Contracts are the life blood of a REALTOR®'s business. A listing contract or buyer agency agreement reflects the broker's contractual and agency relationship with his or her client. The earning of a broker's commission or fee generally relies upon the buyer and seller entering into a binding agreement, often an offer to purchase. Transactions may fail because one or the other party has breached the contract. Other times the parties become embroiled in a dispute over the correct interpretation of language used in the contract. Sometimes the deal is incapable of repair. Although real estate licensees are not attorneys and cannot give legal advice to their clients and customers, they are nonetheless interested in having an understanding of what is likely to occur between the parties. This information is useful for licensees to keep in mind as they draft offers to purchase, assist the parties in fulfilling contract conditions, and recognize when it is time to direct the parties to their respective attorneys. This Legal Update reviews some of the basic rules of contract construction including the interpretation of ambiguous language and contracts with omitted provisions such as when a party neglects to fill in a blank line in a preprinted form. The focus then shifts to an examination of some of the rights and remedies available to parties involved in failing or failed transactions. These remedies include specific performance, monetary damages, contract reformation, and rescission of the contract. The Update also overviews the election of remedies, the recovery of interest, attorneys' fees and costs, and a few basic contract drafting tips to help avoid ambiguity and the need to resort to the rules of construction. The Update concludes with a section of Hotline questions and answers illustrating some of the interpretation rules and drafting tips discussed in this issue. When it comes to the regulation of the real estate profession, one of the key points of emphasis is the set of duties that brokers and their agents owe to the clients, customers and others involved in a real estate transaction. To help licensees properly abide by their duties and steer clear of legal trouble, this Legal Update examines the recent track record of real estate licensees as reported in Wisconsin case law, disciplinary decisions from the Department of Safety and Professional Services and case law from other states. The intent is to illustrate behavior that may be problematic and learn how to best stay clear of legal troubles. This Update first reviews the statutory duties Wisconsin brokers owe to clients and customers and provides some examples of these duties. This is followed by some general observations and some tips for avoiding liability gleaned from the risk management presentation materials from the 2013 NAR Midyear meetings. The Update then summarizes Wisconsin case law involving violations of broker duties, DSPS disciplinary decisions involving those duties and case law from other states involving alleged violation of the broker duties. The goal is to illustrate behavior prudent brokers may wish to avoid and derive lessons that may be used to fashion professional practice guidelines and policies. Short sales continue to represent a significant portion of the real estate market. The National Association of REALTORS® reports that short sales comprised nine percent of the transactions nationally in the first quarter of 2013. Without question short sales are frustrating for the real estate professionals and the parties involved. The "short" in "short sales" certainly does not refer to the transaction timeframe. Known for exasperating delays, erratic decision-making, changing course mid-stream and a documentation delivery nightmare wherein documents can require constant resubmission and/or updating, some of the lenders have started to understand the madden¬ing problems experienced by those trying to facilitate a successful short sale and have implemented reforms to improve the short sale process, at least on paper. Download Full Legal Update here http://www.wra.org/legalupdates

• published: 01 Oct 2013
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