Place of Business (Section 5-45)
Any sponsoring broker actively engaged in the real estate business must maintain a definite office or place of business within Illinois. The sponsoring broker must display a visible, conspicuous identification sign outside the office.
Inside, the sponsoring broker must conspicuously display the branch office license she sponsors.
The sponsoring broker’s office or place of business may not be located in any retail or financial establishment, unless it is set apart as a clearly separate and distinct area within that establishment.
Branch offices
Any sponsoring broker who wants to establish branch offices must apply for a branch office license for each branch office maintained. The sponsoring broker names a managing broker for each branch office and is responsible for supervising all managing brokers. The managing broker, who must be a licensed Illinois managing broker, oversees the branch’s operations.
The name of the branch office must be the same as the primary real estate office or closely linked to it. The Department must be notified immediately in writing of any change of a primary or branch office location and within 15 days of a change of a managing broker for any branch.
Exceptions to required place of business
A broker licensed in Illinois by reciprocity with another state may be exempt from the requirement of maintaining a definite place of business in Illinois if the broker :
- maintains an active broker’s license in the home state,
- maintains an office in the home state, and
- has filed a written statement with the Department appointing the Secretary to act as the broker’s agent for service of process and other legal notices, agreeing to abide by all the provisions of the Illinois Real Estate License Act of 2000, as amended in 2010, and submitting to the jurisdiction of the Department.
Loss of a Branch Office Manager (Section 5-45e)
In the event a sponsoring broker dies or a managing broker leaves a branch office unexpectedly, a request may be made to the Department within 15 days of the loss to grant an extension for continued office operations. The extension may be granted for up to 60 days unless extended by the Department for good cause shown and upon written request by the broker or representative.
Employment Agreements (Section 10-20)
A licensee must have only one sponsoring broker at any given time and may perform real estate activities only for that sponsoring broker.
In turn, a sponsoring broker must have a written agreement with any managing brokers, brokers or leasing agents she employs. The agreement must describe the significant aspects of their professional relationship, such as supervision, duties, compensation, and grounds for termination, and must address the employment or independent contractor relationship terms. A sponsoring broker must also have a written agreement with any licensed personal assistants of licensees sponsored by the broker.
Agency Relationships (Article 15)
Once a relationship has been formed between a licensee and a sponsoring broker, the next set of relationships that dominate the real estate business falls under law of agency. Article 15 deals with the licensee’s relationships with the public. This article indicates specific standards to be held to in agency relationships. It clearly indicates that “the law of agency under this Act … primarily governs the actions of licensees, not common law.” Note that Article 15 of the Real Estate License Act of 2000, as amended in 2010, is the only section of the Act that has private right of action.
Section 15.10 sets out the basic relationship with consumers by saying “licensees shall be considered to be representing the consumer they are working with as a designated (implied) agent for the consumer unless :
- there is a written agreement between the sponsoring broker and the consumer providing that there is a different relationship or
- the licensee is performing only ministerial acts [see earlier definition] on behalf of the consumer.”
Replacing common law, Section 15-15 notes the statutory duties a licensee has toward her client. The statutory duties are fulfilled by:
- performing the terms of the brokerage agreement between a sponsoring broker and a client,
- promoting the best interest of the client (e.g., timely offer presentation, material facts disclosure, best interests of the client prevail over any self-interest),
- obeying any directions that are not contrary to public policy or law,
- exercising skill and care in performing brokerage services,
- timely accounting for all money and property received in which the client has, may have, or should have had an interest,
- keeping confidential information confidential, and
- complying with the Act and applicable statutes.
The Act also clarifies certain often misunderstood situations that occur when one is an agent. Under the Act the following apply:
- It is considered reasonable to show available properties to various prospects without being viewed as breaching duty to a given client.
- A licensee must provide written disclosure to all clients for whom the licensee is preparing or making contemporaneous offers or contract to purchase or lease the same property and must refer any client that requests a referral to another designated agent.
- It is not considered a conflict for a buyer’s agent to show homes wherein the commission is based on the ultimate sales price (in other words, where a higher price creates a higher commission).
- Unless a licensee “knew or should have known the information was false,” a licensee is not considered responsible or liable for false information passed on to the client from a customer via the licensee, or vice versa.
- The licensee remains responsible under common law “for negligent or fraudulent misrepresentation of material information.”
