License Law Q&A Post-Transition

IAR has been advised by IDFPR that the transition process has ended and that the IDFPR website will be updated and current by August 1, 2012. The following are taken from FAQs previously published by IAR in April, 2012 and which are on the IAR website. The following Q and A are those that will be of interest as the transition ends and have been updated, where appropriate, to reflect the end of the transition process.

QUESTIONS AND ANSWERS

Q1.      I am the managing broker for our brokerage company. What responsibility do I have to make sure that our sponsored licensees have transitioned or renewed their real estate brokerage license?

A1.      As the managing broker for your brokerage company the Illinois Department of Financial and Professional Regulation ("DFPR") will consider you as the responsible party with your brokerage company for making sure that all sponsored licensees who are continuing in the business have transitioned or renewed their license as provided by statute. Failure to do so may subject you to discipline.

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Q2.      Will the DFPR website be current as of August 1, 2012 so that I can determine who is properly licensed?

A2.      Yes, the DFPR website is scheduled  to be current as of August 1, 2012 as to all licensees transitioning or renewing their license. 

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Q3.      As managing broker for a brokerage company what should I do to insure that all of our sponsored licensees have transitioned or renewed?

A3.      As of August 1, 2012, the best way to check on your sponsored licensees is to check the DFPR's website. The website will be current at that time and will indicate salespersons who did not transition to broker as “Expired” and those brokers who did not renew as “Not-Renewed”. Those of your sponsored licensees who were brokers and transitioned to the managing broker's license would not have to renew their license as of April 30, 2012, but should be shown on the DFPR website as a licensed managing broker.  If you have any leasing agents they are not required to renew as of April 30, 2012. The renewal date for leasing agents is July 31, 2012.

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Q4.      I am a salesperson who failed to transition. What do I need to do to regain my license?

A4.      You will need to start over by taking the required pre-license education for a broker’s license and pass the State exam. More details are available on the DFPR website.

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Q5.      I am a broker who failed to renew as of April 30, 2012. What do I need to do to regain my license?

A5.      You will need to complete the required continuing education and pay the required fees in order to restore you license. See the DFPR website for more information.

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Q6.      I am a sole proprietor who failed to transition to a managing broker license by April 30, 2012 but renewed my broker’s license. What are my options?

A6.      Your options would appear to be two. The first would be to go to work for a brokerage company that is properly licensed and has a managing broker in place. You would become a sponsored licensee with that brokerage company and would need to do business for and advertise under the name of that company. The second option would be for you to set up a corporation or other entity, of which you could be the sole owner, and hire or retain the services of an individual who has a managing broker license and is not affiliated with any other company. This person would be designated with the DFPR as the managing broker for your new company. Your license would then be sponsored by the new company. You would also need to advertise and do business under the name of the new company. This may well mean that your advertising will be different from your existing advertising unless the new company files for an assumed name which is the same as your sole proprietorship name. Under this scenario you could then continue to advertise under the same name. You will also then have time to take the necessary education and testing required to obtain the managing broker license.

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Q7.      Do I need to be concerned about whether a cooperating brokerage company renewed its license?

A7.      No, since the brokerage company's license extends through October 31, 2012. Thus, the brokerage company is still going to be licensed after April 30, 2012. The only exception to this would be if that brokerage company did not have a managing broker designated with DFPR or have permission from DFPR to continue to act on an emergency basis without a managing broker. You can check the DFPR website to check the license status of a managing broker.

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Q8.      What if I know that one of the sponsored licensees in the cooperating brokerage company who worked on the transaction was not licensed after May 2, 2012?

A8.      The brokerage company is still licensed and the offer to pay the cooperating brokerage fee is to the brokerage company and not to any sponsored licensee. Whether or not the cooperating broker company pays the individual who is unlicensed is up to the cooperating broker. Payment of an individual who is not licensed by the cooperating brokerage company should cause the cooperating brokerage company problems under the Act and with DFPR but that is an issue for the cooperating broker and not for your company who is simply paying the cooperating fee to the cooperating brokerage company. The managing broker of the company that has the listing may want to make the managing broker of the licensed cooperating brokerage company of DFPR aware of your concerns regarding that individual and their unlicensed status but this would not typically be reason to fail to pay the cooperating broker's fee.

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Q9.      Will I be subject to discipline for dealing with or paying an individual or company that is not licensed after July 31, 2012? 

A9.      You may be subject to discipline if you pay an unlicensed company or person a fee after July 31, 2012.

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Q10.    What happens to the listing if a salesperson, who is sponsored by a sponsoring brokerage company and is the designated agent on a listing in a local/regional Multiple Listing Service (MLS), either failed to transition or chose not to transition to a broker’s license and is no longer licensed on August 1, 2012?

A10.    Due to the fact that the MLS participant is really the company as opposed to the sponsored licensee, the managing broker for the sponsoring brokerage company could simply appoint an additional or new designated agent to take over the listing and see the listing through to completion/closing of the transaction.

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Q11.    Same facts as above, except the listing belongs to a one-person sole proprietorship where the sole proprietor broker failed to transition to managing broker and did not renew his broker’s license. What happens to the listing in this situation?

A11.    The listing will be considered void because the agreement is with someone who is no longer licensed. The listing should be removed from the MLS. The sellers would be free to enter a new listing agreement with a properly licensed sponsoring brokerage company. Any new sponsoring broker should take care not to induce sellers to breach a valid listing but can assist those sellers after learning that their prior listing broker is no longer licensed.

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Q12.    I am the owner of a brokerage company. Our company had a managing broker, with a managing broker license, designated with DFPR to manage our company. That person left our brokerage company after May 1, 2012. The company has no other sponsored licensees who have a managing broker's license. What can our company do at this point in time to replace the managing broker and remain licensed?

A12.    Your brokerage company really has two options. The first would be to locate an individual with a managing broker's license with another company or who is self-sponsored and retain their services to be the managing broker for your company. The second option is to find an individual who is a sponsored licensee of your company, with at least two years of experience, who is willing to be a managing broker and obtain the managing broker license. That individual would be named with DFPR as the managing broker for your company, even though they do not yet have the managing broker license. Pursuant to Section 1450.550(a) of the Rules that individual will have a period of 90 days to take the necessary education and pass the required test to obtain the managing broker license. During the interim your company remains properly licensed.

 


© Illinois Association of REALTORS® 2012

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