Term
| In IL the practice of RE is governed by what |
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Definition
| The practice of real estate in illinois is governed by the REAL Estate License Act of 2000 (also known as "The Act")and the rules established by the Illinois Dept of Fianancial and Professional Regulation (IDFPR). the act was amended in 2010 |
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Term
| Agency Relationaship governed by what |
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Definition
| Agency relationship in IL are governed under statutory law. The body of law on which IL agency is based is the Real Estate License Act of 2000 |
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Term
| Define Agency, An Agent, A brokerage agreement, A Client, |
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Definition
- Agency is the relationship in which a consumer has given consent (express or implied) to a real estate licensee to represent the consumer in a real property transaction.
- An agent is the individual who is authorized and consents to represent the interestss of another person. In the real estate business, a firm's sponsoring broker is the agent and shares this responsibility with the license who work for him.
- A brokerage agreement is an agreement for an agent or firm to provided brokerage services to a consumer. In IL any brokerage service agreement must be in wiriting.
- A client is the person or entity that a license represents in a real property transaction.
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Term
| Define Compensation, Confidential Information, A consumer, A Customer, Ministerial Acts |
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Definition
Compensation is payment (monetary or otherwise) made to a person or entity for executing services for a client or customer.
Confidential Information is information given by a client to the licensee during the term of a brokerage agreement that the client keeps in confidence, relates to the client's negotiating position or could damage the client negotiating position if disclosed. This information must not be shared unless the client gives authorization, or is needed or requested by law.
A consumer is a person or entity for whom an agent provides services, which are only to be provided by a licensee, or a person or entity who seeks such services from a licensee.
A customer is a person or entity for whom a licensee is providing services (ministerial acts) but who is not represented by the licensee in an agency relationship.
Ministerial Acts are informative or clerical services provided by a licensee to a consumer/customer. Ministerial Acts does not represent active representation. |
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Term
| Does IL allow dual agent in a transaction if agent is a party in that transaction. |
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Definition
| Illinois license law prohibits an agent from acting as a dual agent in any transaction to which the agent is a party. The agent must be particularly sensitive to any possible conflicts of interest. |
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Term
| Whose responsibility is for full disclosure of property in IL |
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Definition
| The IL Association of Realtor /Residential Real Property Disclosure shifts the responsibility for full disclosure from RE agent to the seller. Under no circumstance should a real estate licensee help the seller complete this form. ( either physically or by answering any question). Full disclosure needs to be given to buyer before offer is made. If disclosure is given after offer is made/accepted and has any negative disclosures/material defects, the buyer has 3 days to rescind the offer. If the problem comes up after the contract is signed and before the closing the seller is responsible to let the buyer know in writing and buyer needs to be compensated for it. |
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Term
| How soon must true copies of signed contract must be delivered, funds deposited in escrow account and define commingling and conversion. How long do escrow accounts need to be kept on file. |
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Definition
In Il licensees are required to deliver true copies of al executed sales contracts to the people who signed them within 24 hrs.
All funds entrusted to a licensee must be deposited in a special escrow account by the next business day following the signing of a sales contract or lease (unless the contract terms specify a different timeframe).
Commingling such monies with the licensee's personal or general business funds is illegal.
Conversion, the practice of using those escrow funds as the licensee's own money, is illegal as well.
Records of escrow accounts must be kept on file for at least five years. |
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Term
| According to License Act of 2000 what are the fiduciary/statutory duties of an agent |
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Definition
According to the statue, the agent:
must perform the terms of the brokerage agreement been a sponsoring broker and the client
promote the best interest of the client (do the best in obtaining the optimum price- in timely and legal fashion)
exercise reasonable skill and care in the performance of brokerage services
keep confidential all confidential info given by the client
comply with rules of ACT of 2000, including fair housing and civil rights |
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Term
| In Il why would a licensee be held liable to the buyer |
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Definition
| An IL licensee may be held liable to the buyer for any deception, false promise, fraud, misrepresentation or concealment, suppression, or omission of any material defect by paying the plaintiff's attorney's fee and court cost in addition to damages. |
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Term
| What is the policy for known latent material defects who is responsible for disclosing it |
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Definition
In Il according to the Harkala v Wildwood case there was no breach of duty to a party in RE transaction " unless the realtor could have discovered the falsity of representation by exercise of ordinary care and cited by Munjal v Baird Warner which states that a salesperson or broker has no responsibility to discover any latent material defects (hidden defects), responsibility of the seller to disclose these facts.
patent defects are defects which can be seen by naked eye, which must be disclosed by the seller and encouraged by the licensee for full disclosure. |
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Term
| In IL what will the licensee not be sued for or liable for |
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Definition
| In Il a licensee will not be responsible for failure to disclose a fact situation on property that is not the subject of transaction and no action will arise against the licensee in failure to disclose the physical condition of property which does not have a substantial affect on the value of the property. |
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Term
| What are rules and regulation of compensation in IL |
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Definition
In Il all exclusive brokerage agreements must be in writing according to the ACT
In IL compensation does not determine the agency relationship. In fact agency can exist even if no fee is involved and is called gratuitous agency.
Both the buyer and seller agents are paid in a cooperative commission agreement which means that the sponsoring broker of the agents are paid first and then the sponsoring broker distributes the commission to respective agents according to the contract agreement between sponsoring broker and agent. Regardless of the type of arrangement made the agent is responsible to the client for informing in each transaction how the sponsoring broker will be compensated and the commission will be split representing the other parties.
In IL it is common for the listing sponsoring broker to share the listing commission with the buyers sponsoring broker. |
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Term
| brokerage agreement termination |
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Definition
| A definite termination date must be included in a brokerage agreement. Automatic extension clauses are illegal according to IL law |
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Term
| Universal Agent, Designated Agency, Dual Agency |
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Definition
In Il a written power of attorney is required to create a universal agency. A universal agent is a person empowered to do anything the principal could do personally. A universal agent's authority to act on behalf of principal is virtually unlimited
Designated Agency is recognized in Il. A sponsoring broker entering into a brokerage agreement may specifically designate those licensee employed by or affiliated with the sponsoring broker to act as legal agents of that client to the exclusion of all other licensees employed or affiliated with the sponsoring broker.
