US Wisconsin Broker License Exam Set Two

The core legal principle at issue is the broker’s independent duty to disclose material adverse facts under Wisconsin law. 1. Identify the relevant statute: Wisconsin Statute § 452.133(1) outlines the duties of a broker. Specifically, § 452.133(1)(a) mandates that a broker shall provide brokerage services to all parties honestly and fairly. Furthermore, § 452.133(1)(c) requires the broker to timely disclose in writing all material adverse facts that the broker knows and that are not known or readily observable by the parties. 2. Define Material Adverse Fact: Wisconsin Administrative Code REEB 24.02(12) defines a material adverse fact as a condition or occurrence that significantly and adversely affects the property’s value, reduces structural integrity, or presents a significant health risk. A history of significant water seepage, even if a remedy has been attempted, falls squarely within this definition. 3. Analyze the Broker’s Duty vs. Client’s Instructions: A broker’s duty to disclose material adverse facts is an independent obligation owed to all parties. It cannot be waived or negated by a client’s instruction. While a broker owes the client a duty of loyalty (e.g., obedience), this duty does not extend to illegal or unethical acts, such as concealing or misrepresenting a material adverse fact. 4. Evaluate the Broker’s Conduct: Anja was aware of the history of seepage, which is a material adverse fact. By intentionally downplaying this history at the seller’s request, she engaged in a form of misrepresentation. The installation of a waterproofing system does not erase the history as a material fact, nor does it guarantee the problem is solved. Anja’s failure was not in relying on the seller’s RECR, but in her own affirmative act of minimizing a known defect, thereby breaching her statutory duty of honest and fair dealing and disclosure to the buyer. Her primary legal exposure stems from this direct breach of her personal and non-delegable duty. Wisconsin law places a high standard on licensees to act as a reliable source of information. The broker’s duties of inspection and disclosure are fundamental to protecting the public and maintaining the integrity of the real estate market. A broker must disclose what they know or should know, even if it is contrary to their client’s wishes or what is stated on the seller’s Real Estate Condition Report. The duty to disclose a known material adverse fact is paramount and supersedes the duty of obedience to a client’s unlawful instruction. The fact that the seller had a remedy installed is a relevant piece of information, but it must be presented factually alongside the history of the defect, not as a substitute for it. Anja’s decision to actively minimize the past problem, rather than presenting all facts neutrally, constitutes a breach of her duties.

The correct answer is determined by applying specific Wisconsin statutes and administrative codes that govern residential rental practices. Under Wis. Admin. Code ATCP 134.08, there is a list of “Prohibited Provisions” that cannot be included in a residential lease. The inclusion of any of these specific provisions has a severe consequence outlined in Wis. Stat. § 704.44(10). This statute dictates that if a residential rental agreement contains a provision that is void and unenforceable under ATCP 134, the entire rental agreement becomes void. This means the landlord cannot enforce any part of the lease, including the collection of rent. One of the explicitly prohibited provisions found in ATCP 134.08(8) is any clause that purports to authorize the landlord to recover attorney’s fees or costs from the tenant for a legal action related to the rental agreement. This prohibition is absolute and does not depend on which party prevails in court. Therefore, inserting such a clause into a lease agreement directly violates ATCP 134.08. Consequently, according to Wis. Stat. § 704.44(10), the presence of this single prohibited clause renders the entire lease void. Other problematic clauses may be unenforceable on their own, but they do not necessarily trigger this specific statutory penalty of voiding the entire contract. For instance, rules around notice periods or automatic renewals have their own specific remedies and requirements but are not listed in ATCP 134.08 as provisions that void the lease itself.

The core legal principle tested here is that the state of Wisconsin does not recognize the form of co-ownership known as tenancy by the entirety. When a married couple, Anya and Jakub, acquire property in Wisconsin, their ownership is governed by the Wisconsin Marital Property Act, Chapter 766 of the Wisconsin Statutes. Even if a deed uses language like “as husband and wife,” which might create a tenancy by the entirety in other states, Wisconsin law interprets this differently. Under Wisconsin law, property acquired by spouses is presumed to be marital property. When a homestead is acquired by a married couple, it is classified as survivorship marital property unless a contrary intent is expressed in the instrument of transfer. Survivorship marital property is functionally similar to a joint tenancy with a right of survivorship. A critical aspect of the Marital Property Act is how it treats debts. An obligation incurred by a spouse during marriage is presumed to be incurred in the interest of the marriage or the family. Consequently, a creditor can typically satisfy this obligation from all marital property, which includes the home held as survivorship marital property. Therefore, despite Jakub alone incurring the business debt, the creditor can pursue a claim against the entire marital property asset, the house, not just a theoretical one-half interest. The assumption that their ownership form provides protection from individual spousal debts, as a tenancy by the entirety would, is incorrect under Wisconsin statutes.

