The WRA’s Revised Commercial Lease Listing Is on its Way

A lot of notable events happened in 1998. For example, comedic great Chris Farley died, the nation was introduced to White House intern Monica Lewinsky, some team other than Green Bay won Superbowl XXXII (sensitive topic, I know), and the WRA Exclusive Listing Contract for Lease of Commercial Property was revised.


 Cori Lamont  |    August 08, 2013
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It has been 15 years since the WRA’s commercial lease listing has been revised, and its time for revision has come. As you know, the state of Wisconsin has created the WB-37 Residential Listing Contract — Exclusive Right to Rent (WB-37), which is considered to be a form for residential rentals. Commercial brokers may choose to use the WB-37 form when taking a commercial lease listing; however that may require a great deal of modification to the preprinted language. In addition, the broker may choose to use a form drafted by an attorney. The WRA created the WRA-CP form for use by real estate licensees when listing a commercial property for lease. 

You will notice as you look at the revised form that its appearance is similar to the format and wording of WB forms. A great deal of the language and inspiration came from three specific state-approved forms: the WB-5 Commercial Listing, WB-6 Business Listing and the WB-37. 

The intent of this article is to highlight some of the bigger changes to the WRA’s commercial lease listing form. To ensure we create a form that is both useful and that addresses all of the necessary legal issues, we reached out to brokers throughout the state who focus on commercial transactions.

Due to the timing of this publication and the final release of the form, the following excerpts are to be considered drafts and proposed language and are used for discussion purposes only. If areas of the WRA-CP have not been addressed, it is because either nominal or no changes were made.

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Download Icon Red Download the draft of the form with highlighted changes.

Basics

 

  • Revised the title: The 1998 form was entitled “Exclusive Listing Contract Right for Lease of Commercial Property.” The title of the 2013 version, “Exclusive Listing Contract Right to Rent Commercial Property,” more accurately reflects the nature of the form and shares similar verbiage for a relative consistency with the WB-37. 
  • Defaults have been inserted: Default language was inserted in areas that included a Strike One opportunity. 
  • Notice about sex offender registry: The website was updated to reflect the appropriate location of gaining access to the registry. 
  • Term of contract: This section of the form is now substantially the same as the WB-5 Commercial Listing. 

 

Most notable updates and inclusions

Delivery: The form now reflects the delivery language similar to that of the WB-15 Commercial Offer to Purchase. The most notable is e-mail delivery.

Owner’s Cooperation: A sentence was added to the end of this section to include the owner’s agreement to allow the broker to “advertise incentives, repairs, build-outs, credits, etc. offered by Owner in additional provisions” or per an addendum. 

Owner’s Disclosure Report and Owner Representation Regarding Defects: This section of the form reiterates Wisconsin license law requirements of the real estate licensee relating to asking the owner about the condition of the property as well as the owner’s disclosure obligations.

Owner’s Obligation: Items 1 and 2 below were added to emphasize the owner’s obligations during the term of the listing.

Updated Broker Disclosure to Clients: The agency laws contained in Wis. Stat. Chapter 452 were modified in 2006. Upon the passage of the new statutory language, the agency language included in the WRA-CP was not accurate. Therefore, the WRA struck the language and attached the appropriate Broker Disclosure to Client form required by law. This section of the WRA-CP now reflects current law and therefore the additional Broker Disclosure to Client form is no longer needed when using the 2013 WRA-CP.

Owner’s Warranties, Covenants and Representations: This area now imitates the structure of the WB-37. In this provision, the owner warrants all of the information and materials are true and complete and that all forms comply with applicable laws. In addition, this section provides that the owner will hold the broker harmless from any loss from the broker’s use of the form.

Showing Responsibilities: This was updated to include the owner’s acknowledgement that showings may be conducted by licensees other than the broker; and appraisals, inspections and tests may be conducted without being accompanied by a licensee, and potential tenants and licensees may be present at all inspections and testing. Lastly, this section includes the statement that potential tenants or licensees photograph or videotape the property.

Definitions now include: Adverse Fact, Deadlines–Days, Material Adverse Fact, Person Acting on Behalf of Tenant, and a slight modification was made to protected tenant.

Extension of Listing: This section has been modified to reflect similar language and flow as the WB-5.

Termination of Listing: This section has been modified to reflect similar language and flow as the WB-5.

Exclusions: The language is now sustainably similar to the WB-5, for example, “week” was changed to “seven days.” In addition, the following sentence was added for clarification: “These other tenants are no longer excluded from this Listing after the specified date unless, on or before the specified date, Seller has either entered into a lease with the tenant or rented the Property to the tenant.”

Signature lines: The signature lines have been modified to provide for an owner that is an entity. If there is an individual owner, that person would sign his or her name, place the date, and print his or her name. The rental listing contract must be signed by whoever is agreeing to pay the commission and will be enforceable against those signatories.

The revised WRA-CP will be available this month in zipForm®.

Cori Lamont is Director of Regulatory Affairs for the WRA.

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