May 2010 - Wisconsin Real Estate Magazine by Lauren Bizorik

Protecting Homes

Lead-safe renovations and carbon monoxide alarms.

May 2010 $5.00

Shoreland Zoning

What property owners should know about new zoning standards.

MAGAZINE

exploring

Environmental Issues

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table of contents

may

features 6

The top 10 things property owners and REALTORS should know about Wisconsin’s new shoreland zoning standards. ®

Protecting Wisconsin Homes and Families

3-Bedroom, 2-Bath with Hardwood Floors and Meth Lab

14 23

Learn the ins and outs of lead-safe renovations and carbon monoxide alarms.

Recently proposed legislation requires sellers to disclose whether or not methamphetamine production has taken place on the premises.

vol.

26, no. 8

articles

New Shoreland Zoning Regulations

2010 |

26 28

Best of the Legal Hotline From nitrates in water to underground storage tanks, environmental questions are addressed.

Renewing Commitment to Homeownership Looking for ways to stir enthusiasm now that the homebuyer tax credit has expired? This month’s sales tip offers one solution.

Which Party Will Control the Wisconsin Legislature? With 14 key districts in the balance, the state’s fall elections could have far-reaching implications.

Pier Grandfathering Deadline Is Approaching Waterfront property owners with larger, existing piers should take notice: just one year remains.

Inside the Wisconsin Way: Part 2 A closer look at the plan to restore Wisconsin prosperity, with a focus on tax reform and modernization.

news.wra.org

News

inside the wra

with bill malkasian

Top News Stories in and Around the Industry

Top News Stories in and Around the Industry substantially increase funding for rental assistance, United Way Honors the Stark Family Wisconsin Receives Millions to Ease particularly help for working families. for Service to Foreclosure Crisis Returning to Wisconsin, the WRA board ach month, I have a chance to sit down with the WRA Milwaukee Business Journal (WI) (09/30/08) Community of directors met April 30. We focused on editor to write my column. Together, we reflect on United Way of Dane County NAR Releases Free FHA Toolkit The state of industry Wisconsinover is due receive nearly $39 the mid-year budget, and I am pleased to what has taken place in the thetopast

Wisconsin REALTORS® Association (10/30/08) in federal funds toupstabilize United Way of Dane C o u nand t ywhat million say that we are on the mark both in terms of month, of interest is coming in the neighborhoods and stave off a spate of abandoned homes. According recognized the Stark future. FamilyThis with the I’d 2008 membership and income We to made month, like to personally welcome our new editor, NAR and the projections. WRA are eager help you meet the to HUD and Gov. Jim Doyle, the funds are separate Tocqueville Society Award for outstanding service some major revisions to our investments and oureconomy. We Vanessa Merina. It is fitting that we wrote our first column together current challenges of the troubled from approximately $9.2 million the government is to the Dane County community and United Way. expenses are in line as well. Bottom line: we are in on Earth Day, April 22, as this issue of the magazine focuses on awarding the city of Milwaukee, where the foreclosure The Tocqueville Society Award celebrates and know that you need resources that can help you good the overall condition. the environment, areas impact9.9 us percent. as real HUD estateis awarding rate isthat currently acknowledges people or families, such as thespecifically Starks, close transactions, and you need them at little or no professionals. Insideofthis you will viafind: its Neighborhood Stabilization Program, who have made a major impact on the quality lifeissue,funds Looking ahead, onNAR May has 11 just we will release first quarter cost. released an all-new FHA Toolkit under which almost $4 billion is being allocated to in Dane County through their exceptional service 2010 housing numbers. I feel comfortable saying • An example of the new shoreland zoning requirements; online for FREE to help you get clients the that financing local and state governments for the redevelopment commitment to the community. Billand Malkasian these will be better than 2009’s numbers, and we will work of abandoned and foreclosed houses. they need in a credit-strapped environment. It is WRA President

•

Lead-safe renovations and new carbon monoxide rules;

City Housing Authority Receives Not legislation Just for Personal 100-Unit Grant • Examination of recentlySites: proposed regarding Milwaukee Journal Sentinel (09/25/08) Pabst, Georgia Connections Anymore methamphetamine disclosure;

with media throughout the state to promote our findings.

one of the most comprehensive toolkits NAR has

Finally, as we ever moveproduced, into June,and theit’s WRA will start preparing the ® available to all REALTORS budget. With behind us, there still also much to rightlots nowofbywork visiting the link below.isThey have Minneapolis-St. Paul Business Journal (09/29/08)new Grayson, The city of Milwaukee’s housing authority is due be done. I looklaunched forwardato updating you“NAR on our progress. • The second installmentKatharine on The Wisconsin Way, a new page called Helps You Navigate

to receive $6.7 million in federal Hope VI money collaborative effort theMinn.-based way we tax, spend ®and St. Paul, REALTOR Teresa Boardman to build 100 new housing units. The 100 units willto improve invest in will Wisconsin. says Flickr, Facebook and other social networking be constructed in a 2.5-mile area and include sites make it easy to meet people who might 29 public housing and affordable rental units; education, we areeventually featuringbecome some upcoming GREEN clients. While many professionals nine affordable housingSwitching units for toincome-eligible Sincerely, courses, including a 2-day green course August 18-19 andbusiness a are using these sites to make contacts families; and 62 moderately priced, open-market Green Residential 20. If you are this business, and companies useinthem to conduct background condominiums. HUD Secretary Steven C. Elective Preston on August checks orissue recruit workers, many simply want comments, “Milwaukee’sit ishousing authority has what important to understand a big thisnew is for all of us. to connect with people who have similar interests. demonstrated it has the leadership to lead and In other to remind to everyone that December Boardman, “The hard sell is dead. It revitalize neighborhoods and education transformnews, lives.I’d likeAccording 14 isand the grow last day renew license.work The door-to-door, WRA offers four andways it doesn’t Bill work on Cities like Milwaukee change andtoneed to yourdoesn’t social live, networks.” On Flickr, Boardman connected revitalize housing to make many your aren’tCE priced to sure complete requirements: self-study, DVD and on out.” Milwaukee is onedemand. of a half-dozen housing with more a fellow who eventually used her I encourage you to learn byphotographer going to http://www. authorities nationwide wra.org/CE. to receive new Hope VI services to purchase a home. grants.

Foreclosures Speaking of the association, there are a number ofPush items Rents I’d like toHigher, Housing Study Delay Frustrates Squeezing Income Families update you on: To begin with, the LegislatureLow has just completed Radio (MN) (09/21/08) Advocates its session, and I am happy toMinnesota say that Public we came out with manyOlson, Dan Milwaukee Journal Sentinel (10/07/08) successes.Williams, You willScott be hearing more about these in the near future.

In Minnesota’s Twin Cities, a wave of home Two years after promising the Milwaukee metro foreclosures has pushed more people into the rental Also, I in willthree be decades, traveling with approximately 70 result Wisconsin area’s first major housing study apartment sector. The is an intensifying ® REALTORS to Washington, duringon theMinneapolis week of May Here rental housing the Southeastern Wisconsin Regional Planning D.C.demand and10. St. Paul’s a short list of what on our agenda: Commission (SEWRPC) isis still struggling to getisthe stock, so much so that the vacancy rate is very low effort launched. Proponents hope the study will and rents are on the rise. This, in turn, means low• May 12: we’ll be visiting our working Congressional serve as a catalyst for improving affordable housing income families Delegation face higher monthly rents issuesBut of importance to our their industry. opportunities throughout thediscussing city’s suburbs. even though income hovers at unchanging commissioners have yet to assemble an advisory levels. Since 2005, the Twin Cities apartment May or 15:set there will be a national board of directors meeting committee to oversee the• research a specific vacancy rate has dipped from 7 percent to closer to in which weEvenson, will come together with leadersmonthly throughout theover that same timetable for conducting the survey. Phil 4 percent. Average rents country talkissues about important questions and challenges the commission’s executive director, said to other time span are up more than $25, rising to more beforehave us. frustrated keep getting in the way. The delays than $850. The St. Paul-based Wilder Foundation housing advocates the most. Bethany Sanchez, recently reviewed income data for several Twin Cities vice president of the Metropolitan Milwaukee Fair counties. The organization’s research found that the Housing Council, laments, “It’s been a long time number of people in those markets paying too much coming.” The Pewaukee-based commission has for their rental housing will double from around not conducted a comprehensive review of housing 70,000 currently to a whopping 140,000 by 2010. patterns since the 1970s. Some say a partial solution would be for the U.S. government to reverse course on housing policy and

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wisconsin real estate magazine wisconsin real estate magazine

may 2010 october 2009

the Current Economy” where you can find dozens of great products and resources, like the FHA Toolkit, for free or at a steep discount. Visit www.Realtor. org/NARHelpsYou for links to these great programs and products.

Home Loans Going Strong, Albeit a Bit Tighter, in Area Wisconsin State Journal (10/17/08) Balousek, Marv

Despite the ongoing national credit crisis, property professionals say mortgage money remains available throughout southern Wisconsin to home buyers with solid credit. Ron Steinhofer, manager of Marshall & Ilsley Bank’s regional home lending group, states, “There’s plenty of money for home loans out there. It is slightly more difficult to qualify than two or three years ago, but if you have a good credit score, a good job and a down payment, money is available.” Steinhofer adds that banks still are making loans via such programs as Fannie Mae and Freddie Mac. Furthermore, credit standards remain about the same as they were six months ago, meaning that qualified home buyers can get loans if they have the proper income verification. On the downside, banks have been less willing to make loans with higher loan-to-value ratios. In addition, conventional financing without a down payment has indeed disappeared. However, 100 percent financing is still available with Veterans Administration and Rural Development home loans.

news.wra.org news.wra.org

Real Estate

Wisconsin Real Estate Magazine™ is published by the WISCONSIN REALTORS® ASSOCIATION. Trademark issued pursuant to Wisconsin state statute; federal trademark is pending.

notes from the wra

John Flor, ABR, CRS, e-PRO, GRI, RRS, Chairman johnflor@sixlakesrealty.com

WRA Distinguished Service Award Applications Now Available

John Horning, Chairman-Elect jphorning@shorewest.com

The Wisconsin REALTORS® Association established The Distinguished Service Award at the January 1985 Board of Directors meeting. The purpose of the award is to recognize REALTORS® who have provided many years of leadership and distinguished service to the Wisconsin REALTORS® Association.

Robert Keefe, Treasurer rkeefe@keeferealestate.com William E. Malkasian, cae, President wem@wra.org

All current members, local association executives and employees of the Wisconsin REALTORS® Association with at least 5 years membership or employment are eligible. The application deadline is June 30, 2010.

Editorial Staff:

William E. Malkasian

Applications are available on the WRA website at: http://www.wra.org/inside_wra/DSA_criteria.htm

Publisher

Robert Uhrina Managing Editor

REALTOR® Magazine’s Good Neighbor Awards Seek Entries

Vanessa Merina Publication Editor

The National Association of REALTORS® is now accepting applications for the 11th annual REALTOR® Magazine Good Neighbor Awards. The awards recognize REALTORS® for their commitment to volunteer service.

Joe Leschisin Senior Designer Wisconsin Real Estate Magazine, USPS 597-850, ISSN 1548-0526, is published monthly by the WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run Road, Ste. 201, Madison, WI 53704. Periodical postage paid in Madison, WI and additional mailing offices. An annual subscription rate of $5 is included in membership dues and a copy is mailed to every paid REALTOR® and affiliate member of the association. Nonmember subscription rate: $60. POSTMASTER: please send address changes to the WISCONSIN REALTORS® ASSOCIATION, 4801 Forest Run Rd., Ste. 201, Madison WI 53704-7337.

