SB3740eng 103RD GENERAL ASSEMBLY

SB3740 Engrossed LRB103 36856 RTM 66968 b

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Finance Act is amended by adding Section 5.1015 as follows:

(30 ILCS 105/5.1015 new)

Sec. 5.1015. The Real Estate Recovery Fund.

Section 10. The Real Estate License Act of 2000 is amended by changing Sections 1-10, 5-20, 5-25, 5-28, 5-35, 5-45, 5-60, 5-70, 10-10, 10-20, 15-35, 15-50, 20-20, 20-20.1, 20-50, 20-82, 25-25, 25-30, 25-35, 30-5, 30-15, and 30-25 and by adding Sections 5-60.1 and 5-60.5 as follows:

(225 ILCS 454/1-10)

(Section scheduled to be repealed on January 1, 2030)

Sec. 1-10. Definitions. In this Act, unless the context otherwise requires:

"Act" means the Real Estate License Act of 2000.

"Address of record" means the designated address recorded by the Department in the applicant's or licensee's application file or license file as maintained by the Department.

"Agency" means a relationship in which a broker or licensee, whether directly or through an affiliated licensee, represents a consumer by the consumer's consent, whether express or implied, in a real property transaction.

"Applicant" means any person, as defined in this Section, who applies to the Department for a valid license as a managing broker, broker, or residential leasing agent.

"Blind advertisement" means any real estate advertisement that is used by a licensee regarding the sale or lease of real estate, licensed activities, or the hiring of any licensee under this Act that does not include the sponsoring broker's complete business name or, in the case of electronic advertisements, does not provide a direct link to a display with all the required disclosures. The broker's business name in the case of a franchise shall include the franchise affiliation as well as the name of the individual firm.

"Board" means the Real Estate Administration and Disciplinary Board of the Department as created by Section 25-10 of this Act.

"Broker" means an individual, entity, corporation, foreign or domestic partnership, limited liability company, registered limited liability partnership, or other business entity other than a residential leasing agent who, whether in person or through any media or technology, for another and for compensation, or with the intention or expectation of receiving compensation, either directly or indirectly:

(1) Sells, exchanges, purchases, rents, or leases real estate.

(2) Offers to sell, exchange, purchase, rent, or lease real estate.

(3) Negotiates, offers, attempts, or agrees to negotiate the sale, exchange, purchase, rental, or leasing of real estate.

(4) Lists, offers, attempts, or agrees to list real estate for sale, rent, lease, or exchange.

(5) Whether for another or themselves, engages in a pattern of business of buying, selling, offering to buy or sell, marketing for sale, exchanging, or otherwise dealing in contracts, including assignable contracts for the purchase or sale of, or options on real estate or improvements thereon. For purposes of this definition, an individual or entity will be found to have engaged in a pattern of business if the individual or entity by itself or with any combination of other individuals or entities, whether as partners or common owners in another entity, has engaged in one or more of these practices on 2 or more occasions in any 12-month period.

(6) Supervises the collection, offer, attempt, or agreement to collect rent for the use of real estate.

(7) Advertises or represents oneself as being engaged in the business of buying, selling, exchanging, renting, or leasing real estate.

(8) Assists or directs in procuring or referring of leads or prospects, intended to result in the sale, exchange, lease, or rental of real estate.

(9) Assists or directs in the negotiation of any transaction intended to result in the sale, exchange, lease, or rental of real estate.

(10) Opens real estate to the public for marketing purposes.

(11) Sells, rents, leases, or offers for sale or lease real estate at auction.

(12) Prepares or provides a broker price opinion or comparative market analysis as those terms are defined in this Act, pursuant to the provisions of Section 10-45 of this Act.

"Brokerage agreement" means an a written or oral agreement between a sponsoring broker and a consumer for licensed activities, or the performance of future licensed activities, to be provided to a consumer in return for compensation or the right to receive compensation from another. Brokerage agreements may constitute either a bilateral or a unilateral agreement between the broker and the broker's client depending upon the content of the brokerage agreement. All exclusive brokerage agreements shall be in writing and may be exclusive or non-exclusive.

"Broker price opinion" means an estimate or analysis of the probable selling price of a particular interest in real estate, which may provide a varying level of detail about the property's condition, market, and neighborhood and information on comparable sales. The activities of a real estate broker or managing broker engaging in the ordinary course of business as a broker, as defined in this Section, shall not be considered a broker price opinion if no compensation is paid to the broker or managing broker, other than compensation based upon the sale or rental of real estate. A broker price opinion shall not be considered an appraisal within the meaning of the Real Estate Appraiser Licensing Act of 2002, any amendment to that Act, or any successor Act.

"Client" means a person who is being represented by a licensee.

"Comparative market analysis" means an analysis or opinion regarding pricing, marketing, or financial aspects relating to a specified interest or interests in real estate that may be based upon an analysis of comparative market data, the expertise of the real estate broker or managing broker, and such other factors as the broker or managing broker may deem appropriate in developing or preparing such analysis or opinion. The activities of a real estate broker or managing broker engaging in the ordinary course of business as a broker, as defined in this Section, shall not be considered a comparative market analysis if no compensation is paid to the broker or managing broker, other than compensation based upon the sale or rental of real estate. A comparative market analysis shall not be considered an appraisal within the meaning of the Real Estate Appraiser Licensing Act of 2002, any amendment to that Act, or any successor Act.

"Compensation" means the valuable consideration given by one person or entity to another person or entity in exchange for the performance of some activity or service. Compensation shall include the transfer of valuable consideration, including without limitation the following:

(1) commissions;

(2) referral fees;

(3) bonuses;

(4) prizes;

(5) merchandise;

(6) finder fees;

(7) performance of services;

(8) coupons or gift certificates;

(9) discounts;

(10) rebates;

(11) a chance to win a raffle, drawing, lottery, or similar game of chance not prohibited by any other law or statute;

(12) retainer fee; or

(13) salary.

"Confidential information" means information obtained by a licensee from a client during the term of a brokerage agreement that (i) was made confidential by the written request or written instruction of the client, (ii) deals with the negotiating position of the client, or (iii) is information the disclosure of which could materially harm the negotiating position of the client, unless at any time:

(1) the client permits the disclosure of information given by that client by word or conduct;

(2) the disclosure is required by law; or

(3) the information becomes public from a source other than the licensee.

"Confidential information" shall not be considered to include material information about the physical condition of the property.

"Consumer" means a person or entity seeking or receiving licensed activities.

"Coordinator" means the Coordinator of Real Estate created in Section 25-15 of this Act.

"Credit hour" means 50 minutes of instruction in course work that meets the requirements set forth in rules adopted by the Department.

"Customer" means a consumer who is not being represented by the licensee.

"Department" means the Department of Financial and Professional Regulation.

"Designated agency" means a contractual relationship between a sponsoring broker and a client under Section 15-50 of this Act in which one or more licensees associated with or employed by the broker are designated as agent of the client.

"Designated agent" means a sponsored licensee named by a sponsoring broker as the legal agent of a client, as provided for in Section 15-50 of this Act.

"Designated managing broker" means a managing broker who has supervisory responsibilities for licensees in one or, in the case of a multi-office company, more than one office and who has been appointed as such by the sponsoring broker registered with the Department.

"Director" means the Director of Real Estate within the Department of Financial and Professional Regulation.

"Dual agency" means an agency relationship in which a licensee is representing both buyer and seller or both landlord and tenant in the same transaction. When the agency relationship is a designated agency, the question of whether there is a dual agency shall be determined by the agency relationships of the designated agent of the parties and not of the sponsoring broker.

"Education provider" means a school licensed by the Department offering courses in pre-license, post-license, or continuing education required by this Act.

"Employee" or other derivative of the word "employee", when used to refer to, describe, or delineate the relationship between a sponsoring broker and a managing broker, broker, or a residential leasing agent, shall be construed to include an independent contractor relationship, provided that a written agreement exists that clearly establishes and states the relationship.

"Escrow moneys" means all moneys, promissory notes, or any other type or manner of legal tender or financial consideration deposited with any person for the benefit of the parties to the transaction. A transaction exists once an agreement has been reached and an accepted real estate contract signed or lease agreed to by the parties. "Escrow moneys" includes, without limitation, earnest moneys and security deposits, except those security deposits in which the person holding the security deposit is also the sole owner of the property being leased and for which the security deposit is being held.

"Electronic means of proctoring" means a methodology providing assurance that the person taking a test and completing the answers to questions is the person seeking licensure or credit for continuing education and is doing so without the aid of a third party or other device.

"Exclusive brokerage agreement" means a written brokerage agreement that provides that the sponsoring broker has the sole right, through one or more sponsored licensees, to act as the exclusive agent or representative of the client and that meets the requirements of Section 15-75 of this Act.

"Inactive" means a status of licensure where the licensee holds a current license under this Act, but the licensee is prohibited from engaging in licensed activities because the licensee is unsponsored or the license of the sponsoring broker with whom the licensee is associated or by whom the licensee is employed is currently expired, revoked, suspended, or otherwise rendered invalid under this Act. The license of any business entity that is not in good standing with the Illinois Secretary of State, or is not authorized to conduct business in Illinois, shall immediately become inactive and that entity shall be prohibited from engaging in any licensed activities.

