CHAPTER 16 ILLINOIS REAL ESTATE LICENSING LAW

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1 CHAPTER 16 ILLINOIS REAL ESTATE LICENSING LAW Illinois Real Estate Law Since 1921, Illinois has had a real estate license law. This body of law is intended to regulate the real estate industry for the protection of the public. Today, the law is called the Real Estate License Act of 2000, as amended in The real estate industry in Illinois is regulated by the Division of Professional Regulation (DPR), a branch of the Illinois Department of Financial and Professional Regulation (IDFPR) also known as the Department, which is charged with protecting and improving the lives of Illinois consumers. The Department is responsible for administering and enforcing the Illinois Real Estate License Act of In addition, the Department administers all licenses for Illinois real estate brokers, managing brokers, leasing agents, real estate corporations, partnerships, limited liability companies, real estate branch offices, real estate schools, and real estate instructors. The Department promulgates rules for the Act's implementation and enforcement. These are often referred to as "the rules," and they supply explanatory detail and guidelines for the Act. The Act, rules, and other significant legislation are available online at (click on Illinois Compiled Statutes, Chapter 225; ILCS 454). These are essential for any real estate licensee to know. ADMINISTRATION OF THE ILLINOIS REAL ESTATE LICENSE ACT There are four major funds administered through the Department: Real Estate License Administration Fund (to which license fees and other funds initially go), Real Estate Research and Education Fund (for research and scholarships), Real Estate Recovery Fund (a consumer-oriented fund for compensating consumers harmed by licensees' actions), Real Estate Audit Fund (for conducting audits of special accounts). 385

2 Division of Professional Regulation The Department, through the Division of Professional Regulation (DPR) has primary authority to administer the Illinois Real Estate License Act of It is also empowered to issue rules and regulations that implement and interpret the Act. The rules accompanying the Act are important to a full understanding of the Act's implications and applications. The Department has the authority to contract with third parties for any services deemed necessary for proper administration of the Act, such as the Applied Measurement Professionals, Inc. (AMP) testing service for Illinois state testing. The Department is responsible for administrative activities such as these: Conducting license examinations Issuing and renewing licenses Preparing all forms, including applications, licenses, and sponsor cards Collecting fees from applicants and licensees The Department has the following additional functions, which may be exercised only on the initiative and approval of the Real Estate Administration and Disciplinary Board: Conducting hearings that may result in the revocation or suspension of licenses or in the refusal to issue or renew licenses Imposing penalties for violations of the Act Restoring suspended or revoked licenses Real Estate Coordinator (Section 25-15) A licensed broker is appointed to the position of Real Estate Coordinator by the Secretary of the IDFPR after the recommendations of real estate professionals and organizations are considered. This individual's license is surrendered to the Department during the appointment. The Real Estate Coordinator's duties include: acting as ex officio Chairperson of the Real Estate Administration and Disciplinary Board (without a vote), being the direct liaison between the Department, the real estate profession, and real estate organizations and associations, preparing and circulating educational and informational material for licensees, appointing any committees necessary to assist the Department in carrying out its duties, supervising real estate activities, and serving as ex officio Chairman of the Advisory Council without a vote. 386

3 Real Estate Administration and Disciplinary Board (Section 25-10) The Real Estate Administration and Disciplinary Board ("the Board") acts in an advisory capacity to the Real Estate Coordinator regarding matters involving standards of professional conduct, discipline, and examination. In addition to its advisory functions, the Board conducts hearings on disciplinary actions against persons accused of violating the Act or the rules. Composition of the Board The Board is composed of nine members appointed by the governor, all of whom must have been residents and citizens of Illinois for at least six years before their appointment date. Six of the nine must have been active real estate managing brokers, brokers or salespeople for at least ten years prior to the appointment. The remaining three must be unlicensed, unconnected with the real estate profession, and represent consumer interests. None of the consumer members (or their spouses) or a person who has an ownership interest in a real estate brokerage business may hold licenses. The Board itself should reasonably reflect representation from all the various geographic areas of Illinois. Members are appointed to four-year staggered terms. Board members may be reappointed, but no individual may serve more than a total of 12 years in a lifetime. The Board makes recommendations to the Secretary regarding professional conduct and discipline of licensees as well as testing of license seekers. The IDFPR develops forms and issues rules pertaining to real estate licensing after considering the requirements of the Illinois Real Estate License Act and any recommendations made by the Board. The Real Estate Coordinator is the nonvoting, ex officio board chairperson. Advisory Council (Section 30-10) Matters related to real estate education are handled by the Advisory Council, another governorappointed body. This five-member council is charged with considering applications for real estate licensing schools and instructors. Pre-licensing and continuing education (CE) course content is also supervised by this body. The purpose of the Advisory Council is to approve and regulate: schools, curricula, sponsors, programs suggest administrative rules to the Department. 387

4 Membership of the Advisory Council Two of the five members must be current members of the Real Estate Administration and Disciplinary Board, One must be a representative of an Illinois real estate trade organization (someone who is not a member of the disciplinary board), One must be a representative of an approved pre-license school or CE school, One must be from an institution of higher education that offers pre-license and CE courses. The Real Estate Coordinator serves as the ex officio chairperson of the Advisory Council without a vote. Section of the Act states The Advisory Council: makes recommendations for the requirements that pre-licensing and continuing education schools and instructors must meet to obtain or renew their licenses, reviews license applications from these schools and instructors to verify that license seekers meet the requirements set out by law and by rule, approve the curricula for pre-licensing and continuing education providers, advise the Board concerning rules to govern these schools and instructors administer the portions of the Illinois Real Estate License Act that pertain to education, A quorum of three Advisory Council members is required for all council decisions. The Real Estate Research and Education Fund (Section 25-25) According to Section of the act, The Real Estate Research and Education Fund is administered by the Department and held in trust by the Illinois Treasury. On September 15 of each year, the treasurer transfers $125,000 from the Real Estate License Administration Fund to the Real Estate Research and Education Fund, primarily to be used to promote real estate research and education at Illinois organizations and institutions of higher learning. Of this sum, $15,000 is set aside for a scholarship program, administered by the Department or a designee of the Department, to support the real estate education of minority real estate professionals. The scholarship money must go toward courses meant to increase the recipients' knowledge or expertise in the real estate field, including Department-approved broker and managing broker licensing courses, courses necessary to secure the Graduate REALTORS Institute designation, and courses at accredited Illinois institutions of higher learning. OBTAINING AND KEEPING A REAL ESTATE LICENSE Who Needs to Be Licensed? (Section 1-10) It is illegal for anyone to act as a broker, managing broker, sponsoring broker or leasing agent without a real estate license issued by the Department. Any broker who performs any of the following services, either directly or indirectly, whether in or through any media or technology, for another and for compensation must have a real estate license: 388

5 Sells, exchanges, purchases, rents, or leases real estate Offers to sell, exchange, purchase, rent, or lease real estate Negotiates, offers, attempts, or agrees to negotiate the sale, exchange, purchase, rental, or leasing of real estate Lists, offers, attempts, or agrees to list real estate for sale, lease, or exchange Buys, sells, offers to buy or sell, or otherwise deals in options on real estate or improvements thereon Supervises the collection, offer, attempt, or agreement to collect rent for the use of real estate Advertises or represents herself as being engaged in the business of buying, selling, exchanging, renting, or leasing real estate Assists or directs in the procuring or referring of leads or prospects intended to result in the sale, exchange, lease, or rental of real estate Assists or directs in the negotiation of any transaction intended to result in the sale, exchange, lease, or rental of real estate Opens real estate to the public for marketing purposes Sells, leases, or offers for sale or lease real estate at auction License Requirement Exemptions (Section 5-20) The requirement for holding a broker, managing broker, sponsoring broker or leasing agent license does not apply to the following: Owners or lessors (whether individuals or business entities) or their regular employees who sell, lease, or otherwise deal with their own property in the ways described under Article 1 definitions (This applies in the course of the management, the sale, or other disposition of their own [or their employer's] property.) acting under duly executed and recorded power of attorney to convey real estate from the owner or lessor The services rendered by an attorney at law in the performance of her duties as an attorney at law Any person acting as receiver, trustee in bankruptcy, administrator, executor, or guardian, or while acting under a court order or under the authority of a will or a testamentary trust A resident apartment manager working for an owner or working for a broker managing the property, if the apartment is her primary residence and if she is engaged in leasing activities of the managed property State and federal officers and employees or state government or political subdivision representatives performing official duties 389

6 Should a sponsoring broker's license be revoked or rendered inoperative, all licensees under that sponsoring broker will be considered inoperative until such time as the sponsoring broker's license is reinstated or renewed or the licensee changes employment. Expiration dates and renewal periods for each license are set by rule, and licenses can be renewed within 90 days prior to expiration upon completion of CE and payment of the required fees. Broker's License (Article 5) A broker is defined as any individual, partnership, limited liability company (LLC), corporation, or registered limited liability partnership other than a leasing agent who, for another and for compensation, whether in person or through any media or technology, or with the intention or expectation of receiving compensation, either directly or indirectly, performs any of the services for which a real estate license is required (Section 1-10). Broker requirements Applicants for a broker's license must meet the following requirements, as discussed in Section 5-27: Be at least 21 years of age and willing to supply a Social Security number. (The minimum age of 21 years will be waived for anyone seeking a broker's license who has attained the age of 18 and has four semesters of college credit emphasizing real estate completed in a school approved by the Department) Be of good moral character Have graduated from high school or obtained the equivalent of a high school diploma verified under oath by the applicant Have completed a minimum of 15 of the previous required hours of pre-license education in brokerage administration Provide satisfactory evidence of having completed 90 hours of instruction, 15 hours of which must consist of situational and case studies presented in the classroom or by other interactive delivery method presenting instruction and real time discussion between the instructor and the students. Satisfactorily pass a state-sponsored written examination Managing Broker's License (Article 5) Managing broker requirements As of May 1, 2012, all applicants for managing broker licenses in Illinois must: be 21 years old or older, be of good moral character, have been licensed as a real estate broker for at least two of the previous three years, have completed four years of study at a high school or secondary school, approved by the Illinois board of education, or the equivalent to four years of study as determined by an Illinois Board of Education-administered exam and verified by the applicant under oath. 390

7 have completed at least 165 hours of education as follows, 120 pre- and post-licensure hours, as required to obtain a broker's license, in the year before the application for managing broker is filed, 45 additional hours on brokerage administration and management, Of these 45 hours, 15 must consist of classroom instruction or some other means of interactive, real-time instruction and discussion between student and instructor, take and pass a Department-authorized written examination for licensure, and submit a valid application for a managing broker license along with a sponsor card, a managing broker appointment, and the required fees. An applicant is permitted to act as managing broker after filing her application with the Department and prior to receiving her license but must not continue in this role past the term of 90 days after filing unless her license has been obtained within that period. Each application for a license (new or renewal) must include the applicant's social security number or tax identification number, in addition to the other required information. Education exemptions: broker, managing broker If an applicant for a broker's and managing broker's license is currently an attorney admitted to the practice of law by the Illinois Supreme Court, she is exempt from the education requirements. The attorney still must take and pass the state exam. Continued eligibility brokers and managing brokers (Section 5-35) Approved education for potential brokers and managing brokers is valid for purposes of licensure for four years after date of satisfactory course completion. An official uniform transcript is needed for taking the state exam except for persons exempt from the educational requirements. The broker, or managing broker license must be applied for within one year of passing the state test. Failure to do so means retaking the test. Failing the state test (either broker or managing broker) four times requires one to retake the educational coursework. Corporations, Limited Liability Companies, and Partnerships (Section 5-15) A corporation, partnership, or limited liability company (LLC) may receive a broker's license under the following conditions: In a corporation, every corporate officer who actively participates in the organization's real estate activities must hold a managing broker license. In addition, every employee of the corporation who acts as a licensee on the corporation's behalf also must hold a license as a real estate broker, managing broker, or leasing agent. 391