The core of this issue rests on the “Extension of Agreement Term” provision, commonly known as the protected property clause, within the Wisconsin WB-36 Buyer Agency/Tenant Representation Agreement. For a broker to successfully claim a commission after the agreement’s expiration, several specific conditions must be met. First, during the term of the agency agreement, the buyer must have personally attended a showing of the property or submitted a written proposal to the seller for the property. In this scenario, the broker at Prestige Realty physically showed the Maple Avenue property to Amelia. Second, after the agreement expires, the broker must deliver a written notice to the buyer identifying the protected properties. The WB-36 form specifies this notice must be delivered to the buyer no later than three days after the expiration of the agreement. Prestige Realty delivered this notice on June 2nd, which is within the three-day window following the June 1st expiration. Third, the buyer must enter into an enforceable contract to acquire an interest in the protected property within the extension period, which is typically one year. Amelia entered into a contract in October, well within this one-year timeframe. Because Prestige Realty met all the necessary conditions outlined in the WB-36—showing the property during the term, delivering a timely written notice after expiration, and the buyer contracting on the protected property during the extension period—the firm has earned its commission as per the terms of the original buyer agency agreement. The expiration of the primary term of the agreement does not negate the broker’s rights under this specific extension clause.

The core of this scenario revolves around the fiduciary duties a Wisconsin broker owes to their client, as established in a listing contract. The primary duties in conflict here are loyalty, disclosure, and obedience. The duty of loyalty requires the broker to act solely in the best financial interests of their client, placing the client’s interests above all others, including their own. The duty of disclosure mandates that the broker must inform their client of all material facts relevant to the transaction. A material fact is any information that could affect the client’s decision-making process regarding the property’s value or the terms of the sale. In this case, the impending municipal project is a significant material fact that will almost certainly increase the property’s value. Withholding this information would prevent the client from making a fully informed decision about whether to accept the current offer or to wait for a better one. While the duty of obedience requires a broker to follow the client’s lawful instructions, this duty is not absolute. It does not obligate a broker to follow instructions from a client who is uninformed about critical, material facts that the broker possesses. The broker’s first responsibility is to ensure the client is fully informed by disclosing the material fact. After the disclosure, the client can then provide new, informed instructions, which the broker would then be obligated to follow. Acting to secure a quick commission at the expense of the client’s potential financial gain would be a severe breach of the duty of loyalty.

The calculation determines the property tax proration credit the buyer will receive from the seller at closing. The property taxes are paid in arrears. First, calculate the daily tax rate. \[ \frac{\$5,110.00 \text{ annual taxes}}{365 \text{ days}} = \$14.00 \text{ per day} \] Next, determine the number of days the seller is responsible for the taxes. In Wisconsin, standard practice dictates that the seller is responsible for the property and its associated costs, including taxes, through and including the day of closing. The period of seller responsibility is from January 1 to June 10. Number of days: January: 31 February: 28 (assuming a non-leap year) March: 31 April: 30 May: 31 June: 10 Total days = \(31 + 28 + 31 + 30 + 31 + 10 = 161\) days. Finally, calculate the total prorated amount, which will be a credit to the buyer and a debit to the seller on the closing disclosure. \[ 161 \text{ days} \times \$14.00/\text{day} = \$2,254.00 \] Proration is the process of dividing and allocating certain expenses and income between the seller and buyer at a real estate closing. For property taxes in Wisconsin, which are typically paid in arrears, this means the seller must compensate the buyer for the portion of the year the seller owned the property, since the buyer will be responsible for paying the full annual tax bill when it comes due at the end of the year. The calculation is based on a 365-day year to determine a per diem, or daily, tax rate. A critical component of this calculation, specific to local custom and practice, is determining who is responsible for the day of closing itself. In Wisconsin, the prevailing standard is that the seller’s ownership period, and thus their financial responsibility, extends through the entire day of closing. Therefore, when calculating the number of days for the proration, the closing date is included in the seller’s total. The final prorated amount is then entered as a debit to the seller and a credit to the buyer on the closing disclosure, ensuring each party pays their fair share of the annual tax liability.

This situation is governed by the Wisconsin Administrative Code, specifically REEB 15, which details the rules for handling trust funds. When a transaction fails to close or a dispute arises between the parties regarding the disbursement of trust funds, such as earnest money, the broker is placed in a specific legal position. The broker’s primary duty is to act as a neutral stakeholder and safeguard the funds. According to REEB 15.09, a broker may not disburse the funds based on their own judgment of which party is right or wrong. The broker must hold the funds in the trust account until one of several conditions is met. The most common and preferred method is receiving a written disbursement agreement, signed by all parties to the contract, which explicitly directs the broker on how to distribute the funds. Alternatively, the broker must abide by an order from a court. The code also provides a mechanism where the broker can initiate a disbursement after providing 60 days’ advance written notice to the parties, but this is a separate, proactive process. In the immediate context of a closing dispute, the broker cannot unilaterally decide to return money to the buyer, transfer it to a third party to handle, or mediate a financial settlement and disburse funds accordingly. The core principle is that without mutual written consent or a court order, the funds are frozen, and the broker’s legal obligation is to continue holding them securely.