The five winners will be announced in November in REALTOR® Magazine. Each winner will be recognized at the 2010 REALTORS® Conference & Expo in New Orleans and receive travel expenses to the conference, national media exposure for his or her community cause, and a $10,000 grant for the charity. In addition to the winners, five honorable mentions will each receive a $2,500 grant.

Permission to reprint or quote any material from this issue is hereby granted, provided the Wisconsin Real Estate Magazine is given proper credit in all articles or commentaries, and the WISCONSIN REALTORS® ASSOCIATION is provided with a copy of any reprint.

Good Neighbor Awards entries must be received by Friday, May 21, 2010. For more details and a nomination form, call 1-800-874-6500 or visit www.REALTOR.org/gna.

Advertising of third party products and services herein does not imply endorsement by the WRA unless specifically stated. Furthermore, the WRA does not endorse, approve, or otherwise warrant the accuracy or legality of any information or content contained in advertisements. Any questions regarding advertising policies should be directed toward the editor.

REALTORS® Tax Credit Campaign Delivers Message to Consumers Campaign wrap-up reports show consumers got the message when the WRA embarked upon a 10-month, $223,000 campaign to promote the industry’s biggest housing tax credit of our decade.

The campaign kicked off in June 2009 and was extended by the REALTORS® group in December 2009 to promote both the extension of the $8,000 first-time home buyer’s tax credit and the $6,500 homebuyer tax credit targeted at existing homeowners.

legal hotline: (608) 242-2296 • (800) 799-4468 general fax: (608) 241-2901 products/education fax: (608) 241-5168 legal hotline fax: (608) 242-2279

The second half of the campaign targeted statewide radio, web, traditional PR, downloadable media, online video and social media components. Statewide radio accounted for 9,990,000 impressions across 68 stations in Wisconsin. 15 spots aired per week over nine weeks for a total of 9,180 spots. WisconsinHomebuyer.org, the central hub for generating awareness, received 11,415 “unique” visitors. 86% of them were from new visitors, demonstrating strong continued interest over time. Web banner ads enjoyed similar results with a Click Thru Rate (CTR) of 0.11%, more than twice the industry average (.02-.05% AVG). Social media landed 766 Facebook fans and 440 Twitter followers. On Facebook, the fan page was visited 11,652 times and received nearly 120 interactions. Online alone, the campaign garnered more than two million impressions.

facebook: www.facebook.com/wisconsinrealtors twitter: www.twitter.com/wirealtors linked-in: www.wra.org/linkedin youtube: www.wra.org/youtube

3 wisconsin real estate magazine

may 2010

Chairman’s Corner

John Flor

ABR, CRS, GRI, RRS, and e-PRO

ello again, REALTORS®. As I sit here and write this column, the sun is shining, the ice is off the lake and the grass is greening up. Unfortunately, May has also brought the end of the Homebuyer Tax Credit that has been keeping many of you busy around the state. As you have probably already figured out, the tax credit is not going to be extended again, so it is time for real estate around the country to sink or swim without the help of the government. I am hoping that historically low interest rates, motivated sellers and a great selection of properties will still keep the buyers coming to closing table. One thing that continues to amaze me is the resilience and positive attitude that our REALTORS®, especially in Wisconsin, are showing through these tough times. Even though our numbers have thinned and the market is not recovering as quickly as we would like, the majority of you continue to look forward to the future with enthusiasm and hope. I must say that your positive attitudes are refreshing to see and will help all of us weather these difficult and changing times in real estate. Keep up the great work. As things continue to change in the real estate industry, I wanted to point out a new program that the federal government just enacted. It is called the Home Affordable Foreclosure Alternatives program or HAFA. It was enacted on April 5th and is intended to streamline the short sale and deed in lieu of foreclosure process. I think we all realize that foreclosures are going to remain a big part of what we are dealing with for the next few years, so I recommend you get familiar with this new opportunity. This program will hopefully make our jobs much easier in the area of short sale negotiation and third party bank acceptance. You can find plenty of information on the REALTOR. org website, and we published an article about it in your March issue of the Wisconsin Real Estate Magazine.

be a highly charged and active election season and I encourage each and every one of you to get involved. I get the feeling our members are going to be more interested and more educated on the issues and people that are running for office than they have been in years. As we get closer to election season, we will be talking to you about candidates that are good for real estate and your business. Currently, Bill Malkasian, John Horning (our incoming Chairman) and I are traveling the state conducting focus groups with younger REALTORS®. We expect to hear a variety of input from our more youthful members on subjects like: Association involvement, politics, communicating with the membership and how to deliver educational products in the best and most efficient way possible. I will make sure to update you on the outcome of those meetings as they progress. Finally, in May many of us will be converging upon Washington D.C. for the National Association of REALTORS® mid-year meetings. If you have never attended, I recommend that you add it to your to-do list soon. These meetings are a great opportunity to meet with our Senators and Representatives to discuss REALTOR® issues on a national level. In addition, it is a time to meet and discuss our Wisconsin issues with the leaders of NAR, through committee involvement and the NAR Board of Directors meeting. I look forward to seeing many of you there. Even though the tax credits have come to an end, keep up the hard work, positive attitudes and don’t forget to show your REALTOR® Pride every day.

John R. Flor

In Madison, the legislative season has wrapped up and things are now turning toward election politics. As you all know, this will most likely

wisconsin real estate magazine

may 2010

news.wra.org

REALTOR NEWSWIRE ®

Top News Stories in and Around the Industry

Green Tool Kit Helps Professionals Determine Home’s Energy Efficiency

Facebook, Social Media Changing Real Estate Business

Frederick News-Post (MD) (04/20/10) Waters Jr., Ed

Peoria Journal Star (IL) (04/19/10) Anandwala, Riya V.

Realty Times (04/16/10) Zeller, Dirk

The National Association of REALTORS® recently rolled out its Green MLS Tool Kit, a collection of guidelines and resources intended for use by property agents, builders, appraisers, and other industry insiders. Not only are real estate professionals becoming educated in the areas of energy efficiency and environmental impact as they pertain to building materials, residential design, and other aspects of their industry, but today’s Multiple Listing Service (MLS) formats now can support data on related features and amenities – including Energy Star appliances and efficient cooling and heating systems. Steve Seawright, a Maryland builder who helped develop the kit, said, “Though not the quick fix that builders and buyers of ‘green’ homes would like to see for the continuing problem of too many appraisers inadequately valuing the ‘green’ attributes of homes, the Green MLS Tool Kit will prove invaluable for having provided a road map that facilitates MLS systems across the land, collecting and reporting the data on home listings that will help home buyers, sellers, REALTORS®, builders and, especially, appraisers fully recognize and value the economic benefits of ‘green’ home construction.”

The number of home buyers searching for properties online surged to 90 percent in 2009 from just 2 percent in 1995, according to National Association of REALTORS® spokesperson Michelle Wardlaw. These days, most real estate agents market themselves and their listings on a personal Web site and communicate with clients through text messages. Others are taking their business onto social media sites, such as Twitter and Facebook, with Adam Merrick of Keller Williams Realty in Illinois handling 15 to 20 transactions via Facebook last year. Although technology is providing more options for agents to obtain new business and market listings, some still rely somewhat on face-to-face contact with clients, yard signs, and newspaper adds.

Real estate agents would be wise to weigh the pros and cons of working for firms of different sizes and types. Those who choose to work at a large firm benefit from a long history and good reputation in the local market and a hefty share of the market’s business. But while they might receive top-notch training during their first weeks, they will have to compete with hundreds of agents for the manager’s attention later on. Small firms are very different from one another when it comes to agent numbers and other features, so it is in a realty practitioner’s best interest to determine the brokerage’s longterm vision, niche, and compensation structure before signing on to ensure that these elements meet their personal goals. REALTORS® considering boutique firms with fewer than 20 agents are more specialized and niche-oriented than small firms and target high-end markets, meaning they are suitable for new agents only if quality training and a chance to work under the principle broker are offered. They also should understand that independent real estate firms are disappearing as firms with national brands become more popular. The business practices of these franchise firms vary even among those with the same brand name in the same market area, making it important for REALTORS® to research their options before making a decision.

Developing a Need for WHEDA Kenosha News (WI) (04/20/10) Olson, Matthew

The lack of private financing for real estate development has highlighted low-income tax credit projects from the Wisconsin Housing and Economic Development Authority (WHEDA). Housing developments in the state that include at least some units for low-income residents can apply for WHEDA tax credits. An applicant must agree to maintain a project for 30 years with either 20 percent of the units rented to residents below 50 percent of the county’s median income or 40 percent of units for tenants whose income does not exceed 60 percent of the county’s median income standards. The state agency has received 42 applications for these credits in 2010. City officials in Kenosha, Wis., believe the recent influx in these proposals is likely influenced by the lack of funding options for developers. “Given what we hear about banks being very picky in lending money, if you’re able to get an outside funding source, that seems to be the only thing working to get from point A to point B,” says Brian Wilke, Kenosha’s development coordinator. Bosman says most of the city’s recent large housing projects include WHEDA funding. “The only projects that we’re seeing are these government-assisted projects,” he notes.

No Place Like Homes Wausau Daily Herald (WI) (04/17/10) Imrie, Robert

Wisconsin real estate agents in the Wausau area are hoping that a surge in March home sales spells the beginning of an upturn in the market. Real estate agents sold 111 homes in the Wausau area in March, the most in that month since 2007, providing some evidence of a recovery. Along with the federal tax credits offered as incentives to stimulate home sales, lower prices, especially on homes worth more than $300,000 may have contributed to the uptick. “I know there were happy REALTORS® in the first quarter,” says Paula Hall, executive officer of the Central Wisconsin Board of REALTORS®. Ron Zahrt, president of First Weber Group, predicts April sales will be up from a year ago, and May and June could be up, too. “I think there is definitely more consumer confidence,” Zahrt says. Evidence of growing consumer confidence includes a 22.5 percent increase in March in report sales for the department store Kohl’s, compared with a year ago, along with a 10.3 percent increase for Target’s sales. Randy Cray, director of the Central Wisconsin Economic Research Bureau at the University of Wisconsin-Stevens Point, says the housing tax credits have worked to shore up the industry but it’s too soon to say whether the first-quarter rebound can be sustained. “We have yet to see any signs that the labor market is improving greatly. You would want to start to see the number of people being hired start going up and the unemployment rate going down,” he said. “There is a lot that has to be repaired before everybody feels that we are on firm ground.” Rob Rybarczyk, president of Coldwell Banker Action in Wausau, notes that last week his company 22 accepted offers on homes compared with just eight during the same week a year ago. “It is a buyer’s market,” Rybarczyk says. “It is not going to reverse itself right away.”

Comparing Different Kinds of Agencies

Clearly Independent Realtor (04/10) Vol. 43, No. 4, P. 8; Freedman, Robert

The federal government is taking steps to clear up misunderstandings about the independent contractor classification for tax, insurance, and healthcare purposes. The Obama administration’s fiscal 2011 budget calls for audits of 6,000 businesses to determine whether employees are misclassified as independent contractors, and legislation introduced by Sen. John Kerry (D-Mass.) and Rep. Jim McDermott (D-Wash.) would clarify the definition of independent contractors. Enhanced enforcement efforts likely will not affect real estate, as “sales associates’ status as independent contractors is very well defined in law and laid out very simply,” according to J.D. Rinehart, vice-chair of the National Association of REALTORS® Federal Taxation Committee. Sec. 3508 of the Internal Revenue Code says real estate brokers must hire sales associates with valid real estate licenses, inform them of their status as independent contractors, and have them acknowledge that they will be paid on a commission basis. Rinehart says brokers should review their hiring procedures and forms and ensure that sales associates retain documentation of business-related expenses to prove that they, and not the broker, covered those costs.

