Wisconsin Real Estate Broker Exam — All Questions

Under Wis. Stat. § 452.03 (2), an individual working on behalf of and under the direction of a firm needs no real estate license if that individual's services are limited to which of the following?

• a.Presenting written offers to sellers on behalf of the listing firm
• b.Showing listed property to prospective buyers when the firm is short of staff
• c.Negotiating lease terms for the firm's property management clients
• d.Tasks that are purely administrative, clerical, or personal in nature✓

Section 452.03 (2) says no license is required for an individual who, on behalf of and under the direction of a firm or its licensees, provides services "that are limited to those that are purely administrative, clerical, or personal in nature." Showing property, negotiating a lease and presenting offers are all brokerage activities described in the § 452.01 (2) definition of broker, so each requires a license. Wis. Stat. § 452.34 (3) (b) reinforces the point for open houses: an unlicensed personal assistant may not assist at one without the direct, on-premises supervision and presence of a licensee.

Under Wis. Stat. § 452.12 (2) (a), a broker's license may be issued to a business entity only if the business entity does what?

• a.Employs no more than one licensed salesperson at each office
• b.Names a supervising broker who owns a majority of the entity
• c.Has at least one business representative licensed as a broker✓
• d.Holds a separate license for every county where it operates

Section 452.12 (2) (a) provides that "[a] broker's license may be issued to a business entity if the business entity has at least one business representative licensed as a broker," and the entity's license then lets each broker business representative act as a broker on its behalf. Nothing in § 452.12 caps the number of salespersons per office, requires the supervising broker to hold an ownership stake, or licenses by county. Under § 452.12 (2) (c) a change in business representatives must be reported to the board on the same form within 30 days of the effective date of the change.

What does Wis. Stat. § 452.13 (4) provide about a firm holding client funds?

• a.It does not require a firm to hold client funds at all✓
• b.It requires every firm to hold client funds in escrow
• c.It requires client funds to be held by the listing firm
• d.It requires client funds to be held until closing occurs

Subsection (4) is captioned TRUST ACCOUNT OPTIONAL and reads: "This section does not require a firm to hold client funds or require a person to transfer client funds to a firm." The obligations attach only once a firm does hold them: § 452.13 (2) (a) then requires the firm to establish an interest-bearing common trust account at a depository institution, and § 452.13 (2) (c) requires it to deposit all client funds there. The WB-1 and WB-36 both say plainly that the Firm may refuse to hold earnest money, which is the same rule seen from the form side.

Under Wis. Stat. § 452.133 (1) (c), a firm owes every party the duty to disclose in writing the material adverse facts that the firm knows and that the party:

• a.has not asked about in writing before the offer is drafted by the firm
• b.does not know or cannot discover through reasonably vigilant observation✓
• c.would consider important only after the offer has been accepted by all
• d.learned about from a third-party inspection report given to the other party's firm

Paragraph (1) (c) states the duty as timely written disclosure of "all material adverse facts that the firm knows and that the party does not know or cannot discover through reasonably vigilant observation, unless the disclosure of a material adverse fact is prohibited by law." The trigger is the firm's knowledge and the party's inability to discover, not a written request from the party, not who hired an inspector, and not the timing of acceptance. Wis. Admin. Code § REEB 24.07 (2) states the same duty in the conduct rules and adds that it is not limited to the condition of the property.

Which duty does a Wisconsin firm owe to a client but not to a customer?

• a.Providing brokerage services to the party honestly and fairly at all times
• b.Loyally representing the client by placing the client's interests first✓
• c.Keeping information given in confidence confidential after the transaction
• d.Safeguarding trust funds and other property the firm holds for the party

Section 452.133 (2) (a) adds, for clients only, "[t]he duty to loyally represent the client's interests" by placing them ahead of the firm's interests and ahead of the interests of persons in the transaction who are not the firm's clients. The other three are § 452.133 (1) duties owed to every party, client or customer: honest and fair service under (1) (a), confidentiality that continues after the transaction is complete under (1) (d), and safeguarding trust funds under (1) (f). The plain-language "Disclosure to Customers" prescribed by § 452.135 (1) (a) lists exactly the sub. (1) duties and no loyalty duty.