This scenario tests the specific requirements for enforcing a listing protection clause, often called an override or extension clause, under Wisconsin law. Such a clause allows a broker to earn a commission after a listing contract expires if the property is sold to a buyer the broker introduced to the property during the listing term. However, this protection is not automatic. For the clause to be enforceable against a seller, Wisconsin Statutes and Administrative Code REEB 24.08 impose a critical and time-sensitive procedural step on the brokerage firm. The firm must provide the seller with a written list of “protected buyers.” A protected buyer is a person or entity who, during the listing term, negotiated for the property, attended an individual showing, or submitted an offer. The most crucial part of this rule is the deadline: this written list must be delivered to the seller no later than three days after the expiration of the listing contract. Merely showing the property to a buyer or being the procuring cause is insufficient on its own. The formal, timely delivery of this list is the legally required action that solidifies the broker’s claim. Failure to deliver this list within the three-day window renders the listing protection clause unenforceable for any sale to buyers who would have otherwise been on that list.

The analysis begins with the accepted primary offer from Anya, which is subject to a Closing of Buyer’s Property Contingency, documented on the WB-41 addendum. This contingency allows the seller, the Chen family, to continue marketing their property. Upon receiving a subsequent offer from Leo that they deem acceptable, the Chens accept it as a secondary offer. This triggers their right to activate the “bump clause” in the WB-41 addendum tied to Anya’s primary offer. The Chens’ broker, Maria, provides proper written notice to Anya’s broker, initiating a specific, non-negotiable timeframe, in this case, 72 hours. According to the standard language of the WB-41, the primary buyer, Anya, must respond to this notice within the specified period by delivering a written waiver of the Closing of Buyer’s Property Contingency to the seller. Failure to deliver this waiver within the 72-hour window has a definitive legal consequence. The primary offer automatically becomes null and void. The contract is terminated due to the non-fulfillment of this specific procedural requirement. Concurrently, the properly executed secondary offer from Leo, which was awaiting this exact outcome, is automatically elevated to the primary position. No further acceptance or signatures are required from the Chen family to make Leo’s offer the primary binding contract. The transition is automatic as a function of the bump clause’s terms.

In Wisconsin, real property is legally identified through one of several types of legal descriptions, including the Rectangular (or Government) Survey System, metes and bounds, and the lot and block system. The Rectangular Survey System describes land based on its position relative to a principal meridian and baseline, dividing land into townships, ranges, and sections. This is often used for large, unsubdivided tracts of land. When a landowner decides to divide a larger parcel into smaller lots for development, they typically create a subdivision plat. This process is governed by state statutes, such as Wisconsin Statutes Chapter 236. The plat is a detailed map that precisely defines the boundaries, dimensions, easements, and other features of each individual lot, block, and street within the new subdivision. Once this plat map is approved by the necessary governmental bodies and officially recorded with the county’s Register of Deeds, it becomes the primary, controlling legal description for all the parcels within that subdivision. In the event of a conflict or discrepancy between the boundaries as shown on the recorded plat and a description derived from the older, more general description of the parent tract (such as the original Rectangular Survey description), the recorded plat will almost always govern. The law presumes that the act of creating and recording the plat was intended to create a new, more specific, and definitive set of boundaries for the lots. Therefore, the plat map serves as the superior evidence of the boundaries for the individual lots it creates, superseding the prior, general description of the land before it was subdivided.

The initial form of ownership is a joint tenancy with right of survivorship among Anya, Ben, and Chloe. This form of co-ownership is defined by the four unities of time, title, interest, and possession. The most significant feature of a joint tenancy is the right of survivorship, which means that upon the death of one joint tenant, their interest in the property is automatically and immediately transferred to the surviving joint tenant or tenants, bypassing the probate process. In Wisconsin, the act of one joint tenant placing a mortgage on their individual interest does not sever the joint tenancy. Wisconsin law operates under the lien theory of mortgages, meaning a mortgage creates a lien on the property but does not convey title. Because the mortgage does not transfer title, it does not destroy the unity of title or any of the other four unities required for a joint tenancy to exist. Therefore, the joint tenancy among Anya, Ben, and Chloe remains fully intact despite Ben’s action. When Ben dies, the right of survivorship takes effect. His interest in the property is extinguished by operation of law. Consequently, the mortgage lien, which was attached only to Ben’s now-extinguished interest, is also extinguished. The lien cannot attach to the interests of Anya and Chloe because they were not parties to the mortgage agreement. As a result, Anya and Chloe automatically absorb Ben’s former interest, becoming the sole owners of the property as joint tenants with each other. They hold the title free and clear of the mortgage lien that Ben had placed on his share.

