Time of Sale Question and Answers

A time of sale (TOS) requirement is an obligation imposed by local government that must be performed when a property is sold, title is transferred, the property is refinanced, or the purchaser takes title or occupancy. A TOS requirement needs to be accomplished either before, at the time of, or within a certain period of time after the property is sold, conveyed, refinanced or occupied. A city requirement that the property must be inspected by a city inspector and noted items repaired before the property can be occupied, a community requirement that a multifamily property must be retrofitted for sprinklers prior to the sale of the property, or a town ordinance requiring a fence to be constructed around a property’s swimming pool within a month after the buyer takes occupancy are examples of TOS requirements. TOS requirements are illegal under Wis. Stat. § 706.22.

How do TOS requirements impact real estate transactions?

While some TOS requirements appear minor on the surface, others are more significant, such as requiring a property owner to pave a gravel driveway prior to the sale of their property. TOS requirements can create confusing and complex hurdles resulting in delayed closings and additional costs. Buyers can be surprised to learn they must take certain actions or pay fees after they are in their new property.

When can TOS requirements create obligations for parties to a transaction?

While TOS requirements are commonly viewed as preconditions to closing or occupying property, they can arise after closing or occupancy occurs as well. Wis. Stat. § 706.22 prohibits local governments from enforcing TOS requirements not only before and at closing or occupancy, but within a certain time period after sale or occupancy as well. Wis. Stat. § 706.22 effectively bars local governments from creating or placing TOS requirements before, during and after sale or occupancy.

TOS requirements not just for sellers or sale

After the original TOS prohibitions were enacted in 2015, some communities asserted the new law only applied to sellers and not to purchasers or new owners taking occupancy or taking of title, who the municipalities claimed could still be targeted with inspections, repairs and fees. However, 2015 Wis. Act 176 added provisions to Wis. Stat. § 706.22 to make it clear that “time of sale” also means “time of purchase.” The time of sale restrictions apply to buyers and the time of occupancy or taking of title as well as to sellers and the time of sale or property transfer. 

What does the law prohibit? 

  • Wis. Stat. § 706.22 stops local governments, such as cities, villages, counties or towns, from creating or enforcing TOS requirements on parties.
  • The prohibition applies to requirements imposed before, at the time of, or within a certain period of time after a sale, transfer of title, refinancing, purchase, taking title or taking occupancy
  • Wis. Stat. § 706.22 bars local government from restricting an owner from selling or transferring title by requiring compliance with an ordinance or paying a related fee before or after the sale
  • Wis. Stat. § 706.22 bars local government from restricting the ability of a buyer to occupy property by requiring compliance with an ordinance or paying a related TOS fee before or after occupancy
  • TOS requirements related to the following are banned: inspections, improvements or repairs; removing junk or debris; mowing or pruning; performance of maintenance or upkeep activities; weatherproofing; upgrading electrical systems; replacing or installing fixtures or other items; and actions relating to compliance with building codes or other property condition standards
  • Existing TOS requirements are unenforceable; new TOS requirements are illegal. 
  • The initial restrictions on local TOS requirements went into effect on July 14, 2015, while the provisions confirming that the restrictions are also applicable to the time of occupancy and to buyers of real property went into effect on March 2, 2016.

What should REALTORS® do if local government continues to enforce a TOS requirement after the effective date of the law?

REALTORS® should inform officials about Wis. Stat. § 706.22 prohibiting the enforcement of local TOS requirements, both new and preexisting, and provide them with a copy of the law. REALTORS® should be aware Wis. Stat. § 706.22 prohibits enforcement of TOS requirements by local government, whether the enforcement of requirements be against a seller or a buyer. Any disputes regarding the applicability of a TOS requirement to a specific transaction should be referred to independent legal counsel. 

Additional TOS resources

  • "Time of Sale Requirements: Coming to a Community Near You?" in the October 2014 issue of Wisconsin Real Estate Magazine: click here
  • Wisconsin Statutes, section 706.22: click here
  • 2015 Wis. Act 176, sections 29-40: click here
  • Pages 6-7 of the February 2016 Legal Update, "Landlord/Tenant Legislation for 2016": click here
  • WRA LegalTalks video "New Time of Sale (TOS) Law" with Tom Larson: click here
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