"Leads" means the name or names of a potential buyer, seller, lessor, lessee, or client of a licensee.

"License" means the privilege conferred by the Department to a person that has fulfilled all requirements prerequisite to any type of licensure under this Act.

"Licensed activities" means those activities listed in the definition of "broker" under this Section.

"Licensee" means any person licensed under this Act.

"Listing presentation" means any communication, written or oral and by any means or media, between a managing broker or broker and a consumer in which the licensee is attempting to secure a brokerage agreement with the consumer to market the consumer's real estate for sale or lease.

"Managing broker" means a licensee who may be authorized to assume responsibilities as a designated managing broker for licensees in one or, in the case of a multi-office company, more than one office, upon appointment by the sponsoring broker and registration with the Department. A managing broker may act as one's own sponsor.

"Medium of advertising" means any method of communication intended to influence the general public to use or purchase a particular good or service or real estate, including, but not limited to, print, electronic, social media, and digital forums.

"Non-exclusive brokerage agreement" means a written brokerage agreement that provides that the sponsoring broker has the non-exclusive right, through one or more sponsored licensees, to act as an agent or representative of the client for the performance of licensed activities and meets the requirements of Section 15-50 of this Act.

"Office" means a broker's place of business where the general public is invited to transact business and where records may be maintained and licenses readily available, whether or not it is the broker's principal place of business.

"Person" means and includes individuals, entities, corporations, limited liability companies, registered limited liability partnerships, foreign and domestic partnerships, and other business entities, except that when the context otherwise requires, the term may refer to a single individual or other described entity.

"Proctor" means any person, including, but not limited to, an instructor, who has a written agreement to administer examinations fairly and impartially with a licensed education provider.

"Real estate" means and includes leaseholds as well as any other interest or estate in land, whether corporeal, incorporeal, freehold, or non-freehold and whether the real estate is situated in this State or elsewhere. "Real estate" does not include property sold, exchanged, or leased as a timeshare or similar vacation item or interest, vacation club membership, or other activity formerly regulated under the Real Estate Timeshare Act of 1999 (repealed).

"Regular employee" means a person working an average of 20 hours per week for a person or entity who would be considered as an employee under the Internal Revenue Service rules for classifying workers.

"Renewal period" means the period beginning 90 days prior to the expiration date of a license.

"Residential leasing agent" means a person who is employed by a broker to engage in licensed activities limited to leasing residential real estate who has obtained a license as provided for in Section 5-5 of this Act.

"Secretary" means the Secretary of the Department of Financial and Professional Regulation, or a person authorized by the Secretary to act in the Secretary's stead.

"Sponsoring broker" means the broker who certifies to the Department the broker's sponsorship of a licensed managing broker, broker, or a residential leasing agent.

"Sponsorship" means that a sponsoring broker has certified to the Department that a managing broker, broker, or residential leasing agent is employed by or associated by written agreement with the sponsoring broker and the Department has registered the sponsorship, as provided for in Section 5-40 of this Act.

"Team" means any 2 or more licensees who work together to provide real estate brokerage services, represent themselves to the public as being part of a team or group, are identified by a team name that is different than their sponsoring broker's name, and together are supervised by the same managing broker and sponsored by the same sponsoring broker. "Team" does not mean a separately organized, incorporated, or legal entity.

(Source: P.A. 102-970, eff. 5-27-22; 103-236, eff. 1-1-24.)

(225 ILCS 454/5-20)

(Section scheduled to be repealed on January 1, 2030)

Sec. 5-20. Exemptions from managing broker, broker, or residential leasing agent license requirement; Department exemption from education provider and related licenses. The requirement for holding a license under this Article 5 shall not apply to:

(1) Any person, as defined in Section 1-10, who: (A) is the that as owner or lessor of real property who performs any of the acts described in the definition of "broker" under Section 1-10 of this Act only as it relates to the owned or leased property; or (B) is with reference to property owned or leased by it, or to the regular employee who, in the course of the employee's duties and incidental to employees thereof with respect to the property so owned or leased, where such acts are performed in the regular course of or as an incident to the management, sale, or other disposition of such property and the investment of the owned or leased property performs therein, if such regular employees do not perform any of the acts described in the definition of "broker" under Section 1-10 of this Act in connection with a vocation of selling or leasing any real estate or the improvements thereon not so owned or leased. The exemption in this item (1) does not apply to the person, the person's employees, or the person's agents performing licensed activity for property not owned or leased by that person.

(2) An attorney in fact acting under a duly executed and recorded power of attorney to convey real estate from the owner or lessor or the services rendered by an attorney at law in the performance of the attorney's duty as an attorney at law.

(3) 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 testamentary trust.

(4) Any person acting as a resident manager for the owner or any employee acting as the resident manager for a broker managing an apartment building, duplex, or apartment complex, when the resident manager resides on the premises, the premises is the primary residence of the resident manager, and the resident manager is engaged in the leasing of that property.

(5) Any officer or employee of a federal agency in the conduct of official duties.

(6) Any officer or employee of the State government or any political subdivision thereof performing official duties.

(7) Any multiple listing service or other similar information exchange that is engaged in the collection and dissemination of information concerning real estate available for sale, purchase, lease, or exchange for the purpose of providing licensees with a system by which licensees may cooperatively share information along with which no other licensed activities, as defined in Section 1-10 of this Act, are provided.

(8) Railroads and other public utilities regulated by the State of Illinois, or the officers or full-time employees thereof, unless the performance of any licensed activities is in connection with the sale, purchase, lease, or other disposition of real estate or investment therein that does not require the approval of the appropriate State regulatory authority.

(9) Any medium of advertising in the routine course of selling or publishing advertising along with which no other licensed activities, as defined in Section 1-10 of this Act, are provided.

(10) Any resident lessee of a residential dwelling unit who refers for compensation to the owner of the dwelling unit, or to the owner's agent, prospective lessees of dwelling units in the same building or complex as the resident lessee's unit, but only if the resident lessee (i) refers no more than 3 prospective lessees in any 12-month period, (ii) receives compensation of no more than $5,000 or the equivalent of 2 months' rent, whichever is less, in any 12-month period, and (iii) limits activities to referring prospective lessees to the owner, or the owner's agent, and does not show a residential dwelling unit to a prospective lessee, discuss terms or conditions of leasing a dwelling unit with a prospective lessee, or otherwise participate in the negotiation of the leasing of a dwelling unit.

(11) The purchase, sale, or transfer of a timeshare or similar vacation item or interest, vacation club membership, or other activity formerly regulated under the Real Estate Timeshare Act of 1999 (repealed).

(12) (Blank).

(13) Any person who is licensed without examination under Section 10-25 (now repealed) of the Auction License Act is exempt from holding a managing broker's or broker's license under this Act for the limited purpose of selling or leasing real estate at auction, so long as:

(A) that person has made application for said exemption by July 1, 2000;

(B) that person verifies to the Department that the person has sold real estate at auction for a period of 5 years prior to licensure as an auctioneer;

(C) the person has had no lapse in the licensure as an auctioneer; and

(D) the license issued under the Auction License Act has not been disciplined for violation of those provisions of Article 20 of the Auction License Act dealing with or related to the sale or lease of real estate at auction.

(14) A person who holds a valid license under the Auction License Act and a valid real estate auction certification and conducts auctions for the sale of real estate under Section 5-32 of this Act.

(15) A hotel operator who is registered with the Illinois Department of Revenue and pays taxes under the Hotel Operators' Occupation Tax Act and rents a room or rooms in a hotel as defined in the Hotel Operators' Occupation Tax Act for a period of not more than 30 consecutive days and not more than 60 days in a calendar year or a person who participates in an online marketplace enabling persons to rent out all or part of the person's owned residence.

(16) Notwithstanding any provisions to the contrary, the Department and its employees shall be exempt from education, course provider, instructor, and course license requirements and fees while acting in an official capacity on behalf of the Department. Courses offered by the Department shall be eligible for continuing education credit.

(Source: P.A. 103-236, eff. 1-1-24.)

(225 ILCS 454/5-25)

(Section scheduled to be repealed on January 1, 2030)

Sec. 5-25. Good moral character.

(a) When an applicant has had a license revoked on a prior occasion or when an applicant is found to have committed any of the practices enumerated in Section 20-20 of this Act or when an applicant has been convicted of or enters a plea of guilty or nolo contendere to forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any other similar offense or offenses or has been convicted of a felony involving moral turpitude in any court of competent jurisdiction in this or any other state, district, or territory of the United States or of a foreign country, the Department Board may consider the prior revocation, conduct, or conviction in its determination of the applicant's moral character and whether to grant the applicant a license.