This is a conceptual question based on Wisconsin law and real estate practice; therefore, no numerical calculation is performed. The solution is derived by analyzing the legal and financial implications of the transaction structure. A land contract, also known as a contract for deed, is a form of seller financing where the buyer makes payments to the seller over time, but the seller retains legal title to the property until the full purchase price is paid. The buyer receives equitable title, which is the right to obtain full ownership. A critical issue arises when the seller has an existing mortgage on the property that contains a due-on-sale clause, which is standard in most modern mortgage instruments. This clause, also called an acceleration clause, gives the lender the right to demand immediate payment of the entire outstanding mortgage balance if the property or any interest in it is sold or transferred without the lender’s prior written consent. The creation of a land contract and the transfer of equitable title to the buyer is typically considered a “transfer of an interest” that can trigger this clause. If the seller’s lender discovers the land contract, it can accelerate the loan. If the seller cannot pay off the mortgage, the lender can initiate foreclosure. This potential for loan acceleration and subsequent foreclosure is a material adverse fact under Wisconsin Administrative Code REB 24.07. A material adverse fact is information that could significantly affect a party’s decision to enter into the contract. A Wisconsin real estate broker has a mandatory duty to disclose all known material adverse facts to all parties in the transaction, in writing and in a timely manner. The broker must inform both the seller of the risk of foreclosure and the buyer of the risk that their investment and the property could be lost.

The correct course of action is for the broker to disclose the observation of the damp spot in writing to all parties. This situation falls under the Wisconsin Administrative Code, specifically REEB 24.07, which outlines a licensee’s duties regarding inspection and disclosure. The damp spot, despite the seller’s explanation, constitutes “information suggesting a material adverse fact.” A material adverse fact is a condition that could significantly impact a party’s decision to proceed with the transaction or the terms of the contract. While the broker is not required to be a home inspector or to have technical expertise, they are obligated to conduct a reasonably competent and diligent inspection of accessible areas of a property. Upon observing a potential red flag like a water stain, the broker cannot simply rely on the seller’s verbal assurance. The duty is to disclose the observation itself, in writing, to all parties. This disclosure informs the potential buyer of the observed condition and allows them to make an informed decision about whether to conduct their own further investigation, for instance, by hiring a professional inspector. Amending the seller’s Real Estate Condition Report is improper, as only the seller can do that. Ignoring the observation is a breach of the duty of disclosure. The broker’s role is not to confirm the problem’s existence or severity but to disclose the information that suggests a problem might exist, thereby shifting the responsibility for investigation to the parties involved.

This question does not require a mathematical calculation. Under Wisconsin Statutes Chapter 32, the process of eminent domain, also known as condemnation, is strictly regulated to protect property owners. When a public or authorized private entity, referred to as the condemnor, seeks to acquire private property for a public purpose and initial informal negotiations with the owner fail, a specific legal procedure must be initiated. The first mandatory, formal step is for the condemnor to provide the property owner with a document called the jurisdictional offer. This is not merely a suggestion but a formal, legally significant offer to purchase the property. This offer must be based on a full narrative appraisal of the property’s fair market value, and a copy of that appraisal must be provided to the owner. The jurisdictional offer must be sent by certified mail with return receipt requested. The property owner then has a statutory period of 20 days to accept or reject this offer. It is called a “jurisdictional” offer because a valid offer is a prerequisite for the condemnor to have the jurisdiction to file a condemnation petition with the court. Only after the owner has rejected the offer, or the 20-day period has lapsed without acceptance, can the condemnor proceed to the next step, which involves petitioning the circuit court to initiate formal condemnation proceedings.

A binding contract was formed at 5:31 PM. The critical concept here is the definition of “delivery” as outlined in the Wisconsin WB-11 Residential Offer to Purchase. In Wisconsin real estate transactions using state-approved forms, delivery is not contingent upon the recipient’s actual receipt, opening, or reading of the document. Instead, delivery is accomplished at the moment of transmission to the delivery address specified in the offer. The WB-11 form allows parties to designate various delivery methods, including email. When a party or their agent transmits a document, such as a signed counter-offer, to the authorized email address of the other party or their agent before the specified deadline, delivery is legally complete at the time of transmission. The sender’s ability to prove transmission, for instance, with a timestamped “sent” receipt from their email server, is sufficient evidence of timely delivery. Any subsequent delays, such as server issues on the recipient’s end or the recipient’s failure to check their email, do not invalidate the delivery. Therefore, because the buyer’s broker sent the accepted counter-offer before the 6:00 PM deadline, a binding contract was created at the moment of sending. The seller’s subsequent acceptance of another offer is a breach of the now-binding contract with the first buyer.

The core of this issue lies in understanding what constitutes a complete loan application under the federal TILA-RESPA Integrated Disclosure (TRID) rule, which dictates the loan application process nationwide, including in Wisconsin. A lender’s obligation to provide a borrower with a formal Loan Estimate (LE) is triggered only after the lender receives six specific pieces of information from the consumer. These six items are: the consumer’s name, income, Social Security number (to obtain a credit report), the property address, an estimate of the value of the property, and the mortgage loan amount sought. Until all six of these data points are provided to the lender, the interaction is considered a preliminary inquiry, and the lender is not legally required to issue a Loan Estimate. In the described scenario, the buyer has only provided four of the six required pieces of information, withholding her income and Social Security number. Therefore, the loan officer is acting correctly and in compliance with federal law by not issuing a formal Loan Estimate. A Wisconsin broker’s duty of reasonable care and skill includes having a fundamental understanding of the financing process. The broker’s appropriate counsel is to accurately explain this standard regulatory procedure to their client. The broker should clarify that providing the remaining information is a necessary and standard step to move from an informal inquiry to a formal application, which then provides the buyer with the consumer protections of the TRID rule, such as the binding Loan Estimate for comparison shopping. The broker should not handle the sensitive information directly but should empower the client with correct information to proceed confidently with the lender.

