PIER GRANDFATHERING
Best of the Legal Hotline
Know the specifics of the new legislation.
Who really should sign the Offer to Purchase.
May 2012 $5.00
MAGAZINE
12 Common Technology Mistakes [and How to Avoid Them] >> Page 6
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North Central Home of the Best AgentsÂŽ
table of contents
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may 2012
vol.
28, no. 8
26 6 features 6 10 26 28
10 articles
12 Common Technology Mistakes
Are your technology choices good for your business? Might your tech choices put you and your clients at risk for mistakes? Find out!
2 13
Tick Tock
Unclear about deadlines in the Offer to Purchase? Take your eyes off the calendar and read to learn more.
New Pier Grandfathering Legislation Signed Into Law
Learn about the background and details of Wisconsin Act 167, signed into law just last month.
Walker for Governor
A summary of Tom Barrett’s real estate-related voting record.
wisconsin real estate magazine
28
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16 20 24
If Not Us, Who? A look at wind siting regulations.
The Best of the Legal Hotline: Sign Here Questions and answers cover life estate sales, LCCs, sibling sellers and more about who really should sign the offer.
Landlord-Tenant Law: New Check-In Sheets and Property Disposal Procedure An overview of the changes made during the recent legislative session regarding Landlord-Tenant Law.
Product Showcase: Balance the Technology Tightrope Make the most out of your technology use with these products. Plus a new product announcement!
The Benefits of Homeownership This month’s REALTOR® Sales Tip will recharge your drive for June Homeownership Month!
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News
inside the wra
with mike theo
Top News Stories in and Around the Industry
If not us, who? United Way Honors the Stark Family for Service to Community
I
United Way of Dane County
f not us, who? If not now, when?
United Way of Dane County You’ve probably heardFamily this with saying recognized the Stark the 2008 Tocqueville numerous times. But Society nowhereAward is the for outstanding to the Dane application of service this principle more County community and United Way. efforts The Tocqueville appropriate than our association’s to balance Society Award celebrates acknowledges people windpower with propertyand rights here in Wisconsin. or families, such as the Starks, who have made a major impact the quality of life in Dane County The WRA hasonbeen criticized in the media and in through their exceptional commitment the capitol over the past service year forand being the leading the community. Billto Malkasian opponent to new wind turbine siting rules that are
WRA President based on a state law passed several years ago. City Housing Authority Receives The law, pushed by the wind industry, eliminated 100-Unit Grant local government power to regulate wind turbines Milwaukee Journal Sentinel (09/25/08) Pabst, Georgia and instead created a single statewide standard. The citylocal of Milwaukee’s housing authority Without control, landowners were leftistodue fend to receive $6.7 million in federal Hope VI money for themselves against large wind developers and to build 100 new housing units. The 100 units will their lawyers. be constructed in a 2.5-mile area and will include 29 public housing and affordable rental units; Despite risks to private property rights and local nine affordable housing units for income-eligible control, the WRA did not oppose the law when it families; and 62 moderately priced, open-market was being considered by the legislature. We clearly condominiums. HUD Secretary Steven C. Preston understood the need for clean, alternative energy comments, “Milwaukee’s housing authority has sources in Wisconsin. But leadership we wantedtoto ensure that demonstrated it has the lead and property owners received pertinent, understandable revitalize neighborhoods and transform lives. Cities like Milwaukee changeonandwhich grow and need toan and timely information to make revitalize to We make surewanted many aren’t priced informed housing decision. also to make sure out.” Milwaukee is one a half-dozen housing turbines were placed farofenough away from homes authorities nationwide to receive new owners Hope VI and other structures to protect property and grants.
neighbors from excessive noise and visual pollution as well as to protect property values for all.
Housing Study Delay Frustrates Advocates Supporters of the legislation assured us that our Milwaukee Journal Sentinel (10/07/08) Williams, Scott
concerns would be addressed in the administrative
Two years after promising the Milwaukee rulemaking process that followed passagemetro of the area’s first major housing study process in three proceeded, decades, law. However as the rulemaking the Southeastern Wisconsin Regional it became increasingly clear that none Planning of the key Commission (SEWRPC) struggling to get would the property rights issues iswestill sought to protect effort launched. Proponents hope the study will be addressed. The louder we complained, the more serve as a catalyst for improving affordable housing apparent it became the wind developers controlled opportunities throughout the city’s suburbs. But the majority ofhave the yet committee, andanthey had no commissioners to assemble advisory intention oftoweakening hand. committee oversee thetheir research orAs setaaresult, specificthe rules, likefortheconducting law, advanced without property timetable the survey. Philthe Evenson, rights protections we sought. the commission’s executive director, said other issues keep getting in the way. The delays have frustrated It was aadvocates fight wethedidn’t and very much housing most.seek Bethany Sanchez, wanted to avoid. In Metropolitan our minds, solutions vice president of the Milwaukeeseemed Fair eminentlyCouncil, reachable. But“It’s thebeen wind developers Housing laments, a long time coming.” Pewaukee-based and their The supporters wanted to commission protect profitshasand not conducted a comprehensive review housing alternative energy — not the rights of of land owners. patterns since the 1970s. Most uplifting was the support we received from
hundreds of property owners who were overjoyed at the WRA’s resolve to stand with them. Together, we argued that allowing massive industrial wind turbines — some as high as 500 feet — within
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wisconsin real estate magazine
Wisconsin Receives Millions to Ease Foreclosure Crisis Milwaukee Business Journal (WI) (09/30/08)
1,200 feet of a home and within 550 feet of a The state of Wisconsin is due to receive nearly $39 commercial or industrial building would negatively million federalvalues funds to neighborhoods impact in property andstabilize create significant health and off arisks spatetoof area abandoned homes.We According andstave safety residents. proposed to HUD and Gov. Jim Doyle, the funds are separate numerous alternatives.
substantially increase funding for rental assistance, particularly help for working families.
at public hearings by those
NAR Free FHA living Releases near existing windToolkit Wisconsin Association (10/30/08) turbines.REALTORS® They face the noise
pollution caused by eager a constant NAR and the WRA are to help you meet the
“whooshing” or pulsating noise that can be heard day and night, inside know that you need resources that can help you and outside homes located too close close transactions, at little or no to turbines that and are you too need big. them Neighbors cost. NARsubject has justtoreleased an flicker” all-new FHA will be “shadow whenToolkit online for FREE help youalign get clients the financing the clouds andtothe sun with massive turning and cast rhythmic shadowsIt is they needblades in a credit-strapped environment. systems, state standards and possible impacts. across themost ruralcomprehensive landscape. And theyNAR facehas one of the toolkits Sites: Not Just for Personal falling property values, estimated by one We argued that anyone negotiating a lease on behalf ever produced, and it’s available to all REALTORS® Connections Anymore Wisconsin-based study to up to 43 percent on of a wind developer must have a real estate license, right now by visiting the link below. They also have Minneapolis-St. Paul Business Journal (09/29/08) Grayson, vacant and up to 39 percent on improved as required under Chapter 452 of Wisconsin law so launchedland Katharine a new page called “NAR Helps You Navigate property. they must obey the fiduciary obligations such as St. Paul, Minn.-based REALTOR® Teresa Boardman the Current Economy” where you can find dozens of honesty and fairness and disclosure of all material The protection of property values and property says Flickr, Facebook and other social networking great products and resources, like the FHA Toolkit, adverse information likemeet otherpeople real estate sites make it easy to who licensees might rights is not an abstract theory we are fighting for free or at a steep discount. Visit www.Realtor. who negotiate leases. eventually become clients. While many professionals for here. It is a very fundamental legal right that from approximately $9.2 million the government is awarding the citytoof Milwaukee, where the foreclosure We argued give homeowners some time rate is currently 9.9 percent. HUD is awarding the after entering into a contract with a wind energy funds via its Neighborhood Stabilization Program, company to have an attorney review the contract. under which almost $4 billion is being allocated to We argued the state provide an informational local and state governments for the redevelopment brochure to and homeowners describing wind energy of abandoned foreclosed houses.
current challenges of the troubled economy. We
are using these sites to make business contacts And we argued that the state should be required to and companies use them to conduct background conductorlonger-term true impacts checks recruit new studies workers,about manythe simply want of connect wind energy systems neighboring property to with people whoon have similar interests. owners. to Boardman, “The hard sell is dead. It According doesn’t work door-to-door, and it doesn’t work on Despite bipartisanOn legislative support forconnected our efforts, social networks.” Flickr, Boardman the Public Service Commission (PSC) refused with a fellow photographer who eventually used her to make any changes.a home. services to purchase
org/NARHelpsYou for links to these great programs
is also the underlying basis for our entire industry.
and As aproducts. legal right, the 5th and 14th Amendments to
the United States Constitution say governments
Home Loans Going Strong, a of shall not arbitrarily infringe on the Albeit basic rights individuals to acquire, possess and freely transfer Bit Tighter, in Area real property. Indeed, the REALTOR organization is Wisconsin State Journal (10/17/08) Balousek, Marv ®
founded on the principle of protecting the freedom to buy, sell and use property — which is the professionals say mortgage money remains basis of all real estate transactions and available markets. Gov. Walker sided with property immediately throughout southern Wisconsin to or home buyers Foreclosures Push Rentsowners Higher, Government-imposed restrictions limitations upon taking office began Families efforts to reverse the that deny property owners the highest and best Squeezing Lowand Income with solid credit. Ron Steinhofer, manager of rules. HePublic wasRadio joined many Olson, lawmakers who use of their property not only hinder economic Minnesota (MN)by (09/21/08) Dan & Ilsley Bank’s regional home lending also championed private property rights. However Marshall freedom, they“There’s hamper social freedom In Minnesota’s Twin Cities, a wave of home group, states, plenty of money for as home despite numerous legislative and administrative well. Governments certainly have the right foreclosures has pushed more people into the rental out there. It is slightly more difficult to qualify efforts, andsector. our best at shuttle diplomacy, loans apartment Theattempts result is an intensifying to protect public health, safety and the the clock out on the legislative session without than two or three years ago, but if you have a good demand onran Minneapolis and St. Paul’s rental housing environment. But when government acts resolving the issue a result, stock, so much so thatand the as vacancy rate these is veryflawed low credit score, a good job and a police down payment, outside those legitimate powers money windrents rules March Delighted and arewent on theinto rise.effect This, in turn, 15. means lowisand available.” Steinhofer adds thatlike banks violate fundamental rights the still are income working families face higher monthly rents wind developers promised to begin siting new rights of private property owners, we making loans via such programs as Fannie Mae even though their income unchanging turbines immediately. Thishovers meansatproperty rights as REALTORS® must be prepared to Freddie Mac. Furthermore, credit standards levels. Sincea real 2005,and theimminent Twin Cities are under threatapartment right here, and activelyabout oppose vacancy rate has dipped from 7 percent to closer to remain the them. same as they were six months ago, right now. 4 percent. Average monthly rents over that same meaning thatwho? qualified homenow, buyers can get loans If not us, If not time span arehard up more than wind $25, rising moreand We fought for fairer siting to rules ifwhen? they have the proper income verification. On the than $850. The St. Wilder Foundation for the rights of Paul-based property owners. We endured downside, banks have been less willing to make recently several damningreviewed media income storiesdata thatfor failed to Twin focusCities on the counties. The organization’s research found that the land owners’ rights being lost or the reasonable loans with higher loan-to-value ratios. In addition, number of people in those markets paying too much conventional financing without a down payment has alternatives we were offering. for their rental housing will double from around 70,000 currently to a it. whopping by 2010.but But it was all worth Not just140,000 for the people, Some a partial solution would be for the U.S. for thesay principle. government to reverse course on housing policy and
Despite the ongoing national credit crisis, property
indeed disappeared. However, 100 percent financing
Mike Theo
is still available with Veterans Administration and Rural Development home loans.
