Taking a professional break while maintaining license

A licensee with a broker’s license decided to take a break from real estate. The licensee plans to resume practicing sometime in the next 12 months and is willing to keep up with continuing education (CE) and licensing requirements. The licensee does not want to renew REALTOR^® membership, does not want to maintain errors & omissions (E&O) insurance, and does not want to pay other office fees. Does the firm still need to hold this person’s license?

An individual with a license remains licensed until the end of the biennium on December 14, 2022. At that time, a licensee may complete CE and pay the license renewal fee with the Wisconsin Department of Safety and Professional Services (DSPS) to retain the license. The first question is whether the licensee wants to remain with the firm or not. If not, the licensee should file a notice of termination of association with the DSPS. 

As long as the individual has a current broker’s license, the broker may continue to engage in real estate brokerage. The broker does not need to be associated with a firm. As an independent broker, it is the broker’s choice whether to renew REALTOR^® membership or apply for MLS participatory rights. Any commission or referral fees are negotiated and paid directly to the individual broker. Whether the individual broker chooses to pay for E&O insurance is a business decision. 

If a licensee chooses not to renew by the December 14 deadline, the licensee may no longer practice real estate after that date. However, within the next five years after that deadline, the licensee may complete CE, pay the late fee and the license fee, and renew the license. Once five years have passed, an individual would have to start over and complete the pre-licensing requirements, including education and testing. 
No late renewal would be available.

Salesperson’s license without firm association

If a person with a salesperson’s license renews their license, can they disassociate from a firm and still negotiate referral fees directly?

Wis. Stat. § 452.19 limits the payment of referral fees, finder’s fees and commission splits to Wisconsin real estate licensees and persons regularly and lawfully engaged in real estate brokerage in another state. The referral fee may be paid to a person with either a broker’s or salesperson’s license. It is not necessary that a licensee be currently associated with a firm to receive a referral fee. It is prudent practice to enter into a written referral agreement to assure the terms and conditions of the referral are documented. 

To leave the firm, the licensee or the firm files a Form 766 Notice of Termination of Licensee Associated with Firm, with the DSPS. In addition, a licensee should read and follow the independent contractor agreement and the office policies for the firm’s termination procedure. Form 766 is available at dsps.wi.gov/Credentialing/Business/fm766.pdf.

Renewal of lapsed license

The firm has an agent who moved to Florida for two years, and now the agent is back. She let her Wisconsin real estate license lapse less than two years ago. What does she have to do to get her license back?

If a Wisconsin real estate license has been expired for less than five years, the individual is required to take the previous biennium’s CE and then renew the license with the DSPS. There is a $25 late fee in addition to the renewal fee. 

The WRA offers CE courses for the previous biennium. Once the education is completed, the license may be renewed with the DSPS.

Individual and LLC renewals

A broker created a real estate firm as an LLC, and the broker has not renewed the business entity license. How can an agent who works for this firm proceed with their individual license renewal?

Real estate brokers with business entities such as corporations, partnerships and LLCs are required to renew two credentials. The broker renewing a business entity license will be asked to renew both the individual broker’s license and the broker business entity license. The broker or the agent may check renewal status online by using the Wisconsin credential search on the DSPS website at licensesearch.wi.gov. If the broker chooses not to renew the entity license, the broker may continue to practice as a sole proprietor broker. However, each of the individual licensees associated with the broker business entity must file a Form 766 Notice of Termination of Licensee Associated with Firm. The licensees would then file a Form 812 Notice of Association with Firm under the individual broker’s license.   

Failure to renew license during pending transactions 

An agent did not complete CE by the biennium deadline, and his license was not renewed, according to the DSPS website. His broker is aware that without a renewed license, that agent cannot show property, conduct closings, write offers or visit the office to work until the DSPS website shows the license as renewed. In this situation, how can the broker handle the agent’s listing contracts? Could the broker provide amendments to the sellers to sign to put the amendments in the broker’s name? Can the listing contracts stay in this agent’s name until the DSPS shows his license is renewed?

The first step is for the broker to file a Form 766 Notice of Termination of Licensee Associated with Firm with the DSPS. Broker supervision rules require brokers to assure each licensee associated with the firm is properly credentialed, including timely renewals. 

If the broker is aware of the causes for the agent’s delay, the broker may know how long it will take the agent to complete the CE and renew the license. Since the agency contracts are with the firm and not an individual agent, those contracts would still be valid. Amendments are not required to notify clients of the change, however, the broker may wish to notify the clients in writing, letting them know that a different agent will be handling the listing on behalf of the firm until this licensing issue gets squared away. Also, the broker must notify the MLS and local association of the agent’s departure. The broker may also wish to notify any cooperating firms with pending transactions so other firms know that another agent is the point of contact for any pending transactions. 

Business entity license renewals

The broker had corporations in the past, but now the broker wants to practice as a sole proprietor. The broker plans to establish a trade name and advertise in a name other than what is on their license. In this scenario, how would the broker proceed with license renewal?

A broker who is a sole proprietor is not required to have a business entity license. If the sole proprietor wants to use a trade name, the trade name must be filed with the DSPS, according to Wis. Admin. Code § REEB 23.03, which provides:

(1) Definition. “Trade name” means the name other than the name appearing on the license, under which the licensed individual broker or a licensed broker business entity advertises or does business.

(2) Notification. A licensee, before doing business under any trade name, shall notify the department in writing of the trade name.

DSPS does not have a specific form or document for licensees to use to communicate trade name information to the DSPS. The broker may use the Wisconsin credential search on the DSPS website to check potential firm names and trade names for any potential conflicts with the intended trade name. Additionally, the broker could also contact the DSPS at dsps@wisconsin.gov to inquire about trade names. Communicating the trade name with a letter or email to the DSPS may be sufficient.