Signs, Signs, Everywhere There's Signs!

What happens after the end of the transaction when the sign is still there


 Cori Lamont  |    May 07, 2014
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When a listing company lists a property for sale with the seller, the preprinted listing contract offers an opportunity for the broker to discuss his or her marketing of the property (lines 15-22 of the WB-1 Residential Listing Contract ‚Äď Exclusive Right to Sell) as well as the seller‚Äôs cooperation with marketing efforts on lines 74-80 of the WB-1.

One of the most commonly used advertising tools for all of real estate is signage. Unless the seller has a specific distaste for signage, or other limitations exist such as condominium rules that disallow posted sale signs by real estate companies, a universally understood commitment to advertising a property is that a sign will be placed on the owner’s property. 

The WRA has recently fielded several questions about what to do when a buyer is upset that the listing company’s sign is still in the yard after the closing. Sometimes this phone call comes to the WRA hours after the closing, a week after closing, or on occasion, even months after the closing. 

In some instances, new buyers have patiently allowed the listing company extra time to either remove the sign or make arrangements for a third-party company to remove the sign, while other buyers have become less tolerant of the listing broker’s sign being in the yard after closing. 

A lawn sign must be removed when the listing contract expires at closing. After closing, the listing broker’s permission from the seller to advertise by posting a lawn sign is no longer effective because the property is now owned by the buyer. 

Historically, the Department of Safety and Professional Services (DSPS) has recognized the importance of having the ‚Äúsold‚ÄĚ sign on the property as an advertising tool for brokers, and as a matter of policy, permits brokers to have a sold sign on the property for a reasonable number of days following the closing if the broker obtains the permission of the buyer/new owner. While it is unclear what would happen if the buyer filed a complaint against the listing broker for having the sign on the property after closing and the listing broker did not have the buyer‚Äôs permission, it is likely that the DSPS outcome will depend on how much time has passed after the closing of the transaction.¬†

Some buyers immediately want the sign removed while others will allow the listing broker a reasonable amount of time to remove the sign. During recent discussions with listing brokers, the buyers have argued that after closing, the sign no longer belongs to the listing company, but rather at the closing, the sign became the buyer’s property. 

The buyer‚Äôs attempt to claim ownership of the listing broker‚Äôs sign may be thwarted because the listing contract is with the seller ‚ÄĒ not the buyer. Therefore the seller did not have the legal authority to sell the listing broker‚Äôs sign. The listing broker should proceed with care though, before stepping foot on the property to retrieve the sign or sending a third-party company to remove the sign. The buyer could attempt to argue that the listing company and/or the third party is trespassing if either goes on to the property to remove the sign.¬†

Due to administrative code and the Code of Ethics, the listing broker should be motivated to quickly remove the sign after closing. The relevant rule and article of the Code of Ethics are provided below.
Wis. Admin. Code § REEB 24.04(1) provides, "Licensees shall not advertise in a manner which is false, deceptive, or misleading."
Article 12 of the Code of Ethics provides, in part, "REALTORS¬ģ shall be careful at all times to present a true picture in their advertising and representations to the public."¬†

This is a delicate situation. Hopefully everyone can take care to be level-minded and not encourage further discord relating to the existence of the sign after closing but can work together to resolve the issue in a friendly and expedited manner. 

If you are the broker who represented or worked with a buyer during a transaction, and the buyer is not open to working out an agreement for the listing broker to remove the sign from the property, encourage your buyer to speak with legal counsel before the buyer takes action in physically removing or altering the sign. For example, buyers who cut down the sign or take the sign out of the ground and throw it away could be held responsible for damage to the sign, if the listing broker successfully argues that the buyer did not gain ownership of the sign during the closing of the real estate transaction. If the buyers makes any representation that they are going to take the matter into their own hands, encourage them to try and work it out with the listing broker and/or suggest that they call an attorney. Help them see the benefit of working out a resolution regarding the sign. Don't assist them in being adversarial.

Cori Lamont is Director of Regulatory Affairs for the WRA.

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