If there was a firm-to-firm compensation agreement and the firm's indicated procuring cause was the standard of performance, then the firms could arbitrate which firm was procuring cause, like when there used to be an MLS offer of compensation. Without a firm-to-firm compensation agreement dictating procuring cause as the standard of performance, arbitrating procuring cause is only relevant in a few limited situations with specific facts. As applicable to the facts indicated here, for the listing firm to be able to file arbitration and claim procuring cause, they would have to fit the scenario identified in Standard of Practice 17-4(5). 

Standard of Practice 17-4(5) identifies a scenario where a buyer's firm is compensated by the seller and the listing firm reduces the commission owed by the seller but the listing firm claims to be procuring cause. In this instance, the arbitration shall be between the listing firm and the buyer's firm and the amount in dispute shall be the amount of reduction the listing firm agreed to with the seller. 

The various scenarios where procuring cause is still applicable are found in the Standards of Practice for Article 17, which can be found on page 14 of NAR’S Code of Ethics & Arbitration Manual.

Depending on what the seller has on the property, the seller may be referred to item E4 in the RECR. 

“E4. Are you aware that the property is located within a special purpose district, such as a drainage district, that has the authority to impose assessments against the real property located within the district?”

Alternately, given the specific nature of the stormwater management system and fees, the seller may use the "other" disclosure in the RECR to share the information with a potential buyer.  

“G5. Are you aware of other defects affecting the property? Other defects might include items such as drainage easement or grading problems; excessive sliding, settling, earth movements, or upheavals; or any other defect or material condition.”

For more information about drainage districts, see the June 2019 Wisconsin Real Estate Magazine article, “Drainage Districts 101: How Does Being In a Drainage District Affect a Property?”

The term “closing costs” is rather generic. Closing costs generally are expenses of the sale that must be paid in addition to the purchase price, in the case of a buyer’s expenses, or be deducted from the proceeds of the sale, in the case of a seller’s expenses. Some closing costs result from legal requirements; others are a matter of local custom and practice. There is no statutory definition of closing costs and it is not defined in the department-approved offer to purchase forms. Thus, contract provisions shifting the responsibility for the payment of closing costs or creating closing cost credits without defining closing costs may lead to disputes between the parties.

Whenever a seller is crediting money toward the buyer’s closing costs, it is best to describe precisely what is or is not included in the credit to avoid situations like the one the broker is describing. The definition of “closing costs” may be inclusive or exclusive. An inclusive definition lists permissible closing costs; an exclusive definition includes all fees and costs paid at closing except for those listed.

If an amount is given for a closing cost allowance or credit, it should be clearly specified if the amount is a maximum — closing costs not to exceed a certain amount or closing costs up to a certain amount — and what will happen to the balance if actual costs do not reach the maximum credit or allowance. It is also wise to check with the lender in advance to make sure the provision will not violate the lender’s underwriting standards.

However, most resources online indicate that closing costs do not include commissions. See the realtor.com article, “Who Pays the Real Estate Commission and Closing Costs: The Homebuyer or Seller?” 

In Wisconsin, licensees may sell a business, whether or not it includes real property. The WB-6 Business Listing Contract — Exclusive Right to Sell allows a licensee to indicate whether the listing includes an interest in real estate. The WB-17 Offer to Purchase — Business without Real Estate Interest allows parties to draft an offer for a business that does not include an interest in real estate. The WB forms can be found in Transactions (zipForm Edition) and the WRA Forms Library.

Wis. Stat. § 452.01(2) provides:

“‘Broker’ means any person not excluded by sub. (3), who does any of the following:

(a) For another person, and for commission, money, or other thing of value, negotiates or offers or attempts to negotiate, whether directly or indirectly, a sale, exchange, purchase, or rental of, or the granting or acceptance of an option to sell, exchange, purchase, or rent, an interest or estate in real estate, a time share, or a business or its goodwill, inventory, or fixtures, whether or not the business includes real property.” (underlining added).

“(b) Is engaged wholly or in part in the business of selling or exchanging interests or estates in real estate or businesses, including businesses’ goodwill, inventory, or fixtures, whether or not the business includes real property, to the extent that a pattern of sales or exchanges is established, whether or not the person owns the real estate or businesses. Five sales or exchanges in one year or 10 sales or exchanges in 5 years is presumptive evidence of a pattern of sales or exchanges.

(bm) For another person, and for commission, money, or other thing of value shows real estate or a business or its inventory or fixtures, whether or not the business includes real property, except that this paragraph does not include showing a property that is offered exclusively for rent.

(c) For another person, and for commission, money, or other thing of value, promotes the sale, exchange, purchase, option, rental, or leasing of real estate, a time share, or a business or its goodwill, inventory, or fixtures, whether or not the business includes real property. This paragraph does not apply to a person who only publishes or disseminates verbatim information provided by another person.

(d) Issues a written report of property value that is prepared for another person and that is not an appraisal, as defined in s. 458.01 (1).”

When contract terms are plain and unambiguous, the courts must interpret the contract just as it was written. The courts look for statements of the parties' intent in the contract itself. If there appears to be an ambiguity in the contract, as seems to be the case here, the court may look elsewhere to determine the parties' intent. Another standard rule of contracts is that ambiguities are generally construed against the drafter.

It is so important to read and re-read any originally drafted language in an offer to purchase and to consider the contract as a whole. That is the only way to avoid ambiguities and to assure that there is a "meeting of the minds" on all terms. If the parties cannot reach an agreement for the timing of the repairs, the seller is to make and amend the offer, they should consult private legal counsel.

If the parties need an attorney, they may contact the State Bar of Wisconsin’s Lawyer Referral Service (LRS). When calling the LRS, a legal assistant helps determine the nature of the potential dispute and can refer attorneys in the caller’s area who have practice in matters related to the potential dispute. They can visit the LRS online, or they may call 800-362-9082, Monday through Friday, from 8:00 a.m. to 5:00 p.m.

See the September 2013 Legal Update, "Contract Construction and Party Remedies," Legal Update 98.12, "Contract Interpretation and Remedies," and the September 2006 Legal Update, "Contract Law Basics.”