(b) In its consideration of the prior revocation, conduct, or conviction, the Department Board shall take into account the nature of the conduct, any aggravating or extenuating circumstances, the time elapsed since the revocation, conduct, or conviction, the rehabilitation or restitution performed by the applicant, mitigating factors, and any other factors that the Department Board deems relevant, including, but not limited to:

(1) the lack of direct relation of the offense for which the applicant was previously convicted to the duties, functions, and responsibilities of the position for which a license is sought;

(2) unless otherwise specified, whether 5 years since a felony conviction or 3 years since release from confinement for the conviction, whichever is later, have passed without a subsequent conviction;

(3) if the applicant was previously licensed or employed in this State or other states or jurisdictions, the lack of prior misconduct arising from or related to the licensed position or position of employment;

(4) the age of the person at the time of the criminal offense;

(5) if, due to the applicant's criminal conviction history, the applicant would be explicitly prohibited by federal rules or regulations from working in the position for which a license is sought;

(6) successful completion of sentence and, for applicants serving a term of parole or probation, a progress report provided by the applicant's probation or parole officer that documents the applicant's compliance with conditions of supervision;

(7) evidence of the applicant's present fitness and professional character;

(8) evidence of rehabilitation or rehabilitative effort during or after incarceration, or during or after a term of supervision, including, but not limited to, a certificate of good conduct under Section 5-5.5-25 of the Unified Code of Corrections or a certificate of relief from disabilities under Section 5-5.5-10 of the Unified Code of Corrections; and

(9) any other mitigating factors that contribute to the person's potential and current ability to perform the job duties.

(c) The Department shall not require applicants to report the following information and shall not consider the following criminal history records in connection with an application for licensure or registration:

(1) juvenile adjudications of delinquent minors as defined in Section 5-105 of the Juvenile Court Act of 1987 subject to the restrictions set forth in Section 5-130 of that Act;

(2) law enforcement records, court records, and conviction records of an individual who was 17 years old at the time of the offense and before January 1, 2014, unless the nature of the offense required the individual to be tried as an adult;

(3) records of arrests not followed by a charge or conviction;

(4) records of arrests where the charges were dismissed unless related to the practice of the profession; however, applicants shall not be asked to report any arrests, and an arrest not followed by a conviction shall not be the basis of a denial and may be used only to assess an applicant's rehabilitation;

(5) convictions overturned by a higher court; or

(6) convictions or arrests that have been sealed or expunged.

(d) If an applicant makes a false statement of material fact on the application, the false statement may in itself be sufficient grounds to revoke or refuse to issue a license.

(e) A licensee shall report to the Department, in a manner prescribed by the Department and within 30 days after the occurrence of: (1) any conviction of or plea of guilty, or nolo contendere to forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any similar offense or offenses or any conviction of a felony involving moral turpitude; (2) the entry of an administrative sanction by a government agency in this State or any other jurisdiction that has as an essential element of dishonesty or fraud or involves larceny, embezzlement, or obtaining money, property, or credit by false pretenses; or (3) any conviction of or plea of guilty or nolo contendere to a crime that subjects the licensee to compliance with the requirements of the Sex Offender Registration Act.

(Source: P.A. 101-357, eff. 8-9-19; 102-970, eff. 5-27-22.)

(225 ILCS 454/5-28)

(Section scheduled to be repealed on January 1, 2030)

Sec. 5-28. Requirements for licensure as a managing broker.

(a) Every applicant for licensure as a managing broker must meet the following qualifications:

(1) be at least 20 years of age;

(2) be of good moral character;

(3) have been licensed at least 2 consecutive years out of the preceding 3 years as a broker;

(4) successfully complete a 4-year course of study in high school or secondary school approved by the state in which the school is located, or a State of Illinois High School Diploma, which shall be verified under oath by the applicant;

(5) provide satisfactory evidence of having completed at least 165 hours, 120 of which shall be those hours required pre-licensure and post-licensure to obtain a broker's license, and 45 additional hours completed within the year immediately preceding the filing of an application for a managing broker's license, which hours shall focus on brokerage administration and management and residential leasing agent management and include at least 15 hours in the classroom or by live, interactive webinar or online distance education courses;

(6) personally take and pass a written examination on Illinois specific real estate brokerage laws authorized by the Department; and

(7) submit a valid application for issuance of a license accompanied by the fees specified by rule.

(b) The requirements specified in item (5) of subsection (a) of this Section do not apply to applicants who are currently admitted to practice law by the Supreme Court of Illinois and are currently in active standing.

(Source: P.A. 101-357, eff. 8-9-19; 102-1100, eff. 1-1-23.)

(225 ILCS 454/5-35)

(Section scheduled to be repealed on January 1, 2030)

Sec. 5-35. Examination; managing broker, broker, or residential leasing agent.

(a) The Department shall authorize examinations at such times and places as it may designate. The examination shall be of a character to give a fair test of the qualifications of the applicant to practice as a managing broker, broker, or residential leasing agent. Applicants for examination as a managing broker, broker, or residential leasing agent shall be required to pay, either to the Department or the designated testing service, a fee covering the cost of providing the examination. Failure to appear for the examination on the scheduled date, at the time and place specified, after the applicant's application for examination has been received and acknowledged by the Department or its designated testing service, shall result in the forfeiture of the examination fee. An applicant shall be eligible to take the examination only after successfully completing the education requirements and attaining the minimum age provided for in Article 5 of this Act. Approved pre-license education, as prescribed by this Act for licensure as a managing broker, broker, or residential leasing agent, shall be valid for 2 years after the date of satisfactory completion of all required pre-license education. Each applicant shall be required to establish compliance with the eligibility requirements in the manner provided by the rules promulgated for the administration of this Act.

(b) If a person who has received a passing score on the written examination described in this Section fails to submit an application and meet all requirements for a license under this Act within one year after receiving a passing score on the examination, credit for the examination shall terminate. The person thereafter may make a new application for examination.

(c) If an applicant has failed an examination 4 consecutive times, the applicant must repeat the pre-license education required to sit for that examination. For the purposes of this Section, the fifth attempt shall be the same as the first, and the applicant must complete a new application for examination. Approved education, as prescribed by this Act for licensure as a managing broker, broker, or residential leasing agent, shall be valid for 2 years after the date of satisfactory completion of the education.

(d) The Department may employ consultants for the purposes of preparing and conducting examinations.

(e) Each applicant shall establish the applicant's compliance with the eligibility requirements in the manner provided by the rules adopted for the administration of this Act.

(Source: P.A. 101-357, eff. 8-9-19.)

(225 ILCS 454/5-45)

(Section scheduled to be repealed on January 1, 2030)

Sec. 5-45. Offices.

(a) If a sponsoring broker maintains more than one office within the State, the sponsoring broker shall notify the Department in a manner prescribed by the Department for each office other than the sponsoring broker's principal place of business. The brokerage license shall be displayed conspicuously in each office. The name of each branch office shall be the same as that of the sponsoring broker's principal office or shall clearly delineate the office's relationship with the principal office.

(b) The sponsoring broker shall name a designated managing broker for each office and the sponsoring broker shall be responsible for supervising all designated managing brokers. The sponsoring broker shall notify the Department in a manner prescribed by the Department of the name of all designated managing brokers of the sponsoring broker and the office or offices they manage. Any changes in designated managing brokers shall be reported to the Department in a manner prescribed by the Department within 15 days of the change. Failure to do so shall subject the sponsoring broker to discipline under Section 20-20 of this Act.

(c) The sponsoring broker shall, within 24 hours, notify the Department in a manner prescribed by the Department of any opening, closing, or change in location of any office.

(d) Except as provided in this Section, each sponsoring broker shall maintain an office, or place of business within this State for the transaction of real estate business, shall conspicuously display an identification sign on the outside of the physical office of adequate size and visibility. Any record required by this Act to be created or maintained shall be, in the case of a physical record, securely stored and accessible for inspection by the Department at the sponsoring broker's principal office and, in the case of an electronic record, securely stored in the format in which it was originally generated, sent, or received and accessible for inspection by the Department by secure electronic access to the record. Any record relating to a transaction of a special account shall be maintained for a minimum of 5 years, and any electronic record shall be backed up at least monthly. The physical office or place of business shall not be located in any retail or financial business establishment unless it is clearly separated from the other business and is situated within a distinct area within the establishment.

(e) A nonresident broker who is licensed in this State by examination or pursuant to the provisions of Section 5-60 or 5-60.5 of this Act shall not be required to maintain a definite office or place of business in this State so long as the broker provided all of the following conditions are met:

(1) the broker maintains an active broker's license in the broker's other state of licensure domicile;

(2) the broker maintains an office in the broker's other state of licensure domicile; and

(3) files the broker has filed with the Department written statements appointing the Secretary to act as the broker's agent upon whom all judicial and other process or legal notices directed to the licensee may be served and agreeing to abide by all of the provisions of this Act with respect to the broker's real estate activities within the State of Illinois and submitting to the jurisdiction of the Department.

The statements under subdivision (3) of this Section shall be in form and substance the same as those statements required under Section 5-60 of this Act and shall operate to the same extent.

(f) The Department may adopt rules to regulate the operation of virtual offices that do not have a fixed location. A broker who qualifies under subsection (e) of this Section may also operate a virtual office in the State subject to all requirements of this Act and the rules adopted under this Act.

(Source: P.A. 101-357, eff. 8-9-19; 102-970, eff. 5-27-22.)

(225 ILCS 454/5-60)

(Section scheduled to be repealed on January 1, 2030)

Sec. 5-60. Managing broker licensed in another state; broker licensed in another state; reciprocal agreements; agent for service of process.