For affected property owners, they now face health problems such as insomnia, anxiety, headaches and nausea — symptoms illustrated repeatedly
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may 2012
www.wra.org/wrem
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
Rob Keefe, Chairman rob@rkeefe.com
2012 REALTOR® Children Scholarship Winners
Renny Diedrich, Chairman-Elect rdiedrich@coldwellhomes.com
The Scholarship Committee of the Wisconsin Realtors® Foundation has awarded its annual REALTOR® Children Scholarships. The scholarships are awarded on the basis of the individual’s scholastic achievement, leadership ability and service to his or her school and community. Eligible applicants must be children of REALTOR® members in active standing with the Wisconsin REALTORS® Association for the past three consecutive years prior to the scholarship application.
Steve Lane, Treasurer lanes@firstweber.com Michael Theo, cae, President mtheo@wra.org
Publisher
The recipients and their REALTOR® parents are: Emily Blackwell (Sandi Blackwell) Sussex; Matthew Dooley (Joseph Dooley) Green Bay; Brandon Garczynski (Dale Garczynski) DeForest; Adam Jasperson (Alan Jasperson) Caledonia; Ryan Prestil (Matthew Prestil) Janesville; Chloe Siamof (Christina Siamof) Appleton; Mitchell Stingl (Debra Stingl) Wauwatosa; Tyler Tannis (Judith Tannis) Waukesha; Carley Valentine (Dean Valentine) De Pere; Austin White-Pentony (Allan White) Fitchburg.
Robert Uhrina
The Foundation congratulates these recipients and their parents and wishes them the best in their future endeavors!
Editorial Staff:
Michael Theo
Advertising
Distinguished Service Award Applications Available
Lauren Bizorik Editor
At the January 1985 board of directors meeting, the WRA established the Distinguished Service Award. The purpose of the award is to provide recognition to those REALTORS® who have provided many years of leadership and distinguished service to the Wisconsin REALTORS® Association. All current members, local association executives and employees of the Wisconsin REALTORS® Association with at least five years membership or employment are eligible. Application deadline is June 29, 2012. Applications are available on the WRA website at www.wra.org/Resources/Membership/Awards/Distinguished_Service_Award.
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.
WRA Member Benefits As a WRA member, you have member benefits available to you. The WRA carefully selects programs that offer valuable health, life, dental, and errors and omissions insurance as well as web design, phone service and more!
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.
Health, Dental & Life Insurance Plans Through REGIT, Inc., specifically designed with REALTORS® in mind. www.regitinc.com
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.
Errors and Omissions Insurance Through Pearl Insurance and underwritten by XL America, Inc. www.pearlins.com UPS Discounts & Delivery Plans Hassle-free! Once you enroll, your savings are automatic every time you ship. www.savewithups.com/wra
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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 president fax: (608) 242-2267 e-mail: editor@wra.org website: www.wra.org
Real Estate Home Pages Create, edit and manage your own website. Free seven-day trial. www.realestatehomepages.com Office Supplies 2U/Emmons Business Interiors Your newest member benefit! Office supplies and furniture. www.os2u.com, www.ebiweb.com Subject to change.
facebook: www.facebook.com/wisconsinrealtors twitter: www.twitter.com/wirealtors linkedin: www.wra.org/linkedin youtube: www.wra.org/youtube wisconsin real estate magazine
Editorial Correction: In the April (Vol. 28, No. 6) edition of Wisconsin Real Estate Magazine, the article “The Closing Bell” noted in subpoint C of the “Presumptive Approval” paragraph that permits are deemed “improved” by the DNR. Rather, permits are to be “approved” if the DNR does not make a decision within statutory timelines.
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Chairman’s Corner
Robert Keefe
J
une will mark Homeownership Month, and this year it takes on special significance. During my lifetime, we have taken for granted that the concept of homeownership as a way to build wealth and secure a future for your family was an essential element of the American Dream. Along with that came the concept of your home as your castle, the iconic symbol of private property and ownership. Today we are faced with the unpleasant reality that these concepts are under attack like no other time in modern history. Pressure from government at all levels has ratcheted up on owners of private property. Cashstarved government bodies view homeowners as a lucrative source of funds. The broad private property rights we have enjoyed are viewed by many in government as unwarrantedly broad and ripe for trimming. By working together as an association, we have been able to score major victories in Wisconsin over the last two years in preserving the sanctity and appeal of real property ownership. Spearheaded by our great staff and supported by you, the WRA secured passage of a number of very significant bills in the last legislative session. Among the wins were bills preserving our right to build piers, reconstruct damaged nonconforming structures, making common-sense changes to help landlords administer their rentals, and placing some boundaries on local governments’ ability to enact development moratoria. Perhaps most significantly, under the leadership of Gov. Scott Walker, the state was able to close an enormous budget deficit without going to the till of the property tax bill. There is plenty of work left to do here in Wisconsin. We were unable to have a number of other bills addressed before the legislature adjourned, including legislation preserving a property owner’s right to rent their property. At the federal level, the record of success has been more limited. The federal government has a vast deficit which it must close, and once again, property owners are being eyed as
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wisconsin real estate magazine
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“contributors.” The tax deductibility of mortgage interest will be on the block, and many smart people predict that some curtailment of this tax policy is likely. The government continues to put counterproductive roadblocks in the way of investor-buyers of foreclosed and short sale property. The continuing encroachment of federal regulations into the realm of private property rights is well documented. The government seems directionless in its search for an appropriate role for federal funds in supporting mortgage finance and raises the regulatory burden on banks while simultaneously demanding more availability of mortgage loans. This is the stormy environment in which NAR finds itself and why our contributions to NAR/RPAC are so important. Finally, and perhaps most concerning, is the fact that many young adults see homeownership in a less positive light than their parents. People tend to have a short view of history, and for many, the housing downturn of the last five years has characterized their entire perception of real estate. It is incumbent upon us as professional REALTORS® to defend the concept of homeownership, to put the recent downturn into perspective, and to continue to highlight the attractiveness of homeownership to a new generation of buyers. Why us? Because no one else can do it! No other profession has the lobbying clout to defend homeownership in government circles, and no other group has the professional credibility to defend property ownership to prospective buyers. The facts are on our side. What can you do? With buyers, be ready to highlight the economic and social benefits of homeownership over the long term. With our government, invest in RPAC/Direct Giver, attend town halls, and make sure your representatives hear your voice. If you need help from your association, we are ready to the answer the call. Respectfully,
Rob Keefe
www.wra.org/wrem
news monthly wisconsin housing report
Housing Market Recovery Continues in March Home sales and prices up, signaling a continuing housing recovery
View all housing statistics at www.wra.org/housingstatistics
By David E. Clark, Economist, C3 Statistical Solutions
> WISCONSIN HOUSING STATISTICS MONTHLY ACTIVITY - MARCH 2012
% Change
YTD-2012
YTD-2011
% Change
-2.6% 25.0% 0.4%
29,261 10,863 $120,000
28,708 9,112 $122,500
1.9% 19.2% -2.0%
Statewide
MAR-2012
MAR-2011
New Listings Closed Sales Median Sales Prices
11,605 4,791 $123,500
11,914 3,834 $123,000
Region
Median Price MAR-2012 MAR-2011 % Change
Existing Home Sales MAR-2012 MAR-2011
% Change
Southeast South Central West Northeast Central North
$127,000 $147,000 $125,000 $112,000 $94,900 $105,000
1,797 943 445 897 287 413
24.3% 25.9% 8.0% 32.9% 32.3% 27.9%
E
xisting home sales were up significantly in March, with home sales growing 25 percent over the levels of March 2011, according to the latest monthly report by the Wisconsin REALTORS® Association (WRA). Home prices in March also rose slightly for the first time since the end of 2010, up 0.4 percent to $123,500 compared to the same month last year. “We certainly had a mild winter, and that may account for some of the strength in home sales last month, but it’s important to note that we’ve seen very strong growth in home sales over the last nine months,” said Rob Keefe, Chairman of the WRA board of directors. He pointed out that all regions of the state were up in March, and most saw growth in the range of 24 percent to 33 percent. The Northeast and the Central regions grew at approximately 32 percent over the period, whereas three other regions — North, South Central and Southeast — were up between 24.3 percent and 27.9 percent over the period. Finally, the West region was up eight percent in March 2012 relative to March 2011. “These are the strongest signals we have seen in some time going into the spring selling season,” said Keefe, who noted that the combination of low wisconsin real estate magazine
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$131,000 $150,500 $120,750 $108,000 $88,900 $95,000
-3.1% -2.3% 3.5% 3.7% 6.7% 10.5%
rates and modest improvements in the job market should support continued growth in sales. The WRA says an improving state jobs market is helping home sales. Since December, the state has added nearly 18,000 nonfarm private jobs even as government employment fell by 3,400 based on seasonally adjusted estimates. “It’s encouraging to see job growth in the state, especially in relatively high-paying sectors,” said Michael Theo, WRA President and CEO, who noted that the manufacturing sector added 4,300 jobs, and construction sector employment was up 6,500 workers over the period. “It’s also good to see some slight improvement in home prices as inventories continue to be sold,” said Theo. After peaking at just under 72,000 unsold homes in July 2011, the state has averaged 52,758 unsold homes over the first three months of this year. “Putting a dent in the stock of unsold homes is key to home price appreciation, and we saw median prices grow in four of the six regions statewide,” said Theo. The strongest appreciation in median prices was in the North region where median prices rose 10.5 percent in March compared to March 2011. Theo cautioned that some of this change in the median price may be due to a change in the may 2012
1,446 749 412 675 217 323
mix of homes sold, for example from lowercost vacation properties to more high-end properties. Also strong was the Central region where median prices rose 6.7 percent over the period. The Northeast and West regions were also up in March in the range of 3.5 to 3.7 percent, and the Southeast and South Central parts of the state had slight reductions in median prices, down 3.1 percent and 2.3 percent, respectively. The Wisconsin Housing Affordability Index, which measures the percentage of a medianpriced home that a buyer with the median family income can afford, was at 260 for March. This is down from a revised 280 in February. While housing remains very affordable in the state, there are clear indications that the market has been strengthening. “With low housing prices and historically low interest rates, this is an excellent time for those who have been considering a house to make the jump to ownership,” said Theo. He noted that using an experienced REALTOR® can help new buyers identify exceptional opportunities in whatever market they are considering. For more information, contact David E. Clark, Economist, C3 Statistical Solutions Office phone: (414) 803-6537
5
12 common technology mistakes
and how to avoid them
12 Common Technology Mistakes [and How to Avoid Them]
By Joe Leschisin
If you’re not particularly tech-savvy, the notion of buying, maintaining or learning about technology for your business can be difficult and alarming.