In Il where dual agency is permitted , all parties must consent to the arrangement, preferably in writing. In dual agency, the agent represent two principals in the same transaction and owes fiduciary duties to both clients in the same transaction at the same time. |
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Term
| Who is considered a designated agent |
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Definition
| In IL Licensees are considered to be representing the consumer/customer as their client with whom they are working with unless there is a written agreement specifying differently or if the licensee is performing only ministerial acts. |
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Term
| Whom does a licensee owe fiduciary duties |
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Definition
In Il an Agent's primary responsibility is to the principal
A Agent will be held liable by court if he/she does not perform their fiduciary duties as stated in the contractual listing agreement by seller/agent or buyer agreement/by buyer/agent.
Courts do not demand fiduciary duties from third parties - who are just customers not client but licensees are to treat all customers honestly. They cannot negligently or knowingly give customers false information.
Licensee must disclose all known material adverse facts about the physical condition of property to the customer and which cannot be discovered by a reasonably diligent inspection of the property by a customer. |
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Term
| In Il what is the agency law for representation according to ACT of 2000 |
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Definition
| IL agency law currently presumes that a broker or managing broker who is working with a seller represents the seller and working with the buyer represents the buyer. Written disclosure is required for any other arrangement according the ACT of 2000 |
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Term
| what type of licensees are there for individuals |
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Definition
In Il brokerage firms vary widely in size and style. There are 3 types of RE licensees for individuals in IL are
broker, managing broker, leasing agent
Every RE office must have a sponsoring broker or and managing broker on record, neither of which need to be the owner of the business. |
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Term
| What are Act policy requirement from a Sponsoring broker |
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Definition
In Il According to ACT - every brokerage company or entity, other than a sole proprietorship with no other sponsored licensee shall adopt a company or office policy dealing with topics such as
the agency policy of the entity,
fair housing, nondiscrimination, and harassment,
confidentiality of client information,
advertising |
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Term
| in Il an unlicensed assistant may not perform which duties |
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Definition
host open houses, kiosks or home show booths or fairs
show property, interpret information listings, titles,financing, contracts, closings or other information relating to a transaction.
explain or interpret a contract, listing, lease agreement or other real estate document with anyone outside the licensee' company.
negotiate or agree to any commission, commission split, management fee or referral fee on behalf of a licensee
perform any other activity for which a license under the ACT is required. |
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Term
| Who pays the licensed personal assistant |
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Definition
| The ACT of 2000 requires that licensed personal assistants must have an employment agreement with the sponsoring broker of the firm in which the are working, even though they are, in practice, working for an affiliate licensee. The sponsoring broker must pay licensed personal assistants. |
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Term
| Who can collect commission for RE in IL |
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Definition
Only a licensed managing or sponsoring broker may collect a commission in IL, and they may share it with any licensee who is directly involved or responsible for a given transaction.
To collect a commission on a RE transaction, the agent must have been "hired" by way of agreement in which the principal agreed to pay a specified commission for services. The percentage of sales price or dollar amount of commission must have been expressed clearly in the agreement.
If another RE office brought in a the buyer the concept of cooperative commission allows the listing broker to pay the selling broker the amount of cooperative commission advertised in advance on the multiple listing service (MLS) |
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Term
| When and who can earn commission? |
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Definition
When: a completed sales contract has been executed by a ready, willing and able buyer. the contract has been accepted by seller and copies of the contract are in possession by all parties.
Who: An individual must be licensed RE broker, be the procuring cause of the sale, employed by the buyer or seller under a valid contract
Procuring cause - when a broker has started a chain of events that resulted in a sale and has to have a signed contract agreement to receive compensation/commission.
In Il, the closing of the sale is the usual proof in a court of law that the broker has produced a buyer and earned a commission.
In IL it is illegal for a sponsoring broker to pay commission to anyone other than to the licensees under that same sponsoring broker or another firm's sponsoring broker (cooperative commission) who then pays his own sponsored licensees involved.
Commission or other compensation (such as gifts, like television set, paid vacation, etc) NOT to be given to UNLICENSED assistant to acquire leads. This is not to be confused by referral fee which are legal as long as it occurs between licensed managing or sponsoring brokers to acquire leads.
If compensation is paid by both parties to a transaction - it needs to be disclosed.
Every company has their own structure of how commission should be paid. Regardless of what the structure is the sponsoring broker is the only one who can pay the compensation.
If the commission is from the listing that has been sold, commission is paid to the sponsoring broker of the listing, who pays the licensee involved in the listing and pays the cooperating sponsoring broker or any firm involved in transaction.
In cooperative transactions the commission is advertised in advance (usually stated as "co-op: X% on MLS sheet), commission is paid by sponsoring broker of list side to sponsoring broker of sell side and then paid to broker who worked for or with the buyer. |
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Term
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Definition
Licensee intending to sell or share consumer info gathered from or thru the internet, or any electronic media must disclose that intention to consumers in a timely and readily apparent manner
licensee cannot use a domain or URL which is deceptive or misleading, deceptively use another RE brokerage website or MLS, mislead the consumer or internet traffic |
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Term
| Fine for sending unsoliciated fundraising and advertising emails |
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Definition
Under IL law sending unsolicited fundraising and advertising emails without the recipient's permission may by punishable by a $500.00 fine
Email recipients must've an opt out method. A licensee must provide and email address or any other mechanism that allows recipient to ask you to not send further emails and which the licensee needs to honor
This Can Spam Act of 2003 - Controlling the Assault of Non-solicited Pornography and Marketing Act - establishes this rule and penalizes for non-compliance |
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Term
| Policy regarding exclusive listing in Il |
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Definition
In Il all exclusive listing agreement must be in writing which must include , the list price of property, the agreed commission and time of payment, the duration of agreement, the names of seller and broker, the identification # of property (address and legal description), the duties of the listing broker, a statement of nondiscrimination and a statement regarding antitrust.
Licensee may not accept form which have blanks to be filled up later |
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Term
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Definition
| Net listing are legal in IL, but not recommended because of the potential for fraud. |
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Term
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Definition
under IL law licensee working with a buyer is not considered to be a subagent of the seller. It is illegal to offer subagency thru an MLS in IL.
