2005 Illinois Code - 225 ILCS 454/ Real Estate License Act of 2000. Article 10 - Compensation And Business Practices
(225 ILCS 454/Art. 10 heading)
ARTICLE 10.
COMPENSATION AND BUSINESS PRACTICES
(225 ILCS 454/10‑5)
(Section scheduled to be repealed on January 1, 2010)
Sec. 10‑5.
Payment of compensation.
(a) No licensee shall pay compensation directly to a licensee sponsored by
another broker for
the performance of licensed activities. No licensee sponsored by a broker may
pay compensation to
any licensee other than his or her sponsoring broker for the performance of
licensed activities
unless the licensee paying the compensation is a principal to the transaction.
However, a non‑sponsoring broker may pay compensation directly to a licensee
sponsored by
another or a person
who is not sponsored by a broker if the payments are made pursuant to terms of
an employment
agreement that was previously in place between a licensee and the
non‑sponsoring broker, and the
payments are for licensed activity performed by that person while previously
sponsored by the now
non‑sponsoring broker.
(b) No licensee sponsored by a broker shall accept compensation for the
performance of
activities under this Act except from the broker by whom the licensee is
sponsored, except as
provided in this Section.
(c) Any person that is a licensed personal assistant for another licensee
may only be
compensated in his or her capacity as a personal assistant by the sponsoring
broker for that licensed
personal assistant.
(d) One sponsoring broker may pay compensation directly to another
sponsoring broker for the
performance of licensed activities.
(Source: P.A. 91‑245, eff. 12‑31‑99.)
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(225 ILCS 454/10‑10)
(Section scheduled to be repealed on January 1, 2010)
Sec. 10‑10.
Disclosure of compensation.
(a) A licensee must disclose to a client the sponsoring broker's
compensation and policy with
regard to cooperating with brokers who represent other parties in a
transaction.
(b) A licensee must disclose to a client all sources of compensation related
to the transaction
received by the licensee from a third party.
(c) If a licensee refers a client to a third party in which the licensee has
greater than a 1% ownership interest
or from which the licensee receives or may receive dividends or other profit
sharing distributions, other than a
publicly held or traded company, for the purpose of the client obtaining
services related to the transaction, then the
licensee shall disclose that fact to the client at the time of making the
referral.
(d) If in any one transaction a sponsoring broker receives compensation from
both the buyer
and seller or lessee and lessor of real estate, the sponsoring broker shall
disclose in writing to a
client the fact that the compensation is being paid by both buyer and seller or
lessee and lessor.
(e) Nothing in the Act shall prohibit the cooperation with or a payment of
compensation to a
person not domiciled in this State or country who is licensed as a real
estate broker in
his or her state or country of domicile or to a resident of a country
that does not require a person to be licensed to act as a real estate broker if
the person complies with the laws of the country in which that person resides
and practices there as a real estate broker.
(Source: P.A. 91‑245, eff. 12‑31‑99; 92‑217, eff. 8‑2‑01.)
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(225 ILCS 454/10‑15)
(Section scheduled to be repealed on January 1, 2010)
Sec. 10‑15.
No compensation to persons in violation of Act; compensation
to unlicensed
persons; consumer.
(a) No compensation may be paid to any unlicensed person in exchange for the
person
performing licensed activities in violation of this Act.
(b) No action or suit shall be instituted, nor recovery therein be had, in
any court of this State
by any person, partnership, registered limited liability partnership, limited
liability company, or
corporation for compensation for any act done or service performed, the doing
or performing of
which is prohibited by this Act to other than licensed brokers, salespersons,
or leasing agents unless
the person, partnership, registered limited liability partnership, limited
liability company, or corporation was duly
licensed hereunder as a
broker, salesperson, or leasing agent under this Act at the time that any such
act was done or service
performed that would give rise to a cause of action for compensation.
(c) A licensee may offer compensation, including prizes, merchandise,
services, rebates,
discounts, or other consideration to an unlicensed person who is a party to a
contract to buy or sell
real estate or is a party to a contract for the lease of real estate, so long
as the offer complies with
the provisions of subdivision (26) of subsection (h) of Section 20‑20 of this
Act.
(d) A licensee may offer cash, gifts, prizes, awards, coupons, merchandise,
rebates or chances
to win a game of chance, if not prohibited by any other law or statute,
to a consumer as an
inducement to that consumer to use the services of the licensee even if the
licensee and consumer
do not ultimately enter into a broker‑client relationship so long as the offer
complies with the
provisions of subdivision (26) of subsection (h) of Section 20‑20 of this Act.
(Source: P.A. 91‑245, eff. 12‑31‑99.)
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(225 ILCS 454/10‑20)
(Section scheduled to be repealed on January 1, 2010)
Sec. 10‑20.
Sponsoring broker; employment agreement.
(a) A licensee may perform activities as a licensee only for his or her
sponsoring broker. A
licensee must have only one sponsoring broker at any one time.
(b) Every broker who employs licensees or has an independent contractor
relationship with a
licensee shall have a written employment agreement with each such licensee.
The
broker having
this written employment agreement with the licensee must be that licensee's
sponsoring broker.
(c) Every sponsoring broker must have a written employment agreement with
each licensee the
broker sponsors. The agreement shall address the employment or independent
contractor
relationship terms, including without limitation supervision,
duties, compensation, and
termination.
(d) Every sponsoring broker must have a written employment agreement with
each licensed
personal assistant who assists a licensee sponsored by the sponsoring broker.
