99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1697

 

Introduced 2/20/2015, by Sen. William E. Brady

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 454/1-10

    Amends the Real Estate License Act of 2000. Changes the definition of "managing broker" to provide that a supervising broker may have supervisory responsibilities for licensees in more than one brokerage company or entity (rather than for licensees in one or more than one office). Effective immediately.


LRB099 06413 HAF 26483 b

 

 

A BILL FOR

 

SB1697LRB099 06413 HAF 26483 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Real Estate License Act of 2000 is amended
5by changing Section 1-10 as follows:
 
6    (225 ILCS 454/1-10)
7    (Section scheduled to be repealed on January 1, 2020)
8    Sec. 1-10. Definitions. In this Act, unless the context
9otherwise requires:
10    "Act" means the Real Estate License Act of 2000.
11    "Address of Record" means the designated address recorded
12by the Department in the applicant's or licensee's application
13file or license file as maintained by the Department's
14licensure maintenance unit. It is the duty of the applicant or
15licensee to inform the Department of any change of address, and
16those changes must be made either through the Department's
17website or by contacting the Department.
18    "Advisory Council" means the Real Estate Education
19Advisory Council created under Section 30-10 of this Act.
20    "Agency" means a relationship in which a real estate broker
21or licensee, whether directly or through an affiliated
22licensee, represents a consumer by the consumer's consent,
23whether express or implied, in a real property transaction.

 

 

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1    "Applicant" means any person, as defined in this Section,
2who applies to the Department for a valid license as a real
3estate broker, real estate salesperson, or leasing agent.
4    "Blind advertisement" means any real estate advertisement
5that does not include the sponsoring broker's business name and
6that is used by any licensee regarding the sale or lease of
7real estate, including his or her own, licensed activities, or
8the hiring of any licensee under this Act. The broker's
9business name in the case of a franchise shall include the
10franchise affiliation as well as the name of the individual
11firm.
12    "Board" means the Real Estate Administration and
13Disciplinary Board of the Department as created by Section
1425-10 of this Act.
15    "Branch office" means a sponsoring broker's office other
16than the sponsoring broker's principal office.
17    "Broker" means an individual, partnership, limited
18liability company, corporation, or registered limited
19liability partnership other than a real estate salesperson or
20leasing agent who, whether in person or through any media or
21technology, for another and for compensation, or with the
22intention or expectation of receiving compensation, either
23directly or indirectly:
24        (1) Sells, exchanges, purchases, rents, or leases real
25    estate.
26        (2) Offers to sell, exchange, purchase, rent, or lease

 

 

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1    real estate.
2        (3) Negotiates, offers, attempts, or agrees to
3    negotiate the sale, exchange, purchase, rental, or leasing
4    of real estate.
5        (4) Lists, offers, attempts, or agrees to list real
6    estate for sale, lease, or exchange.
7        (5) Buys, sells, offers to buy or sell, or otherwise
8    deals in options on real estate or improvements thereon.
9        (6) Supervises the collection, offer, attempt, or
10    agreement to collect rent for the use of real estate.
11        (7) Advertises or represents himself or herself as
12    being engaged in the business of buying, selling,
13    exchanging, renting, or leasing real estate.
14        (8) Assists or directs in procuring or referring of
15    leads or prospects, intended to result in the sale,
16    exchange, lease, or rental of real estate.
17        (9) Assists or directs in the negotiation of any
18    transaction intended to result in the sale, exchange,
19    lease, or rental of real estate.
20        (10) Opens real estate to the public for marketing
21    purposes.
22        (11) Sells, leases, or offers for sale or lease real
23    estate at auction.
24        (12) Prepares or provides a broker price opinion or
25    comparative market analysis as those terms are defined in
26    this Act, pursuant to the provisions of Section 10-45 of

 

 

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1    this Act.
2    "Brokerage agreement" means a written or oral agreement
3between a sponsoring broker and a consumer for licensed
4activities to be provided to a consumer in return for
5compensation or the right to receive compensation from another.
6Brokerage agreements may constitute either a bilateral or a
7unilateral agreement between the broker and the broker's client
8depending upon the content of the brokerage agreement. All
9exclusive brokerage agreements shall be in writing.
10    "Broker price opinion" means an estimate or analysis of the
11probable selling price of a particular interest in real estate,
12which may provide a varying level of detail about the
13property's condition, market, and neighborhood and information
14on comparable sales. The activities of a real estate broker or
15managing broker engaging in the ordinary course of business as
16a broker, as defined in this Section, shall not be considered a
17broker price opinion if no compensation is paid to the broker
18or managing broker, other than compensation based upon the sale
19or rental of real estate.
20    "Client" means a person who is being represented by a
21licensee.
22    "Comparative market analysis" is an analysis or opinion
23regarding pricing, marketing, or financial aspects relating to
24a specified interest or interests in real estate that may be
25based upon an analysis of comparative market data, the
26expertise of the real estate broker or managing broker, and