Lack of agency relationship by the buyer needs to be disclosed. |
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Term
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Definition
Once a long-lasting agreement has been finalized and signed by the broker and seller, Il law prohibits the broker from making any additions, deletions or altering of the written listing without the written consent of the principal (seller/sponsoring broker).
The broker must return a true copy of the listing agreement, signed by the seller and by the broker, to the principal within 24 HRS of execution. |
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Term
| Disclosure rules for Listing Agreement in IL |
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Definition
In IL the following disclosures needed with listing contracts.
Disclosure of material facts
Disclosure of Interest (if buyer or seller is a licensed broker, it needs to be clearly stated in contrast).
Disclosure of special compensation (A licensee/broker is prohibited from accepting "any finder fees, commissions, discounts, kickbacks, or other compensation from any financial institutions, title insurance company, or any other person other than another licensee, without full disclosure in writing of such receipt to all parties in transaction. Sponsored licensees receive any such compensation only thru their sponsoring brokers).
Earnest Money and Purchaser Default (seller will not receive ernest money if buyer/defaults, sale does not occur) this must be in written in BOLD in the listing contract.
Disclosure of property condition ( A property disclosure statement must be given to the buyer before an offer is made and accepted or the buyer will have three days in which to rescind the contract, based on any negative disclosures like lead paint or radon exposure).
Contract should specify about whether brokers are allowed to place sale sign on property, advertise about sale thru social media, and get permission to put on MLS listing and internet. |
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Term
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Definition
A married couple living in the listed property, both spouses must sign the listing agreement, even if only one owns the property to release the homestead rights
Names of all parties to the listing contract must be identified and signature needed for contract to be valid.
Name of brokerage firm,sponsoring broker and designated agent for the individual transaction must be identified in contract.
Listing price - proposed gross price (special assessments, RE taxes, mortgage or trust deed will be deducted from gross price)
Real property and personal property (state what stays with the property and what will be removed or taken by seller after the sale)
Description of Property - address, legal description, lot size and tax id/parcel # should be included. ( the street address sufficient for listing agreement to be valid and enforceable under IL law. Also a warranty deed, insurance policy, or abstract of title with an attorney's opinion can be used for proof of title.) |
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Term
| changes in listing agreement contract about commission. |
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Definition
| By law in lL, listing agreements must state that no change in the amount of the commission or time of payment will be valid or binding unless the change is made in writing and signed by all parties involved. |
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Term
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Definition
A client is not vicariously liable for the acts or omissions of a licensee in providing brokerage services for or on behalf of the clients.
The seller and broker may agree to hold each other harmless (not sue each other ) for any incorrect information supplied by one to the other. thru a process called indemnification (hold harmless) |
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Term
| Minimum Services/ Non discrimination |
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Definition
Seller needs to know that broker will show property without regard to the race, color, creed, or religious preference, national origin, family status, sex, age, or disability of the prospective buyer.
Broker will accept all offers/counteroffer and present them to the client/seller
Assist in developing, communicating, negotiating and presenting offers, counteroffers etc until a sale or leasing contract is signed.
Answer any questions relating to offer, counteroffer, contingencies and notices. |
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Term
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Definition
This clause provides that the property owner will pay the listing broker a commission if, within a specified time period after the listing agreement expires, the owner transfers property title to someone who saw the property while it was listed with the broker. This protects the broker from losing commission due to them,- and from buyer to make a private deal with the sellers. Any new buyers the seller will procure after the expiration of listing agreement is not affected by this clause. Also if the listing has expired and seller lists with a new different broker, the seller does have to pay the first broker any commission even if the buyer saw the property with previous broker. Seller only needs to pay the current broker.
In Il it is common for the listing broker to share the listing fee with the buyers broker,- this makes it clear that compensation does not represent agency However any compensation received from more than once source always needs to be disclosed in writing.
Buyers broker need to keep confidential info - confidential which is received by the client.
A buyers broker is allowed to show the same property to different buyers without breaking any rules by making contemporaneous offers. however written disclosure needs to be given to all client for which the offers were made for a property in question and must refer to any other designated agent if requested to do so by any client. |
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Term
| After termination of Sponsoring Broker and Client |
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Definition
The sponsoring broker need to terminate all services except to
account for all monies and property relating to the transaction
to keep confidential info confidential -received during the course of brokerage agreement, unless required by law. |
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Term
| Expiration of Brokerage Agreement |
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Definition
| Pursuant to 2013 - the Act - no licensee may obtain any written brokerage agreement that does not either provide for automatic expiration within a definite period of time or provide the client with a right to terminate the agreement annually by giving no more than 30 days prior to written notice. Leaving blank of termination agreement date could be ground for discipline. |
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Term
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Definition
| Local units of Gov. and quasi gov. bodies are given the power of eminent domain by IL constitution and by Il Code of civil procedure. In certain situations IL law permits a summary proceedings in which a plaintiff/condemner may obtain immediate fee simple title to real property, including the rights of possession and use. Such a proceeding is known as Quick take. e.g.: state of Il tollway takes property to construct maintain and operate highways. A sanitary district takes property to remove obstruction in a river, such as Des Plaines river or Il river. Airport authority takes property for additional land for airport use. |
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Term
| KeKo - Equity in Eminent Domain Act |
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Definition
| This law places the obligation on the government to prove that an area is blighted before forcing property owners to sell their property for private development projects. Furthermore it allows property owners to get fair market price, relocation costs for displace owners and business and pays attorney fees when property owners successfully sue to keep their property. |
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Term
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Definition
| Escheatment is a process in which if a owner dies without leaving any will or heirs, the property personal and real goes to the state. IN IL REAL PROPERTY WILL ESCHEAT TO THE COUNTY IN WHICH IT IS LOCATED RATHER THAN TO THE STATE!! |
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Term
| Fee Simple Defeasible or Fee Simple Determinable both freehold estates |
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Definition
| The right of re-entry and possibility of reverter can happen only in the future they are considered future interests. Although this condition passes from owner to owner it can stay active or valid for 40 yrs - after which the condition may still be enforced but without the fear of losing the property. |
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Term
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Definition
| Il have abolished the common law concepts of dower and curtsey in favor of the Uniform Probate Code. This gives the surviving spouse the right to take an elective share on the death of the other spouse. |
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Term
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Definition
A homestead is a legal life estate in real estate occupied as the family home. A homestead reserves a certain amount of fund for the family in an event of court sale of property (foreclosure), which is used to pay off any debt secured by the home such as mortgage, unpaid taxes, mechanic liens, from the sale proceeds first. Whatever is left, if any goes towards payment of unsecured debts of the family such as credit cards etc.
