The Illinois Real Estate License Act has been amended. What do you need to know?

This August, Governor J.B. Pritzker signed an Amendment to the Illinois Real Estate License Act of 2000 (RELA). This bill is essentially an extension of the previous RELA rewrite signed in 2009 and scheduled to sunset at the end of this year. There are three areas of major change that you should be aware of.

Recognition of teams, and stricter scrutiny on marketing and advertising 

 

This is the first time that “teams” are being addressed in the RELA. Teams are defined as “any two or more licensees who work together to provide real estate brokerage services, represent themselves to the public as being a part of a team or group, are identified by a team name that is different than their sponsoring broker’s and sponsored by the same sponsoring broker.

 

Perhaps the most relevant change is that the most recent amendment to the RELA specifically outlines a list of words and phrases that may be misleading to the public and therefore should not be used. These terms include: company, realty, real estate, agency, associates, brokers, properties, and property.

 

Another new regulation in this area looks at marketing and advertising materials, specifically an agent’s personal (or team) branding and that of their sponsoring brokerage. The personal and team branding must not be larger or featured more prominently than that of their brokerage’s. For example at our company, a team logo, as well as the team name, may never be larger than the Baird & Warner logo on a flyer.

 

The intent with these changes is to avoid client confusion, who may see a team’s (or individual’s) prominent branding and assume that they are entirely their own brokerage. The new law technically went into effect the moment the Governor signed the bill on August 9, but the IDFPR has indicated they are sensitive to the need for a “grace period” in order to give licensees time to work with advertising development to implement the necessary changes. As yet, there is no date for when this portion of the law will be enforced, so it is best to begin making the appropriate changes right away. If not, violations could result in hefty fines.

 

A new “one-click” advertising rule, and a change to “managing broker”

 

The RELA had to adapt to the many ways agents can get their name out there online in 2019. For online marketing, the new act implements a “one-click” rule, meaning that for ads that include a link, the link must lead directly to a page that clearly states the agent’s full name, team name (if applicable), company name, and their title. Since this is rarely the case best practice is to continue placing your name, role as a broker and company name on all social media business posts.

 

Thus, it would be helpful to have your own landing page within your company’s website. But make sure to remember the specifications mentioned above about making your personal branding equally or less prominent than that of the company’s. 

 

The one-click requirement will have a strong impact on social media, as an agent’s posted link even there cannot just lead to a general company or listing webpage.

 

As mentioned before, the webpage the link leads to must feature the agent’s title, and you should note that titles may need some tweaking as well. Many more agents are now able to go by the “managing broker” title if they hold that license. The actual managing broker is now required to indicate “Designated Managing Broker.” Company policy may dictate whether or not “managing broker” may be used by non-designated managing brokers.

 

The minimum licensing age dropped, and required education hours  redistributed

 

The age requirement for initial licensure in Illinois has been lowered from 21 to 18. Illinois had been somewhat of an outlier among other states with the 21 year old requirement, as most states with age requirements have them at 18. A high school diploma or GED will still be required.

 

Illinois will also be adjusting the required number of hours of licensing education, reducing pre-license hours from 90 to 75, and increasing post-license hours from 30 to 45. The approach here is that despite no net increase in the total number of hours, once the pre-license course has been successfully completed with a passing grade and license in hand, the 45 hour post-license course will focus on getting the new licensee ready to begin working with the public. The 45 hour post-license requirement will be taught in three 15 hour courses that focus on applied brokerage principles, risk management, discipline, and transactional issues. There will be an exam at the end of each 15 hour course.

 

These three are but a few of the changes in the new RELA, so it would useful to look into the other changes as well. For example, perhaps you could benefit from the new provision for “virtual offices”, which removes the requirement for each brokerage to operate from a physical brick-and-mortar location.

 

There were no changes to Illinois’ licensing reciprocity status. Illinois shares reciprocity with Indiana, Wisconsin, Iowa, Nebraska, Colorado, South Dakota, Florida, Georgia, and Connecticut.