(a) A managing broker's license may be issued by the Department to a managing broker or its equivalent licensed under the laws of another state of the United States, under the following conditions:

(1) the managing broker holds a managing broker's license in a state that has entered into a reciprocal agreement with the Department;

(2) the standards for that state for licensing as a managing broker are substantially equal to or greater than the minimum standards in the State of Illinois;

(3) the managing broker has been actively practicing as a managing broker in the managing broker's state of licensure for a period of not less than 2 years, immediately prior to the date of application;

(4) the managing broker furnishes the Department with a statement under seal of the proper licensing authority of the state in which the managing broker is licensed showing that the managing broker has an active managing broker's license, that the managing broker is in good standing, and any disciplinary action taken against the managing broker in that state;

(5) the managing broker passes a test on Illinois specific real estate brokerage laws; and

(6) the managing broker was licensed by an examination in the state that has entered into a reciprocal agreement with the Department.

(b) A broker's license may be issued by the Department to a broker or its equivalent licensed under the laws of another state of the United States, under the following conditions:

(1) the broker holds a broker's license in a state that has entered into a reciprocal agreement with the Department;

(2) the standards for that state for licensing as a broker are substantially equivalent to or greater than the minimum standards in the State of Illinois;

(3) (blank);

(4) the broker furnishes the Department with a statement under seal of the proper licensing authority of the state in which the broker is licensed showing that the broker has an active broker's license, that the broker is in good standing, and any disciplinary action taken against the broker in that state;

(5) the broker passes a test on Illinois specific real estate brokerage laws; and

(6) the broker was licensed by an examination in a state that has entered into a reciprocal agreement with the Department.

(c) (Blank).

(d) As a condition precedent to the issuance of a license to a managing broker or broker pursuant to this Section, the managing broker or broker shall agree in writing to abide by all the provisions of this Act with respect to real estate activities within the State of Illinois and submit to the jurisdiction of the Department as provided in this Act. The agreement shall be filed with the Department and shall remain in force for so long as the managing broker or broker is licensed by this State and thereafter with respect to acts or omissions committed while licensed as a managing broker or broker in this State.

(e) The Prior to the issuance of any license to any managing broker or broker pursuant to this Section, verification of active licensure issued for the conduct of such business in any other state must be filed with the Department by the managing broker or broker, and the same fees must be paid as provided in this Act for the obtaining of a managing broker's or broker's license in this State.

(f) Licenses previously granted under reciprocal agreements with other states shall remain in force so long as the Department has a reciprocal agreement with the state that includes the requirements of this Section, unless that license is suspended, revoked, or terminated by the Department for any reason provided for suspension, revocation, or termination of a resident licensee's license. Licenses granted under reciprocal agreements may be renewed in the same manner as a resident's license.

(g) Prior to the issuance of a license to a nonresident managing broker or broker, the managing broker or broker shall file with the Department, in a manner prescribed by the Department, a designation in writing that appoints the Secretary to act as agent upon whom all judicial and other process or legal notices directed to the managing broker or broker may be served. Service upon the agent so designated shall be equivalent to personal service upon the licensee. Copies of the appointment, certified by the Secretary, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted. In the written designation, the managing broker or broker shall agree that any lawful process against the licensee that is served upon the agent shall be of the same legal force and validity as if served upon the licensee and that the authority shall continue in force so long as any liability remains outstanding in this State. Upon the receipt of any process or notice, the Secretary shall forthwith deliver a copy of the same by regular mail or email to the last known business address or email address of the licensee.

(h) (Blank). Any person holding a valid license under this Section shall be eligible to obtain a managing broker's license or a broker's license without examination should that person change their state of domicile to Illinois and that person otherwise meets the qualifications for licensure under this Act.

(i) This Section is repealed on January 1, 2026.

(Source: P.A. 103-236, eff. 1-1-24.)

(225 ILCS 454/5-60.1 new)

Sec. 5-60.1. Applications for licensure based upon reciprocal agreements. On and after January 1, 2026 (the repeal date of Section 5-60), applications for licensure based upon reciprocal agreements shall not be accepted. Licenses granted under reciprocal agreements prior to January 1, 2026 shall remain in force and may be renewed in the same manner as provided for a broker or managing broker license under Section 5-50 of this Act and by rule.

(225 ILCS 454/5-60.5 new)

Sec. 5-60.5. Managing broker licensed in another state; broker licensed in another state; endorsement requirements; agent for service of process.

(a) A managing broker's license may be issued by the Department to a managing broker or its equivalent licensed under the laws of another state or jurisdiction of the United States under the following conditions:

(1) the managing broker holds an active managing broker's license or its equivalent in another state or jurisdiction;

(2) the managing broker has been actively practicing as a managing broker or its license equivalent in the managing broker's state or jurisdiction of licensure for a period of not less than 2 years immediately prior to the date of application;

(3) the managing broker furnishes the Department with an official statement from the proper licensing authority of each state or jurisdiction in which the managing broker is licensed certifying (i) that the managing broker has an active license, (ii) that the managing broker is in good standing, and (iii) any history of discipline against the managing broker in that state or jurisdiction of licensure;

(4) the managing broker passes a test on Illinois specific real estate brokerage laws; and

(5) the managing broker provides proof of successful completion of a pre-license endorsement course approved by the Department.

(b) A broker's license may be issued by the Department to a broker or its equivalent licensed under the laws of another state or jurisdiction of the United States under the following conditions:

(1) the broker holds an active broker's license or its equivalent in another state or jurisdiction;

(2) the broker furnishes the Department with an official statement from the proper licensing authority of each state or jurisdiction in which the broker is licensed certifying (i) whether the broker has an active license, (ii) that the broker is in good standing, and (iii) any history of discipline against the broker in that state or jurisdiction of licensure;

(3) the broker passes a test on Illinois specific real estate brokerage laws;

(4) the broker provides proof of successful completion of a pre-license endorsement course approved by the Department; and

(5) if the broker has been actively practicing as a broker or its license equivalent in any other state or jurisdiction for less than 2 years immediately prior to the date of application, the broker must complete the 45 hours of post-license broker education prescribed in this Act and by rule.

(c) As a condition precedent to the issuance of a license to a managing broker or broker pursuant to this Section, the managing broker or broker shall agree to abide by all the provisions of this Act with respect to managing broker's or broker's real estate activities within the State of Illinois and submit to the jurisdiction of the Department as provided in this Act. The agreement shall remain in force for so long as the managing broker or broker is licensed by this State and thereafter with respect to acts or omissions committed while licensed in this State.

(d) Prior to the issuance of a license to a nonresident managing broker or broker, the managing broker or broker shall file with the Department a designation in writing that appoints the Secretary to act as the managing broker's or broker's agent upon whom all judicial and other process or legal notices directed to the managing broker or broker may be served. Service upon the Secretary shall be equivalent to personal service upon the licensee. Copies of the appointment, certified by the Secretary, shall be deemed sufficient evidence and shall be admitted into evidence with the same force and effect as if the original is admitted.

(e) The same fees must be paid as provided in this Act for obtaining a managing broker's or broker's license in this State.

(f) In the written designation, the managing broker or broker shall agree that any lawful process against the licensee that is served upon the agent shall be of the same legal force and validity as if served upon the licensee and that the authority shall continue in force so long as any liability remains outstanding in this State. Upon the receipt of any process or notice, the Secretary shall deliver a copy of the same by regular mail or email to the mailing address or email address of record of the licensee.

(225 ILCS 454/5-70)

(Section scheduled to be repealed on January 1, 2030)

Sec. 5-70. Continuing education requirement; managing broker or broker.

(a) The requirements of this Section apply to all managing brokers and brokers.

(b) Except as otherwise provided in this Section, each person who applies for renewal of a license as a managing broker or broker must successfully complete 12 hours of real estate continuing education courses recommended by the Board and approved by the Department during the current term of the license. In addition, those licensees renewing or obtaining a managing broker's license must successfully complete a 12-hour broker management continuing education course approved by the Department during the current term of the license. The broker management continuing education course must be completed in the classroom, or through a live, interactive webinar, or in an online distance education format. No license may be renewed except upon the successful completion of the required courses or their equivalent or upon a waiver of those requirements for good cause shown as determined by the Secretary upon the recommendation of the Board. The requirements of this Article are applicable to all managing brokers and brokers except those managing brokers and brokers who, during the current term of licensure:

(1) serve in the armed services of the United States;

(2) serve as an elected State or federal official;

(3) serve as a full-time employee of the Department; or

(4) are admitted to practice law pursuant to Illinois Supreme Court rule.

(c) (Blank).

(d) A person receiving an initial license during the 90 days before the renewal date shall not be required to complete the continuing education courses provided for in subsection (b) of this Section as a condition of initial license renewal.

(e) The continuing education requirement for brokers and managing brokers shall consist of a single core curriculum, which must include at least 2 credit hours of fair housing training, and an elective curriculum, to be recommended by the Board and approved by the Department in accordance with this subsection. With the exception of the fair housing training, the The core curriculum shall not be further divided into subcategories or divisions of instruction. The core curriculum shall consist of 6 total 4 hours during the current term of the license on subjects that may include, but are not limited to, advertising, agency, disclosures, escrow, fair housing, residential leasing agent management, and license law, and must include at least 2 credit hours of fair housing training. The amount of time allotted to each of the remaining these subjects shall be recommended by the Board and determined by the Department.