8 In a partnership, every general partner must hold a managing broker license. Every employee of the partnership who acts as a licensee on the partnership's behalf also must hold a license as a real estate broker, managing broker, or leasing agent. In a limited liability company (LLC) or limited liability partnership (LLP), every manager must hold a managing broker's license. Additionally, every employee of the LLC/LLP who acts as a licensee on the LLC/LLP's behalf also must hold a license as a broker, managing broker, or leasing agent. No corporation, partnership, LLC, or LLP may be licensed to conduct a brokerage business if any individual broker, leasing agent, or group of brokers and/or leasing agents owns or directly or indirectly controls more than 49 percent of the shares of stock or ownership interest in the business entity. Leasing Agent's License (Article 5) The Real Estate License Act of 2000 provides for a limited scope leasing agent license for persons who wish to engage only in activities limited to the leasing of residential real property in which a license is required. This license allows such activities as "leasing or renting residential real property; attempting, offering, or negotiating to lease or rent residential real property; or supervising the collection, offer, attempt, or agreement to collect rent for the use of residential real property." Licensed brokers and managing brokers do not need a leasing agent license for these activities. A limited leasing agent license applicant must meet the following requirements: Be at least 18 years of age Be of good moral character Have a high school diploma or its equivalent Successfully complete a 15-hour leasing agent pre-license course Pass the state's written leasing license examination A leasing agent must be sponsored by a licensed real estate sponsoring broker. Period in which to obtain a Leasing Agent License A person may engage in residential leasing activities for a period of 120 consecutive days without being licensed, so long as the person is acting under the supervision of a licensed real estate managing broker or sponsoring broker and that broker or sponsoring broker has notified the Department that the person is pursuing licensure. All education, examination, and fee requirements must be met during the 120-day period. THE LICENSING EXAMINATION Requirements to take the State Exam Applicants are eligible to take the licensing agent examination only after they have met the education and age requirements: they must also be able to demonstrate that they have met the other requirements set out by the Illinois Real Estate License Act of 2000 and any associated rules. The test may be administered only at times and places approved by the Department

9 Each test taker must pay the required fee to the appropriate testing center but will forfeit the fee if failing to appear at the scheduled time, date, and place to take the exam following receipt and acknowledgment of one's application by the Department or testing center. Candidates must register with the testing service in advance of the test and pay any fees to reserve a spot at one of many convenient locations throughout Illinois on a day that is convenient to them. All candidates must bring to the testing center two pieces of current identification. The first MUST be a driver's license with photograph, a passport or military identification with photograph, or an official state identification card with photograph. The second form of identification must display the name and signature of the candidate for signature verification. All examinations are given on a computer that displays all the test questions on a monitor and records all the answers. No special knowledge of computers is necessary. After completing the test, candidates are immediately informed if they passed or failed. Passing candidates will be given a score report, which will let them know they passed, but will not be given an actual score unless they fail. Passing candidates also receive a license application, including directions for applying for a real estate license, and an applicant sponsor card. Passing candidates have one year in which to apply for a license, after which time a new examination will be required. Candidates who fail the examination will be told their score and be given diagnostic information in addition to directions on how to apply for a future test. Candidates who fail only one portion (either the state or national portion) of the exam are required to retake only the failed portion. After four failures, the applicant must successfully repeat all pre-license education before further testing. The fifth attempt to pass the exam is then treated by the Department as if it were a first attempt (Section 5-35c). THE REAL ESTATE LICENSE After passing the state exam, a formal application for licensure needs to be made to the state. Prior to receiving the actual license and pocket card in the mail, a person who has just passed the licensing exam still may practice real estate as long as that person has a sponsor card. After passing the state exam, the person is given a blank sponsor card at the testing site with her picture on it. When completed by a sponsoring broker, this sponsor card is valid for 45 days while the wall license and pocket card are being processed. 393

10 Once a brokerage company has been selected by the person who has passed the State Real Estate Broker Exam, the sponsoring broker: signs the card, makes a copy for the Department and for office records, sends the License Application and a copy of the sponsor card to the Department within 24 hours of issuing the sponsor card. The sponsor card certifies the bearer's relationship with the sponsoring broker and serves as a temporary permit to practice real estate. The license will specify whether the individual is authorized to act as a broker, managing broker, or leasing agent. In addition to issuing the license, the Department issues a pocket card to each licensee. This card authorizes the bearer to engage in appropriate licensed activities for the current license period. Licensees must carry this card when engaging in any of the activities for which a license is required by Illinois law. The pocket card must be displayed on request. What Happens to Your License When You Change or Leave Firms? (Section 5-40) Old Broker When a licensee quits or the sponsoring broker or a managing broker terminates the licensee s employment with the sponsoring broker for any reason, the licensee must obtain her license from the employing broker at whose firm it has been kept. The employing broker signs the license, which indicates that the relationship has been terminated. The broker gives the licensee the original, signed license. The broker must send the Department a copy of the signed license within two days of the termination The signed license automatically becomes inoperative, as does the licensee's ability to practice real estate, unless she accepts employment with a new sponsoring broker. New Broker If the licensee is simply changing brokers, the new sponsoring broker will : immediately complete a sponsor card for the licensee to carry until a new license and pocket card (with the new firm's name indicated as sponsor) arrives. prepare and send a duplicate sponsor card to the Department for this transition period within 24 hours of sponsorship, along with the original signed license from the previous sponsoring broker and the required fee. 394

11 Change of Address, Name, or Business Information (Section 5-41) It is the licensee's responsibility to promptly notify the Department of any change of name, address, or office location. When a licensee acquires or transfers any interest in a corporation, LLC, partnership, or LLP that is licensed under the Real Estate License Act of 2000, appropriate change of business information must be filed with the Department. Additionally, any changes in managing brokers, branch managers, or principal officers must be reported in writing to the Department within 15 days after the change. Expiration and Renewal License expiration and renewal dates are established by rule, consistent with the Act; Licenses may be renewed - by paying required fees and meeting CE requirements up to 90 days prior to expiration of the license. Brokers, managing brokers, and leasing agents may renew their expired licenses (provided they pay the necessary fees and meet the continuing education and other requirements) for up to two years following license expiration. Beyond this two-year period, licensees will be required to meet the qualifications for new licenses set out by the Act. Nonresidents and License by Reciprocity (Section 5-60) A managing broker or broker who lives in a state that has a reciprocal licensing agreement with Illinois may be issued an Illinois license ( or an Illinois Licensee may be issued a license in the state offering reciprocity) if the following conditions are met. The key feature of Reciprocity is that the Licensee does not have to live in the state offering reciprocity Illinois Licensee do not have to live in the states offering reciprocity and licensees living in other states offering reciprocity do not have to live in Illinois. For a reciprocal broker or managing broker's license the broker or managing broker holds a broker or managing broker's license in her home state, the licensing standards of that state are substantially equivalent to or greater than the minimum standards required in Illinois, the managing broker or broker has been actively practicing as a managing broker or broker for at least two years immediately prior to the application date, the managing broker or broker furnishes the Department with an official statement, under seal, from her home state's licensing authority that the managing broker or broker has an active managing broker's or broker's license, is in good standing, and has no complaints pending, the managing broker's or broker's home state grants reciprocal privileges to Illinois licensees, the managing broker or broker completes a course of education and passes a test on Illinoisspecific real estate brokerage laws or the real estate brokerage laws of the state where the Illinois licensee wishes to do business. Currently, Illinois has reciprocity with the following states under the Real Estate License Act of 2000: Nebraska, South Dakota, Colorado, Connecticut, 395

12 Indiana, Iowa, Georgia, Wisconsin. Always check the Department Web site for the latest update on reciprocal states. Before a nonresident managing broker or broker will be issued a license, the applicant must file a designation (Person) in writing to act as her agent in Illinois. Additionally, she must agree that all judicial or other process or legal notices directed to the nonresident may be served on the designee. Service upon the agent so designated is equivalent to personal service on the nonresident licensee. Nonresidents applying for an Illinois license must furnish the Department with proof of active licensure in their home state. They also must pay the same license fees that are required of resident brokers and managing brokers. Prospective nonresident licensees must agree in writing to abide by all provisions of the Act and to submit to the Department's jurisdiction. However, once acquired, the reciprocal license allows a new resident who has recently been working under a nonresident license to obtain a valid resident's license without examination. Licenses previously granted under reciprocal agreements with other states shall remain in force "so long as the Department has a reciprocal agreement with that state." Renewal without Fee (Section 5-50) Licensees whose licenses have expired may renew without paying any lapsed renewal or reinstatement fees if the license expired within two years after the termination of the service, training, or education while the licensee was performing any of the following functions: On active duty with the U.S. armed services or called into the service or training by the state militia Engaged in training or education under supervision of the United States prior to induction into military service Serving as the Coordinator of Real Estate in Illinois or as an employee of the Department LICENSE FEES Applicants for real estate licenses are subject to appropriate fees in addition to the testing fee paid to AMP when applying for the examination. The Illinois Real Estate License Act of 2000 provides for predetermined licensing fees. Initial Fees the leasing license initial fee is $75. broker initial license fee is $125. Managing broker initial fee - $150 initial broker's license fee for a partnership, LLC, or corporation is $

13 Included in the initial license fees are a Real Estate Recovery Fund fee of $10 arid a Real Estate Research and Education fee of $5. Other licensing fees are indicated in the rules and are set according to actual cost incurred by the Department and may vary. Returned check penalties and failure to pay (Section 20-25) Anyone who delivers a check or other payment to the Department that is returned for insufficient funds must pay a returned check fine of $50, plus the amount originally owed. If the licensee fails to make full payment of all fees and fines owed within 30 calendar days of the notification that payment is due, the Department will automatically terminate the license or deny the application without a hearing. The licensee may apply for restoration or issuance of the license and pay all fees and fines due the Department. Renewal Fees Leasing agent - $100 Broker - $150 Managing Broker - $200 License Renewal Dates Broker: April 30, even years Leasing agent: July 31, even years Real estate businesses: October 31, even years Managing Broker: April 30, odd years CONTINUING EDUCATION Continuing Education Hours Requirements Leasing Agent 3 hours per year 6 hours each 2 year renewal Broker 6 hours per year 12 hours each 2 year renewal Managing Broker 9 hours per year 18 hours each 2 year renewal Managing brokers seeking to renew their licenses, beginning with the first pre-renewal period following obtaining a Managing Broker s License, complete an 18-hour Department-approved CE course on broker management during each pre-renewal period and, at the conclusion of the course, take and pass a test developed and administered according to Department specifications. All brokers and managing brokers must complete the required courses or equivalent before their licenses may be renewed. 397

14 Managing Broker CE course material shall also include sales promotion; time management; standard real estate company training. Instructors Real estate CE credit may be earned by serving as an approved instructor in an approved course. The amount of credit earned matches the amount of credit given to the course. Other Continuing Education Rules: Credit hours may be earned for self-study programs A broker or managing broker may earn credit for a specific CE course only once during the prerenewal period. No more than six hours of courses may be taken in any one day Pre-and post-licensing course hours may not be counted toward the CE credit-hour requirements unless specifically permitted by the Illinois Real Estate License Act of 2000, as amended in Exempt from the CE requirement Licensees who, during the pre-renewal period, served in the armed services of the United States, served as elected state or federal officials, served as a full-time employee of the Department, Licensees who are licensed attorneys admitted to practice law in Illinois. If a renewal applicant has earned CE hours in another state, the Advisory Council may approve the credit at its discretion based upon whether the course is one that would be approved under the Act. YOUR REAL ESTATE BUSINESS AND THE ACT Place of Business (Section 5-45) Any sponsoring broker actively engaged in the real estate business must maintain a definite office or place of business within Illinois. The sponsoring broker must display a visible, conspicuous identification sign outside the office. Inside, the sponsoring broker must conspicuously display the branch office license she sponsors. The sponsoring broker's office or place of business may not be located in any retail or financial establishment, unless it is set apart as a clearly separate and distinct area within that establishment. Branch offices Any sponsoring broker who wants to establish branch offices must apply for a branch office license for each branch office maintained. The sponsoring broker names a managing broker for each branch office and is responsible for supervising all managing brokers. The managing broker, who must be a licensed Illinois managing broker, oversees the branch's operations. 398

15 The name of the branch office must be the same as the primary real estate office or closely linked to it. The Department must be notified immediately in writing of any change of a primary or branch office location and within 15 days of a change of a managing broker for any branch. Exceptions to required place of business A broker licensed in Illinois by reciprocity with another state may be exempt from the requirement of maintaining a definite place of business in Illinois if the broker : maintains an active broker's license in the home state, maintains an office in the home state, and has filed a written statement with the Department appointing the Secretary to act as the broker's agent for service of process and other legal notices, agreeing to abide by all the provisions of the Illinois Real Estate License Act of 2000, as amended in 2010, and submitting to the jurisdiction of the Department. Loss of a Branch Office Manager (Section 5-45e) In the event a sponsoring broker dies or a managing broker leaves a branch office unexpectedly, a request may be made to the Department within 15 days of the loss to grant an extension for continued office operations. The extension may be granted for up to 60 days unless extended by the Department for good cause shown and upon written request by the broker or representative. Employment Agreements (Section 10-20) A licensee must have only one sponsoring broker at any given time and may perform real estate activities only for that sponsoring broker. In turn, a sponsoring broker must have a written agreement with any managing brokers, brokers or leasing agents she employs. The agreement must describe the significant aspects of their professional relationship, such as supervision, duties, compensation, and grounds for termination, and must address the employment or independent contractor relationship terms. A sponsoring broker must also have a written agreement with any licensed personal assistants of licensees sponsored by the broker. Agency Relationships (Article 15) Once a relationship has been formed between a licensee and a sponsoring broker, the next set of relationships that dominate the real estate business falls under law of agency. Article 15 deals with the licensee's relationships with the public. This article indicates specific standards to be held to in agency relationships. It clearly indicates that "the law of agency under this Act... primarily governs the actions of licensees, not common law." Note that Article 15 of the Real Estate License Act of 2000, as amended in 2010, is the only section of the Act that has private right of action. Section sets out the basic relationship with consumers by saying "licensees shall be considered to be representing the consumer they are working with as a designated (implied) agent for the consumer unless : there is a written agreement between the sponsoring broker and the consumer providing that there is a different relationship or the licensee is performing only ministerial acts [see earlier definition] on behalf of the consumer." 399