REALTOR® Newswire is a monthly news service prepared exclusively for the Wisconsin REALTORS® Association by Information, Inc. Reproduction, use, or inclusion of this material in other publications, products, services or Web sites is not allowed without prior written permission from the Wisconsin REALTORS® Association.

wisconsin real estate magazine

may 2010

The Top 10 Things REALTORS速 Should Know About the

new shoreland

by Tom Larson

n December, the Wisconsin Department of Natural Resources (DNR) adopted new changes to the state’s shoreland zoning regulations (NR 115). Counties have until January 1, 2012, to update their local shoreland zoning ordinances to bring them into compliance with these new standards. These new changes attempt to better protect water quality, wildlife and natural scenic beauty around our water resources by placing stricter standards on new development and construction near our waterways. Because these new changes could impact a prospective buyer’s ability to improve or expand waterfront property, REALTORS® should familiarize themselves with the changes. Background

Because the state shoreland regulations had not been updated in over 25 years, the DNR believed it was necessary to modify them due to increased development in shoreland areas and growing complaints about existing standards from both property owners and local governments. The revision process took over 7 years, with the DNR conducting approximately 30 public hearings and receiving over 50,000 public comments.

In 1966, Wisconsin adopted shoreland zoning regulations to control development along lakes and rivers in unincorporated areas and any area annexed or incorporated after 1982. Generally, these state regulations provide minimum standards for lot sizes, how far structures are set back from the water’s edge, and limits on removing trees and plants near the shoreline. Each county in Wisconsin (except Milwaukee County) is required to adopt and enforce shoreland zoning regulations that meet or exceed the state standards.

The final version of the regulations contains significant changes to the prior version. Counties have until January 2012 to update their shoreland zoning ordinances to meet or exceed the new state standards. Over the next two years, almost every county in the state will be revising their shoreland zoning ordinances. Accordingly, REALTORS® should work closely with their local counties to make sure the new shoreland zoning ordinances balance the need to protect our natural resources and the rights of property owners.

While many people believe that shoreland zoning regulations apply only to property adjacent to waterways, the regulations actually apply to all land within 1,000 feet of a lake, pond or flowage, and land within 300 feet of a stream or river. This means that all property within this shoreland zone is subject to the regulations even if the property is separated from the water by land, buildings or roadways.

zoning regulations wisconsin real estate magazine

may 2010

The Top 10 Changes to the State Shoreland Zoning Regulations The revised shoreland zoning regulations contain many new provisions. Again, it is important to remember that these are only minimum standards and counties have the authority to adopt more restrictive standards if they wish. Here are the 10 new changes to shoreland zoning that will likely have the biggest impact on property owners and REALTORS®:

1. New impervious surface standards will limit the size of new homes and remodeling projects within 300 feet of the water. For new construction and existing homes looking to expand within 300 feet of the water, no more than 15% of the lot (within 300 feet of the water) can be covered in impervious surfaces (concrete, black top, footprint of structure, etc.). This includes roof tops, sidewalks, driveways, patios, and any other surface that will not allow water to infiltrate the ground. The impervious surface limit is raised to 30% of the lot if the property owner meets mitigation standards established by the county. (Note: this provision is triggered only when an existing structure is expanded or replaced.) Any mitigation measures must be proportional to the amount and impacts of the impervious surface being permitted. If an existing home exceeds the 15% or 30% impervious surface standards, the home is effectively grandfathered and will not be required to be brought into compliance with the new standards. In addition, a property owner may reconfigure existing impervious surfaces (e.g., move a sidewalk from the east side to the west side of the house) without performing mitigation. Example – On a typical 10,000-square-foot lot (65’x154’), no more than 30% of the lot can be covered with impervious surfaces (with mitigation). This means that only 3,000 square feet of impervious surface is allowed. If you assume that the average driveway is 200 square feet (25’x8’), this means that you have 2,800 square feet to build a house, garage, driveway, patio and other impervious surfaces. (Note: a driveway, patio and sidewalk can be pervious if designed using the appropriate materials. However, these materials can be expensive.)

2. Unlimited maintenance and repair of ALL nonconforming structures is allowed. The new regulations eliminate the 50% rule, which limited repairs and expansions of nonconforming structures to 50% of the assessed value of the property during the life of the property. (A nonconforming structure is a structure that is not in compliance with one or more current zoning regulations (e.g., the seventyfive-foot building set back from the water)). This is a very important change for property owners who were often prevented from performing routine maintenance or minor expansions under the old regulations. Under the new regulations, nonconforming

wisconsin real estate magazine

may 2010

structures are allowed to be maintained and repaired without any limits on the amount or value of maintenance and repair work.

3. Homes located between 35 feet and 75 feet from the water can be expanded. The new regulations also allow nonconforming structures located between 35 feet and 75 feet of the ordinary high water mark (OHWM) to be expanded if they meet certain requirements. If the property owner wants to expand the structure behind a 75foot setback, the property owner may do so as long as he/she satisfies the impervious surface limit requirements. In addition, these homes may be expanded vertically (not horizontally) if the following requirements are met: (a) the vertical expansion is no higher than 35 feet; (b) the expansion is no closer to the water; (c) the expansion does not exceed the 30% impervious surface limit; and (d) the property owner agrees to perform mitigation, as determined by the county. Also, these homes may be expanded horizontally if: (a) there is not a “compliant building location” (at least 30 feet deep and meets setback requirements) on the property; (b) the expansion is no closer to the water; (c) mitigation requirements are met; and (d) the expansion does not exceed 30% impervious surface limit.

4. Homes located closer than 35 feet from the water cannot be expanded. The new rule prohibits any expansion (vertical or horizontal) if the home or structure is located within 35 feet of the water. By prohibiting any expansion of these structures, the rule effectively requires the house to be torn down and rebuilt behind the setback if the property owner wants to increase the size of the home.

5. New mitigation requirements are triggered when setback and impervious surface standards are not met.

Property owners must perform mitigation if they want to exceed the 15 percent impervious surface standard or expand nonconforming structures closer than 75 feet from the water. (See above.) All mitigation must be proportional to the anticipated impacts of the project. Mitigation standards will be established by the counties, but must meet goals established by the DNR including controlling rainfall runoff to the maximum extent practicable. Mitigation activities may include restoring a natural vegetative buffer along the shoreline, removing an accessory structure near the water, etc.

news.wra.org

8. Most existing substandard lots are grandfathered.

6. Mitigation plans must be recorded with the local register of deeds and disclosed. Property owners who agree to perform mitigation must record the mitigation plan with the local register of deeds. This means that the mitigation requirements will run with the land and will be applicable to future property owners as well. Because the mitigation requirements could impact a prospective buyer’s decision to purchase the property, a seller who has agreed to mitigation should disclose this information to prospective buyers. To assist in this disclosure effort, the real estate condition report will be amended to include this information.

7. New vegetation and removal requirements will create smaller views to water for some larger lots. Within 35 feet of the water, vegetation can be selectively removed or pruned only within a designated “view and access corridor.” Property owners may have a “view and access corridor” equal to 30 feet for every 100 feet of frontage, with a maximum of 200 feet. The limits on tree removal are very similar to current law, but will be more restrictive for large lots with more than 660 feet of frontage. (Note: this provision is triggered when nonconforming structures are expanded or when conforming structures are expanded/replaced and the impervious surface standards are exceeded). Vegetation cannot be removed outside the view access corridor, except in cases where exotic or invasive species need to be removed. Also, the law does not place any restrictions on vegetation removal further than 35 feet from the water.

wisconsin real estate magazine

may 2010

The new law grandfathers most existing substandard lots as long as the lots (a) met the lot-size requirements at the time the lots were recorded, and (b) have not been replatted, merged or combined in any way with adjacent lots. (Note: the lots must still meet all other applicable requirements in the county’s ordinance (e.g., impervious surface standards)). This is a very important provision because some counties have treated small waterfront lots as unbuildable if the lots do not meet the current lot-size requirements in the existing ordinance.

9. A nonconforming structure may be completely replaced or relocated under some circumstances. A nonconforming structure may be replaced (torn down and rebuilt), if (a) no other compliant building location is available on the property to build a house of comparable size; (b) the structure is at least 35 feet from the water; (c) the replacement structure is no closer to the water; (d) mitigation requirements are met; and (e) all other requirements in the ordinance are met.

10. Setbacks may be reduced under certain circumstances.

The 75-foot setback may be reduced (i.e., buildings can be built closer than 75 feet to the water) if “an existing development pattern exists.” The new law defines “existing development pattern” as the location of “existing principle structures within 250 feet of the proposed structure in both directions.” This is an important provision to protect the views for properties located on developed lakes and rivers, where neighboring houses are already built closer to the water. For more information on the new shoreland zoning regulations, please visit the DNR’s website at http://dnr.wi.gov/org/water/wm/ dsfm/shore/news.htm or contact Tom Larson (tlarson@wra.org) at (608) 240-8254. Tom Larson is Director of Regulatory and Legislative Affairs for the WRA.

legal

Protecting Wisconsin Homes and Families:

Lead-Safe Renovations and Carbon Monoxide Alarms By debbi conrad

Lead-Safe Renovations Many homes and apartments built before 1978 have lead paint or varnish on the walls, woodwork, windows and floors. In homes built before 1950 there is a greater chance the paint contains lead. Lead can harm children. Children under six years old can easily be poisoned by dust or chips from lead paint. If they play near windows and other places with worn-out or damaged paint, they can get lead dust on their fingers and toys. When children swallow lead dust it can cause illness and lifelong learning disabilities and behavioral problems. This serious danger first led to the lead-based paint disclosure rules that apply when a property built before 1978 is sold or rented, and now has led to the Lead-Based Paint Renovation, Repair and Painting (RRP) rule. Beginning April 22, 2010, renovation work, repairs and painting activities will be regulated when performed for compensation in a dwelling or childoccupied facility built before 1978 and it disturbs 6 square feet or more of paint per room, 20 square feet or more of exterior paint, or involves windows. This includes rental property owners, management companies, painters, carpenters, plumbers, etc. Is this a state or federal rule? Wisconsinâ&#x20AC;&#x2122;s RRP rule in Wis. Admin. Code ch. DHS 163 is administered and enforced by the Wisconsin Department of Health Services (DHS). Wisconsinâ&#x20AC;&#x2122;s rule is based on the EPA rule. On October 20, 2009 the EPA authorized the DHS to administer and enforce the state rule in lieu of EPA administering and enforcing the federal rule in Wisconsin. What training and certification are required to conduct regulated activities in pre-1978 housing and child-occupied facilities? Every regulated project requires at least one certified Lead-Safe Renovator to ensure compliance with the regulation, train uncertified workers and conduct final cleaning verification. This person must complete an accredited 1-day Lead-Safe Renovation training course and apply to the DHS for a Lead-Safe Renovator certification. For a list of approved trainers, visit www.dhs.wi.gov/lead/Training/index.htm.

