The Wisconsin Department of Safety and Professional Services (DSPS) oversees licensing for all Real Estate sales persons. Both DSPS and local Realtor associations like Lakes Area Realtors Association (LARA), offer options for handling complaints for fraud, misrepresentation and unethical practices.
LARA's four services are outlined below with supporting links to processes and forms. For additional information see the Wisconsin Realtors Association "How To Guide" for filing a DSPS or Realtor Code of Ethics complaint.
A service provided by the Lakes Area REALTORS® Association to help resolve disputes, before a formal complaint process.
The Ombudsman Program is a structured communication and problem-solving service available to consumers and members of the Lakes Area REALTORS® Association to address complaints and questions that may be ethical, transactional, technical and/or procedural in nature.
Upon receiving the request form an Ombusdman will be assigned and information relayed. LARA’s Ombudsman will initiate communication with the “Complainant” no later than one business day after receipt of assignment.
The single, most outstanding characteristic that sets REALTORS® apart from other real estate practitioners is the willingness to accept and abide by the Code of Ethics of the NATIONAL ASSOCIATION OF REALTORS®. The Code of Ethics, which was first adopted on July 29, 1913, is a living document–responsive in its content to changes in the law and industry. The Code has been revised several times through the years to reflect current developments in professional real estate practice. The term REALTOR® has come to represent competency, fairness, and high integrity. These qualities stem from voluntary adherence to an ideal of moral conduct in real estate business practices.
But even with the best of intention, planning and preparation, occasional disagreements arise between REALTORS® and/or between REALTORS® and their clients or customers. The Greater Milwaukee Association of REALTORS® offers its members and their clients and customers a method to resolve complaints if they believe a REALTOR® may have acted in an unethical manner. An ethics hearing may be held and REALTORS® judged by their peers to determine if the code of ethics had been violated.
How the Process Works
Complaints must first be filed in writing. You can obtain a complaint form by calling the LARA office, or from this website. Complaints must be filed within 180 days from the time a complainant knew (or reasonably should have known) that potentially conduct took place.
A Grievance Review Panel will conduct a preliminary investigation of your complaint to determine if an Ethics Hearing should be held to determine if a violation of the REALTORS® Code of Ethics has occurred.
Ethics hearings are not held to resolve civil matters or criminal complaints–they are only held to determine if the REALTORS® Code of Ethics had been violated.
If the Grievance Committee concludes that a hearing should be held, both parties (the complainant and the respondent REALTOR®) are notified of the time and date of the hearing along with instructions as to the procedures that are followed. Both parties are provided an opportunity to state their case and present evidence to the Ethics Hearing Panel.
At the conclusion of the hearing, the Panel decides if the REALTORS® Code of Ethics has been violated. Disciplinary action can be taken against the REALTOR® ranging from a warning, requirement of educational training, fines, or suspension or even expulsion from the Association. The role of the Association is to vindicate the Code of Ethics and to educate the member.
Complaint Filing Instructions
Please fill out the complaint form below under “complainant and respondent”. The “complainant” is the person filing the complaint. The “respondent” is the person(s) you are filing the complaint against.
You may review the REALTORS® Code of Ethics and state on the complaint form under “Complainant(s) Charge(s)” the article(s) you feel have been violated. However, citing an article(s) is optional, and is not required for you to file your complaint. The Grievance Committee of the LARA will conduct a preliminary investigation of your complaint to determine if an ethics hearing is warranted before the Professional Standards Committee. Should the Grievance Committee determine that an ethics hearing should be held the appropriate article(s), would be cited prior to an ethics hearing.
Along with the complaint form, You must return a signed and dated written statement that explains the nature of your complaint. The complaint must be filed within 180 days of the time the facts regarding the complaint could have been known.
Please allow thirty (30) days for the Grievance Committee’s investigation process. After that time, you will be notified in writing of the Committee’s decision.
A key element in the practice of real estate is the contract. Experienced practitioners quickly become conversant with the elements of contract formation. Inquiry, invitation, offer, counter-offer, contingency, waiver, acceptance, rejection, execution, breach, rescission, reformation, and other words of art become integral parts of the broker’s vocabulary.
