My last two posts have discussed two glaring weaknesses in Wis. Stat. § 452.142 - it does not apply to sellers' contribution claims against their real estate agents and it likely does not apply to buyers' misrepresentation claims against sellers' real estate agents. What remains are breach of contract and negligence claims against real estate agents. Since sellers will rarely sue their real estate agents, we're mostly talking about buyers' non-misrepresentation claims against real estate agents.
Unfortunately, most buyers do not get their own real estate agent for what is usually the biggest and most significant financial transaction of their life. They believe that the real estate agent smiling at them from the advertising flyer or the agent who answered the phone at the local real estate office is their agent. No! That real estate agent who drove you to five homes on a Sunday is not your real estate agent unless you entered into a WB-36 Buyers Agency / Tenant Representation Agreement. If you did not enter into such an agreement with a real estate agent, you are not that real estate agent's client. You are merely that agent's customer. Wis. Stat. § 452.135 requires the real estate agent to provide you with a written disclosure statement telling you that you are that agent's customer prior to negotiating on your behalf.
If you are the real estate agent's customer, the real estate agent owes you the following duties:
Breach of most of these duties could form the basis for a negligence cause of action. This cause of action used to be governed by § 893.52's 6-year statute of limitation. Effective March 4, 2016, however, negligence claims against real estate agents are governed by Wis. Stat. § 452.142's 2-year statute of limitation.
** I HAVE UPDATED THE FOLLOWING PARAGRAPH IN LIGHT OF 2017 WIS. ACT
235, WHICH SHORTENED THE STATUTE OF LIMITATIONS OF FRAUD CLAIMS FROM SIX
YEARS TO THREE YEARS.
Breach of the duty to disclose material adverse facts may form the basis for a misrepresentation claim, which used to be governed by Wis. Stat. § 893.93(1)(b)'s 6-year statute of limitation, but is now governed (effective April 5, 2018) by Wis. Stat. § 893.93(1m)(b)'s 3-year statute of limitation.
What about our wise and responsible buyers who hire a buyers' agent? Real estate agents owe clients the duties listed above AND these additional duties:
Real estate agents owe their clients a broader duty of disclosure, and breach of this duty of disclosure may likewise form the basis for a misrepresentation claim that is arguably exempted from the new 2-year statute of limitation. Breach of the other listed duties may form the basis for a negligence cause of action or a breach of contract cause of action. Regardless of whether we allege negligence or breach of contract, such claims meet the same fate under new Wis. Stat. § 452.142. Breach of contract causes of action against real estate agents used to be governed by § 893.43's 6-year statute of limitation. Effective March 4, 2016, breach of contract claims against real estate agents are governed by Wis. Stat. § 452.142 and are therefore subject to a 2-year statute of limitation.
Wis. Stat. § 452.142 appears to have greatly reduced the amount of time that buyers have to allege breach of contract and negligence claims against real estate agents. If you believe that you have suffered harm as a result of the poor performance of the real estate agent who assisted you with the purchase of your home, you need to contact an attorney right away. Please contact me at firstname.lastname@example.org.