Every homeowner in IL gets homestead exemption uptp to 15,000 for single and 30,000 for married couple. The homestead continues after death of an individual for benefit of surviving spouse as long as person continue to stay at homestead residence. Homestead benefits can be for only one single family home at one time. It also extends for all children living there until the younger reaches 18yrs of age. The estate extends to all types of residential property, including condominiums and cooperatives. No notices has to be recorded or filed to establish a homestead in IL. The signatures of both spouses are always required on residential sales contracts, listing agreements, notes, mortgages deeds and other conveyance to release possible homestead rights, even if the property in question is owned solely by either the husband or wife. |
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Term
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Definition
To establish an easement by prescription in IL, the use must be adverse, exclusive, under claim of right, and continous and uninterupted for 2o yrs. The use must be visible open and notorious, that is the owner must have knowledge about it. e.g.: a visible fence, gardening every year on back lot of property, driving over property, etc.
To BLOCK an easement by prescription the owner must display or send a certified letter stating that the access to use of the property is by permission (and thus not adverse!!) |
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Term
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Definition
| Sole ownership common in Il and poses no unique legal problems. However when either a husband or wife have ownership by severalty, - lenders, grantees, and title insurers in Il usually require that spouse sign in order to release any homestead rights. This is true for both listing and sales contracts. |
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Term
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Definition
| IL recognizes co-ownership and most traditional forms of co-ownership except for community property (IL IS A MARITAL PROPERTY STATE) Il also recognizes ownership in trust, in partnership, and by commercial entities such as corporations and limited liability companies. |
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Term
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Definition
In Il a single deed may show the proportional interest of each Tennant in common, or a separate deed issued to each tenant may show her individual proportional interest. When a single deed is used, lack of a description of each tenant's share means all tenants hold equal, undivided shares. Tenants in common hold their share in severalty which means each can sell, convey, mortgage or transfer their interest. The consent of other tenant is not needed. When one co-owner dies, the tenant's undivided interest passes according to the person's will.
In IL the law presumes that two or more owners hold title as tenants in common if deed does not state specifically how title is to be held. |
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Term
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Definition
Joint tenancy - property owned by two or more people.
difference in Jpint tenancy and tenancy in common is unity of ownership-title is held as though all owners collectively constitute one unit. Joint tenancy includes right of survivorship Upon death of one owner his interest transfer directly to the surviving joint tenants.
Joint tenancy - Possession, Interest, Time, Title.
Il law allows a sole owner to execute a deed to herself and others "as joint tenants" and not as tenants in common in order to create a valid joint tenancy.
Joint tenants are free to convey their interest in the jointly held property, but doing so destroy the unities of time and title. The new owner cannot become a joint tenant and will hold interest as tenant in common. |
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Term
| 1983 - case of Minonk State Bank vs Gassman |
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Definition
| the court held that a joint tenant may unilaterally sever the tenancy by conveying her interest to her self without the consent of her co-owners, which means that any owner holding property as joint tenancy may elect at any time to become a tenant in common -which may be will to heirs or sold. |
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Term
| Severance of Joint Tenancy, Partition Suit |
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Definition
Any joint tenancy may be severed by mutual consent of co-owners, by conveyance to third parties or thru partition suit in the court.
Co-owners who wish to terminate their co-ownership may file an action in court to partition the property by process called partition suit. Partition suit is a legal way to dissolve the relationship when involved parties do not agree without destroying value of property. In Il suit is filed in county of which the property resides. The court appoints commissioner to divide property by legal description among co-owners- if division cannot be done without harming the rights of co-owners then commissioners must report valuation of property and property is put on sale for no less than 2/3 of the value set by commissioners. All defendants to the suit ( co-owners who oppose the partition) need to share the cost of court, lawyers fee- however requirement may be waived if the defendant have substantial defense. Once the sale goes thru - the proceeds are divided according the %interest of past owners. |
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Term
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Definition
Il recognizes tenancy by entirety. To create a tenancy by entirety the deed must indicate that the property is to be owned "not as joined tenants, or tenants in common but as tenants by entirety"
death of a spouse - leaves surviving spouse as owner by severalty
divorce, which leaves parties as tenants in common |
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Term
Community Property (Separate property before marriage) Community property after marriage.
/ Marital Property in IL -divided into marital and non-marital property |
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Definition
Il is not a community property state it is a marital property state.
Il divides and recognizes marital and non-marital property. IL law recognizes that a husband and wife acquire joint rights in all property acquired after the date of marriage for the duration of the marriage. Il labels such property as marital property which will be divided betwn spouses in event of divorce. In iL the marriage and dissolution of Marriage act gives the court flexibility in determing the precise division of property. Community property states divides 50/50 unless a prenuptial agreement states otherwise.
non marital property - that is acquired before the marriage or by gift or inheritance at any time even during the marriage. -any income derived from sale of such property is also considered non-marital property.
if non-marital property is commingled with marital property - a presumption of transmutation is created- the resulting property is presumed to be marital property. |
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Term
Trusts
Living Trust, Testamentary Trust, |
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Definition
IL permits real estate to be held in trusts as part of a living or testamentary trust or as the sole asset in a land trust
Living Trust or inter Vivos trust- Trust created during the property owner's lifetime.
Testamentary Trust: Establishment of a trust by a will after owners death
Neither of this wills related to a living will-which deals and gives right to refuse medical treatment
Il permit the creation of land trusts, in which real estate is the only asset.In a land trust , the title is conveyed to a trustee, and the beneficiary is also the trustor. |
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Term
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Definition
Il permit the creation of land trusts, in which real estate is the only asset.In a land trust , the title is conveyed to a trustee, and the beneficiary usually is also the trustor.