Given the significant degree to which Article 3’s mandate for cooperation, coupled with everyday practicality, feasibility and expediency, make cooperative transactions fact of life, it quickly becomes apparent that in virtually every real estate transaction there are actually several contracts which come into play. Setting aside ancillary but still important contracts for things such as mortgages, appraisals, inspections, title insurance, etc., in a typical residential transaction (and the same will be true in many commercial transactions as well) there are at least three (and often four) contracts involved and each, while established independently of the others, soon appears to be inextricably intertwined with the others.
First, there is the listing contract between the seller and the listing broker. This contract creates the relationship between these parties, establishes the duties of each and the terms under which the listing broker will be deemed to have earned a commission, and frequently will authorize the listing broker to cooperate with or compensate (or both) cooperating brokers who may be subagents, buyer agents, or who may be acting in some other capacity.
Second, there is the contract between the listing broker and cooperating brokers. While this may be created through an offer published through a multiple listing service or through some other method of formalized cooperative effort, it need not be. Unlike the bilateral listing contract (where generally the seller agrees to pay a commission in return for the listing broker’s production of a ready, willing and able purchaser) the contract between the listing broker and the cooperating broker is unilateral in nature. This simply means that the listing broker determines the terms and conditions of the offer to potential cooperating brokers (and this offer may vary as to different potential cooperating brokers or as to cooperating brokers in different categories). This type of contract differs from a bilateral contract also in that there is no contract formed between the listing broker and the potential cooperating brokers upon receipt of the listing broker’s offer. The contract is formed only when accepted by the cooperating broker, and acceptance only occurs through performance, that is, through production of a purchaser pursuant to the terms and conditions previously established by the listing broker.
Third, there is the purchase contract sometimes referred to as the purchase and sale agreement. This bilateral contract between the seller and the buyer establishes their respective promises and obligations to each other, which may also impact on third parties. The fact that someone other than the seller or buyer is referenced in the purchase contract does not make them a party to that contract though it may create rights or entitlements which may be enforceable against a party (the buyer or seller).
Fourth, there may be a buyer broker agreement in effect between the purchaser and a broker. Similar in many ways to the listing contract, this bilateral contract establishes the duties of the purchaser and the broker as well as the terms and conditions of the broker’s compensation.
These contracts are similar in that they are created through offer and acceptance. They vary in that acceptance of a bilateral contract is through a reciprocal promise, e.g., the purchaser’s promise to pay the agreed price in return for the seller’s promise to convey good title; while acceptance of a unilateral contract is through performance, e.g., in producing (or procuring) a ready, willing and able purchaser.
Each of these contracts is subject to similar hazards in formation and afterward. The maker’s (offer’s) offer in any of these scenarios may be accepted or rejected. The intended recipient of the offer (or offer) may counter-offer. There may be questions as to whether a contract was formed, e.g., was there an offer, was it accepted, was the acceptance on the terms and conditions specified by the maker of the offer or was the “acceptance” actually a counter-offer (which, by definition, rejects the first offer). A contract, once formed, may be breached. These and other questions of contract formation arise on a daily basis. There are several methods by which contractual questions (or “issues” or “disputes”) are resolved. These include civil lawsuits, arbitration, and mediation.
Boards and Associations of REALTORS® provide arbitration to resolve contractual issues and questions that arise between members, between members and their clients and, in some cases, between parties to a transaction brought about through the efforts of REALTORS®. Disputes arising out of any of the above-referenced contractual relationships may be arbitrated and the rules and procedures of Boards and Associations of REALTORS® require that certain types of disputes must be arbitrated if either party so requests (information on “mandatory” and “voluntary” arbitration is found elsewhere in this Manual.)
While issues between REALTORS® and their clients, e.g. listing broker/seller (or landlord) or buyer broker/buyer (or tenant), are subject to mandatory arbitration (at the client’s request), and issues between sellers and buyers may be arbitrated at their mutual agreement, in many cases such issues are resolved in the courts or in other alternative dispute resolution forums (which may also be administered by Boards or Associations of REALTORS®). The majority of arbitration hearings conducted by Boards and Associations involve questions of contracts between REALTORS®, most frequently between listing and cooperating brokers. These generally involve questions of procuring cause where the panel is called on to determine which of the contesting parties is entitled to the funds in dispute. While awards are generally for the full amount in question (which may be required by state law), in exceptional cases, awards may be split between the parties (again, except where prohibited by state law). Split awards are the exception rather than the rule and should be utilized only when hearing panels determine that the transaction would have resulted only through the combined efforts of both parties. It should also be considered that questions of representation and entitlement to compensation are separate issues.