16 Chapter 16 Iff[nois Real Estate Licensing Law Replacing common law, Section notes the statutory duties a licensee has toward her client. The statutory duties are fulfilled by: performing the terms of the brokerage agreement between a sponsoring broker and a client, promoting the best interest of the client (e.g., timely offer presentation, material facts disclosure, best interests of the client prevail over any self-interest), obeying any directions that are not contrary to public policy or law, exercising skill and care in performing brokerage services, timely accounting for all money and property received in which the client has, may have, or should have had an interest, keeping confidential information confidential, and complying with the Act and applicable statutes. The Act also clarifies certain often misunderstood situations that occur when one is an agent. Under the Act the following apply: It is considered reasonable to show available properties to various prospects without being viewed as breaching duty to a given client. A licensee must provide written disclosure to all clients for whom the licensee is preparing or making contemporaneous offers or contract to purchase or lease the same property and must refer any client that requests a referral to another designated agent. It is not considered a conflict for a buyer's agent to show homes wherein the commission is based on the ultimate sales price (in other words, where a higher price creates a higher commission). Unless a licensee "knew or should have known the information was false," a licensee is not considered responsible or liable for false information passed on to the client from a customer via the licensee, or vice versa. The licensee remains responsible under common law "for negligent or fraudulent misrepresentation of material information." Section deals with a licensee's treatment of customers. A licensee shall "treat all customers honestly and shall not negligently or knowingly give them false information." Ministerial acts are permitted. Section clearly states that compensation does not determine agency. Dual Agency Disclosure Informed written consent is required of both buyer and seller for dual agency under Section of the Act. Also, a licensee may not serve as dual agent in any transaction in which she has an ownership interest, whether direct or indirect. 400

17 Designated Agency This alternative to Dual Agency is highlighted in Section This allows the sponsoring broker to appoint or designate one agent for the buyer and one agent for the seller, even within the same firm, without legally being construed as a dual agent. The broker is obligated to protect any confidential information. Because of this, "a designated agent may disclose to his or her sponsoring broker (or persons specified by the sponsoring broker) confidential information of a client for the purpose of seeking advice or assistance for the benefit of the client in regard to a possible transaction." Article 15 (Agency) also clearly notes the following: Offers of sub-agency through the multiple listing service (MLS) are not permitted in Illinois. A consumer cannot be held "vicariously liable" for the acts or omissions of a licensee in providing licensed activities for or on behalf of the consumer. The Department may further amplify anything in Article 15 by way of promulgating additional rules at any time. There is a time limit on legal actions. Legal actions under Article 15 may be forever barred "unless commenced within two years after the person bringing the action knew or should reasonably have known of such act or omission." In no case may actions be brought after more than five years. Disclosure What Must Be Disclosed: Material facts of a property Known latent physical defects Agency relationships Designated agency Dual agency Lack of agency (to a purchasing customer) No Agency Disclosure Form Compensation sources Real estate disclosure means an acknowledgment, stated clearly and usually in writing, of certain key facts that the law holds might, if left unknown or if unclear, unfairly influence the course of events. Failure to disclose is an increasingly serious issue in a consumer-based society and under consumer-driven laws. Article 15, material facts disclosure A licensee must disclose to the client "material facts concerning the transaction of which the licensee has actual knowledge, unless that information is confidential information. Material facts do not include physical conditions with little or no adverse effect on the value of the real estate. 401

18 A listing agent must disclose to prospective buyer customers "all latent, material, adverse facts pertaining to the physical condition of the property that are actually known by the licensee and that could not be discovered by a reasonably diligent inspection of the property by the customer." A licensee is not to be held liable for false information provided to the customer that the licensee did not actually know was false (15-25a). Non-required disclosure items are : HIV, (Can t Reveal under Federal Law See Below) AIDS, (Can t Reveal under Federal Law See Below) "any other medical condition", the fact that a property was "the site of an act or occurrence that had no effect on the physical condition of the property or its environment or the structures located thereon", factual situations for properties other than the "subject of the transaction", physical conditions on nearby properties that "do not have a substantial adverse effect on the value of the real estate that is the subject of the transaction." It is illegal under federal law to disclose that a property's occupant has or had HIV or AIDS. Section 15-35, agency relationship disclosure before a listing agreement, buyer agency agreement, or any other brokerage agreement may be created, a consumer must be told in writing that No Agency Relationship exists that licensee is not acting as the agent of the customer at a time intended to prevent disclosure of confidential information. the sponsoring broker's compensation policy insofar as cooperating with brokers who represent other parties in a transaction, if an Agency Agreement is signed the name or names of designated agent(s), if an Agency Agreement is signed Section 10-5, disclosure of compensation The Act holds that clients must be made aware of compensation, source of compensation, and the sponsoring broker's policy on sharing commission with cooperating brokers. Handling Client Funds (Section 20-20) Licensees should immediately provide any earnest money checks to their sponsoring broker for proper deposit in a special account. The Act states that the sponsoring broker's escrow account is to be noninterest bearing, "unless the character of the deposit is such that payment of interest thereon is otherwise required by law or unless the principals to the transaction specifically require, in writing, that the deposit be placed in an interestbearing account and who the recipient of the interest is." 402

19 The sponsoring broker must "maintain and deposit in a special account, separate and apart from personal and other business accounts, all escrow monies belonging to others entrusted to a licensee while acting as a real estate agent, escrow agent, or temporary custodian of the funds of others." Receipts must be made, and a duplicate kept by the sponsoring broker for any escrow monies received Earnest money and security deposits must be deposited within one business day of contract or lease acceptance or, if a holiday, the next available business day. The escrow must be in a federally insured depository. The Act does not limit the number of escrow accounts one sponsoring broker may maintain. Commingling of personal and business funds is prohibited. Conversion, or use of the escrow funds for personal or business purposes, is also prohibited. Dispute over Disbursement of Escrow Funds If there should be disputes between the parties regarding escrow money, the sponsoring broker "shall continue to hold the deposit. The Sponsoring Broker must wait: for all parties to signal agreement on the escrow disposition by signing a definite agreement; otherwise she should not disburse funds until such an agreement is reached or a court decision is reached or deemed abandoned and transferred to the Office of the State Treasurer to be handled as unclaimed pursuant to the Uniform Disposition of Unclaimed Property Act. Escrow Account Records Each sponsoring broker who accepts earnest money shall maintain, in her office or place of business, a bookkeeping system in accordance with sound accounting principles, and such system shall consist of at least the following escrow records. Journal. A journal must be maintained for each escrow account. The journal shall show the chronological sequence in which funds are received and disbursed. For funds received, the journal shall include: the date the funds were received, the name of the person on whose behalf the funds are delivered to that sponsoring broker, the amount of the funds delivered. For fund disbursement, the journal shall include: the date, the payee, the check number, the amount disbursed. A running balance shall be shown after each entry (receipt or disbursement). 403

20 Ledger. A ledger shall be maintained for each transaction. The ledger shall show the receipt and the disbursement of funds affecting a single particular transaction such as between buyer and seller, or landlord and tenant, or the respective parties to any other relationship. For Funds received, the ledger shall include: the names of all parties to a transaction, the amount of such funds received by the sponsoring broker, the date of such receipt. For fund disbursement, the ledger shall show : the date, the payee, the check number, the amount disbursed. The ledger shall segregate one transaction from another transaction. There shall be a separate ledger or separate section of each ledger, as the sponsoring broker shall elect, for each of the various kinds of real estate transactions. If the ledger is computer generated, the sponsoring broker must maintain hard copies: of the bank deposit slips, bank disbursement slips, other bank receipts These hard copies are to be retained to account for the data on the ledger. Monthly Reconciliation Statement. Each sponsoring broker shall reconcile, within ten days after receipt of the monthly bank statement, each escrow account maintained by the sponsoring broker except where there has been no transactional activity during the previous month. Such reconciliation shall include a written work sheet comparing the balances as shown on the bank statement, the journal, and the ledger, respectively, in order to insure agreement between the escrow account and the journal and the ledger entries with respect to such escrow account. Each reconciliation shall be kept for at least five years from the last day of the month covered by the reconciliation. Master Escrow Account Log. Each sponsoring broker shall maintain a master escrow account log identifying all escrow bank account numbers and the name and address of the bank where the escrow accounts are located. The master escrow account log must specifically include all bank account numbers opened for the individual transactions, even if such account numbers fall under another umbrella account number. 404

21 If the Department requests to view or audit escrow records, they must be supplied within 24 hours of the request to the Department personnel. Escrow records must be maintained for five years. The escrow records for the immediate prior two years shall be maintained in the office location, and the balance of the records can be maintained at another location. The License Act and Personal Assistants Unlicensed assistants These employees can legally perform only limited tasks (typing, filing, answering phones). Licensed assistants The actual employment agreement for a licensed assistant is made with the sponsoring broker of the firm. Licensed Personal Assistant Compensation This same pattern applies to compensation. "Any person who is a licensed personal assistant for another licensee may only be compensated in her capacity as a personal assistant by the sponsoring broker for that licensed personal assistant" (Section 10-5c). Advertising Regulations (Section 10-30) A sponsoring broker must include her business name and franchise affiliation in all advertisements. Blind ads are prohibited. Blind ads are defined as advertisements relating to the sale or lease of any real estate, other real estate activities, or the hiring of other licensees that : Do not indicate the brokerage firm name, Do not indicate that the advertiser is a licensee Offer only a box number, street address, or telephone number for responses. Managing brokers must advertise as managing brokers. In addition, pursuant to Section 10-40, every brokerage company or entity, other than a sole proprietorship with no other sponsored licensees, must adopt a company or office policy covering certain topics including advertising, Ads prepared by licensees should at least include : licensee name, company name (as registered with the Department) and company city/state, and the city or area of the advertised property. A licensee must: NEVER advertise in only her name, ALWAYS include the firm's name, NEVER advertise another sponsoring broker's listings without permission, and ALWAYS keep advertisements up-to-date and clear. 405

22 Licensees must disclose to consumers their intent to share or sell consumer information that has been collected via the Internet or any other means of electronic communication. This disclosure must be conspicuous and timely. Licensees advertising via the Internet or other forms of electronic media are forbidden to: employ deceptive or misleading URLs or domain names, frame the Web site of another real estate brokerage or multiple listing service without permission or with the intent or effect of deceiving the consumer, and use keywords or other such tools to mislead consumers or deceptively guide or engage Internet traffic. Advertising on the Internet Ads prepared for the Internet must adhere to the following: An Internet ad must include proper identification licensee name, company name, company location, and geographic location of property. E-correspondence, bulletin boards, or e-commerce discussion groups require licensee name, company name, and company location. Links to listing information from other Internet sites are permitted without approval unless the Web site owner requires approval for links to be added. Any such link must not "mislead or deceive the public as to the ownership of any listing information." As with other advertising, Internet sites are to be updated periodically and kept current. In Internet advertising situations, the rules do not allow : "advertising a property that is subject to an exclusive listing agreement with a sponsoring broker other than the licensee's own without the permission of and identifying that listing sponsoring broker," and "failing to remove advertising of a listed property within a reasonable time, given the nature of the advertising, after the earlier of the closing of a sale on the listed property or the expiration or termination of the listing agreement." Advertising must contain all the information necessary to communicate to the public in an accurate, direct, and readily comprehensible manner. Selling your own property Selling or leasing your own property or a property in which you have an interest means you, as a licensee, must use the term "broker-owned" or "agent-owned" in all advertising and on listing sheets. If the real estate firm's sign is used in the yard, and the firm's services are being used, then having the "agent-owned" or "broker-owned" notation on the sign itself is not necessary. 406

