What are Real Estate Trust Funds?
Wis. Admin. Code REEB 18.02(6) defines real estate trust funds as any cash, checks, share drafts, drafts or notes, other than promissory notes, received by a broker or broker’s salespersons or time-share salespersons on behalf of a principal or any other person. Please see the statute for a complete definition.

May a Broker Receive the Interest Earned on any Real Estate Trust Accounts?
Wis. Admin. Code REEB 18.031(3)(a) states that none of the interest earned on the funds deposited into an interest-bearing trust account may inure to the benefit of the broker.

When Must Trust Funds Received by the Broker be Deposited in the Trust Account?
Wis. Admin. Code REEB 18.031(1) states that a broker shall deposit all real estate trust funds in a real estate trust account within 48 hours of receipt of the trust funds, or if received on a day prior to a holiday or some other day when depository institutions are closed, within the next 2 business days.

May a Broker Have More Than one Trust Account?
Yes, a broker may have an unlimited number of trust accounts, but each account must be in compliance with all statutes and the administrative code. Please see Wis. Admin. Code REEB 18.032.

May a Broker Authorize Other Persons to Sign Real Estate Trust Account Checks, Share Drafts, or Drafts Drawn on the Broker's Trust Account?
Wis. Admin. Code REEB 18.04 states that a broker may authorize other persons to sign real estate trust account checks, share drafts, or drafts drawn on the broker’s real estate trust account if the person is at least 18 years of age.

Does a Broker Need to Notify the Department WHen he or she Opens a Trust Fund?
Yes. Wis. Admin. Code REEB 18.035(1) states that a broker must provide the Department with the name and number of the account, with the name of the depository institution in which the broker holds the account and with information concerning whether the account is for client funds or for real estate trust funds other than client funds within 10 days of opening the account.

What are Salespersons' Duties With Regard to Earnest Money?
Wis. Admin. Code REEB 18.031(2) states that a salesperson or timeshare salesperson who receives real estate trust funds shall promptly submit the funds to the employer-broker.

Is There a Limit on the Amount of Money That a Real Estate Broker can put Into an Interest Bearing Real Estate Trust Account?
Wis. Admin. Code REEB 18.10 states that a real estate broker may deposit no more than $300 of his or her personal funds into a real estate trust account. There is no limit on the amount of client funds that may be deposited in the account.

When can a Real Estate Broker Disburse Monies in a Trust Fund?
Wis. Admin. Coe REEB 18.09 states that a broker may disburse trust funds from his or her real estate account under the following circumstances:

• To the payor upon the rejection, expiration, or withdrawal prior to binding acceptance of an offer to purchase, lease, exchange agreement or option on real estate, or a business opportunity.
• As directed in a written earnest money disbursement agreement signed by all parties with interest in the trust funds
• To a court having jurisdiction over a civil action
• As directed by court order
• Upon a good faith decision based on the advice of an attorney not representing any part to the contract
• By authorization granted in the contract
• As otherwise provided in the law

When may a Broker Close a Real Estate Trust Fund?
A broker may close an account if no real estate trust funds remain in the account. See Wis. Admin. Code REEB 18.033(2).

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REAL ESTATE BUSINESS ENTITIES

Is a Broker Required to Maintain a Bookkeeping System for the Broker's Office?
Wis. Admin. Code REEB 18.13 states that each broker shall maintain and be responsible for a bookkeeping system in the broker’s office that consists of at least:

• A cash journal (Wis. Admin. Code REEB 18.13(1)). A record that shows the chronological sequence in which real estate funds are received and disbursed. For funds received, the journal should have the date, the name of the party giving the money and the amount. For disbursements, the journal should include the date, the payee, the number of the check, and the amount. The journal shall also identify each transaction by including the name of the principal, an ID number, and a running balance for each day which receipts or disbursements are entered.
• A ledger (Wis. Admin. Code REEB 18.13(2)). A record that shows receipts and disbursements as they affect a particular transaction. Each ledger shall include the names of both parties to a transaction, the dates and the amounts received and the name of the party giving the money if it differs from the buyer. The broker needs a different ledger for each kind of real estate transaction (e.g. sales, rental, or collections).
• Account reconciliation (Wis. admin. Code EEB 18.13(3)). A broker must reconcile each real estate trust account in writing each month, except if there has been no activity that month. The written reconciliation must include the ending statement balance, date and amounts of deposits or transit, the number of the checks written but not paid, and the reconciled statement ending balance.
• Trial balance (Wis. Admin. Code REEB 18.13(4)). A written listing of all open items in the real estate trust account, in accordance with Wis. Admin. Code REEB 18.13(3). The list must show the names of the parties to the transaction, and the amount held in trust for the parties at the time corresponding to the account reconciliation.
• Validation (Wis. Admin. Code REEB 18.13(5)). The broker or designee must make sure that the reconciled account statement balance, the open ledger account listing, and the journal running balance are valid and in agreement as of the date the account was reconciled.

Can a Broker use a Computerized Bookkeeping System?
Wis. Admin. Code REEB 18.13(6) states that a broker may use a computerized system if the system complies with Wis. Admin. Code REEB 18.13(1)-(5) and if all bookkeeping entries required by the chapter are made in the computerized system, even if other records are maintained at the same time.

What are the Back-Up Requirements for a Computerized Bookkeeping System?
Wis. Admin. Code REEB 18.13(6)(c) states that a back up copy of the bookkeeping records required under (1) to (2) must be made on any day on which the entries are made in the system, and the back -up copy must be made on a disk or other medium which is separate and distinct from that on which the source documents reside.

Wis. Admin. Code REEB 18.13(6)(d) states that the document which records account reconciliation, trial balance, and validation must be immediately copied to a back-up medium and maintained by the broker.

Wis. Admin. Code REEB 18.13(6)(e) states that all records which are not maintained as written paper records must be immediately available without charge to the Department for the purposes a Department audit or investigation.

Wis. Admin. Code REEB 18.13(6)(f) states that all computerized trust account records must be retained, pursuant to Wis. Admin. Code REEB 15.04.

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