Last month, Mike Tobin led a Lunch and Learn on the new out-of-state licensee (OSL) law and cooperating in Wisconsin transactions. A number of questions arose as our members begin to engage with the new forms.
Going back several years – legislation was created as a result of CARW member’s frustration with OSLs, specifically Illinois agents, providing services in the state of Wisconsin. There is now a cooperation structure that creates a process for OSLs and Wisconsin real estate firms to function which also includes substantial penalties. However, now that the law has been in place for a little while if improvements can be made, we welcome suggestions. The next legislation session will be here soon and we are beginning to set priorities. Reach out and let us know!
A few questions that were asked:
- If a company is licensed in the majority of most states and that company has an Illinois salesperson working on a Wisconsin transaction, does that company need to do a cooperation agreement with themselves?As strange as it may sound yes. The intent of the cooperation is to ensure that the OSL has permission from a Wisconsin real estate firm to participate in a Wisconsin transaction. Therefore, in that scenario the Wisconsin real estate firm would need to enter into a WB-28 cooperation agreement with the Illinois real estate firm because it has to do with licensing not the company.
- Does the law apply to buyer agency? It does not apply to buyer agency which means the OSL cannot cooperate unless the property is listed by a Wisconsin real estate firm. When the legislation was in its infancy of drafting it allowed an OSL to have a WB-28 agreement under buyer agency with a Wisconsin real estate firm when the property was not listed by the Wisconsin real estate firm. However, the language was changed because it became quickly apparent that if the property was not listed with the Wisconsin real estate firm and the Wisconsin real estate firm entered into a WB-28 with an OSL under buyer agency that the OSL would have the freedom to practice real estate in Wisconsin without a license. Because cooperation was so new to Wisconsin, the language was changed to only allow cooperation when the property was listed with a Wisconsin real estate firm. Without this change, there was a significant consumer protection issue of allowing an OSL to practice real estate freely in Wisconsin without a license. Therefore the statute only acknowledges listing/rental and states that a WB-28 must be entered with the OSL with each listing. Therefore, it is our understanding that the Real Estate Examining Board’s (REEB) interpretation is if the OSL has a buyer who wants to purchase a property in Wisconsin that is not listed with a Wisconsin real estate firm the OSL cannot participate in the transaction.
- Who regulates this practice – CARW or the state? The Real Estate Examining Board (REEB) by way of the department of Safety and Professional Services (DSPS) regulates the cooperation. WRA has created a form letter for CARW to use for education of the cooperation law.
- How does the OSL subject themselves to Wisconsin’s jurisdiction? The OSL must send the DSPS the irrevocable consent form (#813) which is now included in ZipForm as part of the WB-28 and is also included on the DSPS site.
A few resources:
- WRA LegalTalks video series about the OSL legislation: www.wra.org/LegalTalks/OSL.
- FAQ regarding the OSL legislation: www.wra.org/oslfaq.
- Wisconsin Real Estate Magazine, “Mother, May I?” at http://www.wra.org/WREM/Jan15/OSL/.
Cori Lamont, Director of Corporate and Regulatory Affairs