Using The Wrong Form When Drafting an Offer

Virtually all real estate transaction in Wisconsin involve the standard WB forms approved by the State.  Unique forms apply to different kinds of properties, including:

• WB-11 for Residential;
• WB-14 for Condominiums;
• WB-13 for Vacant Land;
• WB-15 for commercial property;
• WB-16 for a business with real estate.

Licensed Realtors are required to use these forms, and most attorneys and FSBOS also use them.

Using the wrong form can lead to confusion, misunderstandings and liability for the parties and their Realtors.  As a title company, we’ve seen hundreds of transactions where the parties used the wrong form, many of which have turned into ugly disputes. Here are three examples:

Incorrectly Using The WB-11 on the Purchase of a Condominium:

When Realtors fail to use the WB-14 form on a condo, the offer can overlook critically important things like: rights or ownership in Parking and Storage Units; association fees and assessments; and the buyers’ right to rescind the offer after receipt of condo disclosure documents.  Using the WB-11 means that the parties may not be aware of these rights and may not adequately disclose or even transfer storage or parking units. Disputes over these issues can lead to failed closings and lawsuits.

Incorrectly Using The WB-11 on the Purchase of a Business and Real Estate:

When Realtors fail to use the WB-16 form on the purchase of a business, they overlook various business issues; environmental issues; and the value of the non-real estate assets, such as inventory, accounts receivable, and good will.  The WB-11 is missing these critical terms and contingencies, and a buyer can have serious liability based on these oversights.  That liability is heightened when the transaction involves more complicated and expensive commercial or business issues.

Incorrectly Using The WB-11 on a Vacant Property

The WB-11 does not address important considerations relating to vacant land, such as future uses, maps and surveys, and environmental considerations.  Using the wrong form can mean buyers are unable to do the proper due diligence or protect themselves with important contingencies.

Consequences of Using the Wrong Form

In the worst case scenario, using the wrong form can lead to a lawsuit and serious liability for the parties and their Realtors.  Even without a lawsuit, Realtors can be subject to discipline by the DSPS for violating REEB 16 (use of approved forms) and Wisconsin Statute 452.133(1)(b) (the duty to provide brokerage services with reasonable skill and care).  When representing a seller, Realtors should insist that the Buyer and their agent use the correct form.  When drafting offers, Realtors must use the correct form and should seek guidance if they are unsure.

Attorney Peter Zarov represents brokerages and Realtors throughout the State of Wisconsin.  His practice specializes in real estate, brokerage, and title issues.