One of the distinguishing characters of a land trust is that the public records usually do not name the beneficiary.
In IL the trustee is needed to disclose the beneficiary name to certain parties under specific circumstances.
to concerned authority after within 10 days after receiving a complaint of a violation of a building ordinance or law.
if selling the entrusted property by land contract (seller financed). if a fire inspector or another officer is investigating arson. if the trustee/beneficiary is named as a defendant in a private lawsuit. when applying to any state of IL agency for a license or permit affecting the entrusted property. |
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Term
| Partnership, Corporations, Limited Liability Act, Condominium Act. |
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Definition
IL has adopted the federal Uniform Partnership Act which permits real estate to be held in the partnership name.
The creation and regulation of corporations in IL are governed by the Business Corporation Act of 1983. IL also recognizes LLC as legitimate business organizations.
IL has not not adopted the Uniform Condo Act. It is governed by Condo Property Act under which owner/developer may elect to submit a parcel of real estate as a condominium project by recording a declaration to which is attached a three dimensional plat of survey of the parcel showing the location and size of all units in the building.
IL RE licensee are permitted to list and sell cooperative units and interests without obtaining a securities license.
The sale of all time-share units in IL is regulated by RE Timeshare act of 1999, and RE agent must be licensed unless he sells less than 8 time-share properties per year, regardless of where the time share properties are located. The listing of time share must contain a detailed info about the property, such as time periods, %age of common expense and occupancy restrictions, etc before signing the contract. The purchaser has to be given 5 days to rescind the offer without penalty and refund of any payments, also the address where the notice of cancellation is to be sent. |
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Term
| Rectangular Survey Method, Metes and Bounds |
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Definition
Locations in Il are described by their relation to one of the three meridians, (only two meridians run thru IL) and are referenced in legal description of IL properties.
There are no options regarding the meridians and base lines used to describe a particular property once made, a legal description is not changed.
Metes and bounds descriptions may be included in the rectangular survey system used in IL when describing irregular or small tracts.
The lot-and-block system is used in IL. Subdivision description are the predominant method of describing developed land in this state. Under the plat Act when an owner divides a parcel of land into two or more parts, any of which is less than five acres must be surveyed and a plat of subdivision is recorded. The general datum used by IL surveyors is the North American Vertical Datum of 1988. |
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Term
| properties that are exempt from paying general taxes? |
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Definition
| Properties that totally exempt from paying general real estate taxes include schools, religious institutions, cemeteries, and charitable institutions, as well as those owned by federal, state, county, and local government. |
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Term
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Definition
IL property taxes are adjusted to reflect certain concessions given on owner occupied residences.
Homeowner exemption: given to single-family owners, condominiums, cooperatives, and one to six-unit apartment buildings. The exemption is 6000 (cook county-7000). Some county expect you to file every year to the assessor for getting the exemptions and some will give the exemption automatically.
Senior Citizen Homestead Exemption. - Taxes are based on the assessed value of the property. A 5000 exemption on the assessed value of the property is given once the homeowner applies to assessor before Dec. 31st with proof of age 65 and ownership. The Senior Citizen Assessment Freeze Homestead allows IL seniors to freeze their assessed value for the remainder of their lifetime once they have turned 65 and yrly/income does not exceed 55,000.
home improvement exemption-allows 75,000 for improvement
when it increases the appraised value of house for upto four yrs. |
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Term
| Assessment of Taxes/ Calculation of RE taxes, redemption of property after Tax lien |
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Definition
RE taxes are assessed on a sliding sale 10 to 25% of fair market value in cook county. in other counties it is 33.1/3%.
The assessed value of real estate is adjusted every year by applying equalization factor determined by IL Dept. of revenue Assessed value are compared with selling prices to arrive at the equalization factor and the county assigns a multiplier to be used for equalization factor. The equalizer is always applied before any homeowners exemptions are subtracted. The taxes are computed from the final value.
Assessed Value X equalization factor-exemptions X tax rate =annual tax
The county collector prepares and issues only one combined tax bill to each parcel of property.
General RE taxes are levied annually for the calendar year and become a prior first lien, superior to all other liens on Jan 1st of that tax year, however they are not due or payable until the following year. Paid in two installments June 1 and September except in Cook county it is March 1 and second one varies - usually.
The statutory requirements for enforcement of tax liens are complex. When an owner fails to pay taxes on RE, the property may be sold in one of three ways in IL
At an annual tax sale,- goes thru court, purchaser only gets certificate of purchase when they pay for the delinquent tax , court fees, publication fee in a general newspaper. This purchase done thru bidding. the owner, person with legal interest and their agents are not allowed to bid for the same. the owner has 2.5 years from date of sale to redeem property after paying the tax and other fees noted above.
At a forfeiture sale,- Same proceedings as above but when bid comes thru property is forfeited to state. Purchaser has to apply to state - and if the owner wants to redeem property he has to give purchaser 12% for every 6 month the purchaser hold the certificate.
At a scavenger sale: if taxes not paid for two years- same above procedure property to the highest bidder. buyer is not required to pay tax lien but pay current taxes.
Redemption period for vacant nonfarm RE, commercial or industrial property or property improved with seven or more residential unit is 6 months and also payment of tax lien and other payments as noted above need to be fulfilled. |
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Term
| Special Assessment (taxes levied on RE to fund public improvement to the property) |
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Definition
| Special Assessments are always specific and statutory, but they can be either involuntary or voluntary lien. govt levies special assessment it is involuntary, home owner request improvement then it is voluntary |
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Term
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Definition
| are special taxing districts in municipalities that are established by ordinance, often at the request of a developer of new housing in order to pass the cost of streets, landscaping, water lines, and sewer systems to homeowners residing in the SSA. Assesment are billed annually on property tax bills generally for 20 to 30 years. |
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Term
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Definition
Contractor needs to give written notice within 10 days after recording a lien against any property of the owner. This applies only to contractors and sub-contractors. Mechanic lien takes priority over other recorded liens if work done has enhanced the value of the property. The lien attaches as of the date when the work was ordered or contract was signed by the owner.
