I have written much recently about the Chapter 452 Modernization Act. In my last post, I introduced the Act's distinction between "firms" and "licensees" to explain real estate firm responsibility for misrepresentations made by licensees associated with that firm. To review, buyers and sellers enter into contracts with real estate firms, such as Shorewest, First Weber, Re/Max, or EXIT. The individual real estate agent providing services to the buyer or seller is known as a licensee - he or she is individually licensed as a Real Estate Broker or Real Estate Salesperson by the State of Wisconsin.
Wis. Stat. § 452.133 has long spelled out the duties of real estate agents. As of right now (most of the Chapter 452 Modernization Act does not take effect until July 1st), this section is titled "Duties of brokers." Wis. Stat. § 452.133(1) spells out broker duties to all parties in a transaction, while § 452.133(2) sets forth broker duties to clients. The word "broker" is somewhat confusing. Wis. Stat. § 452.01(2)(a) defines "broker" in terms of a "person," while the standard WB-1 Residential Listing Contract uses "broker" in terms of a firm with real estate agents.
At first glance, Wis. Stat. § 452.133(1) and (2) appear to clarify that it is the firm that owes duties to parties and clients:
OK, so licensees are responsible for their own misrepresentations, but firms are solely responsible for brokerage services? Not exactly. Enter brand new § 452.133(4m):
While the phrasing is rather clumsy, the gist appears to be that both real estate firms and individual licensees can be held responsible for breaching the duties owed under §§ 452.133(1) and (2). In fact, even licensees affiliated with the firm who do not provide actual brokerage services to anyone in the transaction can still be held personally responsible if they violate confidentiality, provide inaccurate information about market conditions per a party's request, or fail to safeguard trust funds. In sum, personal responsibility (and thus personal liability) for both real estate firms and individual licensees will apparently be the rule under Wis. Stat. § 452.133.