e
verything from social media to gadgets you use to lack of knowledge can affect your efficiency as a small business owner. Your schedule is loaded with events during the week and on weekends; don’t let technology inefficiencies get in the way of running your business. Here are 12 common tech mistakes and how you can effectively avoid them.
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Improper E-mail Etiquette While smartphones are so popular these days, we find ourselves using them to communicate in multiple ways: call, text, e-mail and surf the web. We use smartphones so much that the language we use to text and e-mail closely resemble each other. We need to take time to make sure e-mails remain professional and we are not using www.wra.org/wrem
language — or abbreviations — you would in a text message. We find ourselves becoming dependent on auto-spell correct and forget to actually proof our e-mails before we fire them off. Remember — you are the professional, and you should communicate like one. You only get one first impression, so make it a great one.
“At any place and at any time of the day, you are able to access documents, files, images and even your home or office computer, thanks to cloud computing.” Not Using Cloud Computing At any place and at any time of the day, you are able to access documents, files, images and even your home or office computer, thanks to cloud computing. It eliminates the need to carry around dozens of unneeded folders or a jump drive. Services such as Dropbox, Google Drive, SkyDrive, SugarSync and Box.net offer free document storage that you can access as long as you have an Internet connection. They also offer a paid subscription if you need larger storage space. Setting up a remote desktop connection will allow you complete access to the computer of your choice. I will say use cloud computing with caution. Even though it is safe and secure, you are still placing some of your most important documents on the Internet that are accessible if your username and password were ever given out.
Jumping on the Bandwagon Technology is a fast-paced environment. New apps and services are coming out every minute of every day. Make sure to do your research before jumping on the bandwagon with new technology products, services and devices. Usually products or services offer a free trial before you have to sign up. Ask questions, see if any colleagues have used the platform before, and read reviews. Consumer and online reviews provide some of the most upfront and honest feedback on a particular service. For every service you’re looking for, there are probably a hundred options and only a few that will be the best fit for you and your business. QR codes, for example, are the latest fad, and many people use them because they feel they have to; but when used improperly, the result is ineffective.
Afraid of Change People are afraid of change because they are scared of the perception of failure. We become comfortable with our everyday habits, and the idea of switching things up makes people cringe. Technology is always changing and
Cloud Services to Check Out.... Below are two services besides the current king of cloud storage, Dropbox.
Google Drive Much like Dropbox and other cloud computing software, Google Drive is the newest service in the field. Launched in late April 2012, this service provides 5GB of storage for free and allows you to connect via PC, Mac and Android devices, and iPhone and iPad (coming soon). www.Drive.Google.com
Microsoft SkyDrive The newly updated service that was once easy for PC/Android users is now Mac and iPhone/iPad-friendly. This cloud storage option allows you to do the same as Dropbox and Google Drive, however their free service starts at 7GB. Files up to 2GB can be dragged and dropped into any drive and any folder just like you would on your home computer. www.SkyDrive.com
wisconsin real estate magazine
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7
12 common technology mistakes
and how to avoid them
adapting to new ideas and functions. You need to be open to the changes and look for the benefits they bring, and not the fact that something is different. Every change made to a service, product, app or device is with the intent of making the specific item better. Sometimes companies fail at that, but most times there is an enhancement. Every time that Facebook makes a change, for example, the news feed is flooded with friends complaining about the difference. They fail to forget it is a free service, and that each and every enhancement is with a goal in mind.
Improper Response Method At times we become creatures of habit, but when communicating to prospective clients, we need to adapt to their method of communication. For example, if a client e-mails you, it is expected that the response would be via e-mail as well, unless noted otherwise. Also, texting is not considered e-mail. I’ve found it a bit interesting when a client texts me with a question. Texting is meant for more of a personal touch, unless the client texted you first. If they call you, you follow up with a phone call. Let the client decide what method of communication they prefer — not you.
Lack of Website Maintenance Many small businesses invest a large amount of time and money in developing a beautiful website. But the problem is that the last time they paid any attention to it was the day they launched it. Think of your website as your lawn: you need to mow it
tech hottips Looking for more technology tips and how-to’s? Check out the WRA’s Tech Hottips to find all sorts of information on various topics. www.TechHottips.com
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“Think of Social Media as a cocktail party, but without the constraints of time or space. Compared to a cocktail party, the social media environment is more public and easier for people to listen in. The goal with any social event is to meet people and start conversations.” weekly, add fertilizer a few times a year, and sprinkle a little grass seed every now and then to make it look beautiful. Your website is not much different; it needs maintenance to keep it looking fresh and up-to-date. Make it a priority to spend time making updates or add money in your budget to have a professional do it for you. Your website and every other piece of marketing is how consumers perceive your business. If it appears unorganized and out-of-date, that is the way your prospective clients will feel about you.
Purchasing Extended Warranties While purchasing an extended warranty may seem like a good idea at the time, it is generally proven that it is not worth it. Typically the price you pay for a warranty on a computer, TV or other large purchases actually covers the entire cost the retailer paid for that product. With that being said, each and every person is different. Some people are harsher on the products they use, and it might not be a bad idea to have extra coverage. Items that don’t do much travel, such and desktops or TVs, probably don’t need a warranty. Cell phones and cameras that are used on a daily basis should have coverage only if it includes water damage.
Failing to Back Up It is important to always back up your files on your computer or any added drives. Not only for IRS purposes, but for ease of mind, take the proper steps to back up everything. Many businesses fail to take the simple procedures of doing this and
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it ends up biting them in the end. Storage space is not an issue, and Apple and Microsoft make it easy to set up a schedule that will automatically back up every single file while you are sleeping. Keep in mind that data recovery is possible; however it can be painful and expensive.
Too Much Travel Time Let’s face it — gas is not cheap these days. Even though we feel that face-to-face meetings are important, thanks to video conferencing services such as Citrix or even Skype, certain meetings are possible while staying at the office. Telecommuting can also save you trips into the office and provide a working environment that may actually be more productive. As a REALTOR®, your schedule can be hectic at times, and these tools will help free up time in your busy day if you take advantage of them.
Throwing Old Technology in the Garbage I may be a stickler for being green, but you can’t just simply toss your old cell phone or printer in the trash when you are finished with it. Each item contains hazardous material that needs to be properly disposed or can damage the environment. Instead, consider spending a few minutes to polish and resell your old tech item. A few minutes on Ebay or Craigslist can save you a few bucks in disposing fees and put a little back in your pocket. Just because you don’t want your old monitor doesn’t mean someone else doesn’t.
www.wra.org/wrem
Not Using Social Media
to take the proper steps to prevent viruses, spam or theft is just lazy. McAfee and Norton provide anti-virus software and Internet security. Along with protecting your computer, you need to take the proper steps to secure your smartphone. Your smartphone carries more sensitive data and it is crucial to have it passwordprotected in case it ends up in the wrong hands. iPhone and Android both have apps available that will locate your phone via GPS in case it is ever stolen.
Think of Social Media as a cocktail party, but without the constraints of time or space. Compared to a cocktail party, the social media environment is more public and easier for people to listen in. The goal with any social event is to meet people and start conversations. You as the REALTOR® are viewed as the professional and should be adding value to any conversation. Be helpful, answer questions and in return ask questions and trust others’ advice. Facebook and Twitter are excellent for building an online presence. Keep in mind these four main goals with social media: 1) Be Found, 2) Connect and Engage, 3) Create a Community, and 4) Promote Content.
Have a specific topic or question you would like to be discussed in the future? Please send your inquires to Joe Leschisin at joel@wra.org. Joe Leschisin is the Senior Designer for the Wisconsin REALTORS® Association. In 2011, he was named to In Business Magazine’s “40 Under 40” List. His graphic design and Web development has been recognized with multiple awards on a local and national level.
No Security One of the most important tools you do your work on is your desktop, laptop or smartphone. It is your lifeline, and failing
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WRA MOBILE Website
Coming May 2012! Later this month, the Wisconsin REALTORS® Association will be launching the all-new mobile website. The site will make it easier for members to access information and register for courses and events right from their fingertips. Look for an e-mail announcing the launch with complete details.
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legal
Tick Tock Calculating Deadlines in the Offer to Purchase
By cori lamont
O
ver the course of the last few years, one consistent conversation has revolved around calculation of dates and deadlines in the Offer to Purchase. While the majority of deadlines in the preprinted state-approved offers run from acceptance, some are calculated from date of the offer, date of closing and also vary depending on hours, days and business days. All of the revised offers to purchase include the same definition of Deadlines. However, the parties may agree to modify the terms of the contract, including altering the preprinted deadlines in the offer. For example, the parties may agree that deadlines will run from binding acceptance, or a specific event such as lender approval. The parties may also modify the deadline provision to include all state and federal holidays when calculating business days or to provide that a deadline expires at 9:00 p.m. rather than midnight of the last day in the time frame. Whatever the agreement, the parties and the agents need to have a clear understanding of how to calculate and determine when deadlines begin to run and when deadlines expire.
“hours” from the occurrence of an event, such as receipt of a notice, are calculated from the exact time of the event, and by counting 24 hours per calendar day. Deadlines expressed as a specific day of the calendar year or as the day of a specific event, such as closing, expire at midnight of that day.”