The correct outcome is determined by understanding the specific legal remedy for default in a Wisconsin land contract, which is typically strict foreclosure. In this process, the vendor does not force a sale of the property. Instead, the vendor files a lawsuit asking the court to declare the vendee in default. The court then grants the vendee a specific period of time, known as the period of redemption, during which the vendee can cure the default by paying the amount they are behind. The length of this redemption period is at the court’s discretion but must be at least seven working days. Factors like the amount already paid by the vendee can influence the court to grant a longer period. If the vendee fails to pay the required amount within the court-ordered redemption period, their equitable interest in the property is terminated, and the vendor retains both the property and all payments previously made by the vendee. The court confirms that the vendor has clear title, and the land contract is extinguished. This process differs significantly from a mortgage foreclosure, which typically concludes with a public sheriff’s sale.

This question evaluates the application of Wisconsin’s fair housing laws, specifically Wis. Stat. § 106.50 and the administrative code REEB 24, to real estate advertising. Both federal and state laws prohibit advertising that indicates a preference, limitation, or discrimination towards any person based on their membership in a protected class. Wisconsin’s law offers broader protections than federal law, adding classes such as lawful source of income, marital status, and sexual orientation. An advertisement does not need to explicitly state “no families” or “only salaried employees” to be discriminatory. The violation can be implicit, using descriptive language that an ordinary reader would interpret as exclusionary. Phrases that describe an ideal resident type, such as “professionals,” “executives,” or “corporate transferees,” can be interpreted as expressing a preference for a certain type of employment and, by extension, a certain source of income. This could illegally discourage individuals who rely on other lawful sources of income, such as public assistance, disability benefits, or alimony. Similarly, language that suggests a living environment is intended for a specific demographic, such as an “adult-oriented atmosphere,” creates a strong inference of discrimination against families with children, which is a protected class. While other phrases, like describing a neighborhood or mentioning a conduct rule, might seem questionable, they are often permissible if they describe the property or its location factually rather than expressing a preference for a certain type of tenant. The most significant legal risk arises from copy that combines multiple potentially discriminatory phrases targeting several protected classes simultaneously.

The core principle guiding the preparation of a closing statement in Wisconsin is found in the Wisconsin Administrative Code, specifically REEB 24.13. This rule mandates that a broker providing a closing statement must ensure it is a complete, true, and accurate accounting of all funds and real estate documents received and disbursed in connection with the transaction. The statement must reflect the entire agreement between the parties. In this scenario, the agreement includes a \( \$500 \) credit from the seller to the buyer for a roof repair. This is a material part of the financial terms of the sale. Even if the parties later agree to handle this sum privately and instruct the broker to omit it, the broker’s professional and legal obligation is to the accuracy of the closing statement itself. The broker is not merely an agent following instructions; they are a licensee with a duty to the state and the integrity of the transaction record. Following the parties’ instruction would result in a closing statement that is factually inaccurate. It would not represent the true consideration and financial adjustments agreed upon. This could have implications for lenders, future tax assessments, and the official record of the sale. Therefore, the broker’s primary duty under REEB 24.13 is to refuse the request and insist that the closing statement accurately reflects all financial aspects of the amended offer to purchase, including the \( \$500 \) credit. The broker must explain to the parties that state regulations require a full and accurate accounting on the closing statement.

The determination rests on the legal distinction between a trade fixture and a permanent improvement that becomes part of the real property. The logical steps are as follows: 1. Identify the relationship of the parties: This is a commercial landlord-tenant relationship. This relationship creates a strong presumption that items installed by the tenant for the purpose of conducting their business are trade fixtures and remain the tenant’s personal property. 2. Define a trade fixture: An item installed by a commercial tenant on leased property for use in their trade or business. These are removable by the tenant before the lease expires. 3. Analyze each item based on the tests of a fixture (Method of Annexation, Adaptability, Intent), keeping the trade fixture rule in mind. – The copper sign is hung by hooks for business identification. It is easily removable and clearly a trade fixture. – The curd-cutting machine is connected via quick-disconnect utilities and is not permanently affixed. It is essential equipment for the cheese-making trade and is a trade fixture. – The custom aging racks are bolted, but they were specifically fabricated for the tenant’s unique business process. The intent was for business use, not permanent improvement of the building. They qualify as trade fixtures. – The built-in office shelving presents a different case. While used by the business, it serves a general purpose (storage) rather than a specialized trade function. More importantly, it is described as permanently affixed and finished to match the office’s existing trim. This method of annexation and adaptation indicates an intent to make a permanent improvement to the real estate itself, causing it to lose its character as personal property. Courts distinguish between equipment for a trade and general improvements to the premises. The shelving has become an integral part of the office. 4. Conclude: The tenant has the least right to remove the item that has been most completely integrated into the real property as a permanent improvement, which is the built-in shelving. In Wisconsin, the concept of trade fixtures is a crucial exception to the general rule that fixtures become part of the real property. This doctrine allows a commercial tenant to install and remove equipment necessary for their business operations. The primary test is the intent of the party making the installation. For a commercial tenant, the law presumes the intent is for the item to facilitate their business and remain their personal property. This applies to signs, machinery, and custom equipment, even if they are bolted down or connected to utilities, as long as they can be removed without substantial damage to the premises. However, this protection does not typically extend to items that constitute a general building improvement rather than specific business equipment. When a tenant makes structural or aesthetic changes, such as installing permanent shelving that is integrated with the finish of a room, the law is more likely to view this as an accession to the real property. The item loses its character as a piece of equipment and becomes part of the building itself, thus becoming the property of the landlord upon installation unless an agreement specifies otherwise. The tenant’s right of removal is lost for such permanent improvements.