wisconsin real estate magazine

may 2010

Does the RRP rule apply to homeowners conducting remodeling activities on their own single-family residence? No. The rule does not apply if the home is occupied solely by the owner and the ownerâ&#x20AC;&#x2122;s immediate family. If an owner hires a contractor to perform renovation, repair or painting work on a pre-1978 home, then training and certification is required. How is LBP defined? The Wisconsin threshold at which paint is defined as LBP is lower than the EPA standard. Wisconsin defines LBP as 0.7 mg/cm2 lead in dried film of paint or 0.06% lead by weight (600 ppm). The EPA defines LBP as 1.0 mg/cm2 lead or 0.5% lead by weight (5,000 ppm). The DHS will recognize paint test kits that detect lead to Wisconsin standards, but there currently are no Wisconsin-recognized test kits available. How does the RRP rule affect rental property owners? Rental property owners who conduct renovation, repair or painting activities on their rental properties or who have employees who do this work must comply with the RRP rule. By April 22, 2010, a rental property owner or a property management company must become a certified LeadSafe Company or hire only certified companies to do paint-disturbing work covered under the RRP regulation. The owner or management company must have at least one Certified Lead-Safe Renovator on staff or hire a Certified Lead-Safe Company that has a Certified Lead-Safe Renovator. Property maintenance personnel and renovators who are not trained in lead-safe work practices risk exposing themselves and occupants to lead at the job site and exposing their own families by bringing lead dust home on their work clothes. How do I find out more information on the RRP rule? Visit http://www.dhs.wi.gov/lead/RenovatorRule/index.htm or see the NAR Lead Paint Renovation Rule Compliance Guide (includes Webinars, videos, FAQs and more) at http://www.realtor.org/government_affairs/ lead_paint_main. news.wra.org

Carbon Monoxide Alarms You can’t see or smell carbon monoxide, but at high levels it is extremely hazardous and can kill a person in minutes. Carbon monoxide (CO) can be produced from the incomplete burning of fuels such as gasoline, kerosene, natural gas, oil, charcoal or wood. If appliances that burn fuel are maintained and used properly, the amount of CO produced is usually not dangerous. However, if appliances are not working properly, are poorly vented or are used incorrectly, dangerous levels of CO can result. Enclosed garages can be quickly engulfed in CO if automobiles are left idling inside. Hundreds of people die accidentally every year from CO poisoning caused by malfunctioning or improperly used furnaces, water heaters, gas stoves and other fuel-burning appliances. CO is the most common cause of fatal poisonings. It’s strongly recommended that all homes be equipped with a CO detector. CO detectors function similarly to smoke detectors and are available at most hardware stores. Wis. Stat. § 101.149 requires the installation of CO alarms in most residential buildings with three or more units that have fuel-burning appliances. The types of residential buildings subject to this law include tourist rooming houses (cabins), bed and breakfast establishments, and any public building used for sleeping or lodging, such as hotels, motels, condominiums, apartment buildings, dormitories, fraternities, sororities, convents, seminaries, jails, prisons, home shelters and community-based residential facilities. Hospitals and nursing homes are not included. Fuelburning appliances include stoves, ovens, grills, clothes dryers, furnaces, boilers, water heaters, heaters and fireplaces. The law required installation of CO alarms in most new residential construction beginning October 1, 2008; these alarms must be interconnected and continuously powered by the building’s electrical service and have a battery backup. For residential buildings existing prior to October 1, 2008, CO alarms were to be installed by April 1, 2010 in buildings with any type of fuel burning appliances. There is no mandatory type of power source for the alarms in these buildings, thereby permitting batteries, electrical outlet plug-ins or wiring to the building’s electrical service. Omission of CO alarms is allowed provided there are no attached garages, and there are no fuel-burning appliances or all fuel burning appliances are “sealed combustion” and are under warranty or annually inspected for CO emissions. For example, no CO alarms are needed if the building has electric heat and appliances and no attached garages. The owner of a residential building shall install a CO detector in all of the following places: 1.

In the basement of the building if there is a fuel-burning appliance in the basement.

Within 15 feet of each sleeping area of a unit that has a fuel-burning appliance (e.g., gas stove or fireplace). “Sleeping area” means the area of the unit in which the bedrooms or sleeping rooms are located. Bedrooms or sleeping rooms separated by another use area such as a kitchen or living room are separate sleeping areas but bedrooms or sleeping rooms separated by a bathroom are not separate sleeping areas.

Within 15 feet of each sleeping area of a unit that is immediately adjacent to a unit on the same floor that has a fuel-burning appliance. wisconsin real estate magazine

may 2010

Not more than 75 feet from the fuel-burning appliance in each room that has a fuel-burning appliance and that is not used as a sleeping area (kitchen, living room, mechanical room, etc.).

In the hallway within 75 feet of the door to a unit that has a fuelburning appliance (in each hallway leading from the unit), except that if there is no electrical outlet within this distance, the CO detector shall be placed at the closest available electrical outlet in the hallway.

If a unit is not part of a multi-unit building, the owner need not install more than one CO detector in the unit. The owner of a residential building shall reasonably maintain every CO detector in the residential building in the manner specified in the instructions for the CO detector. An occupant of a unit in a residential building may give the owner written notice that a CO detector in the building is not functional or has been removed by a person other than the occupant. The owner must repair or replace the nonfunctional or missing carbon monoxide detector within 5 days after receipt of the notice. The recently-enacted Wis. Stat. § 101.647 will require CO detectors in ALL dwellings that have fuel-burning appliances, a fireplace or an attached garage effective February 1, 2011. This affects both existing and newly constructed owner-occupied or rented single-family or two-family dwellings. See “New Law Will Require Carbon Monoxide Detectors in All Homes” in the April 2010 edition of the Wisconsin Real Estate Magazine, online at http://www.news.wra.org/story.asp?a=1302. For additional information, see the DHS Carbon Monoxide fact sheet at http://dhs.wi.gov/eh/ChemFS/fs/CO.htm and the CO alarms brochure at http://commerce.wi.gov/sb/docs/SB-PubCarbMonoBroch209.pdf Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.

legal

3-Bedroom, 2-Bath with Hardwood Floors and Meth Lab By cori lamont

In today’s real estate practice, environmental issues like asbestos, mold and radon have become commonplace discussions. Recently, however, the term “meth lab” has been creeping more and more frequently into the world of real estate. According to the Wisconsin Department of Justice, the incidence of methamphetamine (meth) production is relatively low in Wisconsin when compared to other states; but it is on the rise. Meth is a man-made amphetamine, produced and sold illegally in the form of pills, powder or chunks. Common street names for meth include “speed,” “crank,” “ice,” “glass” and “crystal.” Homemade meth is produced in makeshift labs set up in homes, apartments, hotel rooms, mobile homes or other buildings. Although the ingredients used to produce meth are readily available, many of the chemicals used in the “cooking” process can be harmful. Short-term exposure to high concentrations of chemical vapors in a functioning meth lab can cause severe health problems or even death. For this reason, meth “cookers,” their families, and first responders are at highest risk of acute health effects including lung damage and chemical burns to different parts of the body. Unsuspecting people can also touch residues of meth and have symptoms similar to those experienced by meth users. The “cooking” process to make meth may release toxic gases and hazardous waste materials in the lab and throughout the building. There have been reported cases of illness resulting from lab residue and some reports of structural property damage have been documented. This contamination

wisconsin real estate magazine

may 2010

needs to be cleaned up, and any sanitation, electrical and other safety hazards must be addressed. The Department of Public Health recommends that environmental companies that specialize in hazardous material cleanup undertake any meth lab remediation. Once the main chemicals related to the former lab have been removed, the health department is typically called in to assess the property for hazards and long-term exposure risks from residual chemicals. The Department of Natural Resources may also be called in to assess any environmental impacts from chemical spills or improper waste disposal. When listing a property that has been used to manufacture meth, the broker should see if any reports from these agencies are available to use as a disclosure document. There are no pre-determined, acceptable levels of cleanup inside a building or home for the many chemicals associated with meth labs. Thus, testing can be done after cleanup, but at this time the Department of Health and Family Services does not recommend it. Due to the rising concerns relating to meth labs in Wisconsin real estate, a bill has been proposed that would require residential sellers and news.wra.org

landlords to make specific disclosures regarding the manufacturing of methamphetamine on the property. On March 11, 2010, Assembly Bill 836 was introduced, proposing the modification of two state statutes to include such disclosures: Wis. Stat. § 704 and Wis. Stat. § 709. The proposed change to Wis. Stat. Chapter 709, Disclosure by Owners of Residential Real Estate, would include an additional item to the Real Estate Condition Report (RECR). The RECR is required of sellers of properties that contain one-to-four dwelling units, subject to certain exceptions. The additional item, 17m, would be included to read, “I am aware that methamphetamine has been manufactured on the property.” Wis. Stat. Chapter 704, Landlord and Tenant, would create the new subchapter of § 704.47. The language of 704.47 would read: “Disclosure of methamphetamine manufacture (1) If a landlord of residential rental property is aware that methamphetamine has been manufactured at any time on the rental property, before entering into any rental agreement with a prospective tenant of the rental property or before the commencement of any periodic tenancy or tenancy at will with respect to the rental property, the landlord shall disclose to the prospective tenant in writing that methamphetamine was manufactured on the property. (2) If the rental property contains more than one dwelling unit, the landlord is required to provide the disclosure under sub. (1) Only to a prospective tenant of the dwelling unit in which the methamphetamine was manufactured.” The disclosure would be required on the RECR and tenancies and rental agreements as of the effective date established in the bill. A property owner who has furnished an RECR to a buyer before the effective date would not need to amend the RECR to add this disclosure. The bill was not passed this legislative session, but will be revisited in January 2011.

of Wisconsin

The following are signs that meth may have been manufactured in a property: •

Yellow discoloration on walls and other surfaces.

•

Taped-off fire detectors.

•

Symptoms such as burning eyes, an itchy throat or a metallic taste in the mouth while in the property.

•

Strong odors similar to solvent, cat urine or ammonia.

•

Presence of security cameras or other surveillance equipment.

If the seller does not disclose the property’s history, REALTORS® should generally disclose the current or prior presence of a meth lab on the premises as information suggesting the possibility of a material adverse fact and recommend that the parties obtain expert assistance to inspect or investigate. The broker can contact local law enforcement or the health department. The property could be tested. For additional resources regarding meth lab clean up and identification, see: •

The “Cleaning Up Hazardous Chemicals Meth Labs” fact sheet at www.dhfs.state.wi.us/eh/ChemFS/fs/MethClnUp.htm

•

The Minnesota Department of Health at www.health.state.mn.us/ divs/eh/meth

•

The National Association of REALTORS®’ “Field Guide to Meth Labs” at www.realtor.org/libweb.nsf/pages/fg324

Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA. wisconsin real estate magazine

may 2010

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legal

best of the legal hotline

with tracy rucka

The following questions have been recently submitted to the Wisconsin REALTORS® Association in regard to important environmental issues.