“‘Deadlines’ expressed as a number of ‘days’ from an event, such as acceptance, are calculated by excluding the day the event occurred and by counting subsequent calendar days. The deadline expires at midnight on the last day. Deadlines expressed as a specific number of “business days” exclude Saturdays, Sundays, any legal public holiday under Wisconsin or Federal law, and any other day designated by the President such that the postal service does not receive registered mail or make regular deliveries on that day. Deadlines expressed as a specific number of
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Calculation of Deadlines Typically, the easiest way to illustrate the calculation of deadlines is with an example. Such as, the buyers inserted 10 days on line 421 of the Inspection Contingency in the WB-11 Residential Offer to Purchase. The offer was signed and dated by the sellers as “accepted” on Thursday, but was not
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delivered until Friday morning. How are the 10 days counted? Per line 421, unless modified, the deadline of the Home Inspection Contingency is measured from the date of acceptance. Thus, the home inspection deadline is counted or calculated from the date the offer is accepted, that is, the date when all parties have signed the offer. Lines 174-181 provide guidance concerning counting of days. “Acceptance occurs when all Buyers and Sellers have signed an identical copy of the Offer, including signatures on separate but identical copies of the Offer.” www.wra.org/wrem
Therefore, from the facts provided, acceptance occurred when the sellers signed on Thursday. Thus we begin counting Friday as day one, Saturday – two, Sunday – three, Monday – four, Tuesday – five, Wednesday – six, Thursday – seven, Friday – eight, Saturday – nine and Sunday as day ten. The inspection contingency deadline would expire on the second Sunday at midnight.
Different Time Frames Date of this offer While the majority of deadlines run from the date of acceptance, including those for earnest money, the Financing Contingency, the Appraisal Contingency and the Inspection Contingency, there are some provisions in the offer that run from a different event. For example, the timing in the Special Assessment/Other Expenses provision is one of the most unique in the offer. Special assessments, if any, levied or for work actually commenced prior to the date of this Offer shall be paid by Seller no later than closing. All other special assessments shall be paid by Buyer. This provision is the only one in the preprinted offer that hinges on the date of the offer as opposed to events such as acceptance or closing and is often overlooked because it is typically on an offer page that
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does not include any blank lines. Thus if the special assessment was levied the day after the offer, the buyer would be on the hook for the expense. Days before closing Another hidden treasure for timing is provided in the Title Evidence section, specifically the Provision of Merchantable Title. For purposes of closing, title evidence shall be acceptable if the required title insurance commitment is delivered to Buyer’s attorney or Buyer not less than 5 business days before closing… In these situations, we calculate out from closing as opposed to after acceptance. Keep in mind that not all offers are created equally as the Vacant Land, Farm and Commercial offers express this specific deadline as from days of acceptance, which means it runs earlier in the transaction.
the two because a four-day deadline is shorter than a four-business-day deadline. The majority of deadlines in the offer are expressed as days, however in addition to the merchantable title in the real estate condition report provision, the right to rescind is statutorily two business days. Another example of the use of business days in an offer to purchase is provided in the WB-14 Residential Condominium Offer to Purchase and condominium law; the statutory language provides a buyer’s right to rescind of five business days. The simplest way to remember the distinction between days and business days is that “days” run Monday through Sunday, while “business days” run Monday through Friday and exclude holidays and other noted exceptions.
Days vs. Business Days
Hours
Deadlines expressed as a specific number of “business days” exclude Saturdays, Sundays, any legal public holiday under Wisconsin or Federal law, and any other day designated by the President such that the postal service does not receive registered mail or make regular deliveries on that day.
Deadlines expressed as a specific number of “hours” from the occurrence of an event, such as receipt of a notice, are calculated from the exact time of the event, and by counting 24 hours per calendar day.
There is often an impression that days and business days are interchangeable, and that is incorrect. The definition of Deadlines specifically makes a distinction between may 2012
The offers also include at least one reference to a deadline that utilizes hours. The Closing of Buyer’s Property Contingency provides, within _____ hours of Buyer’s Actual Receipt of said notice … There is not currently any other contingency or provision preprinted in the
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offer that includes an hour deadline. Agents should also note the use of Actual Receipt in this provision. “Actual Receipt” means that a Party, not the Party’s recipient for delivery, if any, has the document or written notice physically in the Party’s possession, regardless of the method of delivery.
“Agents are responsible for keeping track of the dates and deadlines for consumers and should be mindful of what needs to occur and by what day. In addition, agents should feel confident on how to determine and calculate when the provision or contingency deadline expires.”
Once the buyer has the bump notice, not the agent, the clock begins to run hour by hour, 24 hours per calendar day. Therefore it more likely than not that a 72-hour deadline will run out faster than a three-day deadline.
Time Is of the Essence If “Time Is of the Essence” applies to a date or Deadline, failure to perform by the exact date or Deadline is a breach of contract. If “Time Is of the Essence” does not apply to a date or Deadline, then performance within a reasonable time of the date or Deadline is allowed before a breach occurs. Under general contract law, a deadline in a contract for which time is NOT made of the essence does not have to be complied with precisely on the DATE (or time) indicated. The courts will say that, if given the circumstances of the contract, performance was reasonably close in time, it will not be a breach of contract to have missed the deadline. If time is made of the essence as to a particular deadline, failure to perform by the precise moment of the deadline will be a breach of contract. Immediately thereafter the party awaiting performance can give notice that the contract has been cancelled due to the breach of contract.
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If a non-“time is of the essence” deadline is missed by a party, the other waiting party may unilaterally notify the non-performing party that performance must occur by the end of a stated “reasonable” time period for which time is of the essence. This reasonable time period should be stated in a written notice along with the statements that the new deadline is “time is of the essence” and that contract will be void if the new deadline is not met exactly. Parties should be referred to legal counsel should they wish to establish a “time is of the essence” deadline after the passing of a non-time is of the essence deadline in this manner. If the seller will not meet the “reasonable time” closing deadline, the buyer should work with legal counsel. Buyer’s rights may depend upon a variety of technical legal principles such as election of remedies and requirements that buyer demand seller performance and demonstrate buyer’s intent and ability to close. Agents are responsible for keeping track of the dates and deadlines for consumers and should be mindful of what needs to occur and by what day. In addition, agents should feel confident on how to determine and calculate when the provision or contingency deadline expires. Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.
www.wra.org/wrem
best of the legal hotline Questions and Answers Relating to Signatures with tracy rucka
Single Buyer/Married Seller
Sibling Sellers
The seller married since she bought the property and the couple lives in the home. She listed the home and does not want her husband’s signature on any of the documents for listing or selling the property. The cooperating broker working with the buyer wants the husband to sign the offer. Must the husband sign the offer?
A broker is going to list a home that is owned by three siblings. They live all over the country. Must all three sign the listing contract? Must all three sign the same offer?
The listing contract must be signed by someone agreeing to pay the commission. The law does not require that all owners sign a listing contract in order for the listing contract to be enforceable against the owner who does sign. Therefore, technically a wife signing a listing can be liable for a commission to a broker who successfully procures a buyer. Prior to accepting a listing signed by one spouse, counsel may be consulted regarding the myriad of potential problems, including disclosure duties owed to prospective purchasers, homestead law, marital property law, and agency disclosures to the seller client and the seller customer. In Wisconsin, Wis. Stat. § 706.02 provides that both spouses must sign all documents conveying an interest in any homestead property, including the Offer to Purchase and the deed or land contract. Generally speaking, a “homestead” is the home or dwelling of a married person. The definition is intended to be broad and covers a property as long as one or both of the spouses lives there. The brokers may work together, and with the title company, to determine the status of the property and whether or not it is homestead requiring all signatures.
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As previously discussed, the listing contract must be signed by someone agreeing to pay a commission. The law does not require that all the owners sign a listing contract in order for the listing contract to be enforceable against the owner who does sign. The broker may be cautious about proceeding without the signature of all owners because if all sellers are not in agreement to the listing, they may not agree to the sale. For the offer, acceptance must be in writing to satisfy the Wis. Stat. § 706.02 requirements for a written contract conveying an interest in real estate. Wis. Stat. § 706.02 requires that a real estate conveyance document, such as an offer to purchase, must identify the parties and be signed by or on behalf of all the parties to create a binding contract. Given the sellers are in different locations, the broker and parties may use counterparts to obtain a fully executed offer. As indicated on lines 23-24 of the WB-11, “Acceptance occurs when all Buyers and Sellers have signed one copy of the Offer, or separate but identical copies of the Offer.” This provision specifically allows for the use of counterparts, which is helpful, for example, when there are parties living in different states. Wisconsin case law recognizes that contracts may be signed in counterparts — that
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hotline highlights
cont’d
is, no one piece of paper has all the original signatures, but taken together, all parties have executed a copy of the same contract. It is the assent of the parties to the same terms and conditions that makes a contract. When counterparts are being used, it is prudent to include a statement in the offer explaining that the contract is being executed by the buyers and sellers in counterparts, which are multiple copies of the same offer.
Marital Property If a buyer is trying to purchase a home, but her divorce is not final yet, can she purchase a home without the soon-to-be ex-husband’s approval and name on the contract? Although, as a general rule, married persons may purchase property and take title in one of the spouse’s names alone, this buyer’s situation and divorce may impose limitations on the purchase of real property. Often preliminary orders in a divorce prohibit both spouses from entering into any significant economic obligations during the pending divorce. The broker should refer the buyer to consult with her divorce attorney to determine how best to proceed with any transaction in light of the pending divorce and her particular circumstances.
Brokers Signing As the agent of the seller under a listing contract or the agent of the buyer pursuant to a Buyer Agency Agreement, can a licensee sign contracts and documents on behalf of the client? What is the proper form for signing on behalf of another? Unless the broker or agent has actual authority, that is, a Power of Attorney (POA), he or she may not sign for the buyer. The standard listing contract and the buyer agreement forms approved by the Real Estate Examining Board for use by Wisconsin licensees do not provide such an authorization. A licensee signing transaction documents for a party without proper written authorization risks discipline and sanction by the Real Estate Examining Board.
the principal/buyer skips to Rio, the agent becomes the new owner of the property.
