Out with the Old, In with the New

Spring is a time for fresh starts. Spring cleaning gives you the chance to clear out what no longer serves you and make room for what is next. For Wisconsin real estate licensees, spring is also a good time to “clean up” your professional records and make sure your firm associations are current and compliant.

Wis. Stat. § 452.30 sets out clear requirements for associating with a firm and terminating that association, and these notice obligations are not just administrative details. They determine whether a licensee is legally authorized to practice.

Clearing the air: notice of association

Before a licensee can begin providing brokerage services on behalf of a firm, two things must happen:

• The licensee must be associated with the firm.

• The Wisconsin Department of Safety and Professional Services (DSPS) must be notified of that association.

That second step is where issues often arise. A licensee may feel ready to jump in and start working, but until the DSPS has been properly notified through LicensE, which is the DSPS’ online portal for all things related to real estate licensing, the association is not complete for legal purposes. In other words, you cannot begin practicing on behalf of a firm until that notice has been submitted to LicensE. To file a Notice of Association, log in to your LicensE account, click on Amendments, select Request Amendment and choose “Notice of Association — Form 812.”

Notification may occur at the time of initial licensure or, more commonly, by submitting the required form through LicensE and paying any applicable transfer fee when joining a new firm. When moving from one firm to another, the same process applies.

As part of your professional “spring cleaning,” this is a good reminder to confirm that your association is properly on file before engaging in any brokerage activity.

Sweeping out the old: notice of termination

Ending a relationship with a firm requires just as much attention as starting one. Under Wis. Stat. § 452.30, both the licensee and the firm have independent obligations to notify the DSPS when their association ends:

• A licensee must notify DSPS through LicensE within 10 days after ceasing to be associated with a firm.

• A firm must also notify DSPS through LicensE within 10 days after terminating a licensee.

To file a Notice of Termination, log in to your LicensE account, click on Amendments, select Request Amendment and choose “Notice of Termination — Form 766.”

This dual-notice requirement ensures that the DSPS’ records remain accurate and that there is no confusion about where a licensee is authorized to practice. Importantly, one party cannot rely on the other to handle the notice — each has its own responsibility.

Just like cleaning out old files, it is important to formally close out prior associations so there is no lingering uncertainty about your status. Now would be a great time for a firm to review the licensees associated with it within LicensE and file those notices of termination for any licensees no longer associated with the firm.

No dust settling: why timing matters

The 10-day notice requirement is not something to put off for later. Delays can create gaps in compliance, during which a licensee may not be properly authorized to provide brokerage services on behalf of any firm. Additionally, failing to file a notice of termination can make it look like a licensee is associated with two firms, which for a salesperson is contrary to Wis. Stat. 452.30(7).

Similarly, failing to promptly report a termination can create confusion about supervision, liability and which firm is responsible for a licensee’s conduct — particularly in transactions that are still in progress.

Keeping your records current ensures there is no “gray area” about your authority to act.

A spring checklist for compliance

As you take stock of your business this season, consider adding these items to your checklist:

• Confirm your current firm association has been properly reported to the DSPS.

• Submit notice promptly when changing firms.

• Provide notice within 10 days when ending an association.

• Do not assume the other party has handled the required filing.

• Verify your status before engaging in brokerage activity.

• Review the roster of your agents and make sure it accurately reflects who is associated with your firm.

A little attention to these details now can prevent larger issues down the road.

Fresh start, clean records

Wisconsin law makes clear that a licensee’s authority to practice is tied not only to holding a license, but also to being properly associated with a firm and ensuring that association is reported. The same is true when that relationship ends.

By taking a “spring cleaning” approach to your firm associations by clearing out outdated relationships and confirming current ones, you can reduce risk, avoid compliance issues, and move forward with confidence in your practice.