Nitrates in the Water

Chinese Drywall The broker has heard reports that there are remediation standards for homes containing Chinese drywall. How can a homeowner know if there is defective drywall and what are the recommendations for remediation? In January 2010, the United States Department of Housing and Urban Development (HUD) and the U.S. Consumer Product Safety Commission (CPSC) issued guidance for identifying problem drywall in homes. Signs to look for include the blackening of copper electrical wiring and/ or air conditioning evaporator coils, and the installation of new drywall between 2001 and 2008. Chinese drywall often creates a sulfur, or rotten egg, smell in the home. The full guidelines are available online at http:// portal.hud.gov/portal/page/portal/HUD/documents/ InterimIDGuidance012810.pdf. In April 2010, HUD and the CPSC issued interim remediation guidance for homeowners attempting to rid their properties of problems resulting from installation of defective drywall. The interim protocol recommends that consumers remove all possible problem drywall form the home. In addition, homeowners should replace electrical components and wiring, gas service piping, fire suppression sprinkler systems, smoke alarms and carbon monoxide alarms. The Drywall Information Center web site at http:// www.cpsc.gov/info/drywall/index.html has been created to assist homeowners with health and safety resources. More information about Chinese drywall is available in the August 2009 Legal Update, “Environmental Concerns 2009,” at http://www.wra.org/legal/Legal_Updates/pdf/2009/ August2009LU.pdf.

wisconsin real estate magazine

may 2010

The offer to purchase included the Addendum B standard safe water test contingency (for Coliform/E. coli only). Although the plumber who was hired by the sellers was told to test for only Coliform/E. coli, he made a mistake and had the nitrate level tested as well. The test results came back bacteriologically safe, however the nitrate level was over 15 parts per million (over the 10 parts per million recommended by the EPA). The broker assumes that the sellers will now need to disclose this to the buyer since it is now a known defect. However, if the buyer requests it, do the sellers then have the responsibility to remedy the issue since it was unknown at the time the offer was written? Or, since the issue was not part of the original offer, would it be the buyer’s responsibility? Wis. Stat. § 709.035 requires the sellers to amend the Real Estate Condition Report (RECR) prior to the acceptance of a contract if the sellers obtain information or become aware of any condition that would change a response on their RECR. The sellers may choose to attach a copy of an inspection report or test results to the RECR to accomplish disclosure for future transactions. If the sellers amend the RECR for this transaction, it would give the buyer the right to rescind the offer to purchase. If the seller does not amend the RECR, the broker in the transaction has a duty to disclose material adverse facts to the parties, in writing and in a timely manner. If the sellers fail to make complete disclosure, the licensee is required to disclose the material adverse facts revealed in the inspection report. The broker may refer to Legal Update 02.12, online at www.wra.org/LU0212, or ZipForm for a sample material adverse fact disclosure letter. The presence of the higher nitrate level may be treated as a mutual mistake of fact because neither party apparently was aware of this at the time the offer was written and accepted. When both parties are mistaken as to a basic factual assumption on which the contract was made and the mistake has a material effect on their performances, the contract is voidable by the party adversely affected. Under this theory, both parties must have been mistaken. A mistake by only one of the parties makes a contract voidable only if the party who causes the mistake has reason to know the other party is proceeding based on that mistake. The mistake must be based upon a past or present fact. For additional information and resources, see the April/May 2008 Legal update, “Addendum B Revisions: Wells and POWTS,” at www.wra.org/LU0804 and the Department of Natural Resources information at http://dnr.wi.gov/ org/water/dwg/priweltp.htm. news.wra.org

Underground Storage Tank The broker is working with a seller who, the broker believes, took out an underground storage tank (UST) without using a certified tank remover. The broker is going to have the sellers disclose this to the potential buyer. What are the ramifications for the new owners if the prior owner didn’t properly remove the UST? An out-ofservice UST used for storing heating oil or an out-of-service UST of 1,100 gallons or less used for storing motor fuel for noncommercial purposes is required by Wisconsin law to be registered and closed (usually removed) by a certified tank professional. According to the Department of Commerce (DComm), which administers the UST regulations, the best thing to do if an abandoned UST is discovered is to call a certified tank remover. The certified UST remover can give estimates for the work needed to be done to comply with the UST regulations, handle the notifications and paperwork required, remove and properly dispose of the UST and generally see that the job is done properly. If the UST is removed without complying with the UST regulations, licensees will generally be obligated to disclose this fact to all parties pursuant to Wis. Admin. Code § RL 24.07(2), and buyer financing may be jeopardized without expert confirmation that there was no leakage or contamination from the improperly removed UST.

The DCOMM UST Closure page (http://commerce.wi.gov/ER/ER-BSTClosure.html) includes the following information about the implications of self help removal and transfer of property:

Abandoned Wells

I was not aware of the rules and had my tank removed by a contractor who is not certified. What do I need to do to satisfy the requirements?

The broker has a property with a well in a shed that is no longer used. The seller has disclosed this in the Real Estate Condition Report (RECR). What must she do to have the abandoned well closed?

“The remover must complete the Removal Checklist (ERS-8951) and the owner must complete the tank inventory form (ERS-7437). Both forms must be submitted to Commerce along with a letter explaining the circumstances. Upon review of all information submitted, Commerce will determine if the removal and documentation are satisfactory. A site assessment may be ordered to satisfy the closure, in the case where it would not have been required if procedures under the rule had been complied with.”

Abandoned wells can pose a threat to ground water quality and safety and must therefore be properly closed. According to the DNR, when a well is removed from service it must be removed/closed. The abandonment of the well, not the sale, triggers the necessity to remove the well. The abandonment procedures are set forth in Wis. Admin. Code chapter NR 814. Although the DNR does not mandate abandonment before sale, local ordinances may contain this requirement. The broker may refer the parties to the local municipality to determine if the wells must be abandoned before the sale of the property. More DNR information about well abandonment may be viewed at http://dnr.wi.gov/org/water/dwg/Forms/ wellabandonment.pdf and http://www.dnr.state.wi.us/org/ water/dwg/wellaba.htm. Additional information is available on pages 4-5 of the April 2008 Legal Update, “Addendum B Revisions: Wells and POWTS,” at www.wra.org/LU0804 and Legal Update 02.10, “Drinking Water and Wells,” online at www.wra.org/LU0210.

wisconsin real estate magazine

may 2010

What is a closure “site assessment”? “Soil samples from the tank bed are collected by a Certified Site Assessor following Wisconsin DNR protocol. The results of soil sample analysis will determine if further investigation of site contamination is necessary.” I purchased property with an out-of-service UST. Since I have never used the tank, am I responsible for having to close the tank now? Will I be held responsible for any contamination that may be present? “The property owner of record at the time the noncompliance becomes a regulatory issue is responsible for compliance and environmental remediation. Legal action against the previous owner by the current owner may be an option to recover costs.” See http://commerce.wi.gov/ER/ER-BST-Closure.html and http:// commerce.wi.gov/ER/ER-BST-ResTk.html for further information.

legal

Asbestos The home inspector indicates that the insulation in the attic appears to be vermiculite and tells the buyer that the EPA Web site states that if there is vermiculite insulation in a home it should be assumed to contain asbestos. The buyer requests that the seller pay for the insulation to be tested and, if found to contain asbestos, that the seller pay to remove the asbestos. What is the seller’s legal obligation and, if this deal falls through, what—if anything—is the seller obligated to disclose? Asbestos cannot be identified simply by looking at it unless it is labeled, so the only way to know for sure is to get a sample analyzed. Generally, only

Radon Testing

asbestos material that is damaged or will be disturbed need be tested.

The buyer was told that a radon test should be taken in the

Undisturbed asbestos which is in good condition typically will not release

lowest finished living space and not the basement if the

asbestos fibers and may best be handled by leaving it alone. Problems with

basement is not finished. Is there anything to this belief?

friable or damaged asbestos may be treated by either repair or removal. Repair

A radon test per federal law is to be taken at the lowest living level. This generally means the basement, regardless of

However, under the newly revised asbestos rules in Wisconsin that

whether it is finished, partly finished, or not finished at all.

went into effect on May 1, 2009, vermiculite insulation is assumed to be

The EPA Web site at http://www.epa.gov/radon/pubs/ hmbyguid.html#3.b. states: “Make sure that the test is done in the lowest level of the home that could be used regularly. This means the lowest level that you are going to use as living

asbestos-containing material unless proven otherwise in accordance with EPA recommended sampling and analysis protocols specific to vermiculite insulation. At this time, EPA has not published any official guidance for sampling and testing vermiculite insulation. Therefore, vermiculite insulation must be treated as asbestos-containing material. This may

space whether it is finished or unfinished. A state or local

necessitate the use of certified asbestos workers for any projects disturbing

radon official or qualified radon tester can help you make

or impacting the insulation. Information about the new asbestos rules and

some of these decisions.”

certification requirements for asbestos workers is found at http://www.dhs.

The EPA Web site advises that, “The test kit should be placed in the lowest lived-in level of the home (for example, the basement if it is frequently used, otherwise the first floor). It should be put in a room that is used regularly (like a living room, playroom, den or bedroom) but not your kitchen or bathroom” at http://www.epa.gov/radon/pubs/citguide. html#howtotest.

usually consists of sealing or covering the asbestos-containing material.

wisconsin real estate magazine

wisconsin.gov/asbestos/. For more information regarding asbestos, see the Wisconsin Asbestos page at http://dhs.wisconsin.gov/asbestos/index.htm, the EPA Asbestos information at www.epa.gov/asbestos, the August 2009 Legal Update, “Environmental Concerns 2009,” at www.wra.org/LU0908 and Wis. Admin. Code Chapter DHS 159 (repealed and recreated effective May 1, 2009) at www.legis.state.wi.us/rsb/code/dhs/dhs159.pdf. Tracy Rucka is Director of Professional Standards and Practices for the WRA.

may 2010

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Appraisal CE Courses - 9/28 Two-Fer Pricing WRA Appraisal Section Member  Class Only $ 134 $ 144 $ 154 $ 174  Class w/ Convention $ 144 $ 154 $ 164 $ 184  2nd WRA Member* .....$ 90 WRA REALTOR® Member  Class Only  Class w/ Convention

$ 144 $ 154

$ 154 $ 164

$ 164 $ 174

$ 184 $ 194  2nd WRA Member* .....$ 100

Non-Member  Class Only  Class w/ Convention

$ 154 $ 164

$ 164 $ 174

$ 174 $ 184

$ 194 $ 204

• Real Estate Continuing Education – Four of Six courses included in Full Convention Pass - MUST register in advance - first come, first served! • Access to Indoor Theme Park following Chairman’s Dinner - 9/27 Event Fee – Per Person: Golf (9/26) ��$98 Wild Rock Golf Club - Wisconsin Dells  Member One  2nd WRA Member Chairman of the Board’s Dinner (9/27) ��$49  Member One  2nd WRA Member CRS Luncheon (9/28) ��$22  Member One  2nd WRA Member  Special Services: Check here if you require special services to attend. Attach written description of needs. Cancellation Policy: The WRA reserves the right to cancel courses if not filled. Cancellations must be made in writing prior to September 26, 2010 and will be refunded, minus a $25 administration fee. Registrations cannot be transferred from person to person.

PAYMENT: Register by Mail: Wisconsin Realtors® Association 4801 Forest Run Road, Suite 201 Madison, WI 53704-7337

Total amount $__________________  Enclosed is my check made payable to the WRA  Charge my VISA / MasterCard (circle one) Card Number �� Exp. Date___________

>>Technology Corner Engaging Prospects through the Facebook Community: Part 1 By Rob uhrina

Facebook page. It looks like a great trip. Where did you get that picture of the waterfall with the mountain in the background?”

These days it seems like everyone is talking about Facebook. With over 400 million active users worldwide and 120 million in the U.S. alone, Facebook is the largest, free social networking site on the planet (Facebook, May 2010).

It’s also a place to connect with brands. Whether you are an advocate of Nike, Best Buy, Macy’s, the Green Bay Packers or a local microbrewery, Facebook allows you to have a personal one-on-one relationship with your favorite brands so you can keep up-to-date on their products or services. For example, by connecting with Nike, you get a newsfeed that tells you about the upcoming shoes in production for the fall season. Just the same, when you connect with Best Buy, you get tips on how to buy computer electronics, take advantage of rebate programs and get in the know about special in-store promotions.

Facebook’s fastest growing demographic is between the ages of 35-54 years old. 12% of Facebook’s visitors visit it at least once a day (Quantcast.com). Social media and text messaging are now the communication tools of choice for Y-Gens. Currently, more than 100 million users access Facebook through their mobile devices. What tool do you communicate with? Will you be ready for Y-gens when they enter the market? Guess what, they’re already here. With such compelling statistics and the fact that Facebook hit 100 million users faster than any other medium predating social media, it leaves many REALTORS® wondering if it’s a passing fad. Can you really make money using Facebook? What about privacy? Is there even time to do this?

