Legal Matters
Best of the Legal Hotline
Dealing With the New Rules: Telemarketing and Buyer Agency
REALTORŪ compliance with the DATCP telephone solicitation rules continues to be a frequent Legal Hotline topic, while amendments to the Code of Ethics Amendments Standard of Practice 16-13 raise new questions about a requirement for
REALTORSŪ to ask buyers if they are party to a buyer agency agreement.
by Debbi Conrad and Tracy
Rucka
| Q. Couldn't the WRA stop these awful DATCP telephone solicitation rules? |
| A. When the Wisconsin telephone solicitation statute was originally introduced as separate legislation, the WRA sought an exemption for real estate. Legislative debate, however, was cut short when the bill was stuck in a multi-billion dollar state budget bill. This eliminated any public hearings and any opportunity for the WRA to lobby the bill. The WRA supported vetoes from Gov. McCallum that reduced the excessive penalties (up to $10,000) contained in the original bill.
The administrative rules transformed what was still a workable law into a legal nightmare. The DATCP bureaucrats largely ignored the extensive input provided by the WRA during the rule-writing process. Neither the Democrat-controlled Senate nor the Republican-controlled Assembly would agree to hold public hearings to receive concerns of the WRA and other affected parties.
The WRA tried several administrative and governmental channels to modify, delay or stop the DATCP rules. WRA staff worked directly and extensively with every level of government involved with the rules. However, with the timing just prior to the election, officials and agencies remained reluctant to tamper with the rules intended to stop telemarketers from calling grandma at dinnertime.
|
Back to top
| Q. What is the WRA doing about it? |
| A. The WRA and other interested groups are mounting a comprehensive challenge to DATCP's unauthorized expansion of the scope of DATCP's regulations. The coalition will be taking legal as well as administrative and legislative action to address the numerous problems the rules pose for
REALTORSŪ and consumers. The WRA Legal Action Committee and Board of Directors has authorized substantial financial resources for attorney fees and expenses necessary to assist in mounting a comprehensive challenge to DATCP's telephone solicitation rules. This strategy is evolving daily and additional information will be reported in future membership communications.
|
Back to Top
| Q. What are the penalties for violations of the DATCP rules? |
| A. Wis. Stat. § 100.52(10) states that a person violating the telephone solicitation statute may be required to forfeit no more than $100 per violation. This is the penalty that DATCP publicly states they will seek against telephone solicitation violators. However, there are other remedies that DATCP can invoke.
DATCP may also sue under § 100.20(6) for a temporary or permanent injunction and for a court order requiring a violator to reimburse any money damages suffered by consumers as a result of the violator's illegal activities. For persons who intentionally refuse, neglect or fail to obey the rules, DATCP may also seek fines of up to $5,000, imprisonment in the county jail or both, per § 100.26(3). There also is authority under § 100.26(6) for DATCP to seek a civil forfeiture of up to $10,000 for serious violations of DATCP injunctions, orders or rules.
Any consumer who experiences a monetary loss as a result of a telephone solicitation rules violation may sue the violator directly under § 100.20(5) for twice the amount of the loss, together with costs and a reasonable attorney's fee. Many REALTORS(r) may think that nobody would ever bother to sue over a telephone call, however, landlords or property managers may have thought the same thing about tenants suing over a security deposit returned a day too late. Both tenants and call recipients can sue under the "private attorneys general" law that awards consumers double damages plus reimbursement of their costs and reasonable attorneys fees if they win their cases. The purpose of the "private attorneys general" law is to encourage consumers to enforce the law themselves. The double damages and award of reasonable attorneys fees also may inspire class action lawsuits.
In addition, § RL 24.17(1) provides that real estate licensees may not violate any law that is substantially related to real estate practice. The DRL, accordingly, may bring disciplinary action against licensees who violate the telephone solicitation rules. At what point disciplinary action would be triggered is a judgment call, but may be likely if there are repeated or intentional violations or in situations where consumers are seriously harmed.
|
Back to Top
| Q. We have an automated property information program that captures the phone numbers of callers. Can we call these people back? |
| A. Not if the number is not on the do-not-call list and you do not obtain their consent.
|
Back to Top
| Q. If I can't call people on the do-not -call list, how can I reach them? |
| A. If you have consent, you can call them at home.
If they are not on the do-not-call list, you can call them at home.
You can call them at work.
You can call them on their cell phones.
You can e-mail them.
You can fax them.
You can send mailings.
You can meet them in person.