 

 

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1such other factors as the broker or managing broker may deem
2appropriate in developing or preparing such analysis or
3opinion. The activities of a real estate broker or managing
4broker engaging in the ordinary course of business as a broker,
5as defined in this Section, shall not be considered a
6comparative market analysis if no compensation is paid to the
7broker or managing broker, other than compensation based upon
8the sale or rental of real estate.
9    "Compensation" means the valuable consideration given by
10one person or entity to another person or entity in exchange
11for the performance of some activity or service. Compensation
12shall include the transfer of valuable consideration,
13including without limitation the following:
14        (1) commissions;
15        (2) referral fees;
16        (3) bonuses;
17        (4) prizes;
18        (5) merchandise;
19        (6) finder fees;
20        (7) performance of services;
21        (8) coupons or gift certificates;
22        (9) discounts;
23        (10) rebates;
24        (11) a chance to win a raffle, drawing, lottery, or
25    similar game of chance not prohibited by any other law or
26    statute;

 

 

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1        (12) retainer fee; or
2        (13) salary.
3    "Confidential information" means information obtained by a
4licensee from a client during the term of a brokerage agreement
5that (i) was made confidential by the written request or
6written instruction of the client, (ii) deals with the
7negotiating position of the client, or (iii) is information the
8disclosure of which could materially harm the negotiating
9position of the client, unless at any time:
10        (1) the client permits the disclosure of information
11    given by that client by word or conduct;
12        (2) the disclosure is required by law; or
13        (3) the information becomes public from a source other
14    than the licensee.
15    "Confidential information" shall not be considered to
16include material information about the physical condition of
17the property.
18    "Consumer" means a person or entity seeking or receiving
19licensed activities.
20    "Continuing education school" means any person licensed by
21the Department as a school for continuing education in
22accordance with Section 30-15 of this Act.
23    "Coordinator" means the Coordinator of Real Estate created
24in Section 25-15 of this Act.
25    "Credit hour" means 50 minutes of classroom instruction in
26course work that meets the requirements set forth in rules

 

 

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1adopted by the Department.
2    "Customer" means a consumer who is not being represented by
3the licensee but for whom the licensee is performing
4ministerial acts.
5    "Department" means the Department of Financial and
6Professional Regulation.
7    "Designated agency" means a contractual relationship
8between a sponsoring broker and a client under Section 15-50 of
9this Act in which one or more licensees associated with or
10employed by the broker are designated as agent of the client.
11    "Designated agent" means a sponsored licensee named by a
12sponsoring broker as the legal agent of a client, as provided
13for in Section 15-50 of this Act.
14    "Dual agency" means an agency relationship in which a
15licensee is representing both buyer and seller or both landlord
16and tenant in the same transaction. When the agency
17relationship is a designated agency, the question of whether
18there is a dual agency shall be determined by the agency
19relationships of the designated agent of the parties and not of
20the sponsoring broker.
21    "Employee" or other derivative of the word "employee", when
22used to refer to, describe, or delineate the relationship
23between a real estate broker and a real estate salesperson,
24another real estate broker, or a leasing agent, shall be
25construed to include an independent contractor relationship,
26provided that a written agreement exists that clearly

 

 

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1establishes and states the relationship. All responsibilities
2of a broker shall remain.
3    "Escrow moneys" means all moneys, promissory notes or any
4other type or manner of legal tender or financial consideration
5deposited with any person for the benefit of the parties to the
6transaction. A transaction exists once an agreement has been
7reached and an accepted real estate contract signed or lease
8agreed to by the parties. Escrow moneys includes without
9limitation earnest moneys and security deposits, except those
10security deposits in which the person holding the security
11deposit is also the sole owner of the property being leased and
12for which the security deposit is being held.
13    "Electronic means of proctoring" means a methodology
14providing assurance that the person taking a test and
15completing the answers to questions is the person seeking
16licensure or credit for continuing education and is doing so
17without the aid of a third party or other device.
18    "Exclusive brokerage agreement" means a written brokerage
19agreement that provides that the sponsoring broker has the sole
20right, through one or more sponsored licensees, to act as the
21exclusive designated agent or representative of the client and
22that meets the requirements of Section 15-75 of this Act.
23    "Inoperative" means a status of licensure where the
24licensee holds a current license under this Act, but the
25licensee is prohibited from engaging in licensed activities
26because the licensee is unsponsored or the license of the

 

 