Speaking of brands and commerce, let’s revisit “making money” or what I’ll refer to as ROI. When was the last time you asked your significant other, what’s the ROI of your relationship? Please don’t try this at home. This same question applies to social media. Consumers are connecting with you, their potential REALTOR®, on a personal level. The key here is to avoid behaviors that demonstrate to others that you are trying to monetize relationships on Facebook. It’s the fastest way to become “unfriended.”

All good questions. Fad or no fad, it’s just another piece of today’s integrated marketing approach. Social media may not be your favorite medium, but it’s a powerful tool and it’s catching on fast. As a comparison, if Facebook were a country, it would be the world’s third largest country behind China and India. In the U.S. alone, its user base is more than 10 times the population of New York City. Where many professionals struggle initially with Facebook is in their approach. It’s not just a Web site where you post status updates, make friends and aggressively cultivate prospects. It’s a place where you develop personal relationships. It’s a place to make better connections with people. It’s a place to enrich your day-to-day discussions. Of the top reasons why folks use Facebook, it’s to share experiences, reconnect and have conversations with old friends and find people with similar interests. Again, it’s personal. People today have more of a tendency to say, “I saw you went on vacation on your

convert them into prospects? First, remember the phrase, “top of mind.” The more you can keep your name “top of mind” with a consumer, the more they will think of you when they go to buy or sell a home. Be sure to put your Facebook information on all of your business cards, your website, your signature block, your ad and anywhere you promote your business. So why should consumers connect with you on Facebook? First, consumers don’t operate in 30-day cycles and wait for your newsletter to arrive in their mailbox. The world operates in “real time” and this is the way today’s consumer expects it. Facebook, and more broadly, social media combined with mobile technologies, puts your message in front of prospects immediately. Many REALTORS® use Facebook to generate back links to their own Web sites. One strategy is to publish a blog on your Web site and drive traffic back to it from Facebook. The goal here is to demonstrate both your knowledge and expertise and hopefully generate traffic to your listings. Even if prospects don’t immediately view your listings, it’s okay. After a few good blog entries, you will be able to “brand advocates” without ever doing business with them and build your credibility as a sales agent.

Today, the largest demographic on Facebook is between the ages of 18-34 which makes up 38% of all U.S. homebuyers (NAR, Profile of Homebuyers Report). The median household income of homebuyers according to NAR is $74,900. Over 59% of Facebook’s users earn over $60,000 (Quantcast. com), making Facebook a matched demographic for homebuyers. Make it your goal to connect with this growing audience and engage their thoughts and opinions. See it as an opportunity to demonstrate your expertise. In your absence, they may in fact connect with another REALTOR® in your market.

This leads into consumer behavior and buyer cues. In the world of e-commerce, the social media paradigm has shifted how people make decisions. Increasingly, consumers on Facebook are taking cues from one another. For example, if someone posts on Facebook that they had a terrible experience with an airline, that message is fed to all their connections and instantly paints a bad impression of that company, tarnishing their image and reputation maybe indefinitely. Conversely, if someone brags about a transaction you facilitated, positive word of mouth goes a long way in the online world. Ask satisfied customers to publish their thoughts on your page.

Second, the Facebook community is chock full of homebuyers. But the real question is, how do you

One misconception about Facebook is that many people think of it in terms of how much they have to Facebook ... continued on page 27

wisconsin real estate magazine

may 2010

education

QuickStart Distance Learning Available On Demand The QuickStart program is designed to assist agents in learning the business of real estate. QuickStart Distance Learning On Demand is the most convenient method available to complete the QuickStart program. The program begins with building relationships with buyers and sellers including prospecting, pricing properties, responding to concerns and making presentations to buyers and sellers. The course includes contract issues, agency relationships and negotiating strategies. The QuickStart program also discusses various methods of communication, goal setting, time management and incorporating technology into a real estate agent’s business plan. The program is designed to help agents become confident in their practice as well as focused on their personal business plan. Offered in video format reinforced with independent exercises, On Demand offers the same great quality education found in the classroom setting but in the comfort of your own home, office or wherever there is a broadband connection. You will learn from the same experts who teach the classroom courses. The instructors are real estate professionals who teach with energy and enthusiasm. Together with their experience and training, you’ll learn from the best. How does QuickStart On Demand work? It is simple! 1.

Watch the course (each course is broken into five video chapters varying in length from forty minutes to one hour).

Take a short quiz at the end of each chapter.

Take a 15-question multiple choice exam after passing all chapter quizzes.

Print your certificate after passing the exam.

Print your GRI Course 1 certificate after passing all four course exams.

Upon completing the four modules and passing the exam, agents can receive credit for the completion of GRI Course 1. The fee is only $240; however, the WRA offers a New Member Discount of $40 – Cost of this course is only $200. A fantastic price for 4 days of instruction for your new agents.

Sales Pre-License Course July 19-22; 26-29, 2010

ABR Course August 4-5, 2010

WRA Headquarters - Madison

To obtain a real estate license in the state of Wisconsin, you must first complete 72 hours of approved education courses such as our sales and prelicense course. Second, you must pass a state-administered exam. The WRA will be offering an 8-day Accelerated 72-Hour Sales program on July 19-22; 26-29, 2010. Brokers can purchase a $50 discount coupon for only $10, which entitles your new recruit to a $50 discount on the registration fee. Your new recruits can be ready to take the exam as soon as they complete the class. Ask them to call and register today: 1-800-279-1972! This program is also available through self-study video (DVD) or a self-study Internet program.

GREEN (2-Day) Course August 18-19, 2010 WRA Headquarters - Madison NAR’s GREEN designation gives you the tools you need to guide clients through buying, selling, or building in the sustainable marketplace. You will learn how to explain to your clients what makes a home, building or property green; list and market green properties; determine the energy efficiency of a property, and more. For more information, visit: www.wra.org/Green

wisconsin real estate magazine

may 2010

The Accredited Buyer Representative (ABR) designation is the benchmark of excellence in buyer representation. The overall goals of the ABR Designation courses are to educate and prepare buyer representatives to provide the kind of service and fidelity to buyers that seller have always enjoyed, and to offer methods for building your buyer representation business. Visit: www.wra.org/ABRcourses

GREEN Residential Elective August 20, 2010 WRA Headquarters - Madison NAR’s GREEN Designation Residential Elective Course gives you the knowledge and awareness of green building principles applied in residences so that you can guide buyerclients in purchasing and retrofitting green homes as well as help sellers by listing and marketing green properties. For more information, visit: www.wra.org/Green

news.wra.org

Course Schedule

Visit wra.org/CourseSchedule for full schedule.

Sales & Marketing Management Date Course Location

*Fulfills core education for NAR new Short Sales and Foreclosure Resource (SFR) certification ** Early registration applies two weeks prior to the start of the course. ***Includes Convention Registration.

August 4-5, 2010 August 18-19, 2010 August 20, 2010 September 26-27, 2010 # Appraiser section members receive a discount. September 26-27, 2010 September 26, 2010 September 27, 2010

ABR Course (2-day) Madison 260 GREEN (2-day) Madison 285 1-day GREEN Residential Elective Madison 130 Ninja Selling 1 and Ninja Selling 2 Wisconsin Dells ***330 CI Intro to CCIM Wisconsin Dells ***330 *1-day ABR Elective: Short Sales & Foreclosures Wisconsin Dells ***169 *CRS 111: Short Sales & Foreclosures: Protecting Wisconsin Dells ***169 Your Clients Interests (CRS Core 1-day class )

Conference and Conventions

Date Event

Real Estate Continuing Education

Date

Course

May 3, 2010 May 5, 2010 May 6, 2010 May 12, 2010 May 12, 2010 May 12, 2010 May 12, 2010 May 13, 2010 May 19, 2010 May 19, 2010 May 19, 2010 May 20, 2010 May 20, 2010 June 2, 2010 June 3, 2010 June 4, 2010 June 16, 2010 June 22, 2010 June 25, 2010

2009-10 Electives A & C 2009-10 Courses 2 & 1 2009-10 Courses 2 & 1 DVD 2009-10 Course 4 2009-10 Courses 2 & 1 2009-10 Courses 1 & 2 2009-10 Courses 4 & 3 DVD 2009-10 Courses 3 & 4 2009-10 Electives A & E 2009-10 Courses 4 & 3 2009-10 Courses 1 & 2 2009-10 Courses 3 & 4 2009-10 Electives C & A DVD 2009-10 Courses 4 & 3 2009-10 Electives B & D 2009-10 Courses 1 & 2 DVD 2009-10 Electives B & D 2009-10 Electives A & C DVD 2009-10 Courses 3 & 4 DVD

*Approved for Minnesota Real Estate Credit.

Check out the Appraisal Continuing Modules available by DVD and Online. Appraisal Continuing Education

ATD

270 290 295 315 140 160 340 370 340 370 179 209 179 209

Location

September 26-28, 2010 WRA Annual Convention

Elective A: Elective B: Elective C: Elective D: Elective E:

Early Reg.** $Reg.

Wisconsin Dells - Kalahari Resort Location 8:30 – 4:30 8:30 – 4:30 9:00 – 4:30 8:30 – 4:30 8:30 – 4:30 8:30 – 4:30 9:00 – 4:30 8:30 – 4:30 8:30 – 4:30 8:30 – 4:30 8:30 – 4:30 8:30 – 4:30 9:00 – 4:30 8:30 – 4:30 8:30 – 4:30 9:00 – 4:30 8:30 – 4:30 9:00 – 4:30 9:00 – 4:30

La Crosse Madison Kenosha Sheboygan Brookfield Hayward Kenosha Hayward Hayward Brookfield Wausau Wausau Kenosha Madison Brookfield Kenosha Madison Kenosha Kenosha

608-785-7744 800-279-1972 262-942-0592 920-457-7908 800-279-1972 715-835-0923 262-942-0592 715-835-0923 715-835-0923 800-279-1972 800-279-1972 800-279-1972 262-942-0592 800-279-1972 800-279-1972 262-942-0592 800-279-1972 262-942-0592 262-942-0592

Location

Thru 7-31/2010

$27/m; $35/nm $27/m; $35/nm

$27/m; $35/nm $27/m; $35/nm $27/m; $35/nm $27/m; $35/nm $27/m; $35/nm $27/m; $35/nm

Risk Reduction 1031 Exchanges and Exchange Opportunities Condominiums Landlord/Tenant and Property Management Financing the Sale

Date

Course

September 28, 2010 Foreclosures and Short Sales 8:30 – 4:30 Wisconsin Dells $134 - Section Member Challenges and Solutions $144 - WRA Member (submitted for approval) $154 - Non Member $ Early Reg.** $ Regular Reg. Pre-License Date Course Location * Plus books July 19-22; 26-29, 2010 Sales Pre-License Course 8:00 - 5:00 Madison 325* 325* August 9-12, 2010 Broker Pre-License Course 8:00 - 5:00 Madison 260* 280*

Available online!

QuickStart sales training program

www.wra.org/QuickStartOnDemand

wisconsin real estate magazine

may 2010

product showcase New!

eFannieMae.com

Capture Leads With the Click of a Mouse!

Tools and Resources for Real Estate Professionals

Create Your Own Web site and More

You know Fannie Mae, but are you familiar with eFannieMae.com? The Web site aims to support and educate Fannie Mae’s partners in the mortgage industry, and it offers a range of resources for you and your clients, including:

Interested in creating your own Web site? WRA members can design and maintain their own Web sites through Real Estate Home Pages. Software Templates and easy-to-use tools for adding images and formatting text provide a professional look, usually only attained by a graphic artist or Web designer. You’ll be amazed at how easy and inexpensive having a Web site can be! The website packages and services are designed with real estate agents and real estate brokers in mind, giving you the flexibility to create and edit your entire Web site without needing to know HTML or special coding.

