DR Legal News: Changes to License Act

Illinois REALTORS® Lead Way on Much Needed Changes to License Act

Selfby Jeffrey T. Baker, Sorling Northrup Attorneys

Illinois REALTORS® successfully negotiated for numerous, critical changes to the Real Estate License Act during the 2017 spring legislative session. The current version of the Act would likely have been significantly amended in a couple of years as it is scheduled to sunset on January 1, 2020. However, the Association seized an opportunity to strengthen and improve the Act before that scheduled re-write and the results will benefit brokers across the state in many areas:

  1. Education Re-Write
  2. Leasing Agents
  3. Investigations
  4. Advisory Council
  5. Unanimous Support

Education Re-Write -  Simplify and Modernize

Perhaps the most significant change for brokers will be the re-written education provisions. The Association’s goals for education were twofold: first, to simplify and refocus; and second, to bring the education delivery system into the 21st Century. At the core of its mission, Illinois REALTORS® wants to protect the high standards that the industry has become known for.

Current law over-complicated the education system with things like various categories of schools, burdensome test-taking procedures and generally, leaving too much room for confusing regulations. The result was less and less focus on the subjects and processes that made brokers better. The changes that the Association was able to secure include eliminating categories of instructors altogether. 

Now, there will be a single license for Education Providers, who will themselves choose what stage or stages of instruction (e.g., pre-license, continuing education, etc.) they want to teach. 

Another pressing issue contained in the current Act was that, while it provides for a continuing education core curriculum, over time, regulations have been implemented dividing brokers’ attention between Core A and Core B standards within that curriculum.

The legislative changes secured by Illinois REALTORS® eliminate this unnecessary distinction and refocus brokers on a specific list of subjects that are relevant to practitioners, like the ever-expanding importance of advertising and leasing agent management. These changes bring into renewed focus REALTORS®’s emphasis on quality, continuous education while simultaneously streamlining and reducing burdensome regulation.

Illinois REALTORS® also recognized that modern course delivery procedures were not currently reflected in the Act. The current system does not easily work with newer processes like online, interactive webinars and online distance education.

To address this, the revisions provided by REALTORS® state that courses delivered via online, interactive webinars, in the classroom, or by online distance education, must only be a minimum of 2 hours long and no longer require a proctored examination. Instead, those courses would only need to test participants attendance and comprehension by periodic prompts throughout the course. Once the Act’s amendments take effect, only those courses taken via home study will still require an in-person, proctored examination.

Leasing Agents - Education within 60 days of beginning activity

Recognizing that in some areas of the state the use of leasing agents is increasing, Illinois REALTORS® strongly advocated for more language in the Act that governed their role in brokerage practices.

Among the changes that were made, REALTORS® advocated for the requirement that those practicing by a temporary, 120-day leasing agent permit, must be enrolled in a leasing agent pre-license course within 60 days of beginning their leasing agent activities. Also, leasing agent management was added to the core curriculum so as to stress the importance of this topic to licensed brokers throughout the state.

Finally, the Act was also amended to clarify that leasing agents were subject to 6 hours of continuing education every two years and that leasing agents were not authorized to engage in or perform those activities that would be considered sales brokerage activities.

Investigations - Notice to Brokerages

One of the important issues facing managing and sponsoring brokers was insuring proper supervision of brokers who may be subject to investigations or discipline by the Illinois Department of Financial and Professional Regulation. To date, confidentiality concerns have prevented the Department from sharing critical information with managing and sponsoring brokers who were charged with supervisory responsibility.

However, Illinois REALTORS® was able to provide for new authority in the Act for the Department to provide notice to brokerages when one of their licensees is subject to disciplinary proceedings or has had disciplinary action taken against them. This significant change will enable brokerages to better protect their companies and insure compliance with the Act.

Advisory Council – R.E.A.D. Board Merger to Streamline Government

As a part of the larger effort to streamline government, the Act was further amended to merge the Real Estate Education Advisory Council and the Real Estate Administration and Disciplinary (“READ”) Board. To reflect the combination, membership on the Board was increased from 9 to 15 members, and 12 of those members must be actively engaged brokers or managing brokers. Illinois REALTORS® designed these changes, as well as other smaller changes throughout the Act related to Board functions, like continuing education course approval, to maximize Board efficiency.

Unanimous Support from Illinois lawmakers

Illinois REALTORS® recognized that changes to the Act were necessary and capitalized on the opportunity to see those changes made, but its success was no guarantee. Rather, this legislative success was the result of months of hard negotiations with the Department, followed by the influential efforts of Illinois REALTORS®’ members and government affairs team at the state capitol during the legislative session.

As a result of those efforts, Illinois REALTORS®’ legislation greatly strengthening and improving the Illinois Real Estate License Act, passed both the Illinois House of Representatives and Senate unanimously this spring and is expected to be signed into law this summer by Governor Rauner. Once signed, the amendments to the Act would take effect on January 1, 2018.