23 Chapter 16 - Illinois Real Estate Licensing Law However, all written materials (listing sheets, ads, Internet ads) still must carry the "brokerowned" or "agent-owned" notation. The Illinois Real Estate License Act of 2000 provides that no matter how one lists an agent-owned property by owner or through a real estate firm the agent must take care not to confuse the public. Finally, it is possible and permitted by the Department to list your own personal real estate with a firm other than the one at which you work if you so desire and if your sponsoring broker approves. A licensee must : ALWAYS disclose "agent-owned" Place "agent-owned" on the home sign if FSBO If a licensee advertises to personally purchase or lease real estate, disclosure of licensee status is required. Phone book listings Licensees must not place their own names under the heading "Real Estate" in a telephone directory or otherwise advertise their services to the public through any media without also listing the business name of the sponsoring broker with whom they are affiliated. This rule is consistent throughout all advertising media. Compensation and Business Practice (Article 10) Section 10-5 A licensee may not receive compensation from anyone other than her sponsoring broker. In turn, sponsoring brokers may compensate only licensees whom they personally sponsor (including licensed personal assistants). The one exception is a former licensee now working for another sponsoring broker but who is due a commission from work completed while still at the first firm. Sponsoring brokers may directly compensate other sponsoring brokers (as in a cooperative commission arrangement for the listing broker to pay commission to the firm with the buyer). Section Disclosure of compensation is a significant issue. The Act holds that clients must be made aware of compensation, source of compensation, and the sponsoring broker's policy on sharing commission with cooperating sponsoring brokers. If compensation is being issued to an agent from both buyer and seller in one transaction, this must be disclosed. Any third-party compensation must also be disclosed. If a licensee refers a client to a service in which the licensee has greater than 1 percent interest (title, legal, mortgage), the interest must be disclosed. Section It is illegal to compensate unlicensed persons or anyone being held in violation of the Act. 407

24 To sue for commission in Illinois, one must be a licensed real estate sponsoring broker. Funds from sellers or buyers always go through the sponsoring broker. She is the only one who issues compensation to brokers, managing brokers, leasing agents, or licensed personal assistants working under her. No licensee may pay a referral fee to an unlicensed person who is not a principal to the transaction. A licensee may not request a referral fee unless reasonable cause for payment of the fee exists (a contractual referral fee arrangement). Section also states that a licensee "may offer cash, gifts, prizes, awards, coupons, merchandise, rebates or chances to win a game of chance, if not prohibited by any other law" to consumers as a legitimate approach to garnering business Additionally, it is perfectly legal to share commission compensation with a principal to a given transaction. It now is legal for a sponsoring broker to pay a corporation set up by the licensee, rather than the licensee directly, if desired. DISCIPLINARY PROVISIONS AND LOSS OF LICENSE The Real Estate License Act of 2000 lists specific violations for which licensees may be subject to discipline. The Department is authorized to impose the following disciplinary penalties: Refuse to issue or renew any license Suspend or revoke any license Censure or reprimand a licensee Place a licensee on probation Impose a civil penalty of not more than $25,000 for any one cause or any combination of causes Causes for Discipline The Department may take disciplinary action against a licensee for any one cause or a combination of causes. Specifically, a licensee may be subject to disciplinary action or fines if the licensee: makes a false or fraudulent representation in attempting to obtain or renew a license, has been convicted of a felony or of a crime involving dishonesty, fraud, larceny, embezzlement, or obtaining money, property, or credit by false pretenses or by means of a confidence game, 408

25 is unable to practice the profession with reasonable judgment, skill, or safety as a result of a physical illness, practices as a licensee in a retail sales establishment from an office, desk, or space that is not separated from the main retail business and in a separate and distinct area, has been subjected to disciplinary action by another state, the District of Columbia, a territory, a foreign nation, a government agency, or any other entity authorized to impose discipline if at least one of the grounds for that discipline is the same as or equivalent to a cause for discipline in Illinois, has engaged in real estate brokerage without a license or with an expired or inoperative license, attempts to subvert or cheat on the licensing exam or assists someone else in doing so, or advertising that is inaccurate, misleading, or contrary to provisions of the act. A licensee also is subject to disciplinary action if the licensee is found guilty of any of the following activities: Making any substantial misrepresentation or untruthful advertising Making any false promises to influence, persuade, or induce Pursuing a continued and flagrant course of misrepresentation or making false promises through licensee, employees, agents, advertising, or otherwise Using any misleading or untruthful advertising Using any trade name or insignia of membership in any real estate organization of which the licensee is not a member Acting for more than one party in a transaction without providing written agency disclosure Representing or attempting to represent a broker other than the sponsoring broker Failing to account for or remit any monies or documents belonging to others that come into the licensee's possession Failing to properly maintain and deposit escrow monies in a separate account Failing to make all escrow records maintained in connection with the practice of real estate available during normal business hours and within 24 hours of submitted request Failing to furnish, on request, copies of all documents relating to a real estate transaction to all parties executing them Failure of the sponsoring broker to provide appropriate licensing documents (sponsor cards, license termination information) in a timely way Engaging in dishonorable, unethical, or unprofessional conduct of a character likely to deceive, defraud, or harm the public Commingling the money or property of others with one's own has been subjected to disciplinary action by another state, the District of Columbia, a territory, a foreign nation, a government agency, or any other entity authorized to impose discipline if at least one of the grounds for that discipline is the same as or equivalent to a cause for discipline in Illinois 409

26 Employing any person on a purely temporary or single-deal basis as a means of evading the law regarding illegal payment of fees to non-licensees Permitting the use of one's managing broker's license by another person in order to operate a real estate office Engaging in any dishonest dealing, whether specifically mentioned by the act or not Displaying a For Rent or For Sale sign on any property, or advertising in any fashion, without the written consent of the owner Failing to provide information requested within 30 days of the request as related to audits or complaints made against the licensee based on the Act Utilizing blind advertising Offering an improperly constructed guaranteed sales plan, one that does not meet the Act's requirements for such plans Intending to promote racial or religious segregation by use of actions or words or behaving or speaking in such a way as to discourage integration Violating the Illinois Human Rights Act Inducing any individual to break out of an existing contract to enter into a new one, whether a sales contract or a listing contract Negotiating directly with the client of another agent Acting as an attorney in the same transaction in which one acts as a real estate licensee If merchandise or services are advertised for free, any conditions or obligations necessary for receiving the merchandise or services must appear in the same ad or offer Disregarding or violating any provisions of the Land Sales Registration Act or the Time-Share Act Violating a disciplinary order Paying or failing to disclose compensation that violates the Act Disregarding or violating any provision of this act or the published rules or any regulations promulgated to enforce the Act Failing to provide the minimum services required under an exclusive brokerage agreement Violating the terms of a disciplinary order issued by the Department Forcing any party to a transaction to compensate the licensee as a requirement for releasing earnest money Habitual use or addiction to alcohol, narcotics, stimulants, or any other chemical agent that results in licensee's inability to practice with skill and safety 410

27 Nonpayment Issues when obtaining a License or renewing one Nonpayment of child support Specifically highlighted in the Illinois Real Estate License Act of 2000, the Department will refuse to issue or renew (or may revoke or suspend) the licenses of individuals who are more than 30 days delinquent in child support payments. Nonpayment of State Income Tax Anyone who fails to file a tax return or to pay any tax, penalty, interest, or final assessment required by the Illinois Department of Revenue may have her license withheld or suspended until any such tax requirements are met (Section 20-35). Nonpayment of Student Loans If student loans were provided or guaranteed by the Illinois Student Assistance Commission or any governmental agency of the state, and not paid back, the Department will not grant a real estate license to that individual. For an existing licensee, a hearing is made available, after which, if no satisfactory repayment plan has been made, the license may be suspended or revoked. Discrimination Licensee guilty of discrimination (Section 20-50) If there has been a civil or criminal trial in which a licensee has been found to have engaged in illegal discrimination in the course of a licensed activity, the Department must suspend or revoke the licensee's license unless the adjudication is in appeal. Similarly, if an administrative agency finds that a licensee has engaged in illegal discriminatory activities, the Department must take disciplinary action against the licensee unless the administrative order is in appeal. Guaranteed sales plans A licensee is subject to disciplinary action if she offers a guaranteed sales plan without complying with the Act's requirements for such agreements. A guaranteed sales plan is any real estate purchase or sales plan in which a sponsoring broker: enters into an unconditional written contract with a seller, promising to purchase the seller's property for a specified price if the property has not sold within an agreed period of time on terms acceptable to the seller. 411

28 The Act indicates how such a plan can be constructed so as to comply with Illinois law. An Illinois sponsoring broker who offers a guaranteed sales plan in compliance with the Act must: provide the details and conditions of the plan in writing to the seller, offer evidence of sufficient financial resources to satisfy the agreement's purchase commitment, market the listing in the same manner in which she would market any other property, unless the agreement with the seller provides otherwise, and not purchase the seller's property until the brokerage agreement has ended or is otherwise terminated. A sponsoring broker who fails to perform on a guaranteed sales plan in strict accordance with its terms is subject to all the penalties for violating the Act, plus a civil penalty of up to $25,000, payable to the injured party. Unlawful actions by associates if no sponsoring broker knowledge A sponsoring broker will not have her license revoked because of an unlawful act or violation by any managing broker or broker or leasing agent employed by or associated with the sponsoring broker, or by any unlicensed employee, unless the sponsoring broker had knowledge of the unlawful act or violation. The sponsoring broker could possibly be held liable for the employee's actions under vicarious responsibility. Disciplinary Procedures Any person providing or offering to provide real estate services, or who is licensed or claims to be licensed under the Act, may be investigated by the Department. At least 30 days before the date of a hearing set for examination of such an issue, and prior to taking any disciplinary action (including but not limited to reprimand, probation, or revocation or suspension of license), the Department will do the following: In writing, inform the person under investigation of the charges being brought against her and the location and time of the hearing; this notification may be sent by personal delivery or certified mail to the address given by the individual in her last communication with the Department Instruct the accused individual to respond to the charges, under oath and in writing, within 20 days of being informed of the charges and hearing Notify the individual that unless she responds as instructed, default will be taken against her and disciplinary action, such as imposition of a fine or license suspension, revocation, or probation, may be instituted. At the hearing, the charges will be presented to the Board, and the accused individual and her counsel will be allowed to offer a defense via statements, arguments, testimony, and evidence. The Board may continue the hearing from time to time. When an individual fails to respond to the notice and the charges are deemed sufficient, the Department may institute disciplinary action without a hearing. 412

29 The Department is required to keep a record of all formal hearing proceedings, at the Department's expense. According to the same guidelines (concerning fees, mileage, and manner) provided for civil cases for state court, the Department is empowered to subpoena materials, such as books, documents, and records, and bring people before it to testify orally or give depositions, or both. All members of the Board as well as the Secretary, the designated hearing officer, may place witnesses under oath in any authorized Department hearing or in other contexts in which the Department is authorized to do so by this act. The Department will present the licensee with a copy of the Board's report following the conclusion of the hearing. The licensee may request a rehearing, via a motion in writing, which indicates the reasons justifying a new hearing. This request must be made within 20 days after the licensee has been served with the Department's report. If the motion for rehearing is denied, the Secretary is empowered to enter an order as recommended by the Board. If the Secretary determines that emergency action is required to protect the public interest, welfare, or safety, she may move to suspend the accused individual's license without a hearing first. However, a hearing must be scheduled for within 30 days of the suspension. The licensee may seek a continuance to postpone the hearing, but in such a case, the suspension will remain in effect. In any action intended to discipline a license holder or to refuse to issue, restore, or renew a license, the Secretary may appoint an Illinois-licensed attorney to serve in her place as the hearing officer, with complete authority to direct the proceedings. The officer must establish findings pertaining to the allegations, the licensee's conduct, and the law, and present these conclusions to the Board, along with her recommendations. Board members may attend hearings, if they wish, and are required to review the hearing officer s report and then present the board findings to the Secretary and all parties to the hearing. The Secretary is permitted to enter an order that is inconsistent with the board or hearing officer s recommendations if she disagrees with either party. Once the order to suspend or revoke a license has been put through, the licensee is required to immediately hand over her license. If the licensee fails to surrender her license, the Department is empowered to seize it. If the Board so recommends (in writing), the Department can restore the suspended or revoked license at any time following the event. The exception to this is any instance in which the Board further investigates the issue, holds a hearing, and decides that restoring the license would not serve the public interest. The Secretary may order that another hearing be held (before the same examiners or a different set) in the event that she believes that the disciplinary action taken was unjust. Right to Petition Administrative/Judicial Review (Section 20-75) All final administrative decisions are subject to judicial review under the provisions of the Administrative Review Law and its rules. The accused may request a judicial review by petitioning the circuit court of the county of her residence. If the party is not a resident of Illinois, the venue will be in Sangamon County. 413