In the mid-1970’s, the NATIONAL ASSOCIATION OF REALTORS® established the ARBITRATION GUIDELINES to assist Boards and Associations in reaching fair and equitable decisions in arbitration; to prevent the establishment of any one, single rule or standard by which arbitrable issues would be decided; and to ensure that arbitrable questions would be decided by knowledgeable panels taking into careful consideration all relevant facts and circumstances.
The ARBITRATION GUIDELINES have served the industry well for nearly two decades. But, as broker-to-broker cooperation has increasingly involved contracts between listing brokers and buyer brokers and between listing brokers and brokers acting in non-agency capacities, the time came to update the GUIDELINES so they remained relevant and useful. It is to this end that the following is intended.
Ethics Citation Program for REALTORS(R)
LAKES AREA REALTORS® ASSOCIATION ETHICS CITATION PROGRAM
Effective: January 1, 2016
I. Preliminary Procedures / Review by Citation Panel
A. The Lakes Area Realtors® Association (LARA) has established a Citation Schedule of potential violations that are covered by the Ethics Citation Program, and the fines that apply to those violations. Information about the Ethics Citation Program, including the Citation Schedule, will be provided as part of the information sent to all potential complainants who are considering filing complaints.
B. Citation complaints must be typewritten or clearly handwritten and submitted along with an Ethics Citation Complaint Form citing only Articles 1, 3, 4, 5, 6, 12, 14, and/or 16 and only facts covered under certain Standards of Practice within the aforementioned Articles (Section IV. Qualifying Violations). Sufficient documentation and dates should be included. The complaint must be filed within 180 days of the alleged event and must provide documentation of when the event occurred.
C. Anonymous complaints are allowed.
D. When LARA receives a complaint, staff shall review the complaint to determine if it includes allegations that are covered by the Qualifying Violations.
1. If the complaint does not include allegations covered by the Qualifying Violations, or it includes a mixture of those that are covered by the Citation Schedule and those that are not, the complaint shall be processed according to the procedures set forth in the most current NAR Code of Ethics and Arbitration Manual.
2. If the complaint includes only allegations covered under the Qualifying Violations, the Citation Panel will proceed under subsection E., below.
E. If the complaint includes only allegations covered under the Citation Schedule, the Citation Panel will review the information presented in the complaint and, taking all information in the complaint as true on its face, determine if there would be a potential violation of the Code of Ethics. The Citation Panel will not be permitted to add respondents or additional articles of the Code of Ethics at this stage in the proceedings.
1. If the Citation Panel determines there is not a potential violation, the complaint shall be dismissed according to the procedures set forth in the most current NAR Code of Ethics and Arbitration Manual, preserving the Complainant’s right to appeal the dismissal, provided the complaint was not filed anonymously.
2. If the Citation Panel determines there is a potential violation of the Code of Ethics, it shall issue a citation to the Respondent pursuant to Section II below, which shall include the fine(s) as established by the Qualifying Violations.
II. Issuance of Citations
A. The citation will be sent to the Respondent via email and via a traceable method such as certified mail or UPS, as well as to the managing broker of the Respondent’s office.
1. A copy of the complaint will be provided to the Respondent and the identity of the Complainant will be provided if the complaint was not filed anonymously.
B. The Respondent will have thirty (30) days from receipt of the citation to provide notice as to whether the Respondent will accept the citation and pay the fine, or whether the Respondent requests a full hearing on the complaint. Failure to respond within the thirty (30) days will be deemed as acceptance of the citation.
1. If the Respondent requests a hearing and the complaint was filed anonymously, the Citation Panel will become the complainant and a member of the Citation Panel will attend the hearing to present the complaint.
2. Written acceptance of the citation on the form provided by a Respondent shall be deemed to be a final resolution of the complaint, which shall not be appealable or subject to any further review.
3. If the Respondent accepts the citation, payment must be received no later than thirty (30) days after the date of acceptance.
a. The case will be deemed to be closed upon receipt of payment, and notice will be provided to the Complainant, if known, that the citation(s) has been issued and paid.
b. Failure to pay the citation amount within thirty (30) days will result in the automatic suspension of membership and MLS services until the citation has been paid.