The Department, upon the recommendation of the Board, shall review the core curriculum every 4 years, at a minimum, and shall revise the curriculum if necessary. However, the core curriculum's total hourly requirement shall only be subject to change by amendment of this subsection, and any change to the core curriculum shall not be effective for a period of 6 months after such change is made by the Department. The Department shall provide notice to all approved education providers of any changes to the core curriculum. When determining whether revisions of the core curriculum's subjects or specific time requirements are necessary, the Board shall consider recent changes in applicable laws, new laws, and areas of the license law and the Department policy that the Board deems appropriate, and any other subject areas the Board deems timely and applicable in order to prevent violations of this Act and to protect the public. In establishing a recommendation to the Department regarding the elective curriculum, the Board shall consider subjects that cover the various aspects of the practice of real estate that are covered under the scope of this Act.

(f) The subject areas of continuing education courses recommended by the Board and approved by the Department shall be meant to protect the professionalism of the industry, the consumer, and the public and prevent violations of this Act and may include, without limitation, the following:

(1) license law and escrow;

(2) antitrust;

(3) fair housing;

(4) agency;

(5) appraisal;

(6) property management;

(7) residential brokerage;

(8) farm property management;

(9) transaction management rights and duties of parties in a transaction;

(10) commercial brokerage and leasing;

(11) real estate financing;

(12) disclosures;

(13) residential leasing agent management;

(14) advertising;

(15) broker supervision and designated managing broker responsibility;

(16) professional conduct; and

(17) use of technology; and .

(18) diversity, equity, and inclusion.

(g) In lieu of credit for those courses listed in subsection (f) of this Section, credit may be earned for serving as a licensed instructor in an approved course of continuing education. The amount of credit earned for teaching a course shall be the amount of continuing education credit for which the course is approved for licensees taking the course.

(h) Credit hours may be earned for self-study programs approved by the Department.

(i) A managing broker or broker may earn credit for a specific continuing education course only once during the current term of the license.

(j) No more than 12 hours of continuing education credit may be taken in one calendar day.

(k) To promote the offering of a uniform and consistent course content, the Department may provide for the development of a single broker management course to be offered by all education providers who choose to offer the broker management continuing education course. The Department may contract for the development of the 12-hour broker management continuing education course with an outside vendor or consultant and, if the course is developed in this manner, the Department or the outside consultant shall license the use of that course to all approved education providers who wish to provide the course.

(l) Except as specifically provided in this Act, continuing education credit hours may not be earned for completion of pre-license or post-license courses. The courses comprising the approved 45-hour post-license curriculum for broker licensees shall satisfy the continuing education requirement for the initial broker license term. The approved 45-hour managing broker pre-license brokerage administration and management course shall satisfy the 12-hour broker management continuing education requirement for the initial managing broker license term.

(Source: P.A. 101-357, eff. 8-9-19; 102-970, eff. 5-27-22.)

(225 ILCS 454/10-10)

(Section scheduled to be repealed on January 1, 2030)

Sec. 10-10. Disclosure of compensation.

(a) A licensee must disclose to a client the sponsoring broker's compensation and policy, including the terms of compensation and any amounts offered with regard to cooperating with brokers who represent other parties in a transaction.

(b) A licensee must disclose to a client all sources of compensation related to the transaction received by the licensee from a third party.

(c) If a licensee refers a client to a third party in which the licensee has greater than a 1% ownership interest or from which the licensee receives or may receive dividends or other profit sharing distributions, other than a publicly held or traded company, for the purpose of the client obtaining services related to the transaction, then the licensee shall disclose that fact to the client at the time of making the referral.

(d) If in any one transaction a sponsoring broker receives compensation from both the buyer and seller or lessee and lessor of real estate, the sponsoring broker shall disclose in writing to a client the fact that the compensation is being paid by both buyer and seller or lessee and lessor.

(e) Nothing in the Act shall prohibit the cooperation with or a payment of compensation to an individual domiciled in any other state or country who is licensed as a broker in that individual's his or her state or country of domicile or to a resident of a country that does not require a person to be licensed to act as a broker if the person complies with the laws of the country in which that person resides and practices there as a broker.

(Source: P.A. 101-357, eff. 8-9-19.)

(225 ILCS 454/10-20)

(Section scheduled to be repealed on January 1, 2030)

Sec. 10-20. Sponsoring broker; employment agreement.

(a) A licensee may perform activities as a licensee only for the licensee's his or her sponsoring broker. A licensee must have only one sponsoring broker at any one time.

(b) Every broker who employs licensees or has an independent contractor relationship with a licensee shall have a written employment or independent contractor agreement with each such licensee. The broker having this written employment or independent contractor agreement with the licensee must be that licensee's sponsoring broker.

(c) Every sponsoring broker must have a written employment or independent contractor agreement with each licensee the broker sponsors. The agreement shall address the employment or independent contractor relationship terms, including without limitation supervision, duties, compensation, and termination process.

(d) (Blank).

(d-5) If a written agreement provides for an independent contractor relationship that clearly states and establishes that relationship, the specific provisions of this Act shall control for licensee's conduct of brokerage activities.

(e) Notwithstanding the fact that a sponsoring broker has an employment or independent contractor agreement with a licensee, a sponsoring broker may pay compensation directly to a business entity solely owned by that licensee that has been formed for the purpose of receiving compensation earned by the licensee. A business entity that receives compensation from a sponsoring broker as provided for in this subsection (e) shall not be required to be licensed under this Act and must either be owned solely by the licensee or by the licensee together with the licensee's spouse, but only if the spouse and licensee are both licensed and sponsored by the same sponsoring broker or the spouse is not also licensed.

(Source: P.A. 100-831, eff. 1-1-19; 101-357, eff. 8-9-19.)

(225 ILCS 454/15-35)

(Section scheduled to be repealed on January 1, 2030)

Sec. 15-35. Agency relationship disclosure.

(a) A licensee acting as a designated agent shall advise a consumer in writing, no later than beginning to work as a designated agent on behalf of the consumer, of the following:

(1) That a designated agency relationship exists, unless there is written agreement between the sponsoring broker and the consumer providing for a different agency relationship; and

(2) The name or names of the designated agent or agents on the written disclosure, which must can be included as part of in a brokerage agreement or be a separate document, a copy of which is retained by the sponsoring broker for the licensee and company records, and a copy of which must be provided to the consumer or client.

(b) The licensee representing the consumer shall discuss with the consumer the sponsoring broker's compensation and policy, including the terms of compensation and any amounts offered with regard to cooperating with brokers who represent other parties in a transaction.

(c) A licensee shall disclose in writing to a customer that the licensee is not acting as the agent of the customer at a time intended to prevent disclosure of confidential information from a customer to a licensee, but in no event later than the preparation of an offer to purchase or lease real property.

(Source: P.A. 101-357, eff. 8-9-19; 102-970, eff. 5-27-22.)

(225 ILCS 454/15-50)

(Section scheduled to be repealed on January 1, 2030)

Sec. 15-50. Brokerage agreements; designated Designated agency.

(a) A sponsoring broker entering into a brokerage relationship an agreement with any person for the listing of property or for the purpose of representing any person in the buying, selling, exchanging, renting, or leasing of real estate shall set forth the terms of that relationship in a written brokerage agreement. The brokerage agreement shall specifically designate those licensees employed by or affiliated with the sponsoring broker who will be acting as legal agents of that person to the exclusion of all other licensees employed by or affiliated with the sponsoring broker. A sponsoring broker entering into an agreement under the provisions of this Section shall not be considered to be acting for more than one party in a transaction if the licensees are specifically designated as legal agents of a person and are not representing more than one party in a transaction.

(a-5) Nothing in this Section prevents a client from seeking to enforce an oral agreement. The absence of a written agreement does not create an affirmative defense (i) to the existence, or lack thereof, of an agreement between the parties; or (ii) as to whether licensed activity was performed under this Act. This Section does not prevent a court from imposing legal or equitable remedies.

(b) A sponsoring broker designating affiliated licensees to act as agents of clients shall take ordinary and necessary care to protect confidential information disclosed by a client to the his or her designated agent.

(c) A designated agent may disclose to the designated agent's 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. Confidential information shall not be disclosed by the sponsoring broker or other specified representative of the sponsoring broker unless otherwise required by this Act or requested or permitted by the client who originally disclosed the confidential information.

(Source: P.A. 101-357, eff. 8-9-19.)

(225 ILCS 454/20-20)

(Section scheduled to be repealed on January 1, 2030)

Sec. 20-20. Nature of and grounds for discipline.

(a) The Department may refuse to issue or renew a license, may place on probation, suspend, or revoke any license, reprimand, or take any other disciplinary or non-disciplinary action as the Department may deem proper and impose a fine not to exceed $25,000 for each violation upon any licensee or applicant under this Act or any person who holds oneself out as an applicant or licensee or against a licensee in handling one's own property, whether held by deed, option, or otherwise, for any one or any combination of the following causes:

(1) Fraud or misrepresentation in applying for, or procuring, a license under this Act or in connection with applying for renewal of a license under this Act.

