On August 19, 2004, Governor Rod R. Blagojevich signed into law Senate Bill 2887, the IAR legislative initiative amending the Real Estate License Act (Public Act 93-957). Following is a summary of this legislation, which contains several important revisions to the Real Estate License Act to promote greater professionalism and accountability within the industry and to provide greater protections for real estate consumers. Full text is also available on the Illinois General Assembly site at www.ilga.gov

Minimum Services. Section 15-75 of the Act defines the "exclusive brokerage agreement." All exclusive brokerage agreements must specify that the sponsoring broker, through one or more sponsored licensees, must provide at a minimum, the following services:

1. accept delivery of and present to the client offers and counteroffers to buy, sell, or lease the client's property or the property the client seeks to purchase or lease;

2. assist the client in developing, communicating, negotiating, and presenting offers, counteroffers, and notices that relate to the offers and counteroffers until a lease or purchase agreement is signed and all contingencies are satisfied or waived; and

3. answer the clients' questions relating to the offers, counteroffers, notices, and contingencies.

This is effective for all exclusive brokerage agreements signed after August 19, 2004. The failure of a broker to provide such services would constitute a violation of the Real Estate License Act. See Minimum Services FAQs drafted by IAR Legal Counsel.

Grandfather Clause. The Act repeals the "grandfather clause" for continuing education. According to the Illinois Department of Financial and Professional Regulation (IDFPR), Division of Banks and Real Estate, the Act requires that anyone licensed for 15 years prior to January 1, 1992, is no longer exempt from continuing education. A salesperson wishing to renew his license on April 30, 2005, will need to complete six hours of continuing education during the pre-renewal period. Previously exempt brokers must complete 12 hours of continuing education in the two years prior to the April 30, 2006, renewal date. Questions? Contact the Division of Banks and Real Estate, Licensing, 217/782-3414, www.obre.state.il.us/default2.htm.

Broker-Management CE. The Act requires real estate brokers to take an additional six hours of continuing education every two years dealing specifically with broker-management issues. Note: According to the IDFPR, these six hours must be taken in the period between May 1, 2006, and before renewal in 2008. Beginning May 1, 2006, new broker licensees will be required to complete the six-hour broker management course within 180 days of initial licensure. Brokers receiving an initial broker license 90 days or less before the renewal date do not have to take the additional hours for that renewal period but must complete the six hours within 180 days of receiving a broker's license.

The Act also allows the IDFPR the option of contracting with a provider to develop one uniform broker management continuing education course that will be offered by all continuing education course providers. This will provide for consistency in content in the broker management course.

The Act provides that brokers receiving an initial broker license 90 days or less before the renewal date do not have to take the additional hours for that renewal period.

Broker License Status Change. The Act allows a broker to change license status to "salesperson" at any renewal date.

Course exemption for baccalaureate degrees. Deletes the exemption from taking pre-license courses for persons who receive a baccalaureate degree that includes courses involving real estate. This ensures that new licensees receive coursework that specifically deals with the regulatory and practice provisions spelled out in the Real Estate License Act.

While the bill has some internal effective dates regarding the CE provisions, the overall bill is effective immediately.

Please contact Greg St. Aubin or Julie Sullivan, IAR's Statehouse lobbyists, if you have any questions or comments.

Revised 10-04