Wis. Admin. Code Real Estate Examining Board REEB 25.023

Current through November 25, 2024

Section REEB 25.023 - Real estate broker's pre-license business management program

An education program in business management for applicants for a real estate broker's license shall consist of 72 hours. The education program in business management shall contain all of the following topics:

(1) CONTRACTS. Instruction relating to real estate contracts shall include all of the following:

(a) The definition of a contract, including the difference between a contract and an agreement.

(b) Elements of a contract, including all of the following:

1. Offer.

2. Acceptance.

3. Consideration.

4. Competent parties.

(c) Parties to a contract, including all of the following:

1. Parties to an agency agreement.

2. Parties to a sales contract, option, or lease.

3. Multiple parties.

(d) Creating binding contracts, including all of the following:

1. Signatures.

2. Acceptance and binding acceptance.

3. Delivery.

4. Deadlines.

5. Time is of the essence.

(e) Validity of contracts.

(f) Drafting contracts and contingencies, including all of the following:

1. Properly drafting.

2. Pre-printed.

3. Customized.

(g) Ending the contractual relationship, including all of the following:

1. Rescission.

2. Termination.

3. Modification.

4. Death of a party.

5. Default and breach.

(h) Acceptance and counteroffers, including the difference between acceptance and counteroffers.

(i) The law of conveyances, including all of the following:

1. Conveyance defined.

2. Requirements for a valid conveyance.

(j) Agreement to arbitrate real estate transaction disputes under s. 788.015, Stats.

(k) Commercial real estate commission lien under s. 779.32, Stats.

(2) APPROVED FORMS. Instruction relating to real estate approved forms shall include all of the following:

(a) The forms approval process, including all of the following:

1. Forms committee.

2. Real estate examining board.

3. Department of safety and professional services.

(b) The authorized practice of law, including all of the following:

1. Reynolds v. Dinger, 14 Wis. 2d 193.

2. Chapter REEB 16.

(c) Review of forms, including all of the following:

1. Listing contracts for sale.

2. Offers.

3. Counter-offers.

4. Amendments.

5. Buyer agency agreements.

6. Listing contracts for lease.

7. Options.

8. Bills of sale.

9. Exchanges.

10. Cancellation agreement and mutual releases.

11. State bar forms under s. REEB 16.03 (1).

12. Uniform commercial code forms.

13. Forms used in other states.

(d) Developing a form and contingency manual.

(e) Supervising salesperson's use of approved forms.

(3) TRUST ACCOUNTS, ESCROW, CLOSING STATEMENT. Instruction relating to real estate trust accounts, escrow and closing statement shall include all of the following:

(a) Trust accounts under ch. REEB 18, including all of the following:

1. Trust account definition.

2. Trust funds definition.

3. When is a trust account required.

4. Registering a trust account.

5. Procedure to open a trust account.

6. Authorization to sign trust account checks.

7. Depositing of trust funds.

8. Disbursement of trust funds.

9. Bookkeeping system.

10. Closing a trust account.

(b) Escrow agreement procedures, including all of the following:

1. Escrows requiring separate escrow agreements.

2. Pre-closing earnest money escrows.

3. Post closing escrows.

4. Escrows not requiring separate escrow agreements.

5. Drafting escrow agreements.

(c) Closing procedures, including all of the following:

1. Licensees are not required by license law to perform closings.

2. Choosing a closing statement.

3. Closing preparation procedures.

4. Setting a closing date.

5. Preparing closing documentation.

6. Closing procedures.

7. Post closing procedures.

(4) BROKER MANAGEMENT AND MARKETING. Instruction relating to real estate broker management and marketing shall include all of the following:

(a) The legal environment, including all of the following:

1. Requirements for licensure.

2. Liability concerns and risk reduction.

(b) The business plan, including all of the following:

1. Form of ownership.

2. Start up.

3. Capital budget.

4. Operation budget.

5. Marketing strategies.

(c) Professional services, including all of the following:

1. Attorneys.

2. Accountants.

(d) Operational policies, including all of the following:

1. Policy and procedures manual.

2. Independent contractors agreement.

(5) FINANCIAL AND OFFICE MANAGEMENT. Instruction relating to financial and office management shall include all of the following:

(a) Financial management, including all of the following:

1. System of income and expense accounting.

2. Accounts used for handling funds.

3. Bank reconciliations.

4. Financial reports.

(b) Budgeting, including all of the following:

1. Definition of a budget.

2. Purpose of the budget.

3. Comparison of budget income and expenses.

4. Preparing the budget.

(c) Office management under ch. REEB 15 including retention of records.

(6) PERSONNEL. Instruction relating to personnel shall include all of the following:

(a) Hiring, including all of the following:

1. Agents.

2. Personal assistants.

3. The difference between employee and independent contractor.

4. Equal opportunity.

5. Workers' compensation.

(b) Policy manual, including all of the following:

1. Purpose.

2. Recommended content.

3. Maintenance.

4. Access.

(c) Training.

(d) Licensure and supervision of licensees associated with a firm under s. 452.132, Stats., and ch. REEB 17.