•

Mortgage Products & Information: Find details and comparisons of specific products.

•

Training and Education: Learn about mortgage solutions that can help meet homebuyers’ needs.

•

Home-Buying Tools: Helps homebuyers find a lender, a counselor and other financing information.

•

Selling and Servicing Guide forms

•

Spanish-Language Tools: A bilingual glossary of industry terms, mortgage documents and more for Spanish speaking homebuyers.

>> Learn more by clicking the “Real Estate Professionals” link at www.efanniemae.com.

One of their feature packages is a drip e-mail program called “E-Client Contact,” which helps you stay in contact with your clients in an automated way. Some of the great marketing features are automated e-mail campaigns, e-postcards, and more. Upload your own lists or use the database from your Web site. Learn to: •

Import, edit and use multiple e-mail lists

•

Create custom marketing campaigns or choose one from an existing library

•

Schedule all of your holiday e-mails in advance

•

Add pictures, text, links, etc.

•

Choose from e-mail header graphics

•

Choose from over 40 different articles and tips for the real estate market from a content library

•

Add automated opt-out options for your customers

•

Send hundreds of e-mails with the click of a button

•

Attend free online seminars to help you learn the ropes of E-Client Contact

•

Only $19.95 a month

>> Real Estate Home Pages (Quantum Digital) is a Wisconsin REALTORS® Association endorsed Member Benefit. Please contact them at 800-2806926 or check out their Web site for additional Web site packages at www.realestatehomepages.com.

wisconsin real estate magazine

may 2010

news.wra.org

Realtor® sales tip

Renewing Commitment to Homeownership By marcus wally

Homeownership Rates x Region

With the expiration of the homebuyer tax credit, many of us are wondering how to stir that same enthusiasm in customers/clients. This month, I share one great opportunity to do this: National Homeownership Month. The National Association of REALTORS® is renewing its commitment to helping the nation increase homeownership in America, and is dedicated to advancing that aim through National Homeownership Month this June. NAR said its commitment is stronger than ever during today’s challenging real estate market. And, as the professionals on the front line, we must take our positions and do our part to help everyone own a home. This is our greatest talent! This is the primary reason we are REALTORS®! REALTORS® build communities and understand better than anyone else how important homeownership is to our nation. Every day, we work in cities across the country to bring more Americans home; we help build strong families and vibrant neighborhoods. After all, this is the American dream. In the 40 years since the 1968 Fair Housing Act became law, the influence and impact of minority populations on the housing market have grown significantly. Today, an ever-growing number of minorities choose to become homeowners and we must adapt to understand, respect and appreciate their differences. Truly, the face of America has changed.

indicator based on contracts signed in February, rose 8.2 percent to 97.6 from a downwardly revised 90.2 in January, and remains 17.3 percent above February 2009 when it was 83.2. The data reflect contracts and not closings, which usually occur with a lag time of one or two months.

The homeownership rate is the proportion of households that is owner-occupied. It is determined by dividing the number of households that are occupied by owners by the total number of occupied households.

REALTORS® are ideally situated to improve housing opportunities where they live. They are the first stop for the prospective homebuyer or renter. Accordingly, REALTORS® can reach out – through personal involvement in their own communities—to those who need greater access to quality, affordable homeownership and rental opportunities.

Current statistics show that the U.S. homeownership rate at the end of 2009 was 67.2%. This figure has steadily dropped over the last few years from our high of 69.2% in 2004. Specifically for the Midwest region, that number is even higher: 71.3%.

Many of us have enjoyed wonderful success in the last decade, but now many of us face a very different market…despite what others may say, this is a normal market; I refer to it as the “new normal.” As June approaches, I ask each of us to recommit to helping others understand the viability of owning land. A large part of our daily good deeds consists of educating others about the amazing value and benefits of owning versus renting. Owning real property is the best way to insure personal wealth.

We reached our highest level of homeownership in 2004-2005, as shown in the accompanying figure (for the most current information, please see www. census.gov). As of April 5, 2010, pending U.S. home sales rose in February 2010, potentially signaling a second surge of home sales in response to the home buyer tax credit, according to the National Association of REALTORS®.

When we look back at this period in our history, will we remember it only as a time when our industry thrived or also as a time when we gave of ourselves, helping more Americans become homeowners? What will be our legacy? The TV commercials state, wisconsin real estate magazine

“There really has never been a better time to invest in real property.” This is true: interest rates are still at record lows, inventory is at an all-time high, and good incentives to purchase are plentiful. Now is the time to buy! So what are we waiting for? Help me spread the word!

The Pending Homes Sales Index, a forward-looking

may 2010

As we spread the word about National Homeownership Month, take the pledge with me to take a family by the hand and lead them through the process of finding, financing, inspecting and closing on a home. Together, we can help ensure that many more Americans are able to say, “This is my home.” Marcus A. Wally, MBA, is an active Florida REALTOR® in St. Augustine, Florida. Marcus is the founder and broker of New World Realty, which also manages coaching and facilitation of education classes around the world. Marcus earned his MBA from the University of North Florida in Jacksonville. He can be reached at 904-669-1081 or by e-mail at marcuswally@comcast.net.

Inside the Wisconsin Way: Part 2 A closer look at the plan to restore Wisconsin prosperity

public affairs

By michael theo

This is part two of a three-part series on the Wisconsin Way project—a multiyear effort by a coalition of diverse organizations to revolutionize the way we tax, spend and invest in Wisconsin. The WRA is a founding partner in this project.

•

Create a consolidation commission charged with identifying opportunities, costs, benefits and advisability for consolidated delivering of public safety, human services, pre-K-12 education and infrastructure maintenance.

This effort has produced a “Blueprint for Change,” a set of new and novel ideas for reforming Wisconsin. A copy of the full report can be found at www.wisconsinway.org.

•

Encourage and incentivize local government consolidation of services for three years, after which the legislature should mandate consolidations.

Part one of this series focused on ideas for economic development. This article will focus on tax reform and modernization ideas. Next month, the final article will review recommendations for government reform and modernization.

•

Wisconsin Way Ideas for Tax Reform and Modernization Wisconsin’s tax code is showing signs of aging. In order to maintain our commitment to fair and reasonable taxes, we need to reform and modernize our tax system. Reform is necessary to eliminate inequities and inefficiencies that have developed in the system over time. Modernization is necessary to reflect significant changes in our local and global economies and changes in the demographic makeup of our citizens. The Wisconsin Way recommendations seek to significantly reduce our reliance on the property tax as a major source of government revenue and make better use of the tax code to stimulate business development, expansion and job growth. Those tax reductions are offset by increasing reliance on specific fees for specific services and increased reliance on income-sensitive revenue sources like sales and consumption taxes. Here are some Wisconsin Way ideas on how to do that.

•

Consolidate appropriate school district administrative functions. •

Consolidate funding and prioritization for new school building construction at the state level.

•

Create regional purchasing organizations for energy, school materials, texts, paper, technology and other necessities.

•

Conduct a one-year study to report on regional or statewide cost savings including post-employment health insurance options, managed perhaps by the Wisconsin Retirement System.

Shift funding for certain services to a more appropriate funding source such as: •

Shift a significant portion of the current public pre-K-12 funding from the property tax to the state general purpose revenue funding.

•

Shift a significant portion of the current pre-K-12 funding from the property tax to the sales tax (increasing the sales tax rate to 6 percent).

1. Reducing reliance on the property tax.

•

Encourage and assist local units of government to achieve significant operational efficiencies with the goal of a permanent 25% reduction in revenues collected from the property tax.

Restrict property taxes to only property-related services and schools.

•

Shift the cost of protective services to fees from all who need and use the services.

•

Review all state mandates to achieve greater efficiencies and insure appropriate funding sources.

Consolidate the management and delivery of appropriate local governmental services. wisconsin real estate magazine

march 2010

news.wra.org

•

Secure Medicare funding for all per-pupil special education costs that exceed 125 percent of the district’s per-pupil average.

•

Establish a Legislative Council study commission to review the appropriateness, effectiveness and impact of the five major existing property tax relief programs and recommend changes.

•

Allow counties to increase their sales tax by 1 percent.

•

Broaden the property tax base by improving the fairness and progressivity of exemptions and assessments.

2. Improve the fairness and progressivity in the levying and collection of taxes. •

Establish a more equitable property tax exemption procedure. •

•

Require all property tax exemptions be justified and re-codified within 24 months, then reviewed on a staggered basis every five years.

A joint UW business school and Revenue Department review of all current exemptions, including those related to Internet sales, with a report on potential revenue and impact of revoking each.

•

Explore strategies that would enhance Wisconsin’s ability to keep its philanthropic leaders engaged and invested in Wisconsin’s economy.

4. Increase reliance on revenues that recognize the valueadded impact of the service being provided. •

3. Enhance the ability of Wisconsin’s tax structure to stimulate business development and expansion and job growth.

•

Expand the variety and applicability of tax inducements to increase investment in research and development.

Establish a more equitable sales tax exemption procedure. •

•

Establish a neutral, credible review process for establishing the affect of taxes and regulation on Wisconsin’s ability to sustain and grow its economy, co-funded with private and public funds. Align Wisconsin’s income taxes with its desire to grow, expand and attract business and create jobs. •

Establish incentives for businesses to keep recent in-state college graduates in Wisconsin.

•

Create funding incentives for the UW System and Wisconsin Technical College System to educate people in high-demand careers.

•

Create specific individual and corporate income tax incentives for investments in job creation and business growth including: •

Incentives for start-ups and expansion in cluster industries and emerging industries such as green and alternative energy sectors.

•

Establish new corporate income tax credits for job creation.

•

Raise the capital gains tax exemption back to 60 percent.

•

Establish a 100 percent capital gains tax exemption for gains realized from investments in Wisconsin and reinvested in Wisconsin for at least two years.

•

Incentivize technology transfer efforts from public and private higher education institutions to businesses.

•

Energize natural resources sectors such as timber, dairy farming, and agri-businesses to accelerate efforts to modernize, improve productivity and develop new markets. wisconsin real estate magazine

march 2010

•

Restructure and stabilize funding for the UW system. •

Encourage new four-year academic curricula that allow graduation after three years with future access during careers.

•

Establish an educational operations cost per UW system student.

•

Set annual tuition rates for all UW students at 25 percent of the per-student cost.

•

Establish an income-sensitive tuition system that allows students to pay for their education costs over a 25-year period at a rate not to exceed 5 percent of their income.

•

Establish a GPR development fund for the UW system equal to 20 percent of student supported educational operational costs and dedicated to fostering and supporting new programs, research and instructional expansion.

•

Establish a forgiveness program that reduces a graduate’s annual payments by 25 percent for each year they work in Wisconsin.

Increase reliance on revenue sources that recognize the relationship between use and cost of services. •

•

Review all existing fees and update or eliminate as needed.

Convert the federal interstate system (ie: I-90, I-94 and I-39) into a pay-as-you-go system.

What do you think? The tax reform and modernization proposals above—along with the previous article on economic development and the upcoming final article on government reforms and modernization—are presented in an effort to find solutions and stimulate discussion. Remember, it’s a blueprint and change orders are an option! So we’d like to know what you think. Send your reaction to this article, as well as thoughts for new ideas, to mtheo@wra.org. Michael Theo is Vice President of Legal and Public Affairs for the WRA.

public affairs

Which Party Will Control the Wisconsin Legislature?