(2) The licensee's conviction of or plea of guilty or plea of nolo contendere, as set forth in subsection (e) of Section 5-25, to: (A) a felony or misdemeanor in this State or any other jurisdiction; (B) the entry of an administrative sanction by a government agency in this State or any other jurisdiction; or (C) any conviction of or plea of guilty or plea of nolo contendere to a any crime that subjects the licensee to compliance with the requirements of the Sex Offender Registration Act.

(3) Inability to practice the profession with reasonable judgment, skill, or safety as a result of a physical illness, mental illness, or disability.

(4) Practice under this Act as a licensee in a retail sales establishment from an office, desk, or space that is not separated from the main retail business and located within a separate and distinct area within the establishment.

(5) Having been disciplined by another state, the District of Columbia, a territory, a foreign nation, or a governmental agency authorized to impose discipline if at least one of the grounds for that discipline is the same as or the equivalent of one of the grounds for which a licensee may be disciplined under this Act. A certified copy of the record of the action by the other state or jurisdiction shall be prima facie evidence thereof.

(6) Engaging in the practice of real estate brokerage without a license or after the licensee's license or temporary permit was expired or while the license was inactive, revoked, or suspended.

(7) Cheating on or attempting to subvert the Real Estate License Exam or a continuing education course or examination.

(8) Aiding or abetting an applicant to subvert or cheat on the Real Estate License Exam or continuing education exam administered pursuant to this Act.

(9) Advertising that is inaccurate, misleading, or contrary to the provisions of the Act.

(10) Making any substantial misrepresentation or untruthful advertising.

(11) Making any false promises of a character likely to influence, persuade, or induce.

(12) Pursuing a continued and flagrant course of misrepresentation or the making of false promises through licensees, employees, agents, advertising, or otherwise.

(13) Any misleading or untruthful advertising, or using any trade name or insignia of membership in any real estate organization of which the licensee is not a member.

(14) Acting for more than one party in a transaction without providing written notice to all parties for whom the licensee acts.

(15) Representing or attempting to represent, or performing licensed activities for, a broker other than the sponsoring broker.

(16) Failure to account for or to remit any moneys or documents coming into the licensee's possession that belong to others.

(17) Failure to maintain and deposit in a special account, separate and apart from personal and other business accounts, all escrow moneys belonging to others entrusted to a licensee while acting as a broker, escrow agent, or temporary custodian of the funds of others or failure to maintain all escrow moneys on deposit in the account until the transactions are consummated or terminated, except to the extent that the moneys, or any part thereof, shall be:

(A) disbursed prior to the consummation or termination (i) in accordance with the written direction of the principals to the transaction or their duly authorized agents, (ii) in accordance with directions providing for the release, payment, or distribution of escrow moneys contained in any written contract signed by the principals to the transaction or their duly authorized agents, or (iii) pursuant to an order of a court of competent jurisdiction; or

(B) deemed abandoned and transferred to the Office of the State Treasurer to be handled as unclaimed property pursuant to the Revised Uniform Unclaimed Property Act. Escrow moneys may be deemed abandoned under this subparagraph (B) only: (i) in the absence of disbursement under subparagraph (A); (ii) in the absence of notice of the filing of any claim in a court of competent jurisdiction; and (iii) if 6 months have elapsed after the receipt of a written demand for the escrow moneys from one of the principals to the transaction or the principal's duly authorized agent.

The account shall 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 interest-bearing account.

(18) Failure to make available to the Department all escrow records and related documents maintained in connection with the practice of real estate within 24 hours of a request for those documents by Department personnel.

(19) Failing to furnish copies upon request of documents relating to a real estate transaction to a party who has executed that document.

(20) Failure of a sponsoring broker or licensee to timely provide sponsorship or termination of sponsorship information to the Department.

(21) Engaging in dishonorable, unethical, or unprofessional conduct of a character likely to deceive, defraud, or harm the public, including, but not limited to, conduct set forth in rules adopted by the Department.

(22) Commingling the money or property of others with the licensee's own money or property.

(23) Employing any person on a purely temporary or single deal basis as a means of evading the law regarding payment of commission to nonlicensees on some contemplated transactions.

(24) Permitting the use of one's license as a broker to enable a residential leasing agent or unlicensed person to operate a real estate business without actual participation therein and control thereof by the broker.

(25) Any other conduct, whether of the same or a different character from that specified in this Section, that constitutes dishonest dealing.

(25.5) Failing to have a written brokerage agreement between the sponsoring broker and a client for whom the designated agent is working.

(26) Displaying a "for rent" or "for sale" sign on any property without the written consent of an owner or the owner's duly authorized agent or advertising by any means that any property is for sale or for rent without the written consent of the owner or the owner's authorized agent.

(27) Failing to provide information requested by the Department, or otherwise respond to that request, within 30 days of the request.

(28) Advertising by means of a blind advertisement, except as otherwise permitted in Section 10-30 of this Act.

(29) A licensee under this Act or an unlicensed individual offering guaranteed sales plans, as defined in Section 10-50, except to the extent set forth in Section 10-50.

(30) Influencing or attempting to influence, by any words or acts, a prospective seller, purchaser, occupant, landlord, or tenant of real estate, in connection with viewing, buying, or leasing real estate, so as to promote or tend to promote the continuance or maintenance of racially and religiously segregated housing or so as to retard, obstruct, or discourage racially integrated housing on or in any street, block, neighborhood, or community.

(31) Engaging in any act that constitutes a violation of any provision of Article 3 of the Illinois Human Rights Act, whether or not a complaint has been filed with or adjudicated by the Human Rights Commission.

(32) Inducing any party to a contract of sale or lease or brokerage agreement to break the contract of sale or lease or brokerage agreement for the purpose of substituting, in lieu thereof, a new contract for sale or lease or brokerage agreement with a third party.

(33) Negotiating a sale, exchange, or lease of real estate directly with any person if the licensee knows that the person has an exclusive brokerage agreement with another broker, unless specifically authorized by that broker.

(34) When a licensee is also an attorney, acting as the attorney for either the buyer or the seller in the same transaction in which the licensee is acting or has acted as a managing broker or broker.

(35) Advertising or offering merchandise or services as free if any conditions or obligations necessary for receiving the merchandise or services are not disclosed in the same advertisement or offer. These conditions or obligations include without limitation the requirement that the recipient attend a promotional activity or visit a real estate site. As used in this subdivision (35), "free" includes terms such as "award", "prize", "no charge", "free of charge", "without charge", and similar words or phrases that reasonably lead a person to believe that one may receive or has been selected to receive something of value, without any conditions or obligations on the part of the recipient.

(36) (Blank).

(37) Violating the terms of any order issued by the Department.

(38) Paying or failing to disclose compensation in violation of Article 10 of this Act.

(39) Requiring a party to a transaction who is not a client of the licensee to allow the licensee to retain a portion of the escrow moneys for payment of the licensee's commission or expenses as a condition for release of the escrow moneys to that party.

(40) Disregarding or violating any provision of this Act or the published rules adopted by the Department to enforce this Act or aiding or abetting any individual, foreign or domestic partnership, registered limited liability partnership, limited liability company, corporation, or other business entity in disregarding any provision of this Act or the published rules adopted by the Department to enforce this Act.

(41) Failing to provide the minimum services required by Section 15-75 of this Act when acting under an exclusive brokerage agreement.

(42) Habitual or excessive use of or addiction to alcohol, narcotics, stimulants, or any other chemical agent or drug that results in a licensee's managing broker, broker, or residential leasing agent's inability to practice with reasonable skill or safety, which may result in significant harm to the public.

(43) Enabling, aiding, or abetting an auctioneer, as defined in the Auction License Act, to conduct a real estate auction in a manner that is in violation of this Act.

(44) Permitting any residential leasing agent or temporary residential leasing agent permit holder to engage in activities that require a broker's or managing broker's license.

(45) Failing to notify the Department, within 30 days after the occurrence, of the information required in subsection (e) of Section 5-25.

(46) A designated managing broker's failure to provide an appropriate written company policy or failure to perform any of the duties set forth in Section 10-55.

(47) Filing liens or recording written instruments in any county in the State on noncommercial, residential real property that relate to a broker's compensation for licensed activity under the Act.

(b) The Department may refuse to issue or renew or may suspend the license of any person who fails to file a return, pay the tax, penalty or interest shown in a filed return, or pay any final assessment of tax, penalty, or interest, as required by any tax Act administered by the Department of Revenue, until such time as the requirements of that tax Act are satisfied in accordance with subsection (g) of Section 2105-15 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

(c) (Blank).

(d) In cases where the Department of Healthcare and Family Services (formerly Department of Public Aid) has previously determined that a licensee or a potential licensee is more than 30 days delinquent in the payment of child support and has subsequently certified the delinquency to the Department may refuse to issue or renew or may revoke or suspend that person's license or may take other disciplinary action against that person based solely upon the certification of delinquency made by the Department of Healthcare and Family Services in accordance with item (5) of subsection (a) of Section 2105-15 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

(e) (Blank).

(Source: P.A. 102-970, eff. 5-27-22; 103-236, eff. 1-1-24.)