The lender determines the maximum loan amount by applying the Loan-to-Value (LTV) ratio to the lesser of the purchase price or the appraised value. Purchase Price = $510,000 Appraised Value = $500,000 The lesser value is the appraised value of $500,000. The maximum LTV ratio is 85%. Calculation: \[\$500,000 \times 0.85 = \$425,000\] In real estate financing, the Loan-to-Value ratio is a critical risk assessment tool used by lenders. The “Value” component in this ratio is conservatively defined as the lower of two figures: the contractual purchase price agreed upon by the buyer and seller, or the property’s appraised value as determined by a licensed appraiser. This practice protects the lender’s interest. The appraisal provides an objective, third-party opinion of the property’s market value, which represents the collateral securing the loan. If a buyer agrees to a price higher than the appraised value, the lender views that extra amount as unsupported by the collateral. Therefore, to mitigate risk in the event of a borrower default, the lender will always base their loan calculation on the more conservative figure. In this case, the appraised value of the Waukesha home is lower than the purchase price. Consequently, the lender will apply the 85% LTV ratio to the appraisal amount, not the higher sale price, to determine the maximum funds they are willing to lend. This discrepancy creates a financing shortfall that the buyer must address, typically by increasing their down payment or attempting to renegotiate the purchase price with the seller.

No calculation is required for this question. A Phase I Environmental Site Assessment (ESA) is a non-invasive investigation designed to identify potential environmental liabilities, known as Recognized Environmental Conditions (RECs), at a commercial property. It involves reviewing historical records, conducting a site inspection, and interviewing people familiar with the property. The discovery of a REC, such as the documented past use of hazardous chemicals without proper disposal records, does not confirm contamination but indicates a significant potential for it. When a Phase I ESA identifies a REC, the standard and prudent next step in the due diligence process is to conduct a Phase II ESA. The Phase II ESA is an intrusive investigation that involves taking physical samples of soil, groundwater, or building materials to test for the presence and extent of hazardous substances. This step is critical for several reasons. First, it quantifies the environmental risk by confirming whether contamination actually exists and, if so, its severity and scope. This information is essential for estimating potential cleanup costs. Second, performing this level of due diligence is crucial for a buyer seeking to establish liability protection under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). To potentially qualify for the “innocent landowner defense,” a buyer must conduct “all appropriate inquiries” prior to purchase. When a Phase I ESA reveals a REC, failing to investigate further through a Phase II can be interpreted as not meeting this standard, potentially leaving the new owner liable for cleanup costs, even if they did not cause the contamination. A Wisconsin broker, in exercising reasonable skill and care, should advise their client on the necessity of this step to make an informed decision and manage potential liability.

The core issue in this scenario is the denial of a housing application based on the applicant’s use of a housing choice voucher. Under the Wisconsin Open Housing Law, specifically Wis. Stat. § 106.50, “lawful source of income” is a protected class. This protection is more extensive than federal fair housing law. Lawful source of income is defined to include money derived from any legal source, such as employment, public assistance payments, housing assistance payments like Section 8 vouchers, and child or spousal support. A property owner or their agent cannot refuse to rent to a prospective tenant simply because a portion of their income comes from such a source. The decision to rent must be based on the applicant’s ability to meet the total financial obligation, regardless of the income’s origin. In this case, the applicant was otherwise qualified, meeting all financial and background criteria. The denial was explicitly based on the owner’s policy against accepting housing assistance, which constitutes direct evidence of discrimination on the basis of a lawful source of income. Both the property manager who carries out the discriminatory act and the owner who establishes the policy are liable for this violation. An agent’s duty to obey the lawful instructions of a principal does not extend to carrying out illegal instructions, such as violating fair housing laws.