For additional telephone solicitation and do not call list information, go to:
www.wra.org/Resources/resource_pages/telephone_solicitation_rules.htm
|
Back to Top
Q. New Buyer Agency Ethics Provision
A listing agent is sitting at an open house. A buyer walks though the house and wants to write an offer with the listing agent. Does the listing agent have to ask the buyer if he has a buyer's agent? |
| A. Yes. The newly revised Standard of Practice 16-13 requires the listing agent to ask the buyer if he or she is party to a WB-36 Buyer Agency/Tenant Representation Agreement before the listing agent can provide substantive services like writing an offer to purchase.
|
Back to Top
| Q. If the buyer does have a buyer agency agreement, can the listing agent still write the offer to purchase? |
| A. Only if the listing agent has the consent of the buyer or the buyer's agent. The listing agent may obtain that consent by asking the buyer if the buyer wants the listing agent to write the offer for him or her. It may prove helpful to have the buyer's consent in writing if the buyer is going to proceed without the assistance of his or her buyer's agent.
|
Back to Top
| Q. Do
REALTORSŪ have to ask every buyer if they have a buyer agency agreement? |
| A. No. The question must be asked only if the
REALTORŪ is about to provide substantive services such as writing an offer to purchase or presenting a CMA.
|
Back
to Inside This Edition
Return to On-Line
Publications
Top
Court Fair Housing Ruling Favors Broker
In a recent unanimous decision, the U.S. Supreme Court ruled that individual broker-owners are not personally liable for the acts of agents who commit fair housing law violations.
The high court, in the case Meyer v. Holley, reversed a decision by the U.S. Ninth Circuit Court of Appeals in California, which had extended liability to owners and officers. In the case, a racially mixed couple sought to make the owner of Triad,
REALTORSŪ, personally responsible for the actions of one of its agents who allegedly had made disparaging remarks about the couple.
"NAR is pleased that the Supreme Court adopted the position advanced by NAR in its amicus curiae (friend of the court) brief that traditional principles of vicarious liability apply in fair housing cases. As a result, the court found that innocent officers and owners of residential real estate corporations will not be held personally liable for the unlawful conduct of the corporation's employees or agents," said Laurie Janik, NAR general counsel.
In Meyer v. Holley, an interracial couple alleged that they were discriminated against by a real estate agent, and brought a claim under the Fair Housing Act against the agent and the real estate firm for whom the agent worked. The couple also personally sued the individual owner and officer of the firm, claiming that he also was responsible for the agent's alleged conduct.
The trial court applied well-recognized principles to dismiss the Fair Housing Act claims against the individual owner, holding that vicarious liability principles permitted only the corporation, and not the individual owner and officer of the corporation, to be liable for misconduct by the corporation's agents.
The Ninth Circuit Court reversed the decision, concluding that traditional vicarious liability rules did not control with respect to the personal liability of corporate shareholders and officers in Fair Housing Act cases, and that owners and officers may be liable "simply on the basis that the owner or officer controlled (or had the right to control) the actions of the employee."
In a 9-0 decision, the Supreme Court reversed that conclusion of the Ninth Circuit. The Supreme Court opinion, delivered by Justice Stephen Breyer, said that the Fair Housing Act has not "extended traditional vicarious liability rules in that way."
Reprinted from REALTORŪ Magazine by permission of the NATIONAL ASSOCIATION OF
REALTORSŪ. Copyright 2003. All rights reserved
Back
to Inside This Edition
Return to On-Line
Publications
Town Ordinance Must Have Reasonable Basis
by Debbi
Conrad
Town of Eldorado v. Schmitz, (No. 02-0885, Ct. App. 2003).
The owner, Schmitz, owns two billboards in the Town of Eldorado. In 1995, the town adopted a billboard ordinance that requires a permit and a fee of $100 per year for every sign or billboard erected in the town. The ordinance includes a fine of at least $50 per day for billboard owners who did not comply. The owner did not obtain a permit or pay the yearly fee for his two billboards from 1998 to 2001. The town sued the owner, seeking an injunction to stop his use of the signs and a fine of $50 per day.
The court found that the owner had violated the terms of the ordinance from 1998 through 2001. The owner claimed that the town was denying his constitutional rights by enforcing the ordinance only against him and not against others who also had billboards and who had not obtained permits and paid the fees. The court concluded that the town was not purposefully denying the owner's constitutional rights, but rather that the town's management and enforcement efforts were inept. The court further found that the $100 fee was not a penalty or a tax and was a reasonable amount to cover the costs of mailings and inspections. The court concluded that the $50 per day fine would be imposed from the time the complaint had been filed, and assessed a total of $22,850 in fines against the owner.
The owner appealed to the Court of Appeals. The Court of Appeals observed that it must uphold the ordinance if there was any reasonable basis to justify the town's enactment. The court concurred with the court below and found that at the time the town enacted the ordinance, it had a rational basis for assessing the $100 fee-the cost of mailings and inspections. The court also found that the ordinance had not been applied in a discriminatory manner.
With respect to the owner's argument that the $22,850 forfeiture was excessive, the court observed that when a legislative body establishes a minimum and maximum forfeiture, a court does not have discretion to impose less than the minimum. Since the fines imposed by the trial court was the minimum allowed by the ordinance, the court held that the fines were not excessive.
H REALTORŪ Practice Tips: Local ordinances are often difficult to challenge because the municipality typically only needs to show a rational basis for the ordinance. The most effective challenge comes when the ordinance is first adopted.
For additional case law summaries, see Legal Update 03.01 which can found online at http://www.wra.org/legal/ Legal_ Updates/2003/lu0301.asp.
Back
to Inside This Edition
Return to On-Line
Publications
Back to Top
|
