What’s Happening at the DRL – Correction: the DSPS

 Cori Lamont  |    August 08, 2011

A great deal of change is occurring at the former Department of Regulation and Licensing (DRL) with the passing of the 2011-13 state budget. A few changes include: The Real Estate Board is now the Real Estate Examining Board; the DRL is now the Department of Safety and Professional Services (DSPS), and a portion of the Department of Commerce staff and responsibilities are now under the purview of the DSPS. All of these affect you as a licensee on some level or another. Let’s take a look at these changes.

Real Estate Board to Real Estate Examining Board

First, the board became an Examining Board; more easily stated REB to REEB. Prior to the budget, while the REB would assist the secretary in policymaking, discipline of licensees, and would advise the secretary on real estate forms (better known as the “WB forms”) and rules; the secretary had the final authority on forms, education and promulgation of rules affecting real estate.

Like other examining boards, the REEB will now grant real estate licenses, review complaints and enforce disciplinary actions against licensees, enter into reciprocal agreements with other states, and promulgate rules. In addition, the REEB will approve real estate forms (better known as the WB forms), establish education curriculum and requirements for both pre-license and continuing education, and appoint members to the Real Estate Curriculum Examinations Council and the Real Estate Contractual Advisory Committee - both of which are advisory to the REEB.

In its capacity as an examining board, the REEB may take some time to find its rhythm, and when it does, change will find its way to you. Below is a brief overview to give you a little insight as to what’s on REEB’s short-term plate.

Wisconsin Administrative Rules The REEB’s main objective of administrative rule revisions is modernization. The intent of the modernization is to have rules that better serve the real estate industry and continue to protect the public while having value in real-world application.

In the final stages of the rulemaking process:  

  • Wis. Admin. § RL 24 Conduct and Ethical Practices of Real Estate Licensees; proposed effective date January 1, 2012.
  • Wis. Admin. § RL 25.02(2) Broker’s Pre-license Program: increasing the broker pre-license education hours to 72; proposed effective date July 1, 2012.

Items on the REEB’s to-do list include:  

  • Wis. Admin. § RL 15 Broker’s Obligation to Furnish and Maintain Records: Addressing a variety of issues, foremost electronic record retention.
  • Wis. Admin. § RL 16 Approved Forms: While likely to be revised in myriad ways, one specific revision relates to the use of addenda.
  • Wis. Admin. § RL 18 Trust Accounts: One known repair is to remove a conflicting statement about disbursement of earnest money.

Forms update  

In the final stages of the form creation process:  

  • WB-12 Farm Offer to Purchase
  • WB-15 Commercial Offer to Purchase

On the Real Estate Contractual Advisory Committee and REEB’s immediate to-do list:

  • WB-24 Option to Purchase
  • WB-37 Exclusive Listing Contract for Lease of Real Property

Reciprocity with other states

The modification of Illinois license categories requires evaluation of the reciprocal agreement between Wisconsin and Illinois. Currently, licensees from each respective state must pass the other state’s license exam. However, applicants are exempt from the other’s pre-license education requirements when applying for a license. After May 1, 2011, Illinois license applicants were no longer able to obtain a salesperson license. As of today, the only two main license categories in Illinois are managing broker and broker. Arguably, under the Illinois new license structure, Wisconsin licensees are at a significant disadvantage: clearly, the disparity needs to be rectified between the two states. The WRA is carefully tracking how these changes affect Wisconsin’s reciprocity with Illinois, and will keep you informed as those changes come.

Other real estate-pecific items affected at the DSPS by the 2011-13 udget

Other budget items that directly affect real estate and the DSPS are a by-product of the reorganization of the Department of Commerce and DRL. The following are three main items that were modified in the budget and are housed at DSPS.

IBRETA interest Wis. Stat. § 452.13(2)(a) requires real estate brokers holding client funds to establish an interest-bearing common trust account, or more commonly called IBRETA. Historically, the Department of Administration was the beneficial owner of the interest accruing on these accounts, and overtime, the Department of Commerce became the beneficial owner, and the 2011-13 budget once again makes the Department of Administration the beneficial owner of the interest accruing on IBRETA accounts.
Wis. Stat. § 452.13(2)(d) now reads, “The Department of Administration is the beneficial owner. The interest accruing to the interest-bearing common trust account, minus any service charges or fees.”

Storage tank regulation As stated previously, a part of the Department of Commerce was merged with the DSPS. Specifically combining with DSPS, the Department of Commerce Divisions of Safety and Buildings and Environment and Regulatory Services also brought along regulation of storage tanks. Underground Storage Tank (UST) and Aboveground Storage Tank (AST) regulation and registration will occur under the authority of the DSPS.

No more CE test-out Due to lack of participants and significant cost-savings for the DSPS, the budget repealed Wis. Stat. § 452.12(5)(c)2, or better known as the “continuing education test-out.” Previously, real estate licensees had the ability until June 30 of the even year of the biennium to take an examination on the subjects required for continuing education. Any broker or salesperson that passed this examination would therefore be exempt from CE for that biennium. Thus repealing § 452.12(5)(c)2 means CE test-out is no longer an available option for real estate licensees to achieve CE credit. 

The WRA will continue to keep you informed of the activities at DSPS and of the REEB, and how pending changes may affect your real estate license and practice. The newly created DSPS website is located at www.dsps.wi.gov.

Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.

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