Under Wis. Stat. § 452.133 (3) (b), a licensee who acts in a transaction on the licensee's own behalf must obtain what, and where?

• a.Prior oral consent of the seller, confirmed later in the closing statement
• b.Prior written consent of the firm, recorded in the firm's transaction file
• c.Prior written approval of the board, filed before the offer is presented
• d.Prior written consent of all parties, obtained in the transaction contract✓

Paragraph (3) (b) bars a licensee from acting on the licensee's own behalf, on behalf of the licensee's firm, or on behalf of an entity in which the licensee has an interest, "without the prior written consent of all parties to the transaction," and then specifies where: "a licensee shall obtain the written consent in the offer to purchase, option, lease, or other transaction contract." Oral consent does not satisfy a written-consent requirement, and consent runs to the parties rather than to the firm or the board. Wis. Admin. Code § REEB 24.05 (2) simply directs licensees to follow § 452.133 (3) (b).

When must a Wisconsin firm give a party the written "Disclosure to Customers" statement set out in Wis. Stat. § 452.135 (1) (a)?

• a.Before showing any listed property to a prospective buyer or prospective tenant
• b.Before negotiating on behalf of a party who is not the firm's client✓
• c.Before the party signs an agency agreement with a different firm
• d.Before the firm accepts earnest money from a prospective purchaser

Paragraph (1) (a) provides that "[n]o firm, and no licensee associated with a firm, may negotiate on behalf of a party who is not the firm's client unless" the customer disclosure statement is provided. The trigger is negotiating for a non-client, not a showing, another firm's agency agreement, or the receipt of earnest money. Under § 452.135 (1) (b) a subagent owes the same disclosure to any person who is not the principal firm's client and who receives brokerage services within the scope of the subagency.

A client signs an agency agreement covering a two-unit residential property, and the written "Disclosure to Clients" statement is not incorporated into that agreement. What does Wis. Stat. § 452.135 (2) (b) require of the firm?

• a.Record the disclosure statement with the county register of deeds
• b.Deliver the disclosure statement to the client's attorney of record
• c.Request the client's signed acknowledgment that a copy was received✓
• d.Send the disclosure statement to the department within ten days

Paragraph (2) (b) applies where the agency agreement covers real estate "primarily intended for use as a residential property containing one to 4 dwelling units" and the disclosure statement is not incorporated into the agreement; the firm "shall request the client's signed acknowledgment that the client has received a copy of the written disclosure statement." Nothing in § 452.135 calls for recording, delivery to counsel, or filing with the department. The WB-1 and WB-36 avoid the problem by printing the Disclosure to Clients inside the form itself.

Under Wis. Stat. § 452.134 (2), a firm and its licensees may provide brokerage services in a multiple representation relationship only if:

• a.the transaction involves commercial rather than residential property
• b.a different supervising broker reviews each client's file at closing
• c.all of the firm's clients in that relationship consent in writing✓
• d.the firm reduces its commission for each client in the transaction

Subsection (2) reads: "A firm and any licensees associated with the firm may not provide brokerage services in a multiple representation relationship unless all of the firm's clients in the multiple representation relationship have consented to a multiple representation relationship in writing." The consent requirement does not turn on property type, on a second supervising broker, or on any commission adjustment. Designated agency is a separate written consent again under § 452.134 (3) (a), and a client may withdraw that consent by written notice at any time.

A firm is in a multiple representation relationship and one client withdraws consent to designated agency. Under Wis. Stat. § 452.134 (4), the firm and its licensees may not do what?

