Illinois REALTOR® Magazine | July 2013
By Elizabeth A. Urbance | IAR Legal Hotline Attorney; Associate, Sorling Northrup Attorneys
Illinois courts say the practice of law is “giving advice or services ‘when giving such advice or rendition of such service requires the use of any degree of legal knowledge or skill.’ People ex rel. Illinois State Bar Association v. Schafer, 404 Ill. 45, 50 (1949).” The Illinois State Bar Association goes on to say that in Illinois, the practice of law is not limited to appearing in court, but also giving of advice or rendering of any service requiring the use of any legal skill or knowledge. This includes, for example, preparing documents.” ISBA and the Practice of Law – What the Public Needs to Know.
Under the Attorney Act, anyone acting as an attorney without a license is guilty of contempt of court. Remedies include:
Also, it is important to know that punishment for contempt of court can include jail time to stop the offending conduct. [705 ILCS 205/1] Depending upon the subject matter there can be criminal sanctions under other statutes, like the Consumer Fraud and Deceptive Business Practices Act.
Anyone who thinks they have been harmed could seek redress for UPL issues. But also, the Illinois Supreme Court passed a rule that empowers the Attorney Registration and Disciplinary Commission (ARDC) to investigate allegations of UPL and prosecute cases in court.
Joe Taxpayer hired Bob Broker (an Illinois licensed real estate broker) to represent him in front of Joe’s local Board of Review (BOR) to appeal his property tax bill. Not only did Bob find and analyze the values of the comparable properties, but he prepared the complaint form for Joe, signed it on Joe’s behalf and appeared as an advocate for Joe at the hearing before the local BOR. Bob was paid for these services. Is this UPL?
Now consider similar facts as set forth above with these changes: Bob Broker provided Joe Taxpayer with information and comparable sales figures for Joe’s property. Joe completed his own appeal form and signed the form as the property owner. Bob appeared at the hearing before the BOR but as an expert witness to help support Joe’s valuation evidence. Bob was paid for these services. Is this UPL?
Now let’s assume that Bob Broker is a buyer’s broker for Betty Buyer. Betty found a property on which she wanted to make an offer. Bob downloaded the purchase contract form that is commonly used in his community and one that is approved by Bob’s local association of REALTORS®. They have learned that the listed property will be a short sale. Betty does not want to provide earnest money until there is lender approval of the contract. Bob drafts this language into the offer to purchase and presents Betty’s offer, with the new language that Bob wrote, to the listing broker. Has Bob engaged in UPL?
What should Bob have done to assist Betty in this scenario?
Bob Broker was preparing a written listing contract for Sammy Seller to sign giving Bob’s sponsoring real estate brokerage company the exclusive right to market Sammy’s real property for sale. Sammy did not agree with the “hold harmless” language in the listing contract form. He asked Bob to remove this language from the contract. Bob agreed to modify the language and did so at Sammy’s request. Bob is the managing broker of the brokerage company. Is this UPL?
Are there any other areas of concern with regard to UPL issues for real estate licensees?
This article has provided a few examples that we hope will help you discern what activities could constitute UPL and are not activities that fall within the scope of your real estate license. The examples are not exhaustive but hopefully help you to see the differences between brokerage activities or services and legal advice or assistance.
Got a legal question?
The IAR Legal Hotline is the Designated REALTOR®/managing broker’s go-to source for legal information.
9 a.m. to 4 p.m.