30 Good Moral Character (Section 5-25) The Board may revoke licenses or refuse to grant licenses to applicants who make false statements on their licensure applications. In evaluating an applicant's moral character and deciding whether to grant a license, the Board may take into account facts and events from the applicant's past, including prior conduct; revocation of her license; conviction for a felony that involved moral turpitude; or a conviction or plea of guilty or nolo contendere in cases involving "forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, or conspiracy to defraud." In evaluating past conduct, the Board will consider the particular details of the behavior or violation, how long ago the event(s) took place, whether the applicant has made restitution or been rehabilitated, and other factors as the Board desires. Violations (Section 20-22) Any person who is found working or acting as a managing broker, broker, or leasing agent without being issued a valid existing license is guilty of a Class A misdemeanor and, on conviction of a second or subsequent offense, the violator is guilty of a Class 4 felony. Injunctions In addition to criminal prosecutions, the Department has the duty and authority to originate an injunction to prevent or stop a violation or to prevent an unlicensed person from acting as a broker, managing broker, or leasing agent. A violation of the Illinois Real Estate License Act of 2000 is specifically declared to be harmful to the public welfare and a public nuisance. The attorney general of Illinois, a county state's attorney, the Department, and even private citizens may seek an injunction to stop or prevent a violation. Disciplinary Statute of Limitations (Section ) No action may be taken by the Department against any person for violation of the terms of this act or its rules unless the action is commenced within five years after the occurrence of the alleged violation. Index of Decisions (Section 20-5) The Department is required to maintain an index of all its licensee-related formal decisions. This includes all refusals to issue, all renewals or refusals to renew, all revocations or suspensions of licenses, and all probationary and other disciplinary actions. The index is available for public inspection during normal business hours. THE REAL ESTATE RECOVERY FUND The Real Estate Recovery Fund provides a means of compensation for actual monetary losses (as opposed to losses in market value) suffered by any person as a result of actions by a licensee or a licensee's unlicensed employee: a violation of the Real Estate License Act of 2000, its rules and regulations, or act of embezzlement of money or property, 414

31 obtaining money or property by: o o o o o o o o false pretenses, artifice, trickery, forgery, fraud, misrepresentation, deceit, discrimination. Reimbursement from the Recovery Fund applies to situations causing cash losses (rather than the loss of market value) to the harmed party. The fund may pay out a maximum sum of $25,000 to the wronged person, as ordered by the relevant county's circuit court. This amount can include an additional payment for legal costs and attorneys' fees of up to 15 percent of the total amount ordered as recovery for the improper conduct. The maximum fund liability of $100,000 must be spread equally among all co-owners. Interest is not paid on the recovery amount. Recovery sums will only be paid out in cases where valid judgments have been made and will not be paid out for violations of the Land Sales Act or the Time-Share Act. If the licensee wishes to have their license reinstated, the licensee must reimburse the fund all fees plus interest. The interest rate is established by state statute. Collection from the Recovery Fund (Section 20-90) When a lawsuit may result in a claim against the Real Estate Recovery Fund, the Department must be notified in writing by the aggrieved person at the time the action is commenced against the licensee, specifically, within seven days of filing a suit against the licensee. Failure to notify the Department of the potential liability precludes any recovery from the fund. If the plaintiff is unable to serve the defendant with a summons, the Secretary may be served instead, and this service will be valid and binding on the defendant. Additionally, legal action must have commenced no later than two years after the aggrieved person knew of the acts or omissions that gave rise to possible right of recovery from the fund. If a claimant recovers a valid judgment in any court against any licensee or unlicensed employee for damages resulting from an act or omission qualifying for coverage under the fund, the Department must receive written notice of the judgment within 30 days. The Department is also entitled to 20 days' written notice of any supplementary proceedings, in order to permit the Department to participate in all efforts to collect on the judgment. For a claimant to obtain recovery from the fund, all proceedings (including all reviews and appeals) must be completed. In addition, the claimant must show that she has attempted to recover the judgment amount from the licensee or unlicensed employee's real or personal property or other assets and was either unable to do so or the amount recovered was insufficient to satisfy the judgment. The names of all licensees and other parties that are in any way responsible for the loss must have been named in the suit. If they were not, it may preclude recovery from the fund. Finally, the claimant must show that the amount of attorney's fees being sought is reasonable. 415

32 When a judgment amount is paid from the Recovery Fund, the Department takes over the rights of the aggrieved party on this issue. She is required to assign all right, title, and interest in judgment to the Department. By this subrogation, any funds recovered on the judgment will be deposited back in the Recovery Fund. Fund Losses Held Against the Licensee (Section 20-90) When payment is made from the recovery fund to settle a claim or satisfy a judgment against a licensed broker, managing broker, or unlicensed employee, the license of the offending broker or managing broker is automatically terminated. The broker, or managing broker, may not petition for the restoration of her license until she has made repayment in full to the recovery fund of all awards made due to her actions, plus interest at the statutory annual rate. A discharge in bankruptcy does not relieve a person from the liabilities and penalties provided for in the Illinois Real Estate License Act of Statute of Limitations (Sections and ) A suit that may ultimately result in collection from the fund must be commenced within two years after the date the alleged violation occurred. The Department must initiate any action it plans to take against an individual licensee within five years of the violation. Financing the Recovery Fund (Sections 25-35) If at any time during the year the fund slips below $750,000, the Real Estate License Administration Fund is utilized to upgrade the level to a minimum balance of $800,000. All recovery fund monies received from applications, renewals, and fines and penalties are deposited into the Real Estate Recovery Fund, and its sums may be invested and reinvested

33 Chapter 16 Irtinois Real Estate Licensing Law Notes: 417

34 Notes: 418

35 CHAPTER 16 QUESTIONS & ANSWER KEY CHAPTER 16 - QUESTIONS 1. Which of the following types of listing agreements must be in writing to be enforceable? A. Exclusive agency listing agreements only B. Exclusive Right-to-Sell listing agreements only C. All listing agreements D. Both a and b 2. Written listing agreements that do not provide for automatic expiration within a definite period of time are considered to be: A. Void B. Subject to termination upon notice by the seller to the listing broker, C. Commonly used by real estate brokers in Illinois, D. None of the above. 3. Concerning all exclusive right-to-sell listing agreements and all exclusive agency listing agreements, which of the following, in Illinois, is most correct? A. No change in the amount of the commission or the time of payment shall be valid unless made in writing and signed by the involved parties B. The agreed amount of basis of the commission must be included C. The time of payment of the commission must be included D. All of the above are correct 4. The "equalization factor" used in Illinois in computing real estate taxes is designed primarily to: A. Equalize urban and rural taxes B. Compensate for differences in tax rates among various taxing bodies C. Counteract discrepancies in assessments in different localities D. Reduce real estate taxes for senior citizens. 5. In Illinois, a branch real estate office may be managed by: A. The same broker as the main office, so long as IDFPR is notified B. An experienced Licensee C. A designated managing broker, other than the owner of the company, D. Both a and c 419

36 CHAPTER 16 QUESTIONS & ANSWER KEY 6. A real estate broker may lawfully collect a commission from both the buyer and seller, provided the broker has: A. Persuaded both the buyer and seller to sign a sales contract, B. Obtained an exclusive listing agreement signed by just the seller, C. Obtained prior written disclosure and written consent from both buyer and seller, D. Notified both the buyer and seller of this fact after the sale has closed. 7. Broker Roberts has received an exclusive right-to-sell listing from seller Thomas in which seller Thomas promises to pay the broker a 15% commission for selling the property. Under these conditions, such a commission is considered to be: A. Valid B. In violation of the Illinois Usury Law, and the Illinois License Act of 2000, C. A violation of the National Realtor's Code of Ethics, D. In violation of the Law of Agency as it applies to Illinois 8. In Illinois, probably the greatest single cause for license suspension or revocation is commingling of funds. Of the following, all are considered to be commingling except: A. Depositing earnest money received from the buyer in the broker's personal checking account to be held there until requested by the seller B. Placing cash received by the broker from the buyer in the broker's safety deposit box and clearly identifying the money as the buyer's deposit C. Being authorized by the seller to hold an earnest money check in an uncashed form after the offer has been accepted D. None of the above 9. A "blind ad" placed by a real estate licensee is considered to be: A. Illegal unless authorized by the seller B. Illegal C. Permissible, provided the licensee's name and address are included in the advertisement D. One that adequately describes the property with the name and phone number of the listing broker, without disclosing the address of the property 10. Concerning real estate mortgages, the lien theory applied in Illinois is considered to be: A. Mortgage theory B. Title theory C. Intermediate theory D. Lien theory 11. A property manager could perform all of the following functions except: A. Order property insurance B. Set the rental rates C. Complete the building owner's personal income taxes D. Sell residential rental properties 12. A real estate broker would be required to have more than an ordinary knowledge of accounting procedures in which of the following businesses? A. Selling real property securities B. Property management C. The appraisal of real estate D. Selling residential rental properties, 420

37 CHAPTER 16 QUESTIONS & ANSWER KEY 13. Mr. Smith hired his unlicensed son-in-law to complete some electrical work in his single-family home. Mr. Smith then listed his house with broker Kent. Mr. Smith did not disclose that his son-in-law, an unlicensed electrician, did the electrical work. After the completion of the sale, the new owner, Mr. Johnson, suffered a financial loss due to the faulty electrical wiring done by Smith's son-in-law. Under these conditions, broker Kent: A. Is innocent of any wrongful act B. Could be reprimanded for net forewarning the purchaser C. Should have arranged for a proper electrical inspection prior to the sale of the property D. Could be held liable for monetary damages suffered by the purchaser 14. According to Illinois law, who must be licensed as a real estate broker? A. A person seeking to make a commission in a real estate transaction B. An attorney in fact C. An attorney preparing real estate sales contract D. A person selling his own home 15. Jane Mills is moving to Indiana. She needs to sell her home in Illinois. She hires Suzy Smith, a licensed real estate broker, to sell her home. After Suzy has been hired, Suzy finds out that the neighborhood where Jane Mills' property is located is being rezoned commercial. Suzy decides to purchase an option on Jane's home but fails to disclose to Jane that her neighborhood is being rezoned commercial. Suzy decides to exercise her option. Suzy then resells the property to an investor for twice the price she paid to Jane. According to Illinois law, such conduct would be permissible provided that: A. Suzy gave a cash deposit to the seller B. Suzy discloses to Jane that her area is being rezoned commercial and that Suzy would make a profit once she exercises her option C. The real estate contract is in writing and properly signed by all parties D. Suzy holds the earnest money 16. The requirement to look out for the best interest of the client applies to which of the following? A. A property manager employed by an owner B. A consumer asking questions at an open house C. A buyer asking a listing agent how many bedrooms the house contains D. All of the above 17. An exclusive right-to-sell listing is best defined as: A. Broker Employment Contract B. Sales Contract C. Verbal Listing Agreement D. One preferred by For Sale by Owners 18. Broker Able listed a home that he knew was situated on a landfill site and where area homes have been sinking due to the lack of a solid foundation. Broker Able did not reveal this information to a prospective buyer. Given this information, the licensee in this situation could be subjected to: A. Criminal action B. Civil action C. Disciplinary action D. Any of the above 421

38 CHAPTER 16 QUESTIONS & ANSWER KEY 19. A violation of the License Act by a real estate licensee could result in: A. A maximum fine of $25,000 B. A fine up to $10,000 C. A maximum fine of $5,000 D. A maximum fine of $1, Broker Edwards hired Licensee Tennison as an independent contractor. The status of an independent contractor would permit Licensee Tennison to: A. Perform services only through the sponsoring broker B. Collect a commission in the Licensee's name only C. Work for several different brokers at the same time D. Advertise the listed property under the Licensee's own name 21. Broker Matthews expanded his operation and opened a branch office. Broker Matthews must now: A. Do nothing, since he is already a licensed broker B. Apply for a branch office license in the name of the main office C. Apply for a branch office license in the name of the main office and designate a managing broker D. Make a copy of the broker's license and place it in the branch office next to the license of the managing broker 22. Broker West has an exclusive right-to-sell listing agreement on Beck's property. Under which of the following conditions could Broker West sign a valid sales contract for principal Beck? A. Under no circumstances, since this would be a violation of the "Statute of Fraud's" B. Under the Law of Agency, when a broker has an exclusive right-to-sell listing agreement, the broker may do any act for the benefit of the principal C. Provided the broker has a written power of attorney from principal Beck D. Under no circumstances, since this would be a violation of the Illinois Broker-Attorney Accord. 23. In Illinois, real estate licenses may be issued by: A. IDFPR B. Any county located within the State of Illinois C. Any municipality located within the State of Illinois D. Any of the above 24. Ms. Smart was hired by Broker Kingston as an administrative support person for her downtown office. Broker Kingston agrees to pay Ms. Smart a regular salary for her duties as an employee. In addition to the regular office functions, Ms. Smart may legally perform, on behalf of her employer, which of the following duties? A. Soliciting listings and sharing commissions with salespeople in the office B. Showing prospective buyers available listed properties and obtaining offers to submit to sellers C. Sell an apartment building that is managed by broker Kingston D. Fill in the blanks of pre-printed sales contracts for salespeople in the employing broker's office 422