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1sponsoring broker with whom the licensee is associated or by
2whom he or she is employed is currently expired, revoked,
3suspended, or otherwise rendered invalid under this Act.
4    "Interactive delivery method" means delivery of a course by
5an instructor through a medium allowing for 2-way communication
6between the instructor and a student in which either can
7initiate or respond to questions.
8    "Leads" means the name or names of a potential buyer,
9seller, lessor, lessee, or client of a licensee.
10    "Leasing Agent" means a person who is employed by a real
11estate broker to engage in licensed activities limited to
12leasing residential real estate who has obtained a license as
13provided for in Section 5-5 of this Act.
14    "License" means the document issued by the Department
15certifying that the person named thereon has fulfilled all
16requirements prerequisite to licensure under this Act.
17    "Licensed activities" means those activities listed in the
18definition of "broker" under this Section.
19    "Licensee" means any person, as defined in this Section,
20who holds a valid unexpired license as a real estate broker,
21real estate salesperson, or leasing agent.
22    "Listing presentation" means a communication between a
23real estate broker or salesperson and a consumer in which the
24licensee is attempting to secure a brokerage agreement with the
25consumer to market the consumer's real estate for sale or
26lease.

 

 

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1    "Managing broker" means a broker who has supervisory
2responsibilities for licensees in one or, in the case of a
3multi-office company, more brokerage companies or entities,
4than one office and who has been appointed as such by the
5sponsoring broker.
6    "Medium of advertising" means any method of communication
7intended to influence the general public to use or purchase a
8particular good or service or real estate.
9    "Ministerial acts" means those acts that a licensee may
10perform for a consumer that are informative or clerical in
11nature and do not rise to the level of active representation on
12behalf of a consumer. Examples of these acts include without
13limitation (i) responding to phone inquiries by consumers as to
14the availability and pricing of brokerage services, (ii)
15responding to phone inquiries from a consumer concerning the
16price or location of property, (iii) attending an open house
17and responding to questions about the property from a consumer,
18(iv) setting an appointment to view property, (v) responding to
19questions of consumers walking into a licensee's office
20concerning brokerage services offered or particular
21properties, (vi) accompanying an appraiser, inspector,
22contractor, or similar third party on a visit to a property,
23(vii) describing a property or the property's condition in
24response to a consumer's inquiry, (viii) completing business or
25factual information for a consumer on an offer or contract to
26purchase on behalf of a client, (ix) showing a client through a

 

 

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1property being sold by an owner on his or her own behalf, or
2(x) referral to another broker or service provider.
3    "Office" means a real estate broker's place of business
4where the general public is invited to transact business and
5where records may be maintained and licenses displayed, whether
6or not it is the broker's principal place of business.
7    "Person" means and includes individuals, entities,
8corporations, limited liability companies, registered limited
9liability partnerships, and partnerships, foreign or domestic,
10except that when the context otherwise requires, the term may
11refer to a single individual or other described entity.
12    "Personal assistant" means a licensed or unlicensed person
13who has been hired for the purpose of aiding or assisting a
14sponsored licensee in the performance of the sponsored
15licensee's job.
16    "Pocket card" means the card issued by the Department to
17signify that the person named on the card is currently licensed
18under this Act.
19    "Pre-license school" means a school licensed by the
20Department offering courses in subjects related to real estate
21transactions, including the subjects upon which an applicant is
22examined in determining fitness to receive a license.
23    "Pre-renewal period" means the period between the date of
24issue of a currently valid license and the license's expiration
25date.
26    "Proctor" means any person, including, but not limited to,

 

 

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1an instructor, who has a written agreement to administer
2examinations fairly and impartially with a licensed
3pre-license school or a licensed continuing education school.
4    "Real estate" means and includes leaseholds as well as any
5other interest or estate in land, whether corporeal,
6incorporeal, freehold, or non-freehold, including timeshare
7interests, and whether the real estate is situated in this
8State or elsewhere.
9    "Regular employee" means a person working an average of 20
10hours per week for a person or entity who would be considered
11as an employee under the Internal Revenue Service eleven main
12tests in three categories being behavioral control, financial
13control and the type of relationship of the parties, formerly
14the twenty factor test.
15    "Salesperson" means any individual, other than a real
16estate broker or leasing agent, who is employed by a real
17estate broker or is associated by written agreement with a real
18estate broker as an independent contractor and participates in
19any activity described in the definition of "broker" under this
20Section.
21    "Secretary" means the Secretary of the Department of
22Financial and Professional Regulation, or a person authorized
23by the Secretary to act in the Secretary's stead.
24    "Sponsoring broker" means the broker who has issued a
25sponsor card to a licensed salesperson, another licensed
26broker, or a leasing agent.

 

 

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1    "Sponsor card" means the temporary permit issued by the
2sponsoring real estate broker certifying that the real estate
3broker, real estate salesperson, or leasing agent named thereon
4is employed by or associated by written agreement with the
5sponsoring real estate broker, as provided for in Section 5-40
6of this Act.
7(Source: P.A. 98-531, eff. 8-23-13; 98-1109, eff. 1-1-15.)
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.