98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB2722

 

Introduced 2/21/2013, by Rep. Robert Rita

 

SYNOPSIS AS INTRODUCED:
 
225 ILCS 454/1-10

    Amends the Real Estate License Act of 2000. Includes within the definition of "broker" an individual, partnership, limited liability company, corporation, or registered limited liability partnership who negotiates, facilitates, offers, attempts, or agrees to negotiation or facilitate the short sale of residential property or otherwise engages in short sale facilitation. Defines "short sale facilitation". Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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7    (Section scheduled to be repealed on January 1, 2020)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) Negotiates, facilitates, offers, attempts, or
25    agrees to negotiation or facilitate short sale of
26    residential property or otherwise engages in short sale

 

 

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1    facilitation.
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    "Client" means a person who is being represented by a
11licensee.
12    "Compensation" means the valuable consideration given by
13one person or entity to another person or entity in exchange
14for the performance of some activity or service. Compensation
15shall include the transfer of valuable consideration,
16including without limitation the following:
17        (1) commissions;
18        (2) referral fees;
19        (3) bonuses;
20        (4) prizes;
21        (5) merchandise;
22        (6) finder fees;
23        (7) performance of services;
24        (8) coupons or gift certificates;
25        (9) discounts;
26        (10) rebates;

 

 

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

 

 

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

 

 

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1another real estate broker, or a leasing agent, shall be
2construed to include an independent contractor relationship,
3provided that a written agreement exists that clearly
4establishes and states the relationship. All responsibilities
5of a broker shall remain.
6    "Escrow moneys" means all moneys, promissory notes or any
7other type or manner of legal tender or financial consideration
8deposited with any person for the benefit of the parties to the
9transaction. A transaction exists once an agreement has been
10reached and an accepted real estate contract signed or lease
11agreed to by the parties. Escrow moneys includes without
12limitation earnest moneys and security deposits, except those
13security deposits in which the person holding the security
14deposit is also the sole owner of the property being leased and
15for which the security deposit is being held.
16    "Exclusive brokerage agreement" means a written brokerage
17agreement that provides that the sponsoring broker has the sole
18right, through one or more sponsored licensees, to act as the
19exclusive designated agent or representative of the client and
20that meets the requirements of Section 15-75 of this Act.
21    "Inoperative" means a status of licensure where the
22licensee holds a current license under this Act, but the
23licensee is prohibited from engaging in licensed activities
24because the licensee is unsponsored or the license of the
25sponsoring broker with whom the licensee is associated or by
26whom he or she is employed is currently expired, revoked,

 

 

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1suspended, or otherwise rendered invalid under this Act.
2    "Leads" means the name or names of a potential buyer,
3seller, lessor, lessee, or client of a licensee.
4    "Leasing Agent" means a person who is employed by a real
5estate broker to engage in licensed activities limited to
6leasing residential real estate who has obtained a license as
7provided for in Section 5-5 of this Act.
8    "License" means the document issued by the Department
9certifying that the person named thereon has fulfilled all
10requirements prerequisite to licensure under this Act.
11    "Licensed activities" means those activities listed in the
12definition of "broker" under this Section.
13    "Licensee" means any person, as defined in this Section,
14who holds a valid unexpired license as a real estate broker,
15real estate salesperson, or leasing agent.
16    "Listing presentation" means a communication between a
17real estate broker or salesperson and a consumer in which the
18licensee is attempting to secure a brokerage agreement with the
19consumer to market the consumer's real estate for sale or
20lease.
21    "Managing broker" means a broker who has supervisory
22responsibilities for licensees in one or, in the case of a
23multi-office company, more than one office and who has been
24appointed as such by the sponsoring broker.
25    "Medium of advertising" means any method of communication
26intended to influence the general public to use or purchase a

 

 