By joe murray

uring extremely competitive election cycles, voters pay reasonably close attention to the high profile campaigns such as races for governor, U.S. Senate, Wisconsin attorney general or seats in the U.S. House of Representatives. But the November 2nd elections in Wisconsin will decide one other crucial question: which party will control the Wisconsin Legislature? Today both houses of the Legislature are narrowly controlled by majority party Democrats. Democrats have an 18 to 15-seat majority in the State Senate and a 52 to 46seat majority in the State Assembly, with one Independent (Jeff Wood from Chippewa Falls). This means both houses are up for grabs in the 2010 elections. For Republicans to take control of the Senate, they would need a net gain of two seats; for the Assembly, a net gain of four seats. The desire to regain or retain power is a motivating force for both parties. Democrat and Republican campaign staff are busy recruiting candidates and raising money to position their parties for the competitive and expensive fall campaigns. According to the Pew Center on the States, there will be approximately 7,000 races for state legislative seats in all fifty states. But both parties, along with their allies, are narrowly focusing on 100 key races in 16 states that could tip the balance of power in statehouses, including Wisconsin. Targeting statehouse elections is particularly important to federal as well as state political parties in 2010 because of redistricting. Redistricting – or reapportionment – happens every 10 years after the census and draws the boundaries of congressional and state legislative districts that will last a decade. Each party knows that winning key statehouse campaigns would give it the power to redraw district lines and change the balance of power in any or all 16 states. The goal is to win control of state governments, including Wisconsin, ahead of the process for redrawing those political districts. Thus, the outcome of this November’s elections carries significant short- and long-term political consequences.

wisconsin real estate magazine

Wisconsin Targeted Districts In the State Senate, 17 of the 33 seats are up for re-election in 2010. The list includes all odd numbered districts: (note: open seats means the incumbent has decided not to run for reelection.) Senator Alan Lasee (DePere, open) Senator Tim Carpenter (Milwaukee) Senator Jim Sullivan (Wauwatosa) Senator Jeff Plale (Milwaukee) Senator Joe Leibham (Sheboygan) Senator Neal Kedzie (Elkhorn) Senator Scott Fitzgerald (Juneau) Senator Judy Robson (Beloit, open) Senator Dale Schultz (Richland Center) Senator Mike Ellis (Neenah) Senator John Lehman (Racine) Senator Pat Kreitlow (Chippewa Falls) Senator Bob Jauch (Poplar) Senator Jon Erpenbach (Middleton) Senator Russ Decker (Wausau) Senator Kathleen Vinehout (Alma) Senator Ted Kanavas (Brookfield, open) The targeted races for control over the Wisconsin State Senate will likely come down to these 6 districts: Republicans: Senator Alan Lasee (DePere, open) Senator Dale Schultz (Richland Center) Democrats: Senator Jim Sullivan (Wauwatosa) Senator John Lehman (Racine) Senator Pat Kreitlow (Chippewa Falls) Senator Kathleen Vinehout (Alma) In the Wisconsin Assembly, all 99 seats are up every two years. Out of the 99 districts, the following 9 districts are likely to decide which party controls the State Assembly: Republicans: R-80th: Brett Davis (Oregon, open) R-47th: Keith Ripp (Lodi) R-34th: Dan Meyer (Eagle River) R-87th: Mary Williams (Medford) I-67th: Jeff Wood (Chippewa Falls, open)

may 2010

Democrats: D-2nd: Ted Zigmunt (Francis Creek) D-57th: Penny Bernard-Schaber (Appleton) D-92nd: Mark Radcliff (Black River Falls) D-42nd: Fred Clark (Baraboo) I-67th: Jeff Wood (Chippewa Falls, open) The political bottom line: out of 116 total state legislative races in Wisconsin in 2010, 14 key swing seats will likely decide which party controls the State Legislature. The party in control decides committee chairs, committee members, which bills get to the floor of either house for consideration, and this year, how the district boundary lines will be drawn during the redistricting process. Nothing focuses the attention of individual legislators more than who will control the redistricting process and what their individual districts will look like for the next 10 years. The 2010 legislative races, especially in these 14 districts, will more than likely break all the records on spending and political intensity. Joe Murray is Director of Political & Governmental Affairs for the WRA. news.wra.org

Facebook ... continued from page 19

say. Don’t forget conversation is a two-way street. It’s just as important to listen as it is to talk, so be sure to take the time to read posts of others. I taught a course last year and met a REALTOR® who reconnected with an old sorority sister from college who moved to Arizona. Months after they connected, she would follow her friend’s status to see how she was doing. One day her friend posted a comment that read, (she) “disliked her REALTOR® because her house was on the market for two years and barely had any showings.” It was the end of her contract. After she read the post, she contacted her friend and eventually worked with her to sell her home through a successful referral. Case in point, your ROI on Facebook can simply surface from reading and responding to posts. If you are new to Facebook, many lessons can be learned from mistakes. Here is our short list of tips we suggest to help maximize your success on Facebook: 1.

Be consistent. Set a reasonable goal, such as publishing a post a week and stick to it. If you suddenly stop posting, people will think you either don’t practice real estate actively or don’t have the time to spend on this medium. Remember some connections prefer Facebook as a primary communications tool.

Avoid too much silly stuff. Games can be addictive and if you play them, be sure they are not publishing bites of information to your newsfeeds, especially during work hours and open houses.

Don’t publish anything you would not want your mom to read. For example, if you go out for a long evening on Saturday night, don’t publish it. Consumers are well aware of what REALTORS® do on Sundays.

Post items that have value – tips, tricks, local news, market outlooks, special sales at stores and upcoming community events. The key here is the more local your focus, the better. State and national news is a dime a dozen.

Engage your audience. Post topics of interest, ask questions, inquire, monitor and respond back. Be sure to fertilize the good conversations and pull out the weeds.

Avoid embarrassing others. The moment you embarrass someone, you’ve set the stage for someone embarrassing you. Remember the old saying, “what comes around, goes around.” It’s especially true of social media.

10. Avoid “power-selling.” Facebook is not an MLS. If you actively publish listings, do so through the Facebook marketplace which has an option to publish back to your profile page

Be sure to listen. Opportunity hides in unique places. When you’re talking, always remember to curb yourself of too much shop talk. People tune out connections that talk too much shop.

Make your profile professional, but also let it reflect your personality. People like to do business with someone they know and that they can relate to personally. There is nothing wrong with a little personality in your posts.

Last, there are many ways you can develop credibility without applying a sales pitch. One method is to be creative with your Facebook status. Telling prospects that you’re planning three open houses this weekend, creating a virtual tour, preparing a market analysis or that you are excited about the market are subtle ways to remind prospects you are active in the business. Also, be sure to publish a variety of tips for your clients such as greening your home, winterizing, and staging. Mix it up with a balance of video, audio and online articles. If you discover local events or community news that is of general interest to your market, be sure to publish those nuggets as well since they have great pass-along value. This two-part article continues next month with a focus on Facebook Fan Pages, the Facebook Marketplace, Facebook Ads, Google Reader and Bit.ly. Rob Uhrina is the Vice President of Marketing and Communications for the WRA.

Western Wisconsin & Southeast Minnesota (Licensed in Both States)

Serving La Crosse and Surrounding Communities

Remember, you are in front of a live audience at all times. Perception is everything. Rage, rants, saucy details about your weekend and moments of political insanity can scare prospects. If you must post something provocative, be sure to apply security (using the padlock icon) to protect your wall post from unintended eyes. wisconsin real estate magazine

or just simply publish a backlink to new listings on your Web site.

Jo Baldridge, CRS, GRI, CHMS

608-797-0337 jo_baldridge@centurytel.net www.JoBaldridgeRealtor.com

Serving Clients on Both Sides of the Mississippi

may 2010

public affairs

Pier Grandfathering Deadline Is Approaching By tom larson

aterfront property owners with larger, existing piers have until April 1, 2011 to register their piers with the Wisconsin Department of Natural Resources (DNR) if they want to grandfather their piers from future DNR enforcement actions due to noncompliance with new pier size standards.

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Background

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On April 1, 2007, Governor Doyle signed into law the Pier Protection Act (2007 Wisconsin Act 204), legislation that grandfathers 99% of all existing piers from future regulations. The new law became necessary after dimensional standards for piers were added to the Wisconsin Statutes for the first time in 2004. While these new standards were intended to apply only to new piers (those installed for the first time after 2004), attempts were made by some regulators to apply them retroactively to existing piers. As a result, thousands of existing piers could have been declared illegal and been forced to be removed or downsized. With the enactment of the Pier Protection Act, waterfront property owners with existing piers now have clear standards as to what size of pier is allowed without obtaining a special permit from the DNR. Specifically, the new law contains three different regulatory schemes for existing piers, depending upon the size of the pier and the platform at the end of the pier. While the law itself doesn’t name the different regulatory schemes, it is easier to understand the regulations if existing piers are classified in the following manner with respect to their size – regular, big, and too big.

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Neighbors – does not interfere with the riparian rights of other riparian owners. (Generally, this means that the pier and boat hoists do not extend beyond the owner’s property line.) ASNRI waters exception – is not located in an area of special natural resource interest.

If an existing pier exceeds the “regular pier” standards above, the pier may qualify for grandfathering if the following placement, size and registration requirements are met: •

Date – must have been originally placed prior to February 6, 2004

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Width – no more than 8 feet wide

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Platforms – a larger deck/platform is allowed as long as it is located at the lakeward end of the pier and the platform has a surface area of:

If a pier (existing or new) meets the following standards, the property owner does not need to obtain a permit or register the pier:

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Length – extends no farther than a 3-foot water depth or deep enough to moor a boat

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Width – no wider than 6 feet at any point on the pier wisconsin real estate magazine

Number of boat slips – has no more than 2 boat slips for the first 50 feet of shoreline frontage, and 1 boat slip for each additional 50 feet of shoreline frontage

– Registration with the DNR is free of charge. Property owners may also choose to record the registration form with their local register of deeds.) •

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200 square feet or less (any width), or

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Between 200 square feet and 300 square feet, if the deck/platform is no wider than 10 feet.

Neighbors – does not interfere with the riparian rights of other riparian owners. Registration – the pier is registered with the DNR no later than April 1, 2011. Registration forms can be obtained at http://dnr.wi.gov/waterways/permit_ apps/Pier_Registration_Form.pdf. (Note may 2010

ASNRI waters exception – is not located in an area of special natural resource interest.

Piers That Are Too Big An owner of an existing pier that exceeds the “regular pier” and “big pier” standards above can do one of the following: •

Do nothing and wait to see if the DNR brings an enforcement action against the owner;

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Modify the existing pier to bring it into compliance with the “regular pier” standards; or

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Apply for an individual permit from the WDNR (http://dnr.wi.gov/org/water/fhp/ waterway/piers.html#step3). (Note – no permit fee will be imposed).

Big Piers

Regular Piers

Platforms – a maximum 8 feet long by 8 feet wide loading platform at the end of a 6-foot-wide pier, if it is NOT located in an area of special natural resource interest (ASNRI) waterbody. To make this determination, visit the DNR’s website at http://www.dnr.wi.gov/org/water/data_ viewer.html.

Under the new law, the WDNR must approve an application for an individual permit to keep an existing pier unless the WDNR can prove that the pier does one or more of the following: a.

Interferes with public rights in navigable waters

Interferes with rights of other riparians

Extends beyond a locally established pierhead line

Violates a local ordinance

Does not allow the free movement of water underneath

If a permit has already been obtained for an existing pier, no new permit is necessary as long as the terms and conditions of the permit are followed. For more information on pier regulations, please contact Tom Larson (tlarson@wra.org) at (608) 240-8254 or visit http://dnr.wi.gov/ waterways/recreation/piers.html. Tom Larson is Director of Regulatory and Legislative Affairs for the WRA. news.wra.org

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