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Wind developers should be licensed as real estate brokers  

Author:  | Economics, Property values, Regulations, Wisconsin

Wisconsin Statutes Chapter 452 Real Estate Practice

The State of WI has a history of protecting the consumer of real estate services and holding real estate brokers accountable.

The ability to provide a limited practice of law is afforded to brokers by a 4-3 vote of the 1960 WI Supreme Court (The Dinger Case). This right is closely regulated and has served the public well for 60 years.

The legislature and the real estate industry in WI has worked cooperatively to modify Wisconsin’s agency law over those years to enhance the business models available to the WI consumer and raise the level of service and skill provided to the consumer by the licensee.

The activities of persons employed by, or acting on behalf of Turbine Developers, are substantially real estate brokerage services. The services are provided to the Lessor (the landowner) on behalf of the Lessee, (the wind energy developer).

Sign them up

A term commonly used in describing the door to door approach to obtaining leases where land owners “host” a turbine(s) is “Sign them up”.

While sign them up is not a legally defined term, what is being signed is a legally binding contract: a lease. What happens prior to the land owner signing the lease is “negotiation”, another legally defined term. See subsection 452.01

Atypical Lessee-Lessor Relationship

The lease instrument in Wind Energy Development is drafted by the LESSEE—the developer, not the landowner.

The more familiar practice in everyday real estate experience where a landowner leases property to another party is the reverse of what happens in wind energy development.

In siting wind turbines, the developer goes to the landowner.

The developer comes to the property with a vast amount of knowledge and preparation.

There is virtually no advanced notice and no opportunity to brainstorm with other landowners.(In fact we are told by Wind Siting Council members with wind energy interests that it is not favorable to their profit margins to have owners come together to discuss terms prior to signing contracts.)

The developer arrives with a contract and a sales presentation. The wind energy persons have stated that it is common for a family owned farm operation to be struggling financially in Wisconsin, and the promise of $4000 annual payments is attractive.

Protection for the Wisconsin Citizens who consider wind energy development leases

Providing a seven (7) day window of opportunity for the landowner to have the lease reviewed by legal counsel is a good start to protecting Wisconsin residents.

Considering the practice of soliciting lease agreements is a limited practice of law and not incidental to the work of the wind energy developers, it seems prudent for the wind energy developers to be Wisconsin licensed real estate brokers.

Advantage to the Public of Wind Turbine Developers being licensed real estate brokers

  • An avenue of recourse through the Real Estate Board
  • Better disclosure of representation
  • Minimum level of competence for persons negotiating real estate transactions
  • Statutory defined duties of a broker:Fair and honest treatment. Reasonable Care and skill. Disclosure of material adverse facts. Confidentiality. Provide accurate market conditions. Accounting. Objective presentation of the lease.
  • Supervision standards for employees limiting who may discuss lease terms with the consumer

Administrative Rules

RL 15: Maintain copies of documents—Assures the public records of agreements and business practices are available for investigation

RL 16 Use of approved forms and legal advice—RL 16.05 prohibits the licensee from giving legal advice concerning rights and obligations. Will help with landowners being coerced into thinking their agreements are confidential.

RL 17 Protects the consumer from receiving real estate service from a non-licensed person.

RL 24 Conduct and ethical practices—Agreements are in writing, accurate representation of interests,

RL 25 Continuing Education—Keep the wind energy developer current with real estate laws

Prepared by Tom Meyer, Wisconsin Real Estate Broker, For Wind Siting Council Meeting, June 9, 2010, Docket # 1-AC-231

This article is the work of the author(s) indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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