3.4 OBTAINING AND KEEPING A REAL ESTATE LICENSE PART 2

Broker’s License (Article 5)
A broker is defined as any individual, partnership, limited liability company (LLC), corporation, or registered limited liability partnership other than a residential leasing agent who, for another and for compensation, whether in person or through any media or technology, or with the intention or expectation of receiving compensation, either directly or indirectly, performs any of the services for which a real estate license is required (Section 1-10).

Broker requirements Applicants for a broker’s license must meet the following requirements, as discussed in Section 5-27:

• Be at least 18 years of age and willing to supply a Social Security number.
• Be of good moral character
• Have graduated from high school or obtained the equivalent of a high school diploma verified under oath by the applicant
• Provide satisfactory evidence of having completed 75 hours of instruction, 15 hours of which must consist of situational and case studies presented in the classroom or by other interactive delivery method presenting instruction and real time discussion between the instructor and the students.
• Satisfactorily pass a state-sponsored written examination
• 45-hour of post-broker is required before first renewal, it consists of three 15-hour courses covering
• Applied brokerage principles
• Risk management/discipline
• Transactional issues
• 50 question tests after each section given by the education provider
• Will have, at most, 2.5 years to complete the 45 hours prior to first or second renewal date

Managing Broker’s License (Article 5)
Managing broker requirements As of the 2019 Amendment to the Real Estate Law, all applicants for managing broker licenses in Illinois must:

• be 20 years old or older,
• be of good moral character,
• have been licensed as a real estate broker for at least two of the previous three years,
• have completed four years of study at a high school or secondary school, approved by the Illinois board of education, or the equivalent to four years of study as determined by an Illinois Board of Education-administered exam and verified by the applicant under oath.
• have completed at least 165 hours of education as follows,
• 120 pre- and post-licensure hours, as required to obtain a broker’s license,
• in the year before the application for managing broker is filed, 45 additional hours on brokerage administration and management,
• Of these 45 hours, 15 must consist of classroom instruction or some other means of interactive, real-time instruction and discussion between student and instructor,
• take and pass a Department-authorized written examination for licensure, and
• submit a valid application for a managing broker license along with the required fees.

Designated Managing Broker Responsibility and Supervision
A designated managing broker shall be responsible for the supervision of all licensees associated with a designated managing broker’s office. A designated managing broker’s responsibilities include implementation of company policies, the training of licensees and other employees on the company’s policies as well as on relevant provisions of this Act, and providing assistance to all licensees in real estate transactions. The designated managing broker shall be responsible for, and shall supervise, all special accounts of the company.

A designated managing broker’s responsibilities shall further include directly handling all earnest money, escrows, and contract negotiations for all transactions where the designated agent for the transaction has not completed his or her 45 hours of post-license education, as well as the approval of all advertisements involving a licensee who has not completed his or her 45 hours of post-license education. Licensees that have not completed their 45 hours of post-license education shall have no authority to bind the sponsoring broker.

An applicant is permitted to act (subject to IDFPR approval) as designated managing broker after filing her application with the Department and prior to receiving her license but must not continue in this role past the term of 60 days after filing unless her license has been obtained within that period.

The Act creates a new classification of managing broker. A “designated managing broker” is a managing broker appointed by the sponsoring broker who has supervisory responsibilities for licensees in one or multiple offices. 225 ILCS 454 Section 1-10

The sponsoring broker is responsible for supervising all designated managing brokers, shall name a designated managing broker for each office, and notify the Department of all designated managing brokers and the office(s) they manage. 225 ILCS 454 Section 5-45(b)

Designated managing broker’s responsibilities include:

• Supervision and training of all licensees and employees associated with each assigned office;
• Implementing company policies; and
• Supervision of all the sponsoring broker’s special accounts. 225 ILCS 454 Section 10-55(a)

In addition, designated managing brokers shall directly handle all earnest money, escrows, contract negotiations, and advertisements for broker who have not completed the 45-hour post-license education. 225 ILCS 454 Section 10-55(b)

A designated managing broker may be disciplined for failure to provide a written company policy or perform any of the duties set forth in Section 10-55. 225 ILCS 454 Section 20-20(a)(46)

A designated managing broker must identify themselves to the public as the designated managing broker on all advertising except yard signs. 225 ILCS 454 Section 10-30(g)

Each application for a license (new or renewal) must include the applicant’s social security number or tax identification number, in addition to the other required information.

Education exemptions: broker, managing broker
If an applicant for a broker’s and managing broker’s license is currently an attorney admitted to the practice of law by the Illinois Supreme Court, she is exempt from the education requirements.

The attorney still must take and pass the state exam.

Continued eligibility: brokers and managing brokers (Section 5-35)
Approved education for potential brokers and managing brokers is valid for purposes of licensure for two years after date of satisfactory course completion. An official uniform transcript is needed for taking the state exam except for persons exempt from the educational requirements.

The broker, or managing broker license must be applied for within one year of passing the state test. Failure to do so means retaking the test.

Failing the state test (either broker or managing broker) four times from the date that the first real estate test was taken requires one to retake the educational coursework.

Corporations, Limited Liability Companies, and Partnerships (Section 5-15)
A corporation, partnership, or limited liability company (LLC) may receive a broker’s license under the following conditions:

• In a corporation, every corporate officer who actively participates in the organization’s real estate activities must hold a managing broker license. In addition, every employee of the corporation who acts as a licensee on the corporation’s behalf also must hold a license as a real estate broker, managing broker, or residential leasing agent.
• In a partnership, every general partner must hold a managing broker license. Every employee of the partnership who acts as a licensee on the partnership’s behalf also must hold a license as a real estate broker, managing broker, or residential leasing agent.
• In a limited liability company (LLC) or limited liability partnership (LLP), every manager must hold a managing broker’s license. Additionally, every employee of the LLC/LLP who acts as a licensee on the LLC/LLP’s behalf also must hold a license as a broker, managing broker, or residential leasing agent.

No corporation, partnership, LLC, or LLP may be licensed to conduct a brokerage business if any individual broker, residential leasing agent, or group of brokers and/or residential leasing agents owns or directly or indirectly controls more than 49 percent of the shares of stock or ownership interest in the business entity.

Residential Leasing Agent’s License (Article 5)
The Real Estate License Act of 2000 provides for a residential leasing agent license for persons who wish to engage only in activities limited to the leasing of residential real property in which a license is required. This license allows such activities as “leasing or renting residential real property; attempting, offering, or negotiating to lease or rent residential real property; or supervising the collection, offer, attempt, or agreement to collect rent for the use of residential real property.” Licensed brokers and managing brokers do not need a residential leasing agent license for these activities.

A limited residential leasing agent license applicant must meet the following requirements:

• Be at least 18 years of age
• Be of good moral character
• Have a high school diploma or its equivalent
• Successfully complete a 15-hour residential leasing agent pre-license course
• Pass the state’s written leasing license examination

A residential leasing agent must be sponsored by a licensed real estate sponsoring broker.

Period in which to obtain a Residential Leasing Agent License
A person may engage in residential leasing activities for a period of 120 consecutive days without being licensed, so long as the person is acting under the supervision of a licensed real estate designated managing broker or sponsoring broker and that broker or sponsoring broker has notified the Department that the person is pursuing licensure.

All education, examination, and fee requirements must be met during the 120-day period.