In IL the contractor's lien right will expire two years after completion of that contractor's work, unless he files suit within that time to foreclose the lien. |
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Term
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Definition
is a court order that settles and defines the rights and obligation of the parties involved in a lawsuit. Generally involuntarily and equitable lien on both real and personal property owned by the debtor.
In IL Judgement liens becomes a general lien on all the defendant's real property in a county at the time the judgement is recorded in that county and is effective for seven years and may be renewed for another seven years.
The creditor needs a writ of execution from the court for the sheriff to confiscate and sell much of the debtor's property.
There is considerable time between when a lawsuit is filed and judgement is recorded. When a law suit for any property is filed which affects the title of property, a special notice called is Lis pendens - is given. which tells that is a law suit pending. |
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Term
| Commercial RE Broker Lien Act |
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Definition
| The commercial RE Broker Lien Act permits commercial sponsoring broker to place a lien on property in the amount of commission they are entitled to receive for leasing, as well as for a sale under a written brokerage agreement in the event that they are not paid for their services. Applies only to commercial property and must be recorded before closing to be enforceable. |
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Term
| Bilateral or Unilateral contract |
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Definition
In Il an exclusive right to sell listing agreement is considered a bilateral contract. (both parties make promises that have to be fulfilled)
An open listing is a unilateral contract. (only party promises to fulfill) |
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Term
| IL Fraud Act - contract agreement must be in writing to be enforceable in the court of law. |
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Definition
| The IL Frauds Act requires that any contracts for the sale of land or for lease that will not be fulfilled within one year from the date they are entered into, must be in writing to be enforceable in court. The Act of 2000 also requires that certain contracts must be in writing such as employment agreements between sponsoring brokers and sponsored licensees. |
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Term
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Definition
IL law provides that all persons come of legal age on their 18th birthday. Contracts entered into by a minor in IL are voidable until the minor reaches a majority and for a reasonable time afterward depending on special circumstances of each case (courts allow 6 month maximum)
Contracts made by minor for what the law considers necessaries such as food, clothing, shelter and medical expense are generally enforceable. |
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Term
| Validity of contracts or deed made on sunday or legal holiday |
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Definition
| In IL a deed or contract executed on a Sunday or legal holiday is valid and enforceable, however it is executed the next business day. |
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Term
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Definition
| In Il the state of Limitations for oral contracts is five years, for written contracts 10 yes. Any rights not enforced within the applicable period are lost. |
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Term
| Sales Contract Form. and type of form used for sales contract |
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Definition
According to the ruling decision of Chicago Bar Association vs Quinlan & Tyson- Il RE licensees while drafting a sales contract are authorized only to fill up blanks in preprinted contract forms that are customarily used in RE.
In IL a licensee should not use any form titled "Offer to Purchase" if the form is intended to become binding real estate contract. It requires sales contracts to indicate "Real Estate Sales Contract" at top in bold type. |
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Term
| Sale of Residence Contract should list all fixture which could be personal property |
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Definition
| In Il any fixtures that may be questioned as fixtures are listed in the sales contract to avoid arguments at time of final sale |
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Term
| Ernest Money Refund to Buyer |
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Definition
| Many contracts provide that the deposit become the seller's property as liquidated damages if the buyer defaults. To release earnest money in IL for any reason, signatures of both parties are required. |
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Term
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Definition
| Il Uniform Vendor and Purchaser risk Act states that the seller bears any loss that occurs before the title passes or the buyer takes possession. If the entire premises or a material party of it is destroyed, the seller cannot enforce the contract against the buyer. |
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Term
| Dual Agency in sales contract |
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Definition
| Dual Agency confirmation be included in the sales contract is required by IL |
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Term
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Definition
| Il Il land contracts seldom used. They may be used to facilitate transactions that might not otherwise occur. Licensees may negotiate basic terms in a land contract, but attorneys must prepare the articles of agreement. |
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Term
| Requirements for a Valid deed. |
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Definition
In Il the requirements for a valid deed are a grantor with legal capacity to contract, a readily identifiable grantee, a granting clause, a legal description of the property, a recital of consideration, and the signature of a grantor.
Title to the property passes when the grantor delivers a deed to the grantee and it is accepted.
The obligation of a grantor is determined by the form of the deed. The specific words of conveyance in the granting clause are critical in determining the form of deed |
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Term
| Bargain and sale deed, Quitclaim deed |
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Definition
| In Il a bargain and sale deed includes covenants that make it similar to a special warranty deed. A quitclaim deed carries with it no warranties whatsoever and conveys only the interest, if any, the grantor possesses in the property. |
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Term
State and county transfer tax stamps
Acknowledgement and Notarization |
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Definition
State and county transfer tax stamps are paid for by the seller. This money goes to the state and county for affordable housing and land preservations. Many muncipalities have their own transfer tax as well, which can be paid either by seller or buyer.
Acknowledgement and Notarization are standard in county recorder's office. Recording is required for tax deeds and if a deed is to be used as evidence in a court of law. |
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Term
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Definition
| Any person of age 18 or older, who is of sound mind and memory may make a will. Will must be in writing and signed by two witnesses excluding the beneficiaries. |
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Term
| Determination of new owners when a property owner dies! |
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Definition
| When the owner of RE dies how the title of the property was held will determine who the new owners will be. (rather than the laws of descent and distribution or the presence of a will) |
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Term
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Definition
| The period of uninterrupted possession required to claim title by adverse possession (property owner knows about use of property) is 20 years. However, if the party whose property is being claimed has color of title (some flaw in the title) and if the RE taxes on the property are paid while satisfying the other statutory requirements the possessory period may be shortened to seven years. |
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Term
| Real Estate Transfer Tax formula |
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Definition
State transfer tax .50 cents
county transfer tax .25 cents
Sales price - persona property purchase price, less amount of mortgage left on property in question = Net total taxable consideration to be covered by stamps
consideration divided by 500 and multiplied by .75 cents =total transfer tax. |
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Term
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Definition
The words in the granting clause are "grant, bargain, and sell."
A grant, bargain, and sale deed conveys a simple title with the following covenants
1. The grantor holds a fee simple estate
2. the title is free from encumbrances made by the grantor except those listed in the deed.