(225 ILCS 454/20-20.1)

(Section scheduled to be repealed on January 1, 2030)

Sec. 20-20.1. Citations.

(a) The Department may adopt rules to permit the issuance of citations to any licensee for failure to comply with the continuing education and post-license education requirements set forth in this Act or as adopted by rule. The citation shall be issued to the licensee, and a copy shall be sent to the licensee's designated managing broker and sponsoring broker. The citation shall contain the licensee's name and address, the licensee's license number, the number of required hours of continuing education or post-license education that have not been successfully completed by the licensee's renewal deadline, and the penalty imposed, which shall not exceed $2,000. The issuance of any such citation shall not excuse the licensee from completing all continuing education or post-license education required for that term of licensure.

(b) Service of a citation shall be made by in person, electronically, or by mail to the licensee at the licensee's address of record or email address of record, and must clearly state that if the cited licensee wishes to dispute the citation, the cited licensee may make a written request, within 30 days after the citation is served, for a hearing before the Department. If the cited licensee does not request a hearing within 30 days after the citation is served, then the citation shall become a final, non-disciplinary order shall be entered, and any fine imposed is due and payable within 30 60 days after the entry of that final order. If the cited licensee requests a hearing within 30 days after the citation is served, the Department shall afford the cited licensee a hearing conducted in the same manner as a hearing provided for in this Act for any violation of this Act and shall determine whether the cited licensee committed the violation as charged and whether the fine as levied is warranted. If the violation is found, any fine shall constitute non-public discipline and be due and payable within 30 days after the order of the Secretary, which shall constitute a final order of the Department. No change in license status may be made by the Department until such time as a final order of the Department has been issued.

(c) Payment of a fine that has been assessed pursuant to this Section shall not constitute disciplinary action reportable on the Department's website or elsewhere unless a licensee has previously received 2 or more citations and has been assessed 2 or more fines.

(d) Nothing in this Section shall prohibit or limit the Department from taking further action pursuant to this Act and rules for additional, repeated, or continuing violations.

(Source: P.A. 102-970, eff. 5-27-22; 103-236, eff. 1-1-24.)

(225 ILCS 454/20-50)

(Section scheduled to be repealed on January 1, 2030)

Sec. 20-50. Illegal discrimination. When there has been an adjudication in a civil or criminal proceeding that a licensee has illegally discriminated while engaged in any activity for which a license is required under this Act, the Department, following notice to the licensee and a hearing in accordance with the provisions of Section 20-60, and upon the recommendation of the Board as to the nature and extent of the suspension or revocation, shall, in accordance with the provisions of Section 20-64, suspend or revoke the license of that licensee in a timely manner, unless the adjudication is in the appeal process. The finding or judgment of the civil or criminal proceeding is a matter of record; the merits of which shall not be challenged in a request for a hearing by the licensee. When there has been an order in an administrative proceeding finding that a licensee has illegally discriminated while engaged in any activity for which a license is required under this Act, the Department, following notice to the licensee and a hearing in accordance with the provisions of Section 20-60, and upon the recommendation of the Board as to the nature and extent of the discipline, shall, in accordance with the provisions of Section 20-64, take one or more of the disciplinary actions provided for in Section 20-20 of this Act in a timely manner, unless the administrative order is in the appeal process. The finding of the administrative order is a matter of record; the merits of which shall not be challenged in a request for a hearing by the licensee.

(Source: P.A. 96-856, eff. 12-31-09.)

(225 ILCS 454/20-82)

(Section scheduled to be repealed on January 1, 2030)

Sec. 20-82. Fines and penalties; Real Estate License Administration Recovery Fund; Real Estate Recovery Fund. All fines and penalties collected under Section 20-20, Section 20-20.1, and otherwise under this Act by the Department shall be deposited in the Real Estate License Administration Recovery Fund and may be transferred to the Real Estate Recovery Fund in accordance with the authority set forth in Section 25-35 of this Act.

(Source: P.A. 96-856, eff. 12-31-09.)

(225 ILCS 454/25-25)

(Section scheduled to be repealed on January 1, 2030)

Sec. 25-25. Real Estate Research and Education Fund. A special fund to be known as the Real Estate Research and Education Fund is created and shall be held in trust in the State treasury. Annually, on September 15th, the State Treasurer shall cause a transfer of $125,000 to the Real Estate Research and Education Fund from the Real Estate License Administration Fund. The Real Estate Research and Education Fund shall be administered by the Department. Money deposited in the Real Estate Research and Education Fund may be used for research and for education at state institutions of higher education or other organizations for research and for education to further the advancement of education in the real estate industry or can be used by the Department for expenses related to the education of licensees. Of the $125,000 annually transferred into the Real Estate Research and Education Fund, $15,000 shall be used to fund a scholarship program for persons of historically marginalized classes and minority racial origin who wish to pursue a course of study in the field of real estate. For the purposes of this Section: ,

"Course course of study" means a course or courses that are part of a program of courses in the field of real estate designed to further an individual's knowledge or expertise in the field of real estate. These courses shall include, without limitation, courses that a broker licensed under this Act must complete to qualify for a managing broker's license, courses required to obtain the Graduate Realtors Institute designation, and any other courses or programs offered by accredited colleges, universities, or other institutions of higher education in Illinois.

"Historically marginalized classes" means a person of a race or national origin that is Native American or Alaska Native, Asian, Black or African American, Hispanic or Latino, or Native Hawaiian or Pacific Islander, or is a member of a protected class under the Illinois Human Rights Act within the context of affirmative action.

The scholarship program shall be administered by the Department or its designee. Moneys in the Real Estate Research and Education Fund may be invested and reinvested in the same manner as funds in the Real Estate Recovery Fund and all earnings, interest, and dividends received from such investments shall be deposited in the Real Estate Research and Education Fund and may be used for the same purposes as moneys transferred to the Real Estate Research and Education Fund. Moneys in the Real Estate Research and Education Fund may be transferred to the Professions Indirect Cost Fund as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois.

(Source: P.A. 103-236, eff. 1-1-24.)

(225 ILCS 454/25-30)

(Section scheduled to be repealed on January 1, 2030)

Sec. 25-30. Real Estate License Administration Fund; audit. A special fund to be known as the Real Estate License Administration Fund is created in the State Treasury. All fines, penalties, and fees received by the Department under this Act shall be deposited in the Real Estate License Administration Fund. The moneys deposited in the Real Estate License Administration Fund shall be appropriated to the Department for expenses of the Department and the Board in the administration of this Act, including, but not limited to, the maintenance and operation of the Real Estate Recovery Fund, and for the administration of any Act administered by the Department providing revenue to this Fund. Moneys in the Real Estate License Administration Fund may be invested and reinvested in the same manner as funds in the Real Estate Recovery Fund. All earnings received from such investment shall be deposited in the Real Estate License Administration Fund and may be used for the same purposes as fines, penalties, and fees deposited in the Real Estate License Administration Fund. Moneys in the Real Estate License Administration Fund may be transferred to the Professions Indirect Cost Fund as authorized under Section 2105-300 of the Department of Professional Regulation Law of the Civil Administrative Code of Illinois and to the Real Estate Recovery Fund as authorized by Section 25-35 of this Act. Upon the completion of any audit of the Department, as prescribed by the Illinois State Auditing Act, which includes an audit of the Real Estate License Administration Fund, the Department shall make the audit open to inspection by any interested person.

(Source: P.A. 96-856, eff. 12-31-09.)

(225 ILCS 454/25-35)

(Section scheduled to be repealed on January 1, 2030)

Sec. 25-35. Real Estate Recovery Fund. A special fund to be known as the Real Estate Recovery Fund is created in the State Treasury. All fines and penalties received by the Department pursuant to Article 20 of this Act shall be deposited into the State Treasury and held in the Real Estate Recovery Fund. The money in the Real Estate Recovery Fund shall be used by the Department exclusively for carrying out the purposes established by this Act. If, at any time, the balance remaining in the Real Estate Recovery Fund is less than $900,000 $750,000, the State Treasurer shall cause a transfer of moneys to the Real Estate Recovery Fund from the Real Estate License Administration Fund in an amount necessary to establish a balance of $1,000,000 $800,000 in the Real Estate Recovery Fund. If the balance in the Real Estate Recovery Fund exceeds $1,000,000, any excess funds over $1,000,000 shall be transferred to the Real Estate License Administration Fund. These funds may be invested and reinvested in the same manner as authorized for pension funds in Article 1 of the Illinois Pension Code. All earnings, interest, and dividends received from investment of funds in the Real Estate Recovery Fund shall be deposited into the Real Estate License Administration Fund and shall be used for the same purposes as other moneys deposited in the Real Estate License Administration Fund.

(Source: P.A. 96-856, eff. 12-31-09.)

(225 ILCS 454/30-5)

(Section scheduled to be repealed on January 1, 2030)

Sec. 30-5. Licensing of real estate education providers and instructors.

(a) No person shall operate an education provider entity without possessing a valid and active license issued by the Department. Only education providers in possession of a valid education provider license may provide real estate pre-license, post-license, or continuing education courses that satisfy the requirements of this Act. Every person that desires to obtain an education provider license shall make application to the Department in a manner prescribed by the Department and pay the fee prescribed by rule. In addition to any other information required to be contained in the application as prescribed by rule, every application for an original or renewed license shall include the applicant's Social Security number or tax identification number.