• a.Present the withdrawing client's offer to the other client's agent
• b.Continue to provide brokerage services to either client in the deal
• c.Accept a commission from more than one client in the transaction
• d.Place one client's interests ahead of another's in the negotiations✓

Subsection (4) provides that where a client does not consent to designated agency or withdraws that consent, "the firm and any licensees associated with the firm may not place the interests of any client ahead of the interests of any other in the negotiations." That is the neutral form of multiple representation; the firm may keep serving both clients, and nothing bars compensation from more than one client or the presentation of an offer. Only a refusal to consent to multiple representation at all, under § 452.134 (2), stops the firm from serving both.

Wis. Stat. § 452.139 (1) addresses how the duties in ch. 452 interact with the common law by providing that the chapter's duties:

• a.apply only where the common law is silent on the same subject
• b.are enforceable solely by the board and not by a private party
• c.may be waived by written agreement between a firm and a client
• d.supersede common law duties to the extent they are inconsistent✓

Subsection (1) provides that the duties of a firm specified in ch. 452 or its rules "shall supersede duties or obligations under common law to the extent that those common law duties or obligations are inconsistent with the duties specified in this chapter or in rules promulgated under this chapter." It is not a gap-filler that yields to the common law, and it says nothing about who may enforce the duties. Waiver is governed separately by § 452.133 (6), which makes most of the duties non-waivable and permits only a partial or full waiver of the duty to negotiate under sub. (2) (d), and then only with a prescribed written disclosure.

Under Wis. Stat. § 452.23 (2) (a), a licensee need not disclose that a property was the site of a specific act or occurrence, provided the act or occurrence:

• a.took place more than five years before the property was first listed for sale
• b.had no effect on the physical condition of the property or structures✓
• c.was not reported to any law enforcement agency in the county at all
• d.is not a matter the buyer specifically asked the licensee about

Paragraph (2) (a) excuses disclosure of "[t]hat the property was the site of a specific act or occurrence, if the act or occurrence had no effect on the physical condition of the property or any structures located on the property." The test is physical effect, not the age of the event, whether police were involved, or whether the buyer asked. Section 452.23 (1) is a separate and absolute bar: no licensee may disclose information whose disclosure would be unlawful housing discrimination under § 106.50 or under 42 USC 3604, 3605, 3606 or 3617.

A qualified third party's written report states the roof has no defects, but the licensee knows the roof leaked last spring. Wis. Stat. § 452.23 (3) requires the licensee to:

• a.rely on the report because a qualified third party prepared it first
• b.ask the seller to have a second inspection performed before closing
• c.note the discrepancy in the firm's file and inform the listing firm
• d.disclose to the parties the facts that contradict the written report✓

Subsection (3) reads: "A licensee shall disclose to the parties to a real estate transaction any facts known by the licensee that contradict any information included in a written report described under sub. (2) (b)." The third-party report shield in sub. (2) (b) is expressly made subject to sub. (3), so it cannot be used to sit on contradictory knowledge, and an internal file note or a call to the other firm is not disclosure to the parties. Wis. Admin. Code § REEB 24.07 (6) states the same rule for inconsistencies revealed by the licensee's own inspection.

A buyer asks a Wisconsin licensee about the sex offender registry. Under Wis. Stat. § 452.24 (2), the licensee becomes immune from liability for acts or omissions related to that disclosure by timely providing:

• a.a printed copy of the registry entries for the surrounding subdivision
• b.written notice that the Department of Corrections has the information✓
• c.an oral summary of any registry information the licensee already knows
• d.a signed statement that the licensee has searched the state registry

Subsection (1) gives the licensee a duty to disclose registry information the licensee has actual knowledge of when asked; subsection (2) then grants immunity if the licensee "in a timely manner provides to the person requesting the information written notice that the person may obtain information about the sex offender registry and persons registered with the registry by contacting the department of corrections," including the department's telephone number and internet site. Nothing requires the licensee to compile registry entries, to give an oral summary, or to certify a search. The WB-1 and WB-11 both carry that notice preprinted, with the Department of Corrections website and phone number.

Under Wis. Stat. § 703.33 (1), how long before closing must the seller of a condominium unit furnish the required disclosure materials to a member of the public?

