Section 1450.240  Dissolution:  Effect of Suspension or Revocation of Sponsoring Brokers or Managing Brokers

a)         Suspension or revocation of sponsoring broker:

            Upon the effective date of a temporary or otherwise suspension or revocation of the license of a sponsoring broker corporation, limited liability company, partnership, or sole proprietorship and their respective principal or sponsoring broker, unless an interim sponsoring broker or receiver is appointed by the real estate brokerage company or its representative and subject to approval by the Division:

1)         The licenses of all respective sponsored licensees are automatically inoperative.  However, each broker may resume the practice of real estate only upon securing a properly completed 45 day sponsor card, signed either as a self sponsored broker or by another sponsoring broker.  Each salesperson or leasing agent may resume the practice of real estate only upon securing a properly completed 45 day sponsor card signed by an active sponsoring broker.

2)         All brokerage agreements with the sponsoring broker, including listing agreements, are deemed expired pursuant to Section 10-25 of the Act unless a new sponsoring broker is named within 7 business days.  Unless a new sponsoring broker is named within 7 days the suspended or revoked sponsoring broker shall notify, in writing, all clients with whom the sponsoring broker has an active brokerage agreement, and advise that the brokerage agreement expired as of the date that is 7 business days after the suspension or revocation, and that the clients are legally authorized to enter into another brokerage agreement with any active broker.

3)         Suspensions or revocations of a sponsoring broker shall not have an effect on the enforceability of any pending, executed real estate contracts.

A)        the suspended or revoked sponsoring broker shall send a written notice to all clients with a pending, executed real estate contract explaining the suspensions or revocations, and that the suspensions or revocations shall not have an effect on the enforceability of the pending, executed real estate contracts.  The notice shall also identify the name, address, and telephone number of the person in control of the escrow money.  To the extent that the clients require additional real estate services, the notice shall provide that the clients may seek those services from another active broker.

B)        a suspension or revocation shall not preclude the receipt of any commission or other compensation earned by the suspended or revoked sponsoring broker or other formerly sponsored licensee prior to the effective date of a suspension or revocation of the sponsoring broker.

b)         Suspension or revocation of managing broker:

            In the event of a suspension or revocation of a managing broker the offices and branch offices managed by that managing broker may resume the practice of real estate upon securing a replacement managing broker. Consistent with Section 5-45(e) of the Act, if a replacement managing broker is unable to be secured immediately after a suspension or revocation of the managing broker, the entity may continue to practice real estate for the first 15 days after the suspension or revocation.  If, after 15 days, a replacement managing broker has not been secured, the office may only continue to practice real estate upon securing the written authorization of the Division as provided for in Section 5-45(e) of the Act.

c)         In the event of the voluntary retirement or the voluntary dissolution of a sponsoring broker, the sponsoring broker shall, at a reasonable time prior to the voluntary retirement or voluntary dissolution, provide written notice to all sponsored licensees to allow the sponsored licensees to secure new sponsoring brokers, and shall provide written notice to all active clients to allow the clients to secure brokerage agreements with new brokers.

(Source:  Amended at 30 Ill. Reg. 11075, effective June 8, 2006)