The core of this issue lies in the interaction between a will and the Wisconsin Marital Property Act (Chapter 766). The cabin was initially Anya’s individual property. However, under Wis. Stat. § 766.63, when marital property is mixed with individual property, the entire asset is generally treated as marital property unless the individual property component can be traced. More importantly, the application of marital funds (income earned during the marriage) for substantial improvements, taxes, and maintenance creates a marital property interest in the asset. Anya’s will can only dispose of the property she owns at death. This includes her individual property component and her one-half interest in the marital property component. It cannot extinguish Mateo’s pre-existing one-half interest in the marital property component that was created during their marriage. Therefore, Mateo retains an ownership interest in the cabin, proportional to his half of the marital funds invested. Anya’s will is effective in transferring her interest (her original individual stake plus her half of the marital interest) to Chloe. The result is that Mateo and Chloe will likely hold title to the cabin as tenants in common, with ownership percentages reflecting the traced individual and marital property contributions. Mateo’s interest is not merely a right to claim from the estate; it is a direct, vested ownership interest in the asset itself.

The analysis of this scenario requires a step-by-step evaluation of each issue based on Wisconsin real estate law to determine which represents the most immediate and significant threat of a specific monetary lien. 1. The recorded utility easement is a known, non-monetary encumbrance affecting property use. It is already part of the public record and would be disclosed in a title commitment. It does not represent a new or unexpected monetary claim that would jeopardize the closing. 2. The neighboring farmer’s use of the dirt track for 22 years meets the criteria for a potential easement by prescription under Wisconsin Statute 893.28, which requires 20 years of continuous, open, and hostile use. This is a significant non-monetary encumbrance affecting the property’s use and value, but it is not a monetary lien that requires a payoff at closing. 3. A general lien from an unrelated credit card debt only attaches to real property after the creditor obtains a court judgment and dockets it in the county where the property is located. The existence of a mere debt does not automatically create a lien on the property. 4. The unpaid septic system installer’s claim is the most critical issue. According to Wisconsin’s construction lien laws (Wis. Stat. Chapter 779), a prime contractor has six months from the last date of providing labor or materials to file a construction lien against the specific property. Since the work was completed three months ago, the installer is well within this statutory window. This represents an inchoate right to a specific, monetary lien that can be perfected by filing. This potential lien directly clouds the title and must be resolved, typically through payment or an escrow holdback, before a title insurance company will provide a clear policy, making it the most significant and immediate threat to the transaction. The situation described involves several potential encumbrances on the property. An encumbrance is a right or interest in real estate held by someone other than the property owner, which can limit the title or use of the land. The key is to distinguish between different types of encumbrances and their legal status under Wisconsin law. The neighbor’s long-term use of the path for over 20 years likely establishes an easement by prescription according to Wisconsin Statute 893.28. This is a non-monetary encumbrance that affects the use of the property, but it is not a debt to be paid. The utility company’s right-of-way is a recorded easement in gross, a known condition of the title that a buyer would typically accept. The most critical issue from a title transfer perspective is the unpaid septic system installer. Under Wisconsin’s construction lien law, Chapter 779 of the statutes, a prime contractor has a six-month window after furnishing the last labor or materials to file a lien against the property for non-payment. Since the work was completed three months ago, the installer is still within this statutory period. This creates an inchoate or potential lien. It is a specific, monetary claim that, if filed, will attach to the property and must be satisfied to provide clear title to the buyer. This unrecorded but imminently fileable claim poses the most immediate financial risk to the transaction.

In Wisconsin, the type of eviction notice a landlord must provide depends on the nature of the lease and the reason for the eviction. For a periodic tenancy, such as a month-to-month lease, Wisconsin Statute § 704.17 outlines specific procedures for breaches by the tenant. When a tenant causes waste or substantial damage to the premises, which is a serious breach, the landlord has a specific remedy. Under Wis. Stat. § 704.17(2)(b), the landlord can serve the tenant with a 5-day notice to vacate. This notice is distinct from other types of notices because it does not provide the tenant with an opportunity to cure the default by repairing the damage or paying for it. The breach is considered severe enough to warrant termination of the tenancy without a chance for remediation. This contrasts with a 5-day notice for non-payment of rent, which must give the tenant the right to cure by paying the past-due amount. It also differs from a 14-day notice, which is typically used for other lease violations or as a follow-up notice for a second breach within a year. The 28-day notice is the standard method for terminating a month-to-month tenancy without cause, which is not applicable when a specific breach has occurred. Therefore, for substantial property damage under a month-to-month agreement, the correct and most direct legal action is to issue the 5-day notice to vacate.

The logical determination is that the alienation clause is the primary instrument allowing the lender to block the mortgage assumption. The reasoning is as follows: 1. The transaction involves a transfer of title from the seller (Anja) to a new buyer (Kenji). 2. The alienation clause, also known as a due-on-sale clause, is specifically designed to be triggered by the transfer of title or interest in the property. 3. Upon this trigger, the clause grants the lender the right, but not the obligation, to declare the entire outstanding loan balance immediately due and payable. 4. Therefore, this clause directly prevents the buyer from assuming the seller’s existing loan terms without the lender’s consent, which they are unlikely to give in a rising interest rate environment. An alienation clause is a critical component of a mortgage or deed of trust that serves to protect the lender’s security interest and manage its loan portfolio’s risk. This provision, often referred to as a due-on-sale clause, stipulates that if the borrower sells, transfers, or otherwise alienates the property securing the mortgage, the lender has the right to accelerate the loan and demand immediate payment of the entire remaining debt. The primary purpose is to prevent a new, unvetted buyer from assuming the loan, which may have been granted based on the original borrower’s specific creditworthiness. It also allows the lender to adjust its portfolio to current market interest rates. If rates have risen since the loan was originated, the lender will enforce the clause to avoid being locked into a below-market rate with a new owner. The Garn-St Germain Depository Institutions Act of 1982 federally affirmed the general enforceability of these clauses, preempting most state laws that might have restricted them. In contrast, an acceleration clause is triggered by a borrower’s default, such as failing to make payments, not by a sale. A defeasance clause relates to the satisfaction and release of the lien once the loan is fully paid off. A prepayment penalty clause addresses fees for paying off a loan early, which is a consequence of the sale, but not the mechanism that prevents the assumption itself.