Boyfriend/Girlfriend Wis. Stat. § 706.03 states that an agent must be expressly authorized to sign on behalf of a principal — such as a POA. Further, the law provides that the burden of proving the authorization is on the agent. When actually executing real estate documents under a POA, the agent signing on behalf of the principal must comply with Wis. Stat. § 706.03(1m), and state the name of the authorizing principal. It is also recommended that the agent indicate his or her authority or capacity, as illustrated in the following examples: “Seller XYZ By: (agent signs name)(Print or type name), authorized attorney-infact” -OR- “(attorney-in-fact signs name)(Print or type name), as authorized agent on behalf of Buyer ABC.” An agent in Wisconsin who signs an offer as “agent for unidentified principal” or otherwise does not disclose the principal in the contract risks being held personally liable on the contract. In other words, if
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The selling agent allowed the girlfriend to sign the counter-offer on behalf of herself and her boyfriend, who are both named as buyers in the Offer to Purchase. It is unclear whether or not there was an appropriate expressed authorization, as required under Wis. Stat. § 706.03(1m), from the boyfriend to the girlfriend; it appears that there was at least verbal consent. Now the boyfriend no longer wants to buy the property and he is asserting that he never signed the counter-offer. The agent did not disclose to the listing agent that there may not have been proper authorization for the girlfriend to sign on behalf of the boyfriend. The sellers are currently considering their potential options against the buyers. What is the agent’s potential exposure? Would it matter if they were married? It may be prudent for the agent to consult with his or her broker and legal counsel. Authority to sign for another should be given in writing, preferably notarized, with the fullest, most detailed as www.wra.org/wrem
“Whenever someone signs on behalf of another, care must be taken to establish the authority of the person who is signing to do so.”
possible instructions from the party authorizing it. In executing documents, the signing party should comply with § 706.03(1m), which provides that the party’s name — in this case, the boyfriend’s name — appear with an indication of the authority of the signing party — here, the girlfriend — such as “(name of boyfriend) by (name of girlfriend), as authorized agent” or “(name of girlfriend) as agent on behalf of name of boyfriend.” Whenever someone signs on behalf of another, care must be taken to establish the authority of the person who is signing to do so. The fact that the parties were married rather than single would not change the outcome. Spouses do not have automatic authority to sign for each other.
Limited Liability Companies Does an LLC member have the right to sell a property owned by the LLC? With an LLC, the authority to transfer its property depends on whether the LLC is member-managed or centrally managed. In a member-managed LLC, Wis. Stat. § 183.0301 provides that each member is an agent of the LLC. A member may sign documents and bind the LLC if the member is apparently carrying on the ordinary course of business for the LLC, unless the member has no authority to act and the person he is dealing with is aware of his lack of authority. Under § 183.0702, the property of the LLC that is held in the name of the LLC may be transferred by a conveyance executed by any member in the name of the LLC. If one or more managers centrally manage the LLC, a member is not an agent of the LLC and cannot bind the LLC. Rather, each manager is an agent of the LLC and can execute documents and bind the LLC per § 183.0301. If there are one or more managers, property that is held in the name of the LLC may be transferred only by a conveyance executed by a manager in the name of the LLC; LLC members will have no authority to transfer title. When dealing with an LLC, it may be wise to ask for the LLC’s operating agreement and/or other affirmative representations confirming a member’s or a manager’s authority to bind the LLC and to sell the real estate on behalf of the LLC. wisconsin real estate magazine
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Life Estate Sales The accepted offer is signed by seller Jane Smith who is living in the house. The broker did not do a search and hold on title when listing the property. After the offer was accepted by Jane, the title commitment came back with the following: “Jane Smith, life estate and Power of Appointment and remainder interest to, Ronald Smith, Ted Smith and Cary Smith, as tenants in common.” Is the offer valid just with the signature of Jane Smith, or must all parties sign the offer to purchase? It appears that Ronald, Ted and Cary Smith together hold the remainder interest in the property with Jane Smith having a life estate. Someone who has a life estate interest is not a legal owner of the property; however, she has the right to live in the property until her death. All owners of the property, both the person with the life estate and the remaindermen must sign the Offer to Purchase in order to create a valid real estate conveyance to sell the property in fee simple absolute per Wis. Stat. § 706.02. If, however, all that is being sold is Jane Smith’s life estate, then Jane may sell that interest independent of the consent of the remaindermen. In such a situation, the buyer would have the right to occupy the property only until Jane’s death.
Tracy Rucka is Director of Professional Standards and Practices for the WRA.
Resources: For further discussion concerning signatures and power of attorney, see Legal Update 04.05, “Avoiding Liability When Signing and Making Referrals,” at www.wra.org/LU0405, and Legal Update 06.09, “Contract Law Basics” at www.wra. org/LU0609. For further information regarding life estates, see page 8 of the June 2007 Legal Update, “Ownership and Title Pointers for Brokers” at www.wra.org/LU0706.
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Landlord-Tenant Law:
New Check-In Sheets & Property Disposal Procedure By debbi conrad
S
everal important changes were made to landlord-tenant law at the end of the 2011-12 legislative session that will cause a few significant changes to the way landlords and property managers interact with tenants.
Does It Really Say that? From the flurry of amendments to 2011 Senate Bill 466 near the end of the legislative session emerged 2011 Wis. Act 143, which makes numerous changes to landlord-tenant law, primarily in Wis. Stat. chapter 704. Any time there is new legislation, there will be commentary and speculation over how the new provisions will be interpreted and applied because rarely does any legislation contemplate every possible situation or anticipate each possible wrinkle. But Act 143 has drawn a fair share of immediate attention. One reason is the subject: landlord-tenant law. The landlords have one perspective and tenants have another — that is to be expected. Another reason is the timing: SB 466 was signed into law March 21, 2012 and became effective March 31, 2012. There was little time to evaluate the new provisions before it was time to start taking action. There are some differences of opinion over how to read and apply a few of the new provisions. Only time will tell how the perplexing
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provisions are sorted out. The courts may be called upon to decipher the new statutes as they resolve landlord-tenant disputes. Maybe the legislature will be called back into action to clear the air with a trailer bill that smoothes out any rough edges. In the meantime, the major revisions to Wis. Stat. chapter 704 address the following issues:
The Stuff They Leave Behind Landlords and property managers have been happy to hear that they will no longer have to store personal property left behind by tenants when they move out or otherwise vacate the premises. Wis. Stat. § 704.05(5) has been overhauled and now provides that landlords may presume that property that the tenants leave behind is abandoned and may dispose of it in any manner that the landlord believes to be appropriate, if and only if, the landlord first has provided written notice to the tenant. This written notice must be provided to the tenant when the tenant enters into or renews a rental agreement and must indicate that the landlord will not store any personal property the tenant leaves behind.
www.wra.org/wrem
The landlord may dispose of “stuff” left behind by placing it in the dumpster, or the landlord can sell it or find another appropriate disposal method. The landlord can dispose of property left on the premises regardless of whether it is owned by the tenant or someone else. The tenant or any secured party has the right to redeem the property at any time before the landlord has disposed of it, or entered into a contract for its disposition, by payment of any expenses that the landlord has incurred with respect to the disposition of the property. There are two exceptions to the general rules, one for medical items and one for manufactured homes, mobile homes and titled vehicles. With regard to medical items, the revamped § 704.05(5) indicates that if a tenant leaves prescription medicine or prescription medical equipment behind, the landlord must hold those items for at least seven days after the landlord discovers those items and must promptly return them upon the tenant’s request. If the property left behind is a manufactured home, mobile home or a vehicle of some sort — such as cars, boats, snowmobiles or mopeds — the landlord must give notice before selling it or otherwise disposing of it. Notice must be given to the tenant, and to any secured party that the landlord has actual knowledge of, by regular or certified mail to the last known address. Action required: Landlord must give written notice when the tenant enters into or renews a rental agreement. Applies to/effective date: Rental agreements entered into or renewed on or after March 31, 2012.
Check-In Sheets The new § 704.08 requires a landlord to provide a new residential tenant with a check-in sheet. The tenant will have seven days from the date the tenant commences occupancy to complete and return it to the landlord. This already is a common practice for many landlords and property managers and now it is a statewide requirement. But § 704.08 also says that this “standardized information check-in sheet” that the landlord must provide
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when the tenant commences occupancy “contains an itemized description of the condition of the premises at the time of check−in.” This appears to require something new: the landlord is to provide a description of the condition the premises at the time the tenant checks in. In other words, this information check-in sheet would be completed by the landlord in some fashion to describe what the condition of the premises was at check-in time, and may be completed by the tenant after the tenant commences occupancy, presumably to make additional comments about the condition of the rental unit and indicate if any description provided by the landlord does not appear to be accurate. Action required: When the tenant begins occupancy, the landlord must provide the tenant with an information check-in sheet describing the condition of the premises. Applies to/effective date: Tenancies beginning on or after March 31, 2012.
What One Hand Giveth, the Other Taketh Away The new § 704.02 says that if any provision in a rental agreement is found to be invalid or unenforceable, the rest of the agreement is still in force. This was an apparent response to the Baierl v. McTaggart case (2001 WI 107). There, the Wisconsin Supreme Court held that a landlord who includes a provision specifically prohibited by Wis. Admin. Code § ATCP 134.08(3) in a residential lease may not enforce that lease.
“The landlord may dispose of “stuff” left behind by placing it in the dumpster, or the landlord can sell it or find another appropriate disposal method. The landlord can dispose of property left on the premises regardless of whether it is owned by the tenant or someone else.”
This seems straightforward enough, until you see the new additions to § 704.44 that now is entitled “Residential rental agreement that contains certain provisions is void.” The seven prohibited rental agreement provisions listed in Wis. Admin. Code § ATCP 134.08, referred to as the “Seven Deadly Sins,” now also appear in § 704.44. So what does this mean? A rental agreement that includes a provision included in this list — that now appears in two places — will be void. For example, a lease that says the tenant can be evicted by changing the locks or that the tenant must pay the landlord’s attorney’s fees if the parties have a legal dispute is null and void.
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In § 704.44 there actually is an eighth Deadly Sin added to the list. A rental agreement is void and unenforceable if it “allows the landlord to terminate the tenancy of a tenant if a crime is committed in or on the rental property, even if the tenant could not reasonably have prevented the crime.” This appears to say that landlords cannot have rental agreement provisions that say the agreement is terminated if a crime is committed on the premises. It is not clear what impact, if any, the tenant’s ability to prevent the crime has in this provision as written. Action required: Make sure that none of the items in § 704.44 are in any rental agreements entered into or renewed on or after March 31, 2012. Applies to/effective date: Rental agreements entered into or renewed on or after March 31, 2012.