3. the grantor warrants quiet enjoyment
An Il bargain and sale deed is similar to a warranty deed but less complete in warranties. A buyer should purchase a title insurance for protection. |
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Term
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Definition
| The recorder deeds, county clerk, county treasurer, city clerk and collector and clerks of various courts maintain these records. In IL, a recorder of deeds must be elected in each county with a population of 60,000 or more. less than 60,000 the county clerk serves as the recorder of deeds. Recording is the act of placing documents that affects any estate, right, title or interest in land in the county where property is located for public record. Il does not require for most documents to be filed in a specified time. A mechanic lien that has not been recorded may nonetheless still have priority over other liens that have been recorded. |
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Term
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Definition
| For normal Title search goes back 40 yrs. if any litigation about title it goes back to 75 yrs. In cook and dupage county title search cannot go beyond 1871 because records prior to that were destroyed in the Chicago fire. |
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Term
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Definition
| A title insurance policy is the most commonly used evidence that an owner of IL real property tenders to a prospective purchaser or lender as proof of good title. |
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Term
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Definition
| IL often is called an intermediate mortgage theory state where mortgages and deeds of trust convey only qualified title to the lender as security for the loan during the existence of debt. The mortgagor/borrower enjoys the property for all beneficial purposes, and qualified title held by the lender has a defeasance clause which states that upon full paid of the debt, the lender will release, reconvey the title to the mortgagor. |
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Term
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Definition
| A deed of trust (trust deed) conveys naked title or bare legal title that is title without the right of possession. The deed is given as security for the loan to a third party, called the trustee. The trustee holds title on behalf of the lender who is called the beneficiary. The beneficiary is the holder of the note.In IL, a deed of trust is treated like a mortgage and subject to the same rules including foreclosure. The trustor (borrower) in a deed of trust holds the title to the real estate. |
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Term
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Definition
| Lenders in IL are prohibited from charging a borrower a prepayment penalty on a fixed-rate loan secured by residential RE when the loan's interest is greater than 8%/yr. However they can charge prepayment penalty on adjustable rate loan. |
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Term
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Definition
| Any mortgagee or his assigns or agents who fails to deliver a release to the mortgagor or the grantor of deed of trust within one month after full payment and satisfaction will be liable to pay the mortgagor or grantor a $200 penalty. The release must also state in bold letters that for protection of owner the release shall be filed with the recorder of registrar of titles in whose office the mortgage or deed of trust was filed. It is then mortgagors responsibility to record the release. |
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Term
| Escrow Accounts for Mortgages |
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Definition
| In Il the mortgage Tax Escrow Act provides that except during the first year of the loan, a lender may not require an escrow accumulation of more than 150% of the previous years re taxes. Lenders need to give this writing to borrowers at time of closing. the Escrow Act also states that if the loan balance has been reduced to 65% of its original amount, borrowers may terminate their escrow account. |
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Term
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Definition
| The National Flood Insurance Reform Act of 1994 imposes certain mandatory obligations on lenders and loan services to set aside escrow funds for flood insurance on new loans. This also applies to outstanding loans on Sept 23 1994, which means if the property is an flood zone area the lender should notify the borrower to purchase within 45 days and if insurance not purchased the lender needs to purchase it for the borrower and charge the cost of insurance to the borrower. |
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Term
| IL Mortgage Foreclosure Law |
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Definition
In IL mortgage foreclosure may be brought about only thru a court proceedings. Hence IL is classified as a judicial foreclosure state. Under this foreclosure law, the term mortgage includes
deeds of trust, installment contracts payable over a period in excess of 5yrs (when unpaid balance is less than 80% of purchase price), certain collateral assignments of the beneficial interest in land trusts used as security for lenders, and traditional mortgage instruments. |
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Term
| Statutory Rights of Redemption |
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Definition
| There is statutory right of redemption in IL. In IL a mortgagor in default who wishes to exercise the equitable right of redemption to avoid loss of the mortgaged real estate may do so for a period of seven months after the date of service on mortgagor or ofter first publication date, whichever is later. This time period can currently be shortened to as little as 30 days after a judgement is entered if the property has been abandoned or is vacant. |
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Term
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Definition
| The Il Secure and Fair Enforcement for Mortgage Licensing Act of 2008 requires that each individual state must license and register mortgage loan originators |
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Term
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Definition
| In Il the statue of frauds requires that lease agreements be in writing to be enforceable if they are more than one year. This law also applies to leases for one year or less that will not be performed within one year of the contract date. Verbal leases for one year or less that can be performed within a year of their making are enforceable. Written leases must be signed by both lessor and lessee. |
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Term
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Definition
In Il a holdover tenancy is for the same term as the estate from period to period.
According to IL Statue
Tenancy from year to year: at least 60 days written notice is required at any time within the four month period before the last 60 days of the lease period.
Tenancy from month to month: any term that is less than year to year and more than week to week 30 days written notice need to be given
Week to Week : Seven days written notice
Farm tenancies from year to year: Parties must give at least four month written notice to terminate and may do so only at the end of the period. To vacate March 1st, farm tenancy must be given November 1st.
In IL, a holdover tenancy is for the same term as the estate from period to period. A landlord has the option of considering an estate at sufferance (a holdover tenants action) as being a willful holding of possession, in which case the landlord is entitled to charge double rent. |
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Term
| Security Deposit in leasing. |
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Definition
Landlords who receive security deposits on residential less of units in properties containing five or more units may not withhold any part of a security deposits as compensation for property damage unless the give the tenant an itemized statement listing the alleged damage. This statement must be given 30 days of vacating property and if not done so the security deposit needs to be refunded in full. Any landlord who fails to do so in the required time will have to pay double the security deposit, court and attorney fees.