(7) BUSINESS ETHICS. Instruction relating to real estate business ethics shall include all of the following:

(a) Dealing with the public, including all of the following:

1. Avoiding discrimination as required under s. REEB 24.03 (1).

2. Competence in the area of service under s. REEB 24.03 (2).

3. Legal counsel are not to be discouraged under s. REEB 24.06.

4. Tie-in arrangements under s. REEB 24.075.

5. Agreements in writing under s. REEB 24.08.

6. Misleading market values under s. REEB 24.09.

7. No net listings under s. REEB 24.10.

(b) Advertising, including all of the following:

1. False advertisements.

2. Disclosure to the public.

3. Obtain permission.

4. Advertised price.

(c) Offers under ss. REEB 24.12 and 24.13, including all of the following:

1. Confidentiality.

2. Drafting and submitting all offers.

3. Submitting promptly.

4. Presenting fairly.

5. Prompt notification.

(d) Disclosure of compensation and interest under s. REEB 24.05 and s. 452.133, Stats., including all of the following:

1. Disclosure of profits.

2. Disclosure of intent.

3. Property owned by licensee.

4. Referral of service.

5. Compensation from more than one party.

(e) Disclosure under s. REEB 24.07, including all of the following:

1. Material facts.

2. Material adverse facts.

3. Property inspection.

4. Agency.

5. "As-is" sales.

6. Optional disclosure.

(f) Dealings with fellow licensees, including all of the following:

1. Negotiations through a listing firm under s. REEB 24.13 (5).

2. Obtaining a seller's permission for subagent under s. REEB 24.07 (8) (b) 2.

3. Confidentiality of offer under s. REEB 24.12.

4. Disclosing material adverse facts under s. REEB 24.07 (2).

5. False information under s. REEB 24.07 (3).

6. Disclosing buyer agent and seller subagent under s. REEB 24.07 (8).

(g) Dealings with licensee and salespeople, including all of the following:

1. Licensee supervision under s. 452.132, Stats.

2. Office supervision under s. 452.132, Stats.

(i) Agency relationships, including all of the following:

1. Multiple representation with designated agency.

2. Multiple representation without designated agency.

3. Single agency.

(8) CONSUMER PROTECTION. Instruction relating to real estate consumer protection shall include all of the following:

(a) Disclosure, including all of the following:

1. Property inspections under s. REEB 24.07 (1) (a).

2. Investigation of other facts under s. REEB 24.07 (1) (b).

3. Use of third party inspectors under s. REEB 24.07 (5).

4. Property condition under s. 452.23, Stats.

5. Civil liability for misrepresentation.

6. Seller's disclosure duties under ch. 709, Stats.

7. Buyer's inspection obligation.

(b) Fair housing, including all of the following:

1. Federal law.

2. State of Wisconsin law.

3. Local fair housing law.

4. Sanctions for violations.

5. Testers and fair housing organizations.

6. Conduct prohibited by fair housing law.

7. Responding to fair housing questions.

8. Instituting equal professional service procedures.

(c) Antitrust: conspiracy and group boycotts, including all of the following:

1. Section 1 of the Sherman Act.

2. "Conspiracy" requirement.

3. "Restraint of trade" requirement.

4. Compensation and "prices" that have been fixed.

5. Situations creating inferences of price fixing.

6. How to respond to antitrust situations.

7. Elements same as price fixing, including conspiracy and restraint of trade.

8. Situations creating inference of boycott.

(d) Complaint handling procedures, including all of the following:

1. Consumer satisfaction.

2. Liability avoidance.

3. Feedback on fair housing or other law violations.

4. Preventing complaint through education.

5. Documenting the compliant handling program in policy and procedures manual.

6. Informing the parties of the complaint handling program.

7. Dispute resolution systems.

(e) Environmental factors, including all of the following:

1. Underground storage tanks, including registration and closure.

2. Asbestos.

3. Radon.

4. Lead-based paint.

5. Procedures for high risk properties.

6. Wetlands and floodplain.

(f) Education buyers and sellers, including all of the following:

1. Property inspection and disclosing of defects.

2. Earnest money procedures.

3. Licensees' responsibilities and expertise.

4. Utilizing third party experts.

(9) SPECIALTY AREAS. Instruction relating to real estate specialty areas shall include all of the following:

(a) Property management, including all of the following:

1. Management contracts.

2. Insurance liability.

3. Security deposits.

4. Breach of lease.

5. Property inspections.

6. Tenant and landlord rights and obligations under ch. ATCP 134.

7. Rules regarding negotiating leases.

(b) Business opportunities, including all of the following:

1. Special expertise and licensing requirements under s. REEB 24.03.

2. Approved forms.

(c) Selling specialized properties as a brokerage activity.

(d) Alternative marketing methods, including all of the following:

1. Exchanges.

2. Installment sales.

3. Cooperatives.

(e) Mortgage banking, including all of the following:

1. Definitions of mortgage banker, loan originator and loan solicitor.

2. When separate registration is needed.

3. Real Estate Settlement Procedures Act.

(f) Real estate appraisal.

(g) Farms.

(h) Auctions.

(i) Mobile homes.

(j) Time-Share, including familiarity with ch. 707, Stats., when selling time-shares.

(10) NOTIFYING THE DEPARTMENT. Instruction relating to notifying the department shall include all of the following:

(a) Change of name, address or trade name under ch. REEB 23.

(b) Criminal conviction under s. 440.03 (13) (am), Stats.

Wis. Admin. Code Real Estate Examining Board REEB 25.023

Adopted by, CR 15-010: cr. Register September 2015 No. 717, eff.10/1/2015.

Amended by, corrections in (4) (a) 3., (7) (g) 1., 2. made under s. 35.17, Stats., Register March 2017 No. 735, eff. 4/1/2017

Amended by, CR 17-100: r. (4) (a) 3. Register July 2018 No. 751, eff. 8/1/2018

Amended by, CR 23-075: am. (2) (c) 1. to 10., (6) (d), (7) (d) (intro.), (f) 1., (g) 1., r. (7) (h) Register August 26 No. 824, eff. 9/1/2024.