This requirement
applies to all licensed personal assistants whether or not they perform
licensed activities in their
capacity as a personal assistant. The agreement shall address the employment
or independent
contractor relationship terms, including without limitation supervision,
duties, compensation, and
termination.
(e) Notwithstanding the fact that a sponsoring broker has an employment
agreement with a
licensee, a sponsoring broker may pay compensation directly to a corporation
solely owned by that
licensee that has been formed for the purpose of receiving compensation earned
by the licensee.
A corporation formed for the purpose herein stated in this subsection (e) shall
not be required to be
licensed under this Act so long as the person who is the sole shareholder of
the corporation is
licensed.
(Source: P.A. 91‑245, eff. 12‑31‑99.)
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(225 ILCS 454/10‑25)
(Section scheduled to be repealed on January 1, 2010)
Sec. 10‑25.
Expiration of brokerage agreement.
No licensee shall obtain any written brokerage agreement that does not provide
for automatic
expiration within a definite period of time. No notice of termination at the
final expiration thereof
shall be required. Any written brokerage agreement not containing a provision
for automatic
expiration shall be void. When the license of any sponsoring broker is
suspended or revoked, any
brokerage agreement with the sponsoring broker shall be deemed to expire upon
the effective date
of the suspension or revocation.
(Source: P.A. 91‑245, eff. 12‑31‑99.)
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(225 ILCS 454/10‑27)
(Section scheduled to be repealed on January 1, 2010)
Sec. 10‑27.
Disclosure of licensee status.
Each licensee shall disclose,
in writing, his or her status as a licensee to all parties in a transaction
when the licensee is selling, leasing, or purchasing any interest, direct or
indirect, in the real estate that is the subject of the transaction.
(Source: P.A. 91‑245, eff. 12‑31‑99.)
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(225 ILCS 454/10‑30)
(Section scheduled to be repealed on January 1, 2010)
Sec. 10‑30.
Advertising.
(a) No advertising shall be fraudulent, deceptive, inherently misleading, or
proven to be
misleading in practice. It shall be considered misleading or untruthful if,
when taken as a whole,
there is a distinct and reasonable possibility that it will be misunderstood or
will deceive the
ordinary purchaser, seller, lessee, lessor, or owner. Advertising shall
contain all information
necessary to communicate the information contained therein to the public in a
direct and readily
comprehensible manner.
(b) No blind advertisements may be used
by any licensee except as provided for in this Section.
(c) A licensee shall disclose, in writing, to all parties in a transaction
his or her status as a
licensee and any and all interest the licensee has or may have in the real
estate constituting the
subject matter thereof, directly or indirectly, according to the following
guidelines:
(1) On broker yard signs or in broker |
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advertisements, no disclosure of ownership is necessary. However, the ownership shall be indicated on any property data form and disclosed to persons responding to any advertisement or any sign. The term "broker owned" or "agent owned" is sufficient disclosure.
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(2) A sponsored or inoperative licensee selling or
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leasing property, owned solely by the sponsored or inoperative licensee, without utilizing brokerage services of their sponsoring broker or any other licensee, may advertise "By Owner". For purposes of this Section, property is "solely owned" by a sponsored or inoperative licensee if he or she (i) has a 100% ownership interest alone, (ii) has ownership as a joint tenant or tenant by the entirety, or (iii) holds a 100% beneficial interest in a land trust. Sponsored or inoperative licensees selling or leasing "By Owner" shall comply with the following if advertising by owner:
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(A) On "By Owner" yard signs, the sponsored or
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inoperative licensee shall indicate "broker owned" or "agent owned." "By Owner" advertisements used in any medium of advertising shall include the term "broker owned" or "agent owned."
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(B) If a sponsored or inoperative licensee runs
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advertisements, for the purpose of purchasing or leasing real estate, he or she shall disclose in the advertisements his or her status as a licensee.
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(C) A sponsored or inoperative licensee shall
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not use the sponsoring broker's name or the sponsoring broker's company name in connection with the sale, lease, or advertisement of the property nor utilize the sponsoring broker's or company's name in connection with the sale, lease, or advertising of the property in a manner likely to create confusion among the public as to whether or not the services of a real estate company are being utilized or whether or not a real estate company has an ownership interest in the property.
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(d) A sponsored licensee may not advertise under his or her own name.
Advertising shall be
under the direct supervision of the sponsoring or managing broker and in the
sponsoring broker's
business name, which in the case of a franchise shall include the franchise
affiliation as well as the
name of the individual firm.
This provision does not apply under the following circumstances:
(1) When a licensee enters into a brokerage
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agreement relating to his or her own real estate, or real estate in which he or she has an ownership interest, with another licensed broker; or
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(2) When a licensee is selling or leasing his or her
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own real estate or buying or leasing real estate for himself or herself, after providing the appropriate written disclosure of his or her ownership interest as required in paragraph (2) of subsection (c) of this Section.
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(e) No licensee shall list his or her name under the heading or title "Real
Estate" in the
telephone directory or otherwise advertise in his or her own name to the
general public through any
medium of advertising as being in the real estate business without listing his
or her sponsoring
broker's business name.
(f) The sponsoring broker's business name and the name of the licensee must
appear in all
advertisements, including business cards. Nothing in this Act shall be
construed to require specific
print size as between the broker's business name and the name of the licensee.
(Source: P.A. 91‑245, eff. 12‑31‑99.)
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