Revisions to Some of Your Favorite WB Forms


 Debbi Conrad, WRA senior attorney and director of legal affairs  |    June 06, 2022
Revisions

The Real Estate Examining Board at the Wisconsin Department of Safety and Professional Services (DSPS) has approved revisions to five WB forms to bring them up to date and improve ease of use.

Forms Revisions: One-page Forms

The WB-40 Amendment to Offer to Purchase, WB-41 Notice Relating to Offer to Purchase, WB-44 Counter-Offer and WB-45 Cancellation Agreement and Mutual Release are some of the most used forms in a real estate transaction. However, these forms have not been updated since 2015. Accordingly, these forms have been freshened and revised by the Department of Safety and Professional Services Real Estate Contractual Forms Advisory Council, and the changes were approved by the Real Estate Examining Board.

All four updated forms have an optional use date of May 1, 2022, and a mandatory use date of July 1, 2022.An “educational use” copy of each form with yellow highlights that indicate the changes made is available on the WRA forms update resource webpage: www.wra.org/formsupdate

WB-40 Amendment to Offer to Purchase 

The WB-40 is to be used to change terms after the offer has been accepted. The WB-40 did not receive substantive changes as part of the 2022 revisions process. Therefore, the form usage is the same as with previous versions. 

The formatting was improved by adding the word “on” on line 1, and by combining what had been two separate lines for party initials indicating rejection of the amendment into one long line at line 49 of the WB-40.

WB-41 Notice Relating to Offer to Purchase

The WB-41 is used when one party needs to notify another about a contract provision where the other party’s agreement is not necessary. The WB-41 did not receive substantive changes as part of the 2022 revisions process. Therefore, the form usage is the same as with previous versions. 

The only formatting change was the insertion of the word “on” on line 2 of the WB-41.

WB-44 Counter-Offer 

A WB-44 Counter-Offer is used in negotiations before an offer is accepted. In 2022, the WB-44 did not receive substantive changes. Therefore, the form usage is the same as with previous versions.

In terms of formatting changes, more room was allowed on lines 1-2 to help when the buyers have long names, entity names, etc. The labeling of the parties’ signatures on lines 39-42 were changed to read “Buyer’s Signature” and “Seller’s Signature” rather than “Signature of Party Making Counter-Offer” and “Signature of Party Accepting Counter-Offer.” The formatting was also improved at line 46 of the WB-44 by combining what had been two separate lines for party initials when a party is rejecting or countering the Counter-Offer into a single, longer line.

WB-45 Cancellation Agreement and Mutual Release 

The WB-45 Cancellation Agreement and Mutual Release (CAMR) is utilized when an agreement is being cancelled and the parties are releasing each other from their contractual obligations. The revisions include updated terminology and improved clarity about earnest money, but the form usage is substantially the same as with previous versions. 

With regard to formatting changes, the WB-45 title now uses the word “and” rather than using “&” and the form refers to Firms or Firms and their licensees rather than brokers. Lines 6-8 now read:

The Parties hereby release the Firms and their licensees from any and all liability for disbursing trust funds as directed and hereby authorize and direct the Firm or third party holding the earnest money or other trust funds to disburse the trust funds held on behalf of the Parties as follows ...

Thus, the WB-45 now can be used to direct a Firm or a third party holding funds to disburse, and the Firm and its licensees are protected from liability when making a directed disbursement.

Lines 10 and 12 indicate that providing a delivery address for the disbursement is optional since it is possible the disbursement will not be a mailed check but rather a personally delivered check or an electronic transfer, depending on the circumstances. 

To read more about the changes made to improve your ease of use as well as a series of valuable practice pointers for using these forms, see the March 2022 Legal Update, “2022 Changes to the WB-40, WB-42, WB-44 and WB-45,” at www.wra.org/LU2203.

Revisions to the WB-24 Option to Purchase

Changes to the basic transactional provisions made in the WB-11 Residential Offer to Purchase and the other WB offers have also been made in the revised WB-24 Option to Purchase when those same provisions are used. In addition, the same transactional flow has been adopted to the greatest extent possible. Provisions newly added to the WB-24 in this 2022 update include the Contingency for Additional Condominium Information and Foreign Investment in Real Property Tax Act (FIRPTA).

The updated WB-24 has an optional use date of May 1, 2022, and a mandatory use date of July 1, 2022. A copy of the WB-24 for educational use with yellow highlights that indicate the changes made is available on the WRA forms update resource webpage: www.wra.org/formsupdate.

One theme that is unique to the WB-24 option is the possible need to review certain information more than one time. For example, the buyer may wish to review the title and the condominium disclosure materials before paying a nonrefundable option fee but may also want that information updated before the buyer pulls the trigger and exercises the option, thereby committing to a binding purchase contract.

In terms of provisions that are unique to options, the following revisions were made:

Option Terms on lines 10-23: 

  • The INITIAL OPTION FEE subsection first sets forth the amount and the deadline for payment of the initial option fee the buyer will pay to the seller. 
  • Next the EXERCISE DEADLINE subsection provides the deadline for the buyer’s exercise of the option.
  • The EXERCISE subsection describes what the buyer must do to exercise the option and gives the breakdown of what portion of the option fees may be applied to the purchase price. 
  • If the EXTENDED OPTION TERM subsection is completed, the buyer will have the opportunity to extend the term of the option by paying the specified option extension fee by the stated date. 
  • The OPTION FEES subsection at line 20 advises: “Unless otherwise provided in this Option, the option fee and the option extension fee shall be nonrefundable.” One reason this was added is because the new provisions in the title section make the option fees potentially refundable if the buyer terminates the option because the seller cannot remove the buyer’s title objections. 

The Recording of Option section at the top of the second page was restated to make it clear that it is the parties and their attorneys, but not the licensees, who would be responsible to provide the legal description of the property and any notarized signatures required should the parties choose to record the option or a memorandum thereof.

The major substantive change in the 2022 WB-24 is with regard to the Title Evidence provisions. Much of the Title Evidence section was rewritten and reconfigured to give a buyer the opportunity to have title evidence provided at two different points in the option process. The buyer may elect to have title evidence provided upon the granting of the option and will receive title evidence in all cases — unless the parties modify the WB-24 — upon the buyer’s exercise of the option.

Although much of the beginning of the Title Evidence section is the same as it was before with respect to the Conveyance of Title subsection, after that the Title Evidence section divides into two parts: (1) Title Upon Granting of Option and (2) Title Upon Exercise of Option. The Title Upon Granting of Option part is optional and applies only if the box at line 199 is checked while the part for Title Upon Exercise of Option is automatically included and resembles the title evidence provisions from the prior version of the WB-24 and the title evidence provisions in many of the offers.

To read more about the changes made to the WB-24 Option to Purchase, review the May 2022 Legal Update, “WB-24 Option to Purchase 2022,” at www.wra.org/LU2205.

Additional information

Learn more about forms revisions on the WRA forms update resource webpage: www.wra.org/FormsUpdate.

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