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Security Deposits: There are provisions listing the reasons for which a landlord may withhold amounts from a tenant’s security deposit and establishing the timing for the return of the security deposit in Wis. Admin. Code § ATCP 134.06(2)-(3). These provisions now also appear in similar language in the new § 704.28. One substantive change of note appears in the new § 704.28(4)(b): if a tenant vacates before the rental agreement termination date, the 21 days for the return of the security deposit begins on the termination date or on the date the landlord re-rents the premises, whichever comes first.
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Disclosure of Code Violations: The new § 704.07(2)(bm) says that landlords must disclose uncorrected building or housing code violations actually known to the landlord that affect the dwelling unit — or associated common area — being rented and that present a significant threat to the tenant’s health or safety. The disclosure must occur before any earnest money or security deposit is accepted from a tenant. This is narrower than the similar provision in § ATCP 134.04(2)(a) that requires the landlord to show the tenant the violation notices or orders for all uncorrected building and housing code violations impacting the premises.
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Remedies for Violations: The new § 704.95 says that “Practices in violation of this chapter may also constitute unfair methods of competition or unfair trade practices under s. 100.20.” This may mean that a practice that violates a provision in chapter 704 of the statutes may be enforced under the unfair methods of competition and trade practices statute. That would mean double damages and reasonable attorney’s fees for a party suffering pecuniary loss.
Transplants from ATCP 134 Several provisions that appear in Wis. Admin. Code chapter ATCP 134 have been added to the statutes. Most of the provisions are substantially similar, but there have been a few modifications in some cases that change applicable law.
yourChoice Realty.net
Action required: Avoid any violations of chapter 704 because there is a risk of double damages plus attorney’s fees per § 704.95 Applies to/effective date: March 31, 2012.
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The WRA is in the process of updating its forms to comply with the new landlord-tenant law changes. Addenda for the WRA Residential Lease and Residential Rental Contract have been created and made available for those entering into new agreements on or after March 31, 2012. These are available at www.wra.org/Rental and on ZipForm®. The WRA also will revamp the WRA Move-In/Move-Out Report and make revisions to the Rental Disclosure Form and Nonstandard Rental Provisions form — watch for information regarding availability. 2011 Wis. Act 143 may be reviewed at docs.legis.wisconsin.gov/2011/ related/acts/143 and the updated chapter 704 is found at docs.legis. wisconsin.gov/statutes/statutes/704.pdf. All of these changes apply to commercial as well as residential leases, except for the Seven (Eight) Deadly Sins in § 704.44. Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.
www.wra.org/wrem
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1-800-279-1972
www.wra.org/ceondemand
2. LIVE If you enjoy classroom participation, the WRA’s live courses are just for you! The WRA hosts CE courses throughout the state at various dates and times taught by Wisconsin’s finest instructors. Schedule a class now! For a list of courses offered in your area, visit www.wra.org/LiveCE.
1. On Demand
3. Booklet / online exam
Six-Pack Discount The six-pack option allows you to take the four mandatory classes and two elective courses of your choice for only $126. ($21 per course)
The WRA’s comprehensive, easy-to-follow self-study booklets allow you to complete your CE at your own pace and on your own schedule. You can then take the corresponding exam online when you are ready. Courses 1, 2, 3 and 4 as well as Electives A, B, C and D are available in this handy format. $27/course/member www.wra.org/BookletCE
Four-Pack Discount Choose any combination of the mandatory and elective courses for only $92. ($23 per course) Individual Courses Choose any single course for the low price of $27/course. Commercial CE courses can be purchased individually as well. For complete details, visit
www.wra.org/ceondemand
4. DVD / online exam Complete CE in the comfort of your own home with the WRA’s DVD option. Watch the CE class on DVD, follow along with the outline, then take the corresponding exam online. All 20112012 CE courses are available through this program. $27/course/member www.wra.org/DVDCE
Commercial CE The WRA’s commercial-centric CE courses are designed specifically for those who practice in the commercial real estate world, available in classroom or On Demand. www.wra.org/Commercial
All pricing listed above is for Wisconsin REALTORS® Association members only. Non-member pricing is based on a different scale. 4- and 6-Pack pricing only available for On Demand. Commercial CE courses not offered in On Demand 4- and 6-Pack Options. Sold only as individual courses.
product showcase
Balance the Technology Tightrope Take Control of Technology By Nichole Mickelson
T
here is no denying that the amazing advancements in technology allow our lives to become more efficient every day. Arguably the biggest advancement in technology in recent years is its mobility, but in a day and age when losing a cell phone is equivalent to losing your wallet — or worse! — remember to keep perspective on your technology dependence. While there are countless benefits to using technology, it’s all about perspective. Does your smartphone allow you to be accessed anytime and anywhere, or does it allow you to access the rest of the world anytime and anywhere? Technology has provided a free platform for advertising to customers, with the ability to market via blogs and RSS feeds as well as through social media like Twitter, Facebook and LinkedIn. Laptops, smartphones and tablets allow your office to become “virtual” as we are able to do the same work from outside the office — telephone calls, e-mails, complete real estate continuing education courses, check MLS listings, send and receive real estate transaction forms via zipForm®, even accessing office-specific computer technology through remote desktop logins. Mobile technology allows us to operate business 24/7, if desired. Achieve the most success by determining how to walk the technology tightrope and find the right balance of technology in your life.
Technology Guide directs you in determining which technologies you need to become more efficient and effective, maximize your online presence, and profit from the experience of the foremost experts on real estate technology. Learn how to make better use of the technology you already have and how to plan for the next step. www.wra.org/pub275.
New Product Announcement!
Real Estate Technology covers a variety of technology tools, including smartphones, and offers application tips on blogs, podcasts and other marketing ideas to help real estate professionals use current technology in their business. Brokers will also find an additional chapter for using technology within their offices to recruit and retain more agents. www.wra.org/pub164.
Real Estate Technology Guide As technology continues to provide real estate professionals with new tools and capabilities, the challenge becomes how best to use these tools to increase business and your “return on investment.” The Real Estate
Looking for information on how to most efficiently utilize technology in your real estate business, but your iPad, Kindle, or Nook battery is dead? Are your eyes strained from staring at a computer screen for hours on end? Consider a good old-fashioned paperback book from the WRA library! Many of the publications in the WRA’s inventory contain a section on technology. Here are some suggestions.
In addition to the electronic version available through zipForm®, 2012 Wisconsin Real Estate Clauses is available as a paperback book, which is great for use when you don’t have access to a computer or are handwriting a paper form. Cover all your bases by having both on hand for reference! Visit www.wra. org/PUB280 for more.
5 Minutes to Maximize Real Estate Technology
Nichole Mickelson is the Business Services Assistant for the WRA and oversees numerous WRA products.
Feel like you don’t have time to keep up with the latest high-tech applications and marketing strategies? 5 Minutes to Maximize
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wisconsin real estate magazine
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The WRA’s zipForm® 6 Clause Library is now available! The zipForm® 6 Clause Library is the electronic version of 2012 Wisconsin Real Estate Clauses. This is the go-to resource for drafting ideas when standard forms need to be modified to reflect the intent of the parties. The 2012 edition adds new clauses and revises many clauses that appeared in the previous edition. Purchase the Clause Library directly through your zipForm® 6 account. Downloadable PDF instructions can be found on our website at www.wra.org/zipform, www.wra.org/zipClauseStandard or www.wra. org/zipClausePro.
may 2012
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September 9-11, 2012 | Radisson Paper valley hotel - appleton Convention is the perfect place to network with colleagues, get recharged about your business, complete Continuing Education courses or choose from more than 40 workshops across three days. Whether you are looking for new ideas, marketing tips, sales strategies or a primer on new technology, there’s something for everyone.
Sunday September 9
Monday
Tuesday
8:00 a.m. – 5:00 p.m. Exhibits Open
8:00 a.m.
8:30 a.m. – 12:00 p.m. Real Estate CE – Course 3 New Developments
8:30 a.m. – 12:00 p.m. Real Estate CE – Elective A – Short Sales and Foreclosures
September 10
8:30 a.m. – 12:00 p.m. Real Estate CE – Course 1 – Listing Contracts 9:30 a.m. – 4:00 p.m. Golf at Butte des Morts Country Club 11:30 p.m. – 3:00 p.m. Real Estate Bar Camp 1:00 p.m. – 4:30 p.m. Real Estate CE – Course 2 – Offer to Purchase
9:30 a.m. – 11:30 a.m. Opening Session Become the Change You Wish to See in the World
4:00 p.m. – 6:00 p.m. Exhibits Open
1:00 p.m. – 4:30 p.m. Real Estate CE – Course 4 Business Ethics
8:30 p.m. – 1:00 a.m. Icebreaker Party “Connections Carnival”
2:45 p.m. – 4:00 p.m. Workshops - Session 2
1:00 p.m. – 2:30 p.m. Workshops - Session 1 7:00 p.m. – 9:00 p.m. Chairman’s Installation Dinner 9:00 p.m. – 12:00 a.m. The After Party
September 11
Exhibits Open
8:30 a.m. – 4:30 p.m. Appraisal CE - UAD: Coping with the Aftereffects 8:45 a.m. – 10:00 a.m. General Session: NetWORTHingTM ... The New Social Economy 10:30 a.m. – 11:45 a.m. Workshops - Session 1 1:00 p.m. – 4:30 p.m. Real Estate CE - Elective D – Financing 1:15 p.m. – 2:30 p.m. Workshops - Session 2 2:45 p.m. – 4:00 p.m. Workshops - Session 3
www.wra.org/convention
education
WRA Annual Convention I September 9–11, 2012 I Appleton
Mission: Convention Photo Contest Like photography? Like Wisconsin? Don’t miss your chance to win! We want to see Wisconsin through your lens. Enter your photographs that capture Wisconsin life in the WRA’s Convention Photo Contest for your chance to win prizes and receive photo credit in future issues of Wisconsin Real Estate Magazine as well as other WRA media. Contestants must be current WRA REALTOR® members or affiliate members with a knack for photography. Enter photos in any of our categories — parks and recreation; arts and culture; outdoors and natural attractions; travel destinations; sports and community events; and orchards and markets — and compete to win prizes! Review the official contest rules and details to be fully prepared and ready to compete. The contest is open May 1, 2012 through August 10, 2012. Community judging will take place starting May 1, 2012 on the WRA convention website and will continue during the duration of the contest. First, second and third place winners will be announced at the WRA’s Annual Convention at the Opening Session on Monday, September 10, 2012, in Appleton! Grab your gear and get outdoors! For official contest rules and details, visit www.wra.org/ConventionPhotoContest.