The logical determination concludes that the Income Approach is the least relevant for this valuation. The reasoning is as follows: 1. Property Type Analysis: The subject is an owner-occupied, single-family residence. Its primary value is for personal use and enjoyment, not for generating rental income. 2. Income Approach Applicability: This approach is designed for income-producing properties (e.g., apartment buildings, commercial centers). It converts an income stream into a value estimate. Since the subject property generates no income, applying this approach is fundamentally flawed. 3. Use of Market Rent Data: While rental data for other homes exists, using it to derive a Gross Rent Multiplier (GRM) for the subject property is highly speculative. Market rent would not capture the unique value attributes of a historic home, such as its specific architecture, craftsmanship, and historical significance, which are key drivers of value for a potential owner-occupant, not a tenant. 4. Comparison with Other Approaches: The Cost Approach is suitable for unique properties like this, despite the difficulty in estimating depreciation. The Sales Comparison Approach, while weakened by the lack of direct comparables, could still provide some context if broader market trends are considered, though it would also be given less weight than the Cost Approach. 5. Conclusion on Weighting: In the final reconciliation of value, an appraiser assigns weight to each approach based on its relevance and the quality of available data. For an owner-occupied historic home, the Income Approach is the least relevant and would be given minimal to no weight. In appraisal practice, the principle of highest and best use is critical. For an owner-occupied historic home, the value is tied to its utility and appeal as a residence. The Income Approach fundamentally misaligns with this use. This approach derives value from a property’s ability to generate money, which is not the purpose of the subject property. An appraiser might mention the approach in the report simply to state why it was not used, but it would not contribute meaningfully to the final value opinion. The Cost Approach is often a primary method for properties with historical significance or unique construction when comparable sales are scarce. It allows the appraiser to account for the cost to reproduce the unique features, then adjust for depreciation and add the land value. While estimating depreciation can be complex, especially functional or external obsolescence, it is a standard and necessary part of the process for such properties. The Sales Comparison Approach remains the most preferred method for residential properties, but its reliability diminishes significantly when truly comparable properties have not been sold recently, requiring the appraiser to rely more heavily on other methods.

The contract is voidable at the seller’s option. The WB-11 Residential Offer to Purchase, a standard form in Wisconsin, contains a “time is of the essence” clause. This clause means that all dates and deadlines are firm and must be strictly met. When the buyer failed to meet the financing contingency deadline of June 15th, she was in default of the contract. However, this default does not automatically terminate the contract. Instead, it gives the non-breaching party, in this case the seller, the right to take action. The seller has the option to unilaterally terminate the contract by delivering a written notice of termination to the buyer. Until the seller exercises this right by providing proper notice, the contract remains in a state of being voidable. The buyer’s broker’s email about a delay does not constitute a formal amendment, as any changes to the contract, including deadline extensions, must be in writing and signed by both the buyer and the seller to be enforceable under the Statute of Frauds as it applies to Wisconsin real estate contracts. The seller is not obligated to agree to an extension and retains the power to void the agreement due to the buyer’s breach of the deadline.

No calculation is required for this question. The solution is based on a logical application of Wisconsin real estate law. Under Wisconsin Administrative Code, specifically chapter REEB 24 which governs advertising, a broker has clear responsibilities. REEB 24.04(2)(a) mandates that all advertisements for the sale of real estate or for brokerage services for which a license is required must include the licensed business entity’s name. The name must be presented in a clear and conspicuous manner. This rule applies to all forms of advertising, including electronic communications such as automated emails or digital flyers generated by a Customer Relationship Management (CRM) system. Furthermore, a supervising broker is ultimately responsible for all professional activities of the licensees they supervise, which includes reviewing and ensuring the compliance of all advertising. When a brokerage firm implements a technology like a CRM system, the supervising broker is responsible for configuring it, or ensuring it is configured, to comply with all state laws and regulations. The automation of a task does not absolve the broker of this supervisory duty. The failure of an automated e-flyer to include the firm’s name is a direct violation of REEB 24.04. Because the supervising broker is responsible for the firm’s overall compliance, including the systems it uses for advertising, the responsibility for this violation rests with the supervising broker. The agent associated with the specific transaction also has a duty to ensure their advertising is compliant, but the ultimate oversight and system-level responsibility falls to the supervising broker who implemented and oversees the use of the CRM.