C. If the Respondent requests a hearing, the complaint shall be sent to the Grievance Committee for a full review as though it were a new complaint.
A. There is a limit for an individual Realtor® as to the number and type of citations that he/she may receive, according to the following rules:
1. No more than two citations within a consecutive twelve (12) month period, starting on the date the first complaint was filed.
2. No more than three citations within a consecutive twenty-four (24) month period, starting on the date the first complaint was filed.
3. No more than two citations for the same Article and Standard of Practice within five (5) years.
B. If another complaint is filed against the same Respondent arising out of the same transaction or event covered under a previous citation issued and paid, the complaint will not be considered by the Citation Panel. The Complainant, if known will be informed that the Respondent has already been cited for the same offense.
C. Should an individual Respondent exceed the limits set forth in subsection A of this Section, any further complaints will be processed as a complaint following procedures set forth in the most current NAR Code of Ethics and Arbitration Manual. The program administrator will review the citation history of a Respondent to determine eligibility, and if the Respondent is not eligible to receive a citation, the complaint will be forwarded to the Grievance Committee with a notation that the complaint is not covered by the Qualifying Violations. If the complaint was filed anonymously, the Citation Panel will become the complainant and a member of the Citation Panel will attend the hearing to present the complaint.
D. Citation violations are subject to being published according to the rules adopted by the association for ethics violations.
E. Where a Hearing Panel has found a violation of the Code of Ethics after a hearing, it will consider past citations paid by the Respondent within the last three (3) years in establishing a sanction.
F. The Program Administrator will review the citation history of a Respondent to determine eligibility, and if the Respondent is not eligible to receive a citation, the complaint will be forwarded to the Grievance Committee.
G. The Program Administrator will track the number of citations issued, the number of citations paid, and the violations for which citations are issued. This information may be provided in the aggregate to the LARA Board of Directors or to the local associations, but will not include details about the complaints nor identify the Respondents.
IV. Qualifying Violations
A. The following violations qualify for the Ethics Citation Program:
Accessing or using listed or managed property on terms or conditions other than those authorized by the owner or seller (SOP 1-16) $1,000
Failure to disclose existence of dual or variable rate commissions (SOP 3-4) $500
Failure to disclose existence of accepted offers to any broker seeking cooperation (SOP 3-6) $250
Providing access to listed property on terms other than those established by the owner or the listing broker (SOP 3-9) $1,000
Failure to provide written disclosure of Realtor’s® interest in property being bought or sold $500
Providing professional service without disclosing interest in property $500
Accepting any commission, rebate or profit on expenditures without client’s knowledge or consent $500
Failure to present a true picture in real estate communication, marketing and advertising $250
Failure to disclose status as a real estate professional in advertising, marketing and other real estate communications $250
Failure to disclose potential compensation or benefit received from a third party for services provided free to a client (SOP 12-2) $250
Advertising or offering to sell/lease property without authority of owner or owner’s authorized agent (SOP 12-4) $500
Failure to disclose name of real estate firm in advertising in a readily apparent manner(SOP 12-5) $250
Failure to disclose status of both owner/landlord and Realtor® or licensee when advertising property in which Realtor® or licensee has ownership interest (SOP 12-6) $500
Falsely claiming to have “sold” property (SOP 12-7) $250
Failure to disclose on a website the firm’s name and state of licensure in a reasonable and readily apparent manner (SOP 12-9) $250
Failure to present a true picture in advertising and representations to the public including Internet content posted and the URLs and domain names used. (SOP 12-10) $250
Registration or use of deceptive URL or domain name (SOP 12-12) $500
Representing that the Realtor® has a designation, certification or other credential that the Realtor® is not legitimately entitled to use (SOP 12-13) $500
Failure to cooperate in any professional standards proceeding or investigation $500
Use of terms of an offer to modify listing broker’s offer of compensation (SOP 16-16) $500
Placement of for sale/lease sign on property without permission of seller/ landlord (SOP 16-19) $250|
B. Fines for citations shall be as follows:
1. For the first violation: as established in Section IV
2. For the second violation: as established in Section IV, plus $500
3. For the third violation: as established in Section IV, plus $750