RE BarCamp Returns to 2012 Annual WRA Convention RE BarCamp is back!
re
WISCONSIN
RE BarCamp will return once again to the WRA’s Annual Convention in September 2012. Often described as an “informal gathering of like-minded people,” REALTORS® gather at RE BarCamp to discuss how technology, social media and other emerging trends can benefit you as a REALTOR®. While many breakout session topics will be decided the day of BarCamp by the attendees, a new feature this year also will allow BarCamp attendees to submit discussion topics in advance. With the ability to view pre-selected topics, make sure to come prepared to share! RE BarCamp will be held on the first day of the convention, September 9, at 11:30 a.m. before the Packers game. Mark your calendar now, and stay tuned for complete details on the WRA convention website!
www.wra.org/ConventionCamp 22
wisconsin real estate magazine
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Course Schedule
Visit www.wra.org/CourseSchedule for full schedule. Sales & Marketing Management* Date Course Location **Early
*Wisconsin CRS Members receive a $20 discount
November 1–2, 2012
Conference and Conventions Date Event/Course
CRS 202*
Milwaukee
September 9–11, 2012
Real Estate Continuing Education
Date
Course
May 7, 2012 May 7–11, 2012 May 8, 2012 May 9, 2012 May 9, 2012 May 9, 2012 May 10, 2012 May 10, 2012 May 10, 2012 May 10, 2012 May 10, 2012 May 11, 2012 May 15, 2012 May 15, 2012 May 16, 2012 May 16, 2012 May 18, 2012 May 21, 2012 May 22, 2012 May 22, 2012 May 23, 2012 May 24, 2012 May 24, 2012 June 11, 2012 June 25, 2012 July 9, 2012 July 23, 2012 July 25, 2012 July 25, 2012 August 1, 2012 August 2, 2012 August 6, 2012 August 8, 2012 August 10, 2012 August 15, 2012 August 20, 2012 August 30, 2012
2011-12 Course 1 - DVD Manitowoc 2011-12 Electives A & B - DVD Mosinee 2011-12 Courses 1 & 2 - DVD Rhinelander 2011-12 Courses 4 Sheboygan 2011-12 Courses 4 & 3 Madison 2011-12 Courses 1 & 2 Hayward 2011-12 Course 2 - DVD Manitowoc 2011-12 Courses 3 & 4 Hayward 2011-12 Courses 3 & 4 Sturgeon Bay 2011-12 Electives C & D Brookfield 2011-12 Courses 1 & 2 - DVD Kenosha 2011-12 Courses 1 - DVD Manitowish Waters 2011-12 Course 3 - DVD Manitowoc 2011-12 courses 3 & 4 - DVD Rhinelander 2011-12 Electives A & B Hayward 2011-12 Electives C & D Madison 2011-12 Courses 3 & 4 - DVD Kenosha 2011-12 Course 4 - DVD Manitowoc 2011-12 Elective B - DVD Manitowoc 2011-12 Electives A & C - DVD Rhinelander 2011-12 Electives A & D - DVD Kenosha 2011-12 Elective D - DVD Manitowoc 2011-12 Elective D - DVD Kenosha 2011-12 Course 1 - DVD Manitowish Waters 2011-12 Course 2 - DVD Manitowish Waters 2011-12 Course 3 - DVD Manitowish Waters 2011-12 Course 4 - DVD Manitowish Waters 2011-12 Elective C Sheboygan 2011-12 Courses 1 & 2 Madison 2011-12 Course 1 & 2 Brookfield 2011-12 Course 3 & 4 Brookfield 2011-12 Elective A - DVD Manitowish Waters 2011-12 course 3 & 4 Madison 2011-12 Elective D & A Brookfield 2011-12 Elective D & A Madison 2011-12 Elective C - DVD Manitowish Waters 2011-12 CE 1 & 2 (Commercial) Milwaukee
Date
Appraisal Continuing Education
Setpember 11, 2012
Pre-License Available online!
QuickStart
Date October 1-5, 8-10, 2012
Location
Price (920) 553–6227 (715) 693–7325 (715) 356–3400 (920) 457–7908 (800) 279–1972 $27/m; $35 nm (715) 835–0923 (920) 553–6227 (715) 835-–0923 (920) 743–9651 (800) 279–1972 $27/m; $35 nm (262) 942–0592 (715) 356–3400 (920) 553–6227 (715) 356–3400 (715) 835–0923 (800) 279–1972 $27/m; $35 nm (262) 942–0592 (920) 553–6227 (920) 553–6227 (715) 356–3400 (262) 942–0592 (920) 553–6227 (262) 942–0592 (715) 356–3400 (715) 356–3400 (715) 356–3400 (715) 356–3400 (920) 457–7908 (800) 279–1972 $27/m; $35 nm (800) 279–1972 $27/m; $35 nm (800) 279–1972 $27/m; $35 (715) 356–3400 (800) 279–1972 $27/m; $35 nm (800) 279–1972 $27/m; $35 nm (800) 279–1972 $27/m; $35 nm (715) 356–3400 (800) 279–1972
Location
UAD: Coping with the Aftereffects
Sales Pre-license Course
$280
Radisson Paper Valley Hotel in Appleton
Course
Course
$260
The 2009-2010 real estate continuing education is still available through On Demand, DVD and Self-Study Booklets: 1 – Listing Contracts Course 2 – Offer to Purchase Course 3 – New Developments Course Course 4 – Buyer Agency Agreements Elective A – Risk Reduction Elective B – 1031 Exchanges and Exchange Opportunities Elective C – Condominiums D – Landlord/Tenant and Property Management Elective E – Financing Elective F – Broker Supervision Elective 2011-12 Electives: A – Short Sales & Foreclosures Elective B – Environmental Matters Elective C – Other Approved Forms Elective D – Financing Elective
A.T.D.
$250
Location WRA Annual Convention
Regular
Location Madison
Appleton Member price Non-Member price $325*
$335*
* Plus books
sales training program
www.wra.org/QuickStartOnDemand
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Realtor® sales tip
The Benefits of Homeownership!
H
ousing touches many sectors of the American economy, accounting for more than 15 percent of the gross domestic product, according to NAR. For every two homes sold, a job is created. New spending on building products, furniture, and other residential investments also have a huge economic impact.
So why the drop of people wanting to own a home? The homeownership rate in the U.S. for the fourth quarter 2011 was 66 percent, which was lower than the fourth quarter 2010 rate of 66.5 percent.
2001 2002 2002 2003 2004 2005
68.0% 68.3% 68.3% 68.3% 69.2% 69.0%
2006 2007 2008 2009 2010 2011
By examining these options, we can give potential buyers a rational basis for making a housing decision, and history shows that real estate is one of the greatest hedges when it comes to inflation.
Our goal must be to make sure we look at the glass half full ... always search for the sunshine as it is there! We must remind all whom we come in contact with that housing is shelter first and foremost, but under normal circumstances, is also a proven, sound long-term investment.
Home price appreciation is by far the most important variable in a homeownership Costs vs. Benefits analysis. It is wise to look for local trends and long-term averages. Intangible benefits, like peace of mind, pride of ownership and security, are important. They should be part of a homeownership decision, but don’t let emotions overrule a rational decision. Homeownership provides a broad range of benefits to individual homeowners and to society as a whole: •
The children of homeowners do better in school and are more successful later in life.
•
Homeownership acts as a powerful economic stimulus, benefiting the individual homeowner and the national economy.
It is clear that where you live plays a large role in building home equity and wealth. Unfortunately, it is not always possible to decide where you live. Most importantly, past rates of home price appreciation are not necessarily an accurate indicator of future rates of home price appreciation. For most people, a high rate of home price appreciation should be considered good fortune. However, buyers should study demographic and economic trends in deciding where to purchase a home — this includes a local analysis within a certain geographical area — assuming that location is a choice.
•
Homeownership benefits neighborhoods, providing economic and social capital. Homeowners are more likely to participate in local organizations, and homeownership in distressed communities raises neighborhood property values by a significant amount.
•
Homeowners state that they are more satisfied with their living situation than renters.
Tax Benefits
Buying a home generates a pride of ownership and commitment to community, which comes with achieving this key part of the American Dream. Combined, these factors contribute to the quality of life in communities across the country — inspiring our nation to be described as the “best-housed nation on earth”
The second largest financial benefit of owning a home is tax savings. For most Americans, there are tax savings associated with owning a home. The biggest of these is the ability to deduct the annual interest paid on a mortgage from income.
The largest measurable financial benefit to homeownership is price appreciation. Price appreciation helps build home equity, which is the difference between the market price of the house and the remaining mortgage payments. I always tell my team of brokers that you will not get rich selling real estate, but you can obtain financial freedom when you buy the product we sell to customers and clients.
For example, an individual or family with a 30year 7%, $400,000 mortgage would pay $4,063 in principal and $27,871 in interest in the first year of that mortgage. If they were in a 28% tax bracket, their tax savings would be $7,804 (.28 x 27,871 = 7,804). Private Mortgage Insurance (PMI) may also be tax deductible. Always advise every customer or client to seek the advice of a professional CPA, accountant and/or lawyer. We must never cross the line and give
One of our biggest challenges as professional REALTORS® is that the younger Americans have seen what homeownership has done to their friends and families, and many want no part of it. Credit has wisconsin real estate magazine
advice in an area where we are not licensed and or skilled. This is a violation of our Code of Ethics and Wisconsin license law.
Location, Location, Location
68.9% 67.8% 67.5% 67.2% 66.5% 66.0%
For potential homeowners, the decision to buy a home is one of the largest financial decisions they will ever make. Like many purchases, the decision may be driven by emotions. Buying offers tangible benefits, but also there are costs associated with owning a home. Let’s weigh them out.
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become very nearly elitist. Home prices, whatever your particular data provider preference might be, are still falling. We are in challenging times!
In February 2012, Warren Buffett stated that singlefamily homes are a very attractive investment right now. Appearing on CNBC, Buffett stated that he’d buy “a couple hundred thousand” single-family homes if it were practical to do so. If held for a long period and purchased at low rates, Buffett says houses are even better than stocks. He advises buyers to take out a 30-year mortgage and refinance if rates go down.
The homeownership rates in the Northeast, Midwest, South and West were not statistically different from their corresponding fourth quarter 2010 rates, but a large reduction has occurred in the last 10 years. See the country’s homeownership rates below.
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By marcus A. wally
may 2012
Just the fact of owning my own home gives me a sense of peace and security that cannot be appreciated when you rent.
Keep moving forward! 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) 6691081 or by e-mail at marcus@newworldrealty.com. www.wra.org/wrem
Dreamers Wanted Everyone has a different dream of success. At Coldwell Banker, we welcome them all. Whether your dream is a record-breaking year of sales, or a career that lets you work at your own pace, it’s up to you.