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1particular good or service or real estate.
2    "Ministerial acts" means those acts that a licensee may
3perform for a consumer that are informative or clerical in
4nature and do not rise to the level of active representation on
5behalf of a consumer. Examples of these acts include without
6limitation (i) responding to phone inquiries by consumers as to
7the availability and pricing of brokerage services, (ii)
8responding to phone inquiries from a consumer concerning the
9price or location of property, (iii) attending an open house
10and responding to questions about the property from a consumer,
11(iv) setting an appointment to view property, (v) responding to
12questions of consumers walking into a licensee's office
13concerning brokerage services offered or particular
14properties, (vi) accompanying an appraiser, inspector,
15contractor, or similar third party on a visit to a property,
16(vii) describing a property or the property's condition in
17response to a consumer's inquiry, (viii) completing business or
18factual information for a consumer on an offer or contract to
19purchase on behalf of a client, (ix) showing a client through a
20property being sold by an owner on his or her own behalf, or
21(x) referral to another broker or service provider.
22    "Office" means a real estate broker's place of business
23where the general public is invited to transact business and
24where records may be maintained and licenses displayed, whether
25or not it is the broker's principal place of business.
26    "Person" means and includes individuals, entities,

 

 

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1corporations, limited liability companies, registered limited
2liability partnerships, and partnerships, foreign or domestic,
3except that when the context otherwise requires, the term may
4refer to a single individual or other described entity.
5    "Personal assistant" means a licensed or unlicensed person
6who has been hired for the purpose of aiding or assisting a
7sponsored licensee in the performance of the sponsored
8licensee's job.
9    "Pocket card" means the card issued by the Department to
10signify that the person named on the card is currently licensed
11under this Act.
12    "Pre-license school" means a school licensed by the
13Department offering courses in subjects related to real estate
14transactions, including the subjects upon which an applicant is
15examined in determining fitness to receive a license.
16    "Pre-renewal period" means the period between the date of
17issue of a currently valid license and the license's expiration
18date.
19    "Proctor" means any person, including, but not limited to,
20an instructor, who has a written agreement to administer
21examinations fairly and impartially with a licensed
22pre-license school or a licensed continuing education school.
23    "Real estate" means and includes leaseholds as well as any
24other interest or estate in land, whether corporeal,
25incorporeal, freehold, or non-freehold, including timeshare
26interests, and whether the real estate is situated in this

 

 

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1State or elsewhere.
2    "Regular employee" means a person working an average of 20
3hours per week for a person or entity who would be considered
4as an employee under the Internal Revenue Service eleven main
5tests in three categories being behavioral control, financial
6control and the type of relationship of the parties, formerly
7the twenty factor test.
8    "Salesperson" means any individual, other than a real
9estate broker or leasing agent, who is employed by a real
10estate broker or is associated by written agreement with a real
11estate broker as an independent contractor and participates in
12any activity described in the definition of "broker" under this
13Section.
14    "Secretary" means the Secretary of the Department of
15Financial and Professional Regulation, or a person authorized
16by the Secretary to act in the Secretary's stead.
17    "Short sale facilitation" means, for compensation or gain,
18either directly or indirectly offering or negotiating on behalf
19of a borrower or homeowner to facilitate the sale of
20residential real estate subject to one or more residential
21mortgage loans or debts constituting liens on the property in
22which the proceeds from selling the residential real estate
23will fall short of the amount owed and the lien holders are
24contacted to agree to release their lien on the residential
25real estate and accept less than the full amount owed on the
26debt.

 

 

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1    "Sponsoring broker" means the broker who has issued a
2sponsor card to a licensed salesperson, another licensed
3broker, or a leasing agent.
4    "Sponsor card" means the temporary permit issued by the
5sponsoring real estate broker certifying that the real estate
6broker, real estate salesperson, or leasing agent named thereon
7is employed by or associated by written agreement with the
8sponsoring real estate broker, as provided for in Section 5-40
9of this Act.
10(Source: P.A. 96-856, eff. 12-31-09.)
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.