Section 15-25 deals with a licensee’s treatment of customers. A licensee shall “treat all customers honestly and shall not negligently or knowingly give them false information.” Ministerial acts are permitted.
Section 15-40 clearly states that compensation does not determine agency.
Dual Agency Disclosure
Informed written consent is required of both buyer and seller for dual agency under Section 15-45 of the Act.
Also, a licensee may not serve as dual agent in any transaction in which she has an ownership interest, whether direct or indirect.
Designated Agency
This alternative to Dual Agency is highlighted in Section 15-50. This allows the sponsoring broker to appoint or designate one agent for the buyer and one agent for the seller, even within the same firm, without legally being construed as a dual agent. The broker is obligated to protect any confidential information. Because of this, “a designated agent may disclose to his or her sponsoring broker (or persons specified by the sponsoring broker) confidential information of a client for the purpose of seeking advice or assistance for the benefit of the client in regard to a possible transaction.”
Article 15 (Agency) also clearly notes the following:
- Offers of sub-agency through the multiple listing service (MLS) are not permitted in Illinois.
- A consumer cannot be held “vicariously liable” for the acts or omissions of a licensee in providing licensed activities for or on behalf of the consumer.
- The Department may further amplify anything in Article 15 by way of promulgating additional rules at any time.
- There is a time limit on legal actions. Legal actions under Article 15 may be forever barred “unless commenced within two years after the person bringing the action knew or should reasonably have known of such act or omission.” In no case may actions be brought after more than five years.
Disclosure
What Must Be Disclosed:
- Material facts of a property
- Known latent physical defects
- Agency relationships
- Designated agency
- Dual agency
- Lack of agency (to a purchasing customer) — No Agency Disclosure Form
- Compensation sources
Real estate disclosure means an acknowledgment, stated clearly and usually in writing, of certain key facts that the law holds might, if left unknown or if unclear, unfairly influence the course of events. Failure to disclose is an increasingly serious issue in a consumer-based society and under consumer-driven laws.
Article 15, material facts disclosure
A licensee must disclose to the client “material facts concerning the transaction of which the licensee has actual knowledge, unless that information is confidential information.
Material facts do not include physical conditions with little or no adverse effect on the value of the real estate.”
A listing agent must disclose to prospective buyer customers “all latent, material, adverse facts pertaining to the physical condition of the property that are actually known by the licensee and that could not be discovered by a reasonably diligent inspection of the property by the customer.” A licensee is not to be held liable for false information provided to the customer that the licensee did not actually know was false (15-25a).
Non-required disclosure items are :
- HIV, (Can’t Reveal under Federal Law – See Below)
- AIDS, (Can’t Reveal under Federal Law – See Below)
- “any other medical condition”,
- the fact that a property was “the site of an act or occurrence that had no effect on the physical condition of the property or its environment or the structures located thereon”,
- factual situations for properties other than the “subject of the transaction”,
- physical conditions on nearby properties that “do not have a substantial adverse effect on the value of the real estate that is the subject of the transaction.”
It is illegal under federal law to disclose that a property’s occupant has or had HIV or AIDS.
Section 15-35, agency relationship disclosure before a listing agreement, buyer agency agreement, or any other brokerage agreement may be created, a consumer must be told in writing
- that No Agency Relationship exists
- that licensee is not acting as the agent of the customer at a time intended to prevent disclosure of confidential information.
- the sponsoring broker’s compensation policy insofar as cooperating with brokers who represent other parties in a transaction, if an Agency Agreement is signed
- the name or names of designated agent(s), if an Agency Agreement is signed
Section 10-5, disclosure of compensation The Act holds that clients must be made aware of compensation, source of compensation, and the sponsoring broker’s policy on sharing commission with cooperating brokers.