Every Dream Deserves a Chance DreamBlueBlog.com • ColdwellBankerOnline.com
wisconsin real estate magazine
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legislative
New Pier Grandfathering Legislation Signed Into Law
O
n April 2, 2012, Governor Walker signed into law 2011 Wisconsin Act 167, legislation that grandfathers almost all existing piers. In addition, the new law eliminates the pier registration requirement and creates new standards for piers placed on or after April 17, 2012. Finally, the new law guarantees that waterfront property owners have a right to place a pier, even if the property is located in areas that the Wisconsin Department of Natural Resources (DNR) considers to be environmentally significant.
Background In 2007, Wisconsin lawmakers enacted a law that attempted to grandfather 99 percent of the existing piers from DNR permitting requirements. (2007 Wisconsin Act 204.) To be eligible for grandfathering, a pier was required to meet the following standards: • • •
The pier must have been originally placed prior to February 6, 2004. The width of the pier could be no wider than eight feet. A loading platform or deck was allowed as long as it is located at the lakeward end of the pier and the platform had a surface area no greater than either (a) 200 square feet, which may be any width, or (b) 300 square feet, if the deck/platform is no wider than 10 feet.
By tom Larson
In addition, the pier must have been registered with the DNR by April 1, 2011. The registration deadline was later changed to April 1, 2012. However, both the DNR and lawmakers discovered that many more piers than originally anticipated would not qualify for grandfathering. In addition, very few piers that did qualify for grandfathering were registered with the DNR. Accordingly, lawmakers decided that it would be best to resolve the pier grandfathering issue once and for all by grandfathering all existing piers.
Grandfathering of Existing Piers Under the new law, all existing piers placed before April 17, 2012 are grandfathered unless: a. The DNR notified the riparian owner before April 17, 2012 that the pier is “detrimental to the public interest.” b. Or if the pier “interferes with the riparian rights of other riparian owners.” A pier that extends into a neighbor’s riparian zone, which is the water in front of the neighbor’s property, is an example of a pier that would interfere with the neighbor’s riparian rights. Also, if the pier is grandfathered, the riparian owner may relocate or reconfigure the pier as long as the pier is not enlarged.
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In addition, the riparian owner does not need to register the pier with the DNR in order to grandfather the pier. All existing piers are automatically grandfathered unless the pier meets at least one of the two exceptions previously listed.
•
Note: REALTORS® should ask waterfront property owners if (a) they have received notice from the DNR that their pier is “detrimental to the public interest,” and (b)their pier interferes with the rights of other riparian owners.
•
•
•
New Piers In addition to the grandfathering provisions, the new law creates a few different standards for new piers, which are piers placed for the first time on or after April 17, 2012. First, the new law increases the boat density requirement under existing law to allow for personal watercraft, such as jetskis and waverunners. Under current law, waterfront property owners are allowed two boat slips for the first 50 feet of frontage and one boat slip for each additional 50 feet of frontage thereafter. Because a personal watercraft is often tied to a dock and is not placed in a “slip” or on a hoist or lift, the law is not clear as to whether any limits exist regarding the number of personal watercraft that a property owner may have. Accordingly, the new law allows riparians to have two personal watercraft for the first 50 feet of frontage and one additional personal watercraft for each additional 50 feet of frontage thereafter. This is in addition to the number of boat slips allowed under current law. Second, the new law changes the maximum size requirement for loading platforms on new piers to 200 square feet in total area. Prior law allowed for a maximum width of eight feet wide but did not limit the total area. This change allows for greater flexibility in the size and dimensions of loading platforms so that riparian owners can determine what configuration would best meet their needs. As a result of these changes, new piers can be placed without obtaining a permit from the DNR if the pier meets the following requirements: • Width: No more than six feet wide. wisconsin real estate magazine
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Length: No longer than what is necessary to moor your boat or use a boat lift, or 3-foot water depth, whichever is greater. Number of boats: Two boat slips/lifts for the first 50 feet of water frontage of your property, plus one more boat slip/lift for each additional 50 feet of frontage. Number of personal watercraft: Two personal watercraft for the first 50 feet of water frontage of your property, plus one more personal watercraft for each additional 50 feet of frontage. Loading platforms: A loading platform/ deck with a surface area no greater than 200 square feet.
If a waterfront property owner wants to place a pier that exceeds these standards, a permit must be obtained from the DNR.
Piers Located in Areas of Special Natural Resource Interest (ASNRI) Due to a law change in 2003, riparian owners located adjacent to a body of water considered by the DNR to be an area of special natural resource interest (ASNRI) were unable to lawfully place a pier without a permit. This problem was magnified by the fact that the definition of ASNRI is overly broad and includes any “area that possesses significant scientific value, as identified by the DNR.” This definition is vague and gives the DNR the discretion to designate any area to be an ASNRI. In fact, the term has been interpreted to mean not just specific areas in a lake, but the entire lake in some cases. As a result, riparian owners located adjacent to an ASNRI may be required to obtain a permit to place a pier and could be denied from placing a pier altogether. While the new law did not eliminate the requirement to obtain a permit for a pier located in ASNRI waters, it does clarify that if a pier is located in an ASNRI, then (a) the pier is eligible for a general permit, and (b) the DNR may impose conditions on the location, design, construction and installation of a pier located in ASNRI waters, but the DNR may not prohibit the owner from placing a pier. In other words, the riparian owner is guaranteed the right to place a pier, but the exact dimensions may be determined by the DNR. This provision is intended to allow the DNR to determine may 2012
the size, location and design of a pier to avoid any adverse impacts to sensitive areas like fish spawning areas and other sensitive habitats, but also protects the right of waterfront property owners to place a pier to access the waterway. See the DNR’s website for an interactive map showing all of the lakes and rivers in Wisconsin that are designated ASNRI at http://dnrmaps. wi.gov/imf/imf.jsp?site=SurfaceWaterViewer. deswaters.
Nonconforming Wet Boathouses In addition to modifying the pier regulations, the new law eliminates the restrictions placed on the ability of riparian owners to maintain and repair wet boathouses, which are located below the ordinary high water mark. The restrictions limited the value of all maintenance and repairs over the life of the property to 50 percent of the assessed value of the boathouses, which was intended to eventually eliminate these boathouses by forcing them to fall into disrepair. The 50 percent rule has been unfair to property owners because it applies retroactively to existing boathouses that were legal when originally constructed. Moreover, the rule had proven difficult to enforce because it is almost impossible for county zoning administrators to keep track of each dollar spent on necessary paint, boards and roofing shingles. As a result, it encouraged property owners to be dishonest about what they have spent on repairs and maintenance. The new law eliminates application of the 50 percent rule to wet boathouses. As a result, riparian owners may perform unlimited maintenance and repair to these existing boathouses that were constructed before 1979. This new law change allows property owners to “keep what they have” but does not allow the boathouses to be expanded. For more information on the new law, please contact Tom Larson (tlarson@wra.org) at (608) 240-8254. Tom Larson is Vice President of Legal and Public Affairs for the WRA.
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Walker for Governor
By joe murray
I
n October 2010, the WRA mailed every member a brochure that laid out the real estate record of the two candidates for governor, Republican Scott Walker and Democrat Tom Barrett. The purpose of the mailing was to outline in detail the differences between the two candidates and why our board of directors recommended Walker over Barrett.
Photo by Lauren Bizorik
In January 2012, the WRA board of directors endorsed Gov. Walker in the historic recall election scheduled for June 5 this year. And once again, Milwaukee Mayor Tom Barrett is a candidate in the recall, setting up a possible rematch between Walker and Barrett. In February of this year, we published Walker’s record on real estate issues. In the April edition of Wisconsin Real Estate Magazine, we published Kathleen Falk’s record. In this issue, we once again publish what we published in the October 2010 mailing regarding Tom Barrett’s real estate record. Only 16 months have passed since Walker was elected, and Mayor Barrett’s record remains virtually the same. Here is what we told you in October 2010.
value, except for establishing a listing price, unless they held an appraiser’s license/certification. •
Supported a landlord licensing ordinance that requires owners of rental property to register property and pay new fees.
•
Refused to make a pledge to not impose or support a sales tax on real estate
Why the WRA Board Did Not Endorse Tom Barrett for Governor Tom Barrett’s positions on past issues: •
•
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Introduced six consecutive budgets with a property tax levy increase, totaling over 24 percent, as Mayor. Supported large fee increases impacting property owners, such as snow removal and trash collection during his tenure as Mayor.
•
Supported a series of mandates on local construction projects that increased costs as Mayor.
•
During Barrett’s tenure as Mayor, the City of Milwaukee was one of the principle supporters of Assembly Bill 472, legislation that would prohibit real estate licensees from giving opinions of
wisconsin real estate magazine
commissions or commercial leases. •
Refused to make a pledge not to increase the real estate transfer tax.
•
Supported changing the uniformity clause to provide property tax relief to only targeted property owners.
•
Supports having the Natural Resources Board appoint the DNR Secretary, which the WRA opposes.
•
Opposed increasing the federal tax deduction for health savings accounts.
•
Opposed giving property owners the ability to bring “takings” cases to federal courts.
What was true back in 2010 is true today. Based on real estate-related issues, Scott Walker has a superior track record over Tom Barrett. Watch for additional information regarding this historic recall election in the weeks ahead. Joe Murray is Director of Political and Governmental Affairs for the WRA.
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WHAT MAKES A CENTURY 21 AGENT? THE SPEED OF A THOROUGHBRED. THE NOTHING-CAN-SLOW-ME-DOWN ENDURANCE OF A HUMAN ENERGY DRINK. AND THE SHEER “GET ‘ER DONE” POWER OF A CHAMPION. BECAUSE FINISHING LESS THAN FIRST ISN’T AN OPTION. ®
CENTURY 21 AGENTS. SMARTER. BOLDER. FASTER.
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What is our WHEDA Advantage ? ®
Down payment assistance. First-time home buyers may qualify for up to $11,000 in down payment assistance with a WHEDA Advantage mortgage. WHEDA’s new, low-cost secondary financing option can be paired with down payment assistance programs provided by the Federal Home Loan Bank of Chicago reducing cash-to-close, shrinking monthly mortgage payments. To see if your first-time home buyer qualifies, go to www.wheda.com/Realtors. Income and purchase price limits apply and home buyer education is required. Interest rates are subject to change daily. WISCONSIN HOUSING AND ECONOMIC DEVELOPMENT AUTHORITY 800.334.6873 ■ www.wheda.com