• a.Not later than 15 days prior to the closing of the sale of the unit✓
• b.Not later than 30 days prior to the closing of the sale of the unit
• c.Not later than 10 days prior to the closing of the sale of the unit
• d.Not later than 5 days prior to the closing of the sale of the unit

Section 703.33 (1) is captioned MATERIAL TO BE FURNISHED BY SELLER TO PURCHASER BEFORE CLOSING and begins: "Not later than 15 days prior to the closing of the sale of a unit to a member of the public, the seller shall furnish to the purchaser the following." The list runs from the declaration, bylaws and rules through the budget, floor plan and the executive summary required by § 703.33 (1) (h). The 10-day figure belongs to a different rule, the real estate condition report deadline in § 709.02 (1).

The cover sheet prescribed by Wis. Stat. § 703.33 (2) (a) tells a condominium purchaser that the contract of sale may be canceled in writing within what period after receipt of the documents?

• a.5 business days✓
• b.3 business days
• c.10 business days
• d.15 business days

The third boldface statement required on the cover sheet reads: "YOU MAY AT ANY TIME WITHIN 5 BUSINESS DAYS FOLLOWING RECEIPT OF THESE DOCUMENTS, OR FOLLOWING NOTICE OF ANY MATERIAL CHANGES IN THESE DOCUMENTS, CANCEL IN WRITING THE CONTRACT OF SALE AND RECEIVE A FULL REFUND OF ANY DEPOSITS MADE." The same 5-business-day period applies where the seller delivers less than all of the required documents. Section 709.02 (2) separately requires a condominium seller who must give a condition report to attach specified association information as an addendum.

Wis. Stat. § 452.132 (4) (b) limits the supervising broker's pre-closing review to confirming that the written disclosure statement was provided, confirming that any applicable approved form was used and completed consistently with the structure of the form, and:

• a.confirming the accuracy of the seller's condition report entries
• b.verifying that the buyer's financing has actually been approved
• c.communicating apparent errors in the forms to the licensee✓
• d.approving the commission the licensee will be paid at closing

Paragraph (4) (b) confines the review to three things, the third being "communicating to the licensee any errors in how the forms were completed that are apparent on the face of the document and known to the person reviewing the document." It is a facial review of paperwork, not an audit of financing, of the seller's disclosures, or of compensation. Section 452.40 (2) adds that reviews conducted under § 452.132 (4) are not the provision of legal advice or opinion, and § 452.132 (6) (a) puts the follow-up discussion with the party on the associated licensee.

A Wisconsin firm that is not a licensed broker business entity makes no specific delegation of the duty to supervise its licensees. Under Wis. Stat. § 452.132 (5) (b), who is the supervising broker?

• a.The board appoints a supervising broker for that firm
• b.The most senior salesperson associated with that firm
• c.No supervising broker is required for that kind of firm
• d.The firm itself is deemed to be the supervising broker✓

Paragraph (5) (b) allows such a firm to delegate supervision to a licensed individual broker, "but in the absence of a specific supervising broker delegation, the firm itself is deemed to be the supervising broker for that firm." There is no board appointment, no seniority rule, and no exemption. A firm that is a licensed broker business entity has no such default: § 452.132 (5) (a) requires it to delegate the duty to a supervising broker who is a licensed individual broker, and § 452.132 (5) (c) requires the delegation to be written and signed by both sides.

Wis. Admin. Code § REEB 23.02 requires a licensee who changes the name appearing on a current license, or who moves from the last address provided to the department, to notify the department in writing within:

• a.10 days of the change
• b.60 days of the change
• c.30 days of the change✓
• d.5 days of the change

Section REEB 23.02 provides that any person licensed under ch. 452 "who changes the name appearing on a current license or moves from the last address provided to the department shall notify the department in writing of the new name or address within 30 days of the change." Trade names are governed by § REEB 23.03 (2), which requires notice in writing before doing business under the trade name rather than within a set number of days. A different 10-day clock, in § 452.30 (4), applies when a licensee ceases to be associated with a firm.