39 CHAPTER 16 QUESTIONS & ANSWER KEY 25. A contractor performed work on a piece of property and has a signed contract. What is the length of time that he has to file a mechanic's lien notice with the county clerk? A. Four months from the date the contract was first signed B. Four months from the date the work was completed C. One year from the date the work was completed D. One year from the date the contract was signed 26. Who pays the Licensee their commission? A. The seller B. The buyer C. The sponsoring broker D. A cooperative broker 27. A real estate Licensee has a listing on a vacant farmhouse and barn. A Licensee from another company has a prospect that wants to rent only the house. The prospect does not want to buy the property nor the barn, just rent the house. The Licensee from another company who has the renter prospect goes directly to the owner of the property is this proper? A. Yes, because the prospect is only interested in renting B. Yes, because the Licensees may be able to convince the homeowner to rent the house rather than the sell the house C. No, because the property is listed with a broker and the Licensee from another company cannot negotiate anything with the seller who is being represented by a broker without the presence and/or permission of the listing broker D. No, because it was an offer to rent, not an offer to purchase 28. A landowner who is the sole owner of a piece of property dies without a will. His property will be disposed of: A. According to the grandfather clause B. According to the laws of descent and distribution C. According to the inheritance tax laws D. According to the laws of testate succession 29. A licensee sells a building. It is later discovered by the buyer that the building was poorly constructed, and had numerous flaws. If the buyer files a claim with the Illinois Real Estate Recovery Fund: A. The buyer can recover all moneys back from the Recovery Fund B. The buyer can only collect up to $10,000 from the Recovery Fund C. The buyer can only use the Recovery Fund if the buyer has exhausted all other avenues for recovering the money D. The Recovery Fund will pay the buyer the amount of loss, up to the maximum of $50, Real estate taxes are based on: A. The dollar and cents per $1,000 of the equalized assessed value B. Dollars and cents per $1.00 of assessed value C. The recent sales of comparable properties D. A percentage of the market value of the property as established by the assessor 423

40 CHAPTER 16 QUESTIONS & ANSWER KEY 31. Regardless of interest or non-interest bearing accounts, earnest money deposits must be placed into: A. Money market funds B. Mutual funds C. Federally chartered banks D. Banks or federally insured deposits 32. The Illinois Licensing Act of 2000 protects: A. The buyer B. The seller C. The broker D. The public 33. Mr. Rogers is planning to move to New Mexico. His neighbor, Ms. Young, has had some real estate experience but has not renewed her real estate license. Mr. Rogers tells Ms. Young that he will give $5,000 to anyone who sells his house for him. Ms. Young finds a buyer and the deal is consummated. Mr. Rogers then decides that he is not going to pay the commission, so Ms. Young decides to sue for her commission. Can she do this? A. Yes, because she had an oral agreement with the seller B. Yes, because she did perform a service for which she was entitled to a commission C. No, because she is not licensed under the Illinois Real Estate Licensing Act of 2000 D. No, because the agreement was not in writing 34. Which of the following licensees would be required to complete 120 classroom hours at an approved real estate school? A. A high school graduate with 90 hours of college course work wanting to become a licensed Licensee B. A licensee that renewed their real estate license one year past their expiration date C. A broker who has an expired real estate license in excess of two years D. An attorney who is licensed or approved by the Illinois State Supreme Court to practice in the State of Illinois 35. A closing statement is for the purpose of: A. Transferring ownership B. Making a full accounting of all the moneys involved in the transaction C. Delivery of the deed D. None of the above 36. Jane Doe has a Licensee's license, but a broker has not sponsored her for six (6) years. She is thinking about renewing her license and going to work for John Jones Realty. She: A. Must complete 12 hours of continuing education and pay the reinstatement fees B. Can be employed immediately so long as the broker issues a temporary work permit C. Must report her change of address D. Cannot renew her license 37. Licensees must fully disclose any interest they may have in a property, which must be made: A. Orally B. In writing C. Through their sponsoring broker D. Through an attorney 424

41 CHAPTER 16 QUESTIONS & ANSWER KEY 38. The real estate commissions that are paid by the public to brokers are regulated by: A. The Illinois Department of Financial and Professional Regulations B. Local Boards of Realtors C. The Illinois Association of Realtors D. None of the above 39. A real estate licensee is successful in selling a piece of property, which was difficult to market, and the grateful seller not only pays the commission but also includes a $500 gift certificate for the Licensee. What should the Licensee do in this situation? A. Accept both the commission and the gift certificate on behalf of the broker because it was earned B. Accept the commission, but refuse the gift certificate because Licensee can only accept cash or its equivalent C. Accept the commission, but turn the gift certificate over to the broker D. Accept the commission, but convert the gift certificate into cash and return it to the seller as a gift 40. A broker takes money from the escrow account and pays his overdue personal real estate taxes because he is afraid his real estate license will be suspended. Later, the broker replaces this money prior to the closing. The broker is guilty of: A. Nothing he has a duty to keep his license active at all times B. Redlining C. Conversion D. Commingling 41. When a Licensee terminates his employment with his broker, his broker must: A. Remove the Licensee's license from the wall, endorse it and give it to the Licensee B. Remit the original Licensee's license to IDFPR within 10 days C. Send the Licensee's sponsor card to IDFPR within 2 days D. Telephone the information to 1DFPR 42. The Illinois (state and county) transfer tax is based upon: A. $.25 per $500 of purchase price; B. $.75 per $500 of purchase price; C. $1.00 per $500 of the purchase price; D. None of the above. 43. A valid deed contains all of the following, except: A. The name and signature of the grantor B. The name of the grantee and the grantee's present address C. The property's legal description D. An acknowledgment of the grantor before a notary public 44. A broker writes an offer on a fellow broker's listing on Monday and collects the earnest money. The listing broker submits the offer to the seller on Wednesday. The seller counters the offer. The earnest money amount remains the same and the buyer accepts the counteroffer on Thursday. The earnest money must be deposited in the listing broker's escrow account: A. On Friday B. On Wednesday C. On Thursday D. One week from Friday 425

42 CHAPTER 16 QUESTIONS & ANSWER KEY 45. When a buyer and a seller have a written agreement as to the disposition of earnest money in an interest-bearing account, which is entitled to the interest? A. The buyer B. The seller C. It is split equally between the buyer and seller D. It is disbursed according to the written contract 46. A Licensee has a listing on a 20-acre parcel. A buyer who is willing to pay a finder's fee for the 20-acre parcel contacts the Licensee. The Licensee arranges a meeting between the buyer and the seller and explains to each that the Licensee is receiving compensation from both parties. The Licensee also asks each party to sign a written disclosure and give written permission before he begins to represent the buyer. This is proper because: A. The Licensee is disclosing to both parties of the transaction that he is acting as a dual agent and receiving compensation from both B. The 20-acre parcel is his listing C. It was mentioned orally to his employing broker D. The Licensee is operating as an "independent contractor" 47. A farmer has 180 acres of land with three houses on it. The farmer is planning to retire and wants to give one house and 15 acres to his son John, and 4 acres and one house to his son Paul, and keep 161 acres and a house for himself. Which of the following would come under the jurisdiction of the Illinois Plat Act? A. Son John's house and the 15 acres B. Son Paul's house and the 4 acres C. The farmer's house and the 161 acres D. None of the above because it was a division of land within the family 48. A real estate Licensee is convicted of discrimination and a suit is filed. The plaintiff is awarded so much money that the licensee has to declare bankruptcy. The plaintiff then goes to the Real Estate Recovery Fund and files a claim and collects whatever money they have corning. In order to be reinstated as a real estate licensee, the licensee must: A. Repay the Real Estate Recovery Fund with interest B. Repay the Real Estate Recovery Fund, but no interest C. Show evidence of the bankruptcy D. None of the above 49. The Illinois Department of Financial and Professional Regulations (IDFPR) have the power to hold hearings, to impose penalties, and to revoke and suspend licenses for which of the following circumstances? A. Advertising a piece of property using a blind ad B. Commingling funds C. Acting as an attorney while at the same time acting as a broker for both buyer and seller without written consent D. All of the above 50. In Illinois, the broker's escrow account must be reconciled within how many days after receipt of the bank statement? A. 2 days B. 5 days C. 10 days D. 20 days 426

43 CHAPTER 16 QUESTIONS & ANSWER KEY 51. A real estate transaction closed on January 31. On the closing statement, the buyer will be credited with: A. 1 month of tax payments B. 11 months of tax payments C. 12 months of tax payments D. 13 months of tax payments 52. A broker who offers a guaranteed purchase plan must: A. Explain the plan orally to the seller B. Provide the seller with a list of lenders who would finance the sale C. Provide the seller with a written proposal, including the broker's financial resources; D. Supply the seller only with a current financial statement. 53. John Jones, a Licensee with Fargo Realty, has a listing on a house. The Licensee finds a ready, willing and able buyer and submits an offer to purchase. Meanwhile, the seller decides not to sell the house and asks to be released from the listing agreement with the broker. The broker agrees to release the seller from the listing contract agreement. What recourse does the Licensee have? A. None B. Sue Fargo Realty C. Sue the MLS system D. Sue the seller 54. The Director of the Real Estate Division must meet which of the following requirements: A. Be a licensed Illinois real estate broker B. Be a resident of Illinois C. Reside in Springfield D. Both a and b 55. The commissions that a real estate broker may charge are regulated by: A. The local board of realtors B. Be a retired broker C. The National Association of Realtors D. None of the above 56. If a managing broker of a branch office dies, the sponsoring broker must: A. Within 15 days request a temporary permit from IDFPR B. Assume responsibility for the office C. Do nothing D. Both a and b above 57. All of the following must be licensed by IDFPR, except: A. A manager of an apartment building in which he resides B. A dealer who handles options on behalf of real estate brokers C. A person who sells or offers for sale a property owned by another and who receives compensation for such efforts D. A leasing agent who has no more than five commercial, buildings 427

44 CHAPTER 16 QUESTIONS & ANSWER KEY 58. The sales price of a parcel of property is $150,000. The sales commission is 6% of the sales price. If the commission were split 50/50 between the broker and the Licensee, less a 10% commission to the listing broker in another office, what would be the amount of commission payable to the licensee? A. $9,000 B. $4,500 C. $900 D. $4, If a seller has an open listing contract with a broker, and the broker immediately erects a "for sale" sign on the seller's property without the seller's permission: A. He is in violation of a state statute of the State of Illinois B. He is in violation of the Real Estate License Act of 2000 C. He is not in violation because it is an open listing D. It is not a violation because he is duly licensed by the State of Illinois as a broker 60. If a parcel of property is forfeited or sold because of unpaid taxes, that property could be acquired by submitting a bid under a (n): A. Reclamation sale B. Assessor's sale C. Repossession Sale D. Redemption sale 61. A broker put his own property on the market, and is advertising that property for sale by owner. On the yard sign he only includes the statement "agent owned". He does not indicate who his sponsoring broker is. Is this proper? A. No, it is against the disclosure regulations of IDFPR B. No, because it is a blind ad and all blind ads are illegal C. Yes, because Illinois licensees are allowed to advertise their property "by owner" so long as they do not use the brokerage services of any broker and they disclose "agent owned property" D. Yes, because he possesses a real estate license 62. An exclusive right-to-sell listing contract contains which of the following? A. Description of the property B. Listing price C. An automatic renewal clause D. Both a and b above 63. Broker "A" kept his escrow account in ABC Bank, but for various reasons decided to switch banks. The new bank is the XYZ Bank. How much notice must be given to IDFPR? A. Immediately B. 30 days C. 6 months D. 1 year 64. Joe Bums dies Without a Will. After all debts are cleared, his estate amounts to $120,000. Bums is survived by his Wife and three daughters. How much money will each of the daughters receive? A. $20,000 B. $30,000 C. $40,000 D. $50,