(b) (Blank).

(c) (Blank).

(d) (Blank).

(e) (Blank).

(f) To qualify for an education provider license, an applicant must demonstrate the following:

(1) a sound financial base for establishing, promoting, and delivering the necessary courses; budget planning for the school's courses should be clearly projected;

(2) a sufficient number of qualified, licensed instructors as provided by rule;

(3) adequate support personnel to assist with administrative matters and technical assistance;

(4) maintenance and availability of records of participation for licensees;

(5) the ability to provide each participant who successfully completes an approved program with a certificate of completion signed by the administrator of a licensed education provider in a manner prescribed by the Department; the certificate of completion shall include the program that was completed, the completion date, the course number, and the student's and education provider's license numbers;

(6) a written policy dealing with procedures for the management of grievances and fee refunds;

(7) lesson plans and examinations, if applicable, for each course;

(8) a 75% passing grade for successful completion of any continuing education course or pre-license or post-license examination, if required;

(9) the ability to identify and use instructors who will teach in a planned program; instructor selections must demonstrate:

(A) appropriate credentials;

(B) competence as a teacher;

(C) knowledge of content area; and

(D) qualification by experience.

Unless otherwise provided for in this Section, the education provider shall provide a proctor or an electronic means of proctoring if a proctored examination is required for each examination; the education provider shall be responsible for the conduct of the proctor; the duties and responsibilities of a proctor shall be established by rule.

Unless otherwise provided for in this Section, the education provider shall must provide for closed book examinations for each course when required unless the Department, upon the recommendation of the Board, excuses this requirement based on the complexity of the course material.

(g) Advertising and promotion of education activities must be carried out in a responsible fashion clearly showing the educational objectives of the activity, the nature of the audience that may benefit from the activity, the cost of the activity to the participant and the items covered by the cost, the amount of credit that can be earned, and the credentials of the faculty.

(h) (Blank). The Department may, or upon request of the Board shall, after notice, cause an education provider to attend an informal conference before the Board for failure to comply with any requirement for licensure or for failure to comply with any provision of this Act or the rules for the administration of this Act. The Board shall make a recommendation to the Department as a result of its findings at the conclusion of any such informal conference.

(i) All education providers shall maintain these minimum criteria and pay the required fee in order to retain their education provider license.

(j) The Department may adopt any administrative rule consistent with the language and intent of this Act that may be necessary for the implementation and enforcement of this Section and to regulate the establishment and operation of virtual offices that do not have a fixed location.

(Source: P.A. 100-188, eff. 1-1-18; 100-831, eff. 1-1-19; 101-357, eff. 8-9-19.)

(225 ILCS 454/30-15)

(Section scheduled to be repealed on January 1, 2030)

Sec. 30-15. Licensing of education providers; approval of courses.

(a) (Blank).

(b) (Blank).

(c) (Blank).

(d) (Blank).

(e) (Blank).

(f) All education providers shall submit, at the time of initial application and with each license renewal, a list of courses with course materials that comply with the course requirements in this Act to be offered by the education provider. The Department may establish an online mechanism by which education providers may submit for approval by the Department upon the recommendation of the Board or its designee pre-license, post-license, or continuing education courses that are submitted after the time of the education provider's initial license application or renewal. The Department shall provide to each education provider a certificate for each approved pre-license, post-license, or continuing education course. All pre-license, post-license, or continuing education courses shall be valid for the period coinciding with the term of license of the education provider. However, in no case shall a course continue to be valid if it does not, at all times, meet all of the requirements of the core curriculum established by this Act and the Board, as modified from time to time in accordance with this Act. All education providers shall provide a copy of the certificate of the pre-license, post-license, or continuing education course within the course materials given to each student or shall display a copy of the certificate of the pre-license, post-license, or continuing education course in a conspicuous place at the location of the class.

(g) Each education provider shall provide to the Department a report in a frequency and format determined by the Department, with information concerning students who successfully completed all approved pre-license, post-license, or continuing education courses offered by the education provider.

(h) The Department, upon the recommendation of the Board, may temporarily suspend a licensed education provider's approved courses without hearing and refuse to accept successful completion of or participation in any of these pre-license, post-license, or continuing education courses for education credit from that education provider upon the failure of that education provider to comply with the provisions of this Act or the rules for the administration of this Act, until such time as the Department receives satisfactory assurance of compliance. The Department shall notify the education provider of the noncompliance and may initiate disciplinary proceedings pursuant to this Act. The Department may refuse to issue, suspend, revoke, or otherwise discipline the license of an education provider or may withdraw approval of a pre-license, post-license, or continuing education course for good cause. Failure to comply with the requirements of this Section or any other requirements established by rule shall be deemed to be good cause. Disciplinary proceedings shall be conducted by the Department Board in the same manner as other disciplinary proceedings under this Act.

(i) Pre-license, post-license, and continuing education courses, whether submitted for approval at the time of an education provider's initial application for licensure or otherwise, must meet the following minimum course requirements:

(1) Continuing education courses shall be required to be at least one hour in duration. For each one hour of course time, there shall be a minimum of 50 minutes of instruction.

(2) All core curriculum courses shall be provided only in the classroom or through a live, interactive webinar, or in an online distance education format.

(3) Courses provided through a live, interactive webinar shall require all participants to demonstrate their attendance in and attention to the course by answering or responding to at least one polling question per 50 minutes of course instruction.

(4) All participants in courses provided in an online distance education format shall demonstrate proficiency with the subject matter of the course through verifiable responses to questions included in the course content.

(5) Credit for courses completed in a classroom or through a live, interactive webinar, or in an online distance education format shall not require an examination.

(6) Credit for courses provided through correspondence, or by home study, shall require the passage of an in-person, proctored examination.

(j) The Department is authorized to engage a third party as the Board's designee to perform the functions specifically provided for in subsection (f) of this Section, namely that of administering the online system for receipt, review, and approval or denial of new courses.

(k) The Department may adopt any administrative rule consistent with the language and intent of this Act that may be necessary for the implementation and enforcement of this Section.

(Source: P.A. 101-357, eff. 8-9-19; 102-970, eff. 5-27-22.)

(225 ILCS 454/30-25)

(Section scheduled to be repealed on January 1, 2030)

Sec. 30-25. Licensing of education provider instructors.

(a) No person shall act as either a pre-license or continuing education instructor without possessing a valid pre-license or continuing education instructor license and satisfying any other qualification criteria adopted by the Department by rule.

(a-5) Each person with a valid pre-license instructor license may teach pre-license, post-license, continuing education core curriculum, continuing education elective curriculum, or broker management education courses if they meet specific criteria adopted by the Department by rule. Those persons who have not met the criteria or who only possess a valid continuing education instructor license shall only teach continuing education elective curriculum courses. Any person with a valid continuing education instructor license who wishes to teach continuing education core curriculum or broker management continuing education courses must obtain a valid pre-license instructor license.

(b) Every person who desires to obtain an education provider instructor's license shall attend and successfully complete a one-day instructor development workshop, as approved by the Department. However, pre-license instructors who have complied with subsection (b) of this Section 30-25 shall not be required to complete the instructor workshop in order to teach continuing education elective curriculum courses.

(b-5) The term of licensure for a pre-license or continuing education instructor shall be 2 years, with renewal dates adopted by rule. Every person who desires to obtain a pre-license or continuing education instructor license shall make application to the Department in a manner prescribed by the Department, accompanied by the fee adopted by rule. In addition to any other information required to be contained in the application, every application for an original license shall include the applicant's Social Security number or federal individual taxpayer identification number, which shall be retained in the agency's records pertaining to the license. As soon as practical, the Department shall assign a customer's identification number to each applicant for a license.

Every application for a renewal or restored license shall require the applicant's customer identification number.

The Department shall issue a pre-license or continuing education instructor license to applicants who meet qualification criteria established by this Act or rule.

(c) The Department may refuse to issue, suspend, revoke, or otherwise discipline a pre-license or continuing education instructor for good cause. Disciplinary proceedings shall be conducted by the Department Board in the same manner as other disciplinary proceedings under this Act. All pre-license instructors must teach at least one pre-license or continuing education core curriculum course within the period of licensure as a requirement for renewal of the instructor's license. All continuing education instructors must teach at least one course within the period of licensure or take an instructor training program approved by the Department in lieu thereof as a requirement for renewal of the instructor's license.

(d) Each course transcript submitted by an education provider to the Department shall include the name and license number of the pre-license or continuing education instructor for the course.

(e) Licensed education provider instructors may teach for more than one licensed education provider.

(f) The Department may adopt any administrative rule consistent with the language and intent of this Act that may be necessary for the implementation and enforcement of this Section.

(Source: P.A. 101-357, eff. 8-9-19; 102-970, eff. 5-27-22.)

Section 99. Effective date. This Act takes effect January 1, 2025, except that this Section, Section 5, and the changes to Sections 20-82, 25-30, and 25-35 of the Real Estate License Act of 2000 take effect upon becoming law.