January 2012

Happy New Year

By Steve Bochenek, IAR Chief Legal Counsel

With the beginning of the 2012 New Year we celebrate new opportunities that will present themselves in the coming year. Our hope is that your brokerage company will be presented with new opportunities that will help your company prosper in 2012. So what does this have to do with the legal issues we typically discuss here? Plenty, as you will see in the following paragraphs.

In order for your company to be able t¬o take advantage of new opportunities, you need to have people properly licensed under the Real Estate License Act of 2000 working for you. As you read this article, there are less than 85 days left for licensees to take a proficiency exam. The last day for taking the proficiency exam is March 15, 2012. Who needs to and why do you need to take the proficiency exam?

As of April 30, 2012, all of your sponsored licensees holding a salesperson’s license MUST have transitioned to a broker’s license. If they have not, they will not be able to work for your brokerage company and will need to start from scratch to obtain a new license. To transition to the broker’s license, a salesperson will either need to have taken the proficiency exam by March 15, 2012 and pass that exam or take a 30-hour transition course and pass the school’s exam before April 30, 2012.

Another group that must transition by April 30, 2012 is sole proprietors. If you are a self-sponsored broker, without a legal entity serving as your sponsoring brokerage company, you MUST transition to a managing broker license by April 30, 2012. This would be accepted either by taking and passing the proficiency exam by March 15, 2012, or by taking a 45-hour transition course and passing the school’s exam before April 30, 2012. If you do not transition to a managing broker license by April 30, 2012, you will not be able to be self-sponsored and will need to be sponsored by a licensed entity or a person holding a managing broker license.

The third category of licensee that MUST transition by April 30, 2012 is brokers who are acting as managing brokers for a brokerage company. Remember that all licensed entities must have at least one managing broker or the entity will lose its license. All licensees who are or will be a managing broker as of April 30, 2012 MUST transition to a managing broker license. This can be done by successfully completing the proficiency exam by March 15, 2012, or by taking a 45-hour transition course and passing the school’s exam by April 30, 2012.

Other licensees may also choose to transition. However, the MUST-transition categories are (1) those individuals licensed as a salesperson, (2) self-sponsored brokers (sole proprietors) and (3) licensees who will be managing brokers on May 1, 2012.

Another important point is that you should apply for your new license as soon as possible. In every case you must apply for the new license as of April 30, 2012. This means that you need to submit the application even if you do not have your exam results back. Applications for a new license obtained through the transition process will not be accepted by the Department of Financial and Professional Regulation (DFPR) after April 30, 2012. If you submit your application after April 30, 2012, your application will be denied and you will need to start from scratch, i.e. obtain all of the required education before you can take a new licensing exam.

One important item sometimes lost in the transition process is that April 30, 2012, is also the date for all those holding a broker’s license or obtaining a broker’s license through the transition process (proficiency exam or 30-hour transition course) to renew the broker’s license. This means you will need to submit a renewal application with the proper fee and have the required continuing education hours.

How many CE hours will you need? If you had a salesperson’s license and took a proficiency exam to transition, you will need 18 hours of CE to renew. If you had a salesperson’s license and took the 30-hour course to transition, you will not need any additional CE hours. If you had and continue to have a broker’s license (no transition to a new license was needed), you will need 12 hours of CE. All of these hours of CE will need to be completed by April 30, 2012.

Don’t wait until it is too late. Make sure your sponsored licensees are transitioning now. You certainly want and need to have the licensees necessary to take advantage of those opportunities your company will have in 2012.

• Find transition charts, CE requirements, IAR Legal Webinars and more at the Illinois Association of REALTORS® official website for the Illinois real estate transition process, www.IARlicenselaw.org.
• Also see IDFPR’s Online Real Estate Transition Guide, www.idfpr.com/DPR/RE/RETransition.asp.