45 CHAPTER 16 QUESTIONS & ANSWER KEY 65. Which of the following statements is true about a branch office manager? A. The branch office manager is responsible for all Licensees at that branch; B. If the branch office manager is an officer of the corporation; he does not have any responsibilities over the Licensees C. If the branch office manager resigns, the most senior Licensee can manage the branch office on an interim basis D. The branch manager may be an experienced Licensee 66. Mary Smith, who is the wife of John Smith, is the beneficiary of property held in trust by the Illinois Land Trust. If this property is conveyed to Helen and George Jones, which of the following must occur? A. The trustee's deed must be signed by Mary Smith B. The trustee's deed must be signed by the trustee C. A warranty deed must be signed by Mary Smith D. A warranty deed must be signed by Mary Smith and her husband John Smith 67. Broker Harry listed a piece of property for a friend. The property was difficult to market because of an unusually high sales price demanded by the seller. Therefore, the listing contract was written up with no expiration date. This listing contract is: A. Void B. Voidable C. Properly completed D. Enforceable in court 68. A buyer and seller enter into a purchase contract, but the improvements burn down before the closing. Who is responsible for the loss? A. The seller B. The buyer C. The broker D. The Licensee 69. Ms. Mars has two rooms in her home that she wishes to rent to women only. Under the Illinois Human Rights Act, may she do so? A. Yes, if she owns the property and she is not a real estate broker B. No, because this action is considered unlawful under the Illinois Human Rights Act C. Yes, but only if the rent is less than $200 per month per tenant D. None of the above 70. On a piece of property that was owned as of January 2010, counties that do not participate in the accelerated tax payment system would have the first payment due: A. January 2010 B. June 2010 C. January 2011 D. June In Illinois, according to law, mobile homes are taxed as: A. Personal property B. Real property C. 50/50 split between real and personal property D. 75% real and 25% personal property 429

46 CHAPTER 16 QUESTIONS & ANSWER KEY 72. Who is not required to have a real estate license? A. Part-time Licensee B. Broker manager C. Real estate appraiser D. None of the above 73. Concerning government owned property, which of the following statements is most correct? A. Only government property can be acquired by adverse possession B. Any property may be acquired by adverse possession C. Only privately owned real property can be acquired by adverse possession D. None of the above 74. The Illinois (state) transfer tax on a real property sale of $250,000 with a $25,000 assumable loan is: A. $ B. $ C. $ D. $ Concerning Licensee licensing fees, all of the following are true, except : A. $110 processing fee B. $150 annual renewal fee C. $10 Recovery Fund Fee D. $40 processing fee 76. A builder or developer of a housing project who builds and sells units within his or her own project is required to: A. File a zoning variance B. Have a valid Illinois real estate license C. Employ a real estate broker to sell the units D. None of the above 77. Any unlicensed person who performs a real estate act that requires a license may be prevented from doing so by IDFPR filing a(n): A. Civil lawsuit B. An injunction called a "cease and desist order" C. Bankruptcy report D. None of the above 78. Brokers are allowed to operate their real estate offices out of their principal residence provided that: A. Hours of operation are posted B. Parking is provided for clients C. Two telephone numbers are listed D. The broker's real estate license is prominently displayed at the residence 79. A co-owner can seek division of a property ownership through action by: A. Participation B. Partition C. Severance D. Joint tenancy 430

47 CHAPTER 16 QUESTIONS & ANSWER KEY 80. An example of an enforceable lease provision is the: A. Prohibition of a tenant subleasing to a third party without the lessor's consent B. Prohibition of a tenant reporting a fire code violation to the local authorities C. Prohibition of a tenant assigning a lease to certain minorities D. Prohibition of having more than three related children in the unit at any given lime 81. Who must provide written consent prior to a broker advertising a property for sale? A. Buyer B. Listing broker C. Seller D. Commissioner 82. Who is eligible for company benefits and medical insurance coverage? A. Employees B. Independent contractors C. Both of the above D. None of the above 83. No later than entering into a brokerage agreement with a client, a broker shall advise the client as to the broker's compensation and whether the broker will share that compensation with brokers who represent other parties in a transaction. A. False B. True C. True, but only if requested by the seller D. True, but only if requested by the buyer 84. A broker may be disciplined for which of the following activities? A. Failing to review and sign a closing statement B. Treating clients differently C. Continuing to manage a property with full knowledge of code violations that threaten the public interest D. All of the above 85. Which of the following items is not necessarily part of the independent contractor's agreement? A. Compensation B. Supervision C. Duties D. Sales quotas 86. A licensee may not accept finder's fees, commissions, discounts, or any other compensation from financial institutions, or title companies, unless the licensee: A. Makes prior written disclosure to all parties in the transaction B. Has obtained written approval from IDFPR C. Collects a referral fee which is less than $100 from a single transaction D. Reports the referral fee income to the Internal Revenue Service 431

48 CHAPTER 16 QUESTIONS & ANSWER KEY 87. The Legislative General Assembly found that the application of the common law of agency to real estate brokers, Licensees and consumers of brokerage services had resulted in misunderstandings. This resulted in consequences contrary to the best interests of the public. Concerning the "Law of Agency" all of the following are true, except: A. The Illinois Real Estate Act was therefore amended to limit the number of individuals who could obtain a real estate license B. The intent of the agency law is to promote and provide stability in the real estate market C. The Legislature found that it was in the best interests of the public to provide codification of the relationships between real estate brokers and Licensees and consumers of real estate brokerage services D. The law was enacted to prevent detrimental misunderstandings and misinterpretations of the relationships by consumers, real estate brokers, and Licensees 88. Under the Agency - Brokerage Relationships Law, a "client may be defined as: A. Any person who walks into a real estate office in Illinois B. Person who view homes on their own at any 'open house" showing C. A person who is represented by a licensee D. Any person who is employed by an Illinois real estate broker to assist the broker in providing real estate services to others for compensation 89. The agency law defines a "customer" as a person who is: A. Represented by a licensee B. Not being represented by a licensee but for whom the licensee is performing ministerial acts C. Named by a broker as the legal agent of a client D. A public source of real estate information 90. The responsibility for the activities of an employed "unlicensed assistant" rests with the: A. The employing Licensee B. Board of Realtors C. IDFPR D. The employing licensee's broker 91. The term "ministerial acts" includes all of the following, except: A. Attending an open house and responding to questions about the property from a consumer B. Responding to questions from consumers walking into a licensee's office concerning brokerage services offered for particular properties C. Accompanying an appraiser, inspector, contractor, or similar third party on a visit to a property D. Entering into a relationship in which the licensee is representing both the buyer and the seller in one transaction 432

49 CHAPTER 16 QUESTIONS & ANSWER KEY 92. Real estate licensees are permitted to employ: A. A "gopher" to perform the more mundane tasks in a real estate transaction B. An "unlicensed assistant" to-perform certain limited activities relating to a real estate transaction C. A "personal representative" to handle all matters which the licensee elects to delegate to the employee D. An "assistant Licensee" who after serving a two year apprenticeship may qualify for a real estate license without taking any formal real estate course or the state examination 93. Setting an appointment to view property; describing a property or the property's condition in response to a consumer's inquiry, and showing a client through a property being sold by an owner on behalf of the owner are considered to be: A. Ministerial acts which do not create an agency relationship B. Violations of the Real Estate Act unless the licensee has a contract of employment with the person receiving the services C. Acts which constitute acting as a "dual agent" D. The normal expected duties of a good office administrative person 94. What is the difference between a sponsor card and a pocket card? A. A sponsor card is issued once a licensee is newly sponsored by a broker and the pocket card is issued once the license has been received B. A pocket card is issued once a licensee is newly sponsored by a broker and the sponsor card is issued once the license has been received C. A pocket card is the 45 day permit that goes in your pocket D. A sponsor card is the copy of the license that indicates who your sponsoring broker is 95. Illinois law requires a licensee to promote the best interests of the client. This would include all of the following except: A. Timely presentation of all offers to and from the client, unless the client has waived this duty B. Obeying specific directions of the.client even if they are contrary to applicable statutes, ordinances, or rules C. Timely accounting for all money and property received in which the client has, may have, or should have had an interest D. Disclosing to the client material facts concerning the transaction of which the licensee has actual knowledge, unless that information is confidential information 96. A licensee's 'unlicensed assistant' may not: A. Interpret information on listings, titles, financing, contracts, closings, or other information relating to a transaction B. Negotiate or agree to any commission, commission split, management fee, or referral fee on behalf of a licensee C. Explain or interpret a contract, fisting, lease agreement, or other real estate document with anyone outside the licensee's firm D. Perform any of the above acts 433

50 CHAPTER 16 QUESTIONS & ANSWER KEY 97. All of the following are activities an employed 'unlicensed assistant' may perform, except: A. Host open houses, kiosks, home show booths or home fairs B. Place signs on property C. Order items of routine repair as directed by a licensee D. Act as a courier to deliver documents, pick up keys, etc. 98. A licensee must disclose in writing to a customer when the Licensee is not acting as the customer's agent A. This must be done in time to prevent the customer from disclosing confidential information to the licensee B. The written disclosure may be made after the preparation of an offer to purchase or lease real property C. The law does not apply to a residential lease or rental transaction if it includes an option to purchase the real estate D. The disclosure is usually done at the time the transaction closes 99. Once a broker has terminated a Licensee's license: A. The broker must send the original license to the Illinois Department of Financial and Professional Regulations within 24 hours of termination B. The broker must send a copy the Licensee's license to the Illinois Department of Financial and Professional Regulations within 24 hours of termination C. The broker must send a copy the Licensee's license to the Illinois Department of Financial and Professional Regulations within 2 days after termination D. The broker must send the original license to the Office of Banks and Real Estate within 2 days of termination 100. All of the following are what a licensee can do for clients when acting as a dual agent. except: A. Disclose confidential information the licensee may know about the clients with the client's permission B. Disclose all latent material defects in the property that are known to the licensee C. Help the buyer or tenant to arrange for property inspections D. Provide information about comparable properties that have sold to the buyer so they do not submit a high offer 434

51 CHAPTER 16 QUESTIONS & ANSWER KEY CHAPTER 16 - QUESTIONS - ANSWER KEY 1. (D) All exclusive agency listing contracts and exclusive right-to-sell listing Contracts must be in writing, in Illinois, to be enforceable. 2. (A) All written listing contracts must provide for an automatic expiration date within a definite period of time or the listing contract is void. 3. (D) In Illinois, in any exclusive right-to-sell listing agreement or exclusive agency agreement, the amount or basis of the commission, and the time of payment of the commission must be included and no changes in the amount or method of payment shall be valid unless such change is in writing and signed by all of the parties. 4. (C) The equalization factor, as used in Illinois in computing real estate taxes, is designed primarily to counteract discrepancies in assessments in different localities. 5. (D) The operation of a branch office must be supervised by the principal and/or managing broker. IDFPR must be notified as to whom the designated office manager is. A broker is allowed to be the managing broker for more than one office. 6. (C) It is lawful for a broker to collect a commission from both the buyer and the seller, provided the broker has obtained the prior knowledge and consent of all parties. This consent must be in writing. 7. (A) There is no set limit on a commission as long as the commission amount is agreed to between the broker and the principal. 8. (C) The broker may hold an uncashed earnest money check after the offer has been accepted, provided the broker has authority from the seller. 9. (B) A "blind ad" is any ad in which the property appears to be owned by a licensee without disclosing that the property is in fact listed by a broker who is not the owner. Such an ad is illegal. All advertising must include the company name of the broker. 10. (C) Illinois subscribes to an intermediate theory. The borrower remains the legal owner of the property against all parties except the lender. 11. (C) Although property managers need more than an ordinary knowledge of income tax procedures, a property manager is not responsible for completing personal income tax returns for his principal. 12. (B) Due to the complexity of Internal Revenue Service rules and regulations, and the resultant tax consequences for income property, a property manager would be required to have more than a passing knowledge of accounting procedures. 435

