Unwanted ‘hot potato’

Designated agency proposal shifted to back burner in Wisconsin

Thursday, April 04, 2002

Inman News Features

One side called it a battle won. But the other side said the whole war was a low priority.

The truth in Wisconsin’s continuing controversy over designated agency once again seems to be in the eyes and ears of the protagonists, who are putting their own spin on recent developments.

The Wisconsin Realtors Association maintains that the now-tabled state legislation that would have allowed designated agency was but one item on a list of transaction-related issues that didn’t get past the legislative drafting process this year.

"Demands on drafting attorneys and other legislative priorities--like two state budgets with tens of hundred of amendments--helped contribute to unusually long and understandable drafting delays," wrote the association’s VP for Public Affairs Michael Theo in the April issue of the association’s member bulletin.

Rick Staff, general counsel of the association, said the state’s billion-dollar budget deficit pushed issues like designated agency onto the back burner. In fact, Staff downplayed the whole process and claimed designated agency was simply "a concept that had been kicking around the organization." Referring to the recent draft revision, he said: "Nothing was defeated; nothing was put in bill draft form."

A draft may not have been finalized, but several versions were presented to the Wisconsin Real Estate Commission. Chairman Jim Imhoff said the commission took no position on the drafts because the final bill wasn’t ready and the commission knew it was going to be withdrawn.

"The issue in Wisconsin is a $1.2 billion-dollar budget deficit and the only legislation on the docket is to settle the budget. The speaker asked us to take issues like this off of the agenda," Imhoff said.

But Jay Reifert, a buyer’s agent in Madison, Wis., hasn’t given up what he calls a "grass roots cyber campaign" against the very idea of designated agency in the state.

"While the war is far from finished, the first battle over designated agency has been won," he said.

Reifert’s efforts enlisted the support of the Consumer Federation of America and the National Association of Exclusive Buyer Agents.

When the almost 15 month-long session of the Wisconsin legislature ended on March 15, only 44 bills had been signed into law. Reifert believes this legislative gridlock only enhanced his efforts.

"We turned (designated agency) into a hot potato issue," he said, "and there is no way the legislators this year wanted to have a hot potato issue."

The hot potato was on a front burner earlier this year, when the association was putting forth a proposal to allow real estate brokers to avoid dual agency on in-house transactions by designating one individual agent within the brokerage to represent the buyer and another individual agent within the brokerage to represent the seller.

The association said designated agency wouldn’t be radically different from the way business already is conducted in the state and existing confidentiality laws would protect home buyers and sellers in designated agency transactions.

At least 20 other states already allow designated agency. But such groups as the National Association of Exclusive Buyer Agents oppose it and heavy-hitters like Ralph Nader have weighed in against it.

Reifert said the proposal would dilute the agent-client relationship and violate the tenets of the common law of agency.

He began taking action against the proposal by circulating lengthy e-mail messages decrying designated agency. The messages were sent to real estate agents, the media, government officials, consumer advocacy groups and lobbyists registered in Wisconsin.


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