The Best of the Legal Hotline: DSPS Documents


 Tracy Rucka  |    August 12, 2019
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DSPS document overview

Application for license

The following DSPS forms are used in license application scenarios:

Licensee transition

A licensee leaving a firm: The notice of termination form must be submitted  within 10 days after the licensee ceases to be associated with the firm. Use Form 766 Notice of Termination of Associated with Firm, available at dsps.wi.gov/Credentialing/Business/fm766.pdf.

Licensee associating with a firm: Before the licensee provides brokerage services on behalf of a firm, the licensee must notify the DSPS by submitting Form 812 Notice of Licensee Association with Firm, available at dsps.wi.gov/Credentialing/Business/fm812.pdf.

Changes in business representatives: The broker must inform the DSPS of a change in business representative within 30 days of the effective date of the change by submitting Form 815 Application for Real Estate Broker Business Entity License, available at dsps.wi.gov/Credentialing/Business/fm815.pdf.

Wisconsin offers three real estate licenses: salesperson, broker and real estate business entity. The DSPS licensee lookup online at app.wi.gov/licensesearch allows users to search for individual and entity credentials.   

Broker supervision requires a firm to ensure licensees hold a valid license. This obligation is both at the time the licensee is associated with the firm and at the beginning of each biennial licensure period. The licensee lookup serves as a way to validate the licensure of an individual licensee or entity. 

Brokers and agents are advised to check the DSPS licensee lookup to assure changes have been processed and assure the DSPS accurately reflects which licensees are associated with the firm and which broker(s) are business representatives of the firm.

How does an agent, who is associated with a firm, move his or her license to a different firm?

First, the licensee should refer to the independent contractor agreement and office policy to determine which notice is required prior to termination. Two forms need to be filed with the DSPS to begin this transfer:

DSPS Form 766: DSPS Notice of Termination of Licensee Association with Firm, Form 766, must be filed by the licensee or the broker when a licensee leaves a firm. This notice must be submitted within 10 days of when the licensee leaves the firm. Form 766 is available at dsps.wi.gov/Credentialing/Business/fm766.pdf.

DSPS Form 812: DSPS Notice of Licensee Associated with Firm, Form 812, is filed when a licensee will be associated with a firm. To become associated with a firm, Form 812 must be filed with a $10 fee. This form is available at dsps.wi.gov/Credentialing/Business/fm812.pdf.

Unfortunately, there is not currently a way to complete these forms online. These forms must be printed, filled out and mailed to the DSPS.

When can the transferring agent work for the new firm? 

DSPS Form 812 provides as follows:

Section A: Identify licensee to be associated with a firm. The licensee may not provide brokerage services on behalf of a firm until licensee has notified DSPS by submitting this form. 

Legally, the licensee can practice if he or she has provided the proper paperwork. The challenge, however, is the fact that the DSPS website does not always timely reflect the change. 

Notification to association

The changes submitted to the DSPS are independent from notification to the REALTOR¬ģ association and MLS. The brokers and agents will need to communicate changes to the association and MLS. Until the changes are reflected in the DSPS licensee lookup search results, the firm and the board can work together to find a way to establish the DSPS has been provided the proper paperwork for a licensee to be associated with the firm, even though the DSPS website does not yet reflect the accurate information.

How does a firm notify the DSPS of a new business representative or changes to business representatives of a firm?  

To name a new business representative, the business representative completes DSPS Form 815, which is the application for a business entity license and for informing the DSPS of a change in the business representative. If there is a change in any of the business representatives, the change shall be reported to the board within 30 days after the effective date of the change by submitting this form. No fee is required to change the business representative.

The broker is thinking about creating an LLC. How does the broker proceed with creating the LLC? What about choosing a name for the entity?

The broker should start by using the DSPS licensee lookup to determine if there are any firms with the broker’s preferred LLC name. In addition, a review of entities filed with the Department of Financial Institutions (DFI) should be conducted to assure there is not another entity using the chosen name. The broker can search for those names on the DFI’s corporate records search page at www.wdfi.org/apps/CorpSearch/Search.aspx?.

Next, to initiate the process of entity formation, the broker will start with the DFI since both LLCs and corporations are created with the DFI. Once an LLC or corporation is formed with the DFI, the broker may complete the DSPS Form 815.

The application for the real estate business entity will show the broker as the business representative, allowing the broker to provide brokerage services in that capacity. Note an individual with a sales license may not create a licensed real estate business entity unless that individual engages a broker to be the business representative for the entity. Legal counsel should be consulted to document such a relationship. 

The broker who is a business representative of a firm is moving to a different firm. How does that licensee notify the DSPS about no longer being a business representative of the firm?  

Although it may seem counter-intuitive to use an application form to inform the DSPS of this change, the DSPS Form 815 is the proper form to use to make changes to business representatives. 

An agent submitted her application for license renewal with the DSPS, but there has been a lengthy delay. In addition, a new applicant also has experienced great frustration because nothing seems to be happening. What is causing these delays at the DSPS with its licensing program?

One possible cause might be if the licensee or applicant has disclosed a criminal conviction. Another cause may be that the licensee or applicant owes the DSPS additional information, or the licensee or applicant failed to include the necessary information called for in the application. For instance, many licensees seemingly presume that if they passed the CE exams for the required CE courses, then they need not do any more regarding completion of the required education. Unfortunately, these licensees failed to submit proof of the education, and thus the application is going nowhere until that information is received.

If a licensee is curious about a delay with the DSPS and is expressing frustration, the applicant should look up his or her license status online using the DSPS application status page at online.drl.wi.gov/ApplicationStatus/CredentialApplicationStatus.aspx.

Do branch offices need to be licensed in Wisconsin?

Individual branch locations are not licensed. All licensees associated with the brokerage firm must notify the DSPS of that association using Form 812 Notice of Licensee Association with Firm. Although each branch office historically required a full-time, on-site broker, given changes to Wisconsin law, a brokerage firm does not have to have a supervising broker at each branch office. The firm must comply with the supervision rules found in Wis. Stat. § 452.132, including providing licensees with a supervising broker, providing licensees with a written statement of procedures for handling transaction documents, and notifying licensees where a copy of the department rules are located

Can a broker delegate broker supervision?

A brokerage firm may delegate supervision to one or more supervising brokers. The delegation must be in writing and signed by or on behalf of the delegating firm and be signed by the broker to whom the delegation is made. There is currently no DSPS form to document the delegation of broker supervision. The WRA delegation form will be available in the near future.

Trust funds

Trust funds must be held in a bank, savings bank, savings and loan association, or a credit union that is authorized by federal or state law to do business in this state and that is insured by the Federal Deposit Insurance Corporation or by the National Credit Union Share Insurance Fund. When a trust account is opened, the firm must file DSPS Form 814 Consent to Examine and Audit Trust Account, available at  dsps.wi.gov/Credentialing/Business/fm814.pdf.

For additional questions related to practice and licensing in Wisconsin, contact the DSPS at 608-266-2112. Also see the statutes at docs.legis.wisconsin.gov/statutes/statutes/452.pdf and the website at https://dsps.wi.gov/pages/Home.aspx

Tracy Rucka is Director of Professional Standards and Practices for the WRA. 

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