52 CHAPTER 16 QUESTIONS & ANSWER KEY 13. (A) Due to the fact that the broker did not have prior knowledge, and it would be virtually impossible for anyone without electrical experience to diagnose the problem of the faulty electrical wiring done by the son-in-law, the broker would not be liable and would be considered to be innocent of any wrongful act. 14. (A) Any person seeking to make a commission in a real estate transaction, according to Illinois law, must be a licensed managing broker, or work for an Illinois licensed broker who pays the commission to the Licensee. 15. (B) Under Illinois law, it is permissible for a broker to obtain an option on property, which the broker has listed, and exercise that option provided that the broker's profit is revealed to the seller and the broker has obtained written consent prior to exercising the option. 16. (A) When a property manager is hired by a property owner, the property manager must look out for the best interests of the property owner - the principal. 17. (A) An exclusive right-to-sell listing contract is a broker employment contract. 18. (D) If a licensee fails to reveal pertinent information, the licensee could be subjected to civil action, criminal action, and/or disciplinary action for the one (1) violation. 19. (A) The licensee could be fined a maximum of $25, (A) The status of independent contractor permits a Licensee to perform services only through the sponsoring broker. 21. (C) When a broker opens a branch office, a separate branch office license must be obtained and the license must be in the name of the main office. It must also indicate the name of the managing broker who will manage the branch office. 22. (C) A real estate broker may sign a sales contract for a principal provided the broker has a written power of attorney. 23. (A) Real estate licenses may only be issued by the State of Illinois through the Illinois Department of Financial and Professional Regulations. 24. (D) As an administrative support person, Ms. Smart is permitted to fill in the contract blanks for office Licensees. 25. (B) An individual has a right to file a mechanic's lien notice with the county clerk up to 4 months from the date the work was completed. 26. (C) A Licensee is paid commissions by the sponsoring broker. 27. (C) When a real estate licensee has a prospective renter for a property, which is currently listed; it would be unethical for the licensee to take the prospective renter directly to the property owner. This could influence the salability of the property. Therefore, ethically, the licensee should work through the listing office on having the property shown for possible rental. 436

53 CHAPTER 16 QUESTIONS & ANSWER KEY 28. (B) If a landowner, who is the sole owner of a parcel of property, dies without a will, the court will appoint an administrator to dispose of the property according to the laws of descent and distribution (also known as the probate laws). 29. (C) A person who is injured and entitled to collect under the Recovery Fund Act may only do so after the injured party has exhausted all other avenues for recovering the loss. The injured party can collect up to $25,000 PLUS court costs PLUS legal fees. 30. (A) Real estate taxes are based on the dollar and cents amount per $1,000 of equalized assessed property valuation. 31. (D) Earnest money deposits placed into interest or non-interest bearing accounts must be placed into federally insured depositories. 32. (D) The Illinois Licensing Act 2000 is for the protection of the public. 33. (C) In order for a person to sue for a commission when performing a real estate act for another, that person must have a real estate license. 34. (C) A real estate broker who has allowed their real estate license to expire for more than two years must start at the beginning; 120 hours of pre-license education and pass the state exam. 35. (B) The purpose of a closing statement is to make a full accounting of all the moneys involved in the transaction. 36. (D) After two (2) years of not being sponsored by a broker, a licensee cannot renew their real estate license. They must fulfill the requirements of a new license. 37. (B) Real estate licensees must fully disclose any interest they may have in a property they are involved in selling, leasing, buying, etc. The disclosure must be made in writing. 38. (D) Real estate commissions that are paid by the general public to an employed real estate broker are not regulated. Commissions are established by negotiation between the employed sponsoring broker and the seller or buyer (the principal). 39. (A) It is permissible for a Licensee to accept a commission and a gift certificate given by a grateful seller, so long as the Licensee turns all forms of compensation over to the sponsoring broker. 40. (C) If a real estate licensee takes money from an escrow account to pay personal bills, the licensee is guilty of conversion. 41. (A) When a Licensee terminates employment with a broker, the broker must endorse the license and give the original endorsed license to the Licensee. 437

54 CHAPTER 16 QUESTIONS & ANSWER KEY 42. (B) The Illinois (state) transfer tax is based on $.50 per $500 of the purchase price. The Illinois transfer tax at the county level is based on $.25 per $500. When the two taxes are combined, they result in a figure of $.75 PER EACH $500 or portion of $ (D) A valid deed would contain the name and signature of the grantor, a description of the property, and the name of the grantee, who is not required to sign the document. 44. (A) When a selling broker obtains an earnest money deposit (whether a counteroffer is involved or not is immaterial), the selling broker has until the next business day, from the date of acceptance, to deliver the funds for deposit into the listing office's escrow account. 45. (D) When a buyer and seller have an agreement as to the disposition of earnest money in an interest-bearing account, the earned interest will be paid according to the terms of the written agreement. 46. (A) A real estate licensee may act as a "dual agent" and receive compensation from all parties involved, provided the licensee has disclosed to all parties that the licensee is receiving compensation from all parties. 47. (B) When dividing acreage, if the resulting parcel were less than 5 acres, such parcel would come under the jurisdiction of the Illinois Plat Act. 48. (A) When a real estate licensee has been convicted of a violation of the real estate law and the plaintiff has been awarded an amount of money to the point that the licensee must declare bankruptcy, the plaintiff would recover the damages limited by the Real Estate Recovery Fund. In order for the licensee to be reinstated and/or continue that person's career, the licensee must repay the Recovery Fund the amount paid by the Recovery Fund plus 6% interest. 49. (D) IDFPR has the power to hold hearings, impose penalties and to revoke/suspend licensure for "commingling" of funds or advertising the property using a blind ad. Likewise, a real estate broker, if a licensed attorney, may act as a broker and an attorney for both the buyer and the seller, provided the attorney has disclosed the "dual agency" activities AND obtained the written consent of all parties. 50. (C) The broker's escrow account must be reconciled within 10 days. 51. (ID) In a real estate transaction that closes on January 31st of a given year, the closing statement would reflect that the buyer is to be credited with 13 month's taxes. In Illinois, taxes are paid in arrears, so it would equal 12 months of taxes from the previous year and 1 month of taxes from the present year. 52. (C) A broker offering a guaranteed purchase plan must provide the seller with a written proposal, including the broker's financial resources. 53. (B) When a real estate Licensee obtains a ready, willing, and able buyer and 438

55 CHAPTER 16 QUESTIONS & ANSWER KEY submits an offer to purchase the property, and the broker of the firm has meanwhile agreed with the seller to release the seller from the listing contract, the licensee's only recourse would be to sue the employing sponsoring broker. Remember the listing agreement is between the sponsoring broker and the seller only. 54. (D) It is required that the Director of the Real Estate Division be actively engaged as a broker for 10 years prior to appointment and be a resident of Illinois. 55. (D) Since commissions are viewed as compensation for services, there are no limits as to the amount the broker may charge. 56. (D) If the office is to remain open, the employing sponsoring broker must assume responsibility for the office AND obtain a temporary permit from IDFPR within fifteen (15) days. 57. (A) As the term "Resident Property Manager" is defined, the manager must reside on the property that the individual manages. 58. (D) Step1: Step 2: $150,00 Sales price $9,000 Gross Commission X 6% Selling commission x 10% Listing Broker Comm Rate $9,000 Total GROSS commission $ 900 Listing Broker's Commission Amount Step 3: Step 4: $9,000 Gross Commission $8,100 Selling Commission $900 Listing Side Commission 2 (50/50) Commission split $8,100 Selling Side Commission Step 5: $4,050 commission due to the Licensee 59. (B) This action by the broker violates the Real Estate License Act of (B) This action is referred to as an assessor's sale. 61. (C) A broker who puts his own property on the market and advertises that property by owner must be the sole owner and not use the brokerage services of any broker and must disclose "agent owned" on any advertising. 62. (D) Exclusive right-to-sell listings contain a description and a listing price. However, they must contain a definite termination date, not an automatic renewal clause. 63. (A) IDFPR must be notified immediately if a broker changes banks. 64. (A) Under the Laws of Descent and Distribution, a surviving spouse receives no less than 1/2 of the decedent's estate, and the children receive the balance to share in equal portions. 439

56 CHAPTER 16 QUESTIONS & ANSWER KEY Step 1: Step 2: $120,000 Total Estate - 1/2 = $60, 000 $60,000/ 3 = $20, (A) Managing brokers are responsible for supervising their Licensees. 66. (B) The legal title to the property is invested in the trustee, whereas, the beneficial interest of the trust accrues to the beneficiary. 67. (A) Any listing not providing a definite termination date is void. 68. (A) Because improvements were destroyed prior to the signing, this indicates title is still with the Seller, making them the responsible party. 69. (A) Under the Illinois Human Rights Act, an owner-occupant may rent to a particular sex, provided the owner does in fact own the property, is not a real estate licensee, AND one of the units is owner-occupied. 70. (D) Taxes are payable in the year after they are levied. Therefore, the first installment penalty date is June 1, (A) In Illinois, by law, mobile homes are classified as personal property. 72. (D) All of the above are required to be licensed. 73. (C) Government property, by law, is NOT subject to adverse possession. Only private property could be acquired by adverse possession. 74. (B) Step I: Step 2: $250,000 Purchase price $225,000/500 = 450 Units $25,000 Assumed Loan Step 3 : $225,000 New Money Amount 450 x $.50 = $ Transfer Tax 75. (D) In Illinois, the Licensee license fee does involve a $50 annual renewal fee (paid $100 biannually); a $10 Recovery Fund fee; and a $110 processing fee. It is not true that the processing fee is $ (D) A builder who owns the land is not required to have a real estate license when building and selling units from the owner's project. 77. (B) If an unlicensed person continues to perform real estate activities without a real estate license, the state is empowered to pursue legal action. 78. (D)The real estate license must be displayed since the residence is also being used as a place at business. 79. (B) Suit for partition is the way to legally dissolve ownership between co-owners. 440

57 CHAPTER 16 QUESTIONS & ANSWER KEY 80. (A) A clause preventing subleasing from a tenant to a third party is enforceable. 81. (C) The seller must approve any advertising of the property. 82. (A) Employees are eligible. Independent contractors must supply their own medical coverage and other related benefits. 83. (B) No later than entering into a brokerage agreement with a consumer, a broker shall advise the consumer as to the broker's compensation and whether the broker will share the compensation with brokers who represent other parties in a transaction. 84. (D) All three choices are violations of real estate law and cause for disciplinary action. 85. (D) Sales quotas are not a requirement. Information concerning compensation, supervision and performance of duties must be in the employment contract. 86. (A) A licensee may not accept finder's fees, commissions, discounts, or any other compensation from financial institutions, or title companies, unless the licensee makes prior written disclosure to all parties in the transaction. 87. (A) It is NOT true that the Illinois Real Estate Act was amended to limit the number of individuals who could obtain a real estate license. The Legislative General Assembly did find that the application of the common law of agency to real estate brokers, Licensees and consumers of brokerage services had resulted in misunderstandings. The intent of the new law is to promote and provide stability in the real estate market. The Legislature found that it was in the best interests of the public to provide codification of the relationships between real estate brokers and Licensees and consumers of real estate brokerage services. The law was enacted to prevent detrimental misunderstandings and misinterpretation of the relationships by consumers, real estate brokers, and Licensees. 88. (C) Under the Agency - Brokerage Relationships in Real Estate Transactions Law, a "client" may be defined as a person who is represented by a licensee. 89. (B) The agency law defines a "customer" as a person who is NOT being represented by a licensee but for whom the licensee is performing ministerial acts. 90. (A) The responsibility for the activities of an employed "unlicensed assistant" rests with the employing Licensee. 91. (D) The term "ministerial acts" does NOT include entering into a relationship in which the licensee is representing both the buyer and the seller in one transaction. This is the definition of a "dual agent". All of the other choices in the question are "ministerial acts". 441

58 CHAPTER 16 QUESTIONS & ANSWER KEY 92. (B) Effective June 1, 1996 real estate licensees, including Licensees, are now permitted to employ an "unlicensed assistant" to perform certain limited activities relating to a real estate transaction, 93. (A) Setting an appointment to view property, describing a property or the property's condition in response to a consumer's inquiry, and showing a client through a property being sold by an owner on behalf of the owner are considered to be "ministerial acts" which do not create an agency relationship. 94. (A) A sponsor card, (a 45 day temporary work permit), is issued before a real estate license/pocket card. 95. (B) Illinois law specifically prohibits a licensee from obeying specific directions of the client IF those instructions are contrary to applicable statutes, ordinances, or rules. All of the other choices constitute proper behavior by a licensee. 96. (D) A licensee's "unlicensed assistant may NOT perform any of the acts listed in the question, which make the "D" choice MOST correct. 97. (A) An employed "unlicensed assistant" may not host open houses, kiosks, home show booths or home fairs. The other acts listed in the question are permitted PROVIDED the activities are properly supervised. 98. (A) A licensee must disclose in writing to a customer when the licensee is not acting as the customer's agent in time to prevent the customer from disclosing confidential information to the licensee. 99. (C) Once a broker has, endorsed the license of a Licensee the broker must mail a copy of the endorsed license to IDFPR within 2 days (A) When acting as a dual agent a licensee has to be careful to act as an intermediary and not favor one side of the transaction. 442