WRA will Pursue Mandatory VLCR

 Tom Larson  |    May 01, 2011

As part of our legislative agenda for the 2011—12 session, the WRA will be pursuing legislation to require sellers of vacant land to complete a vacant land condition report (VLCR). As with other required disclosures, the goal is to make sure buyers are aware of information known by seller that could have a significant impact on the buyer’s decision to purchase the property, or the price the buyer is willing to pay for it.


Historically, sellers of Wisconsin real estate had no duty to disclose any information to buyers in a real estate transaction. Buyers who purchased real estate assumed tremendous risk relating to the condition of the property, including conditions that were intentionally concealed by the seller. This doctrine was known as caveat emptor, or “let the buyer beware.”

Over time, courts and the legislature eroded away this doctrine and began imposing liability on sellers who concealed defects, interfered with a buyer’s attempt to inspect a property, and in cases where the seller intentionally misrepresented material facts related to the property.

In 1991, Wisconsin lawmakers adopted the seller disclosure law to ensure that buyers of residential real estate are aware of any adverse conditions affecting the property. Under the law, most sellers of one to four family dwellings are required to complete a real estate condition report and disclose any known defects about the property to prospective buyers prior to the time the buyer purchases the property. See Wis. Stat. Ch. 709. If the seller fails to provide the buyer with the RECR within 10 days after the offer to purchase has been accepted, the buyer may rescind the offer to purchase.

While not required by law, several voluntary disclosure reports related to other types of transactions have been produced by the WRA and are used frequently by REALTOR® members. For example, the WRA has produced condition reports for commercial property (WRA Real Estate Condition Report C) and vacant land (WRA Real Estate Condition Report V).

Why Require the Use of a VLCR

Fewer disputes related to disclosure issues. In recent years, the regulatory environment affecting vacant land has changed significantly. New regulations at both the federal and state levels have been adopted that affect how vacant land can be used, where development can occur, and the type and amount of fees paid for certain activities. As a result, a growing number of complaints, violations and lawsuits have resulted because buyers were not aware of these regulations or fees prior to the time they have purchased the property. Requiring sellers to complete a VLCR will likely reduce the disputes related to the failure to disclose important conditions affecting the property.

Better seller compliance with new disclosure requirements. To achieve better compliance with these regulations and to reduce the number of lawsuits filed by unhappy buyers, the Wisconsin Legislature has imposed a number of new disclosure obligations upon sellers of vacant land. For example, owners of vacant land have an obligation to disclose any known penalties under the use value law, and whether the property is enrolled in the managed forest program. The legislature will likely continue to impose new disclosure requirements and it would be easier for sellers to comply with the requirements if a mandatory disclosure form contained all of the requirements.

More user-friendly than Offer to Purchase. Because these disclosures are mandatory, they must be made even though state law does not require a disclosure form for vacant land transactions. While many of the required disclosures have been incorporated into the WB 13 - Vacant Land Offer to Purchase (Offer), the Offer may not contain all of the necessary disclosure obligations due to the practical difficulties in amending the Offer every time the legislature or court creates a new disclosure requirement. In addition, the disclosures contained in the Offer are less interactive than the disclosures in the VLCR. In other words, the Offer, unlike the VLCR, does not require the seller to indicate whether each individual condition applies to the subject property by indicating “yes” or “no.” As a result, a seller may be more likely to overlook a disclosure obligation contained in the Offer, than a similar disclosure obligation in the VLCR.

* For more information regarding the proposed mandatory VLCR, please contact Tom Larson (tlarson@wra.org)  at (608) 240-8254.

Tom Larson is Chief Lobbyist and Director of Legal and Public Affairs for the WRA.

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