In Il leases are entitled to receive annual interest on their security deposits, rate of interest is .023% for properties which have more than 25 units, on deposits held for more than 6 months the interest required to be paid is from the date of deposit at a rate similar to minimum deposit savings account of the state's largest commercial bank with its main banking facilities located in IL |
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Term
| Implied warranty of habitability. |
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Definition
Under the implied warranty of habitability act of residential tenancies of 1972
A landlord must deliver and maintain throughout the duration of the lease any residential leasehold free from defects that would render the use of the dwelling "unsafe or unsanitary" and unfit for human occupancy. Nothing present on premises should seriously endanger the life, health, or safety of the tenant. |
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Term
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Definition
| In Il a landlord seeking actual eviction of a tenant must file an action called a forcible entry and detainer. This can be used when tenancy has expired, by its terms, by operation of law, or by proper notice. It should be filed in county where premises are located |
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Term
| Fair Housing and Civil Rights Law |
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Definition
The IL human right Act extends the list of protected classes for IL to secure for all individuals in IL the freedom from discrimination because of race, color, religion, sex, national origin, ancestry, age, order of protection status, marital status, physical or mental disability, military status, sexual orientation, or unfavorable discharge form military service in connection what employment, real estate transaction, access to financial credit, and the availability of public accommodation.
Also many municipalities have local ordinances, for ex: source of income a a protected class in the city of Chicago and all of Cook County and refusing to rent to Section 8 voucher holder is discrimination. |
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Term
| Lead Poisoning Prevention Act |
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Definition
| According to this act the owner of any residential building cited by the state as lead-paint hazard property has to give prospective tenants written notice of danger unless the owner has a certificate of compliance. If a mitigation order is issued to owner of building it must be eliminated with 90 days of issuance in manner prescribed by the state law or 30 days if a pregnant women or a child of age less than 6 is residing at the premises in question. |
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Term
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Definition
| In IL any person or business entity that operates a rental-finding service must obtain a real estate license and comply with all provisions of the RE License Act of 2000. General circulation newspapers and listing contracts between owners or lessors of RE and registrants are exempt from this requirement. |
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Term
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Definition
Act 2000 provide for a limited scope license for individuals who wish to engage solely in activities related to the leasing of residential real property as longs as they do not engage in real state activities such as marketing single family homes
Leasing or renting residential real property
collecting rent for residential real property
Attempting, offering, or negotiating to else, rent, or collect rent for the use of residential real property. |
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Term
| referral fees to landlords |
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Definition
Act 2000 allows landlords to pay referral fee to tenants. A resident tenant who refers a prospective tenant for a unit in the same building or complex may be paid a referral fee if he
1) refers no more than 3 prospective lesses in any 12 month period. 2) receives compensation of no more than 1,500 or the equivalent of one month's rent, whichever is less in a year. 3) limits his activities to referring prospective lesses to the the owner (or owners agent) and does not show units, discuss lease terms or otherwise participate in the negation of a lease. |
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Term
| Community Association Management |
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Definition
| The Community Association Manager Licensing and Disciplinary Act was created to regulate community association managers, to ensure that managers are qualified to engage in community association management, and to enforce high standards of professional conduct by those licensed. Community association managers cannot perform real state activities as a broker and a broker cannot perform community association manager activities without being licensed for both. |
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Term
| Corporate Property Management |
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Definition
| Corporate Property managers manage properties for corporation that invest in real estate. Property management agreements must be in writing. In IL they require a RE license to be corporate property manager and must perform management services under the supervision of a sponsoring broker. |
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Term
| Maintenance and interest payment of Security Deposits |
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Definition
| Specific Legal procedures must be followed in taking legal action against a tenant. IL law has specific provisions regarding the maintenance and payment of interest on security deposits. Property managers must handle and deposit security deposits the same way as earnest money and deposit in a escrow account in the next business day after a lease is signed and must be recorded in the journal and ledger. The escrow is non-interest bearing account unless the property is residential with 25 or more units, in which case interest must be paid to the tenants. |
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Term
| Personal Property Insurance Policy |
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Definition
| In IL the policy type tenants should ask for HO-4 form, designed specifically to cover renters personal property |
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Term
| RE Appraiser Licensing Act of 2002 |
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Definition
The RE Appraiser Licensing act of 2002 provides for mandatory licensure with limited exceptions of IL appraisers. IL recognizes three categories
Associate RE trainee appraiser who's reports must be signed by a state certified RE appraiser.
Certified residential RE appraiser : Qualified to appraise residential property of one unit to four units without regard to transaction value or complexity, but in restrictions in accordance with USPAP (Uniform Standards of Professional Appraisal Practice.)
Certified general RE appraiser : Qualified to appraise all type of RE property without restrictions as to the scope of practice subject to USPAP requirements.
Only individuals may be certified as appraisers (not corporations, partnership firms, or groups) |
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Term
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Definition
Constitution of State of IL allows for Home rule units of government. Any municipality with a population in excess of 25,000 and any county that has a chief executive officer elected by the people are automatically home-rule units. However, a home-rule unit may elect by referendum not to be one or a municipality with population less than 25,000 may elect by referendum to become a home-rule unit of government. T
Townships are not allowed to be home-rule-units
A home-rule-unit of government may exercise any power and perform any function pertaining to its government, including the exercise of police power by laws that control the use of land. Home rule units have great freedom in enforcing their laws including power to jail offenders for 6 months. Occasionally when conflicts arise between home rule units and municipalities laws the municipality usually wins.
Township zoning ordinances give way to county ordinances. and townships are not empowered to pass subdivision or building codes. |
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Term
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Definition
| Any restrictive covenants that forbids or restricts conveyance encumbrance occupancy or lease on the basis of race, color, religion, or national origin is void. Exceptions to this section of IL human rights act are allowed for religious and charitable organizations |
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Term
| Land Sales Registering Act of 1999 |
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Definition
Sale or promotion with IL of subdivided land is regulated by the Land Sales Registration Act of 1999. This act regulates the offering, sale, lease or assignment of any improved or unimproved land divided in 25 acres or more lots and offered as a part of common promotional plan.
Subdividers must register with the state and file a full disclosure report that contains info of land, tax status, financial arrangements, and liens associated with the offering. as in the federal statue the purchaser who has received such a report, before a contract is signed, can rescind the offer in writing before midnight of seventh day following the signing of contract or agreement.
A purchaser who does not receive such report before a contract or agreement is signed may cancel the contract or agreement anytime within 2 yrs from the date of signing. |
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Term
| Equal Housing Opportunity |
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Definition
Act of 2000 and the general rules require that licencees fully adhere to the principles of equal housing opportunity. A licensee is prohibited from taking any listing or participating in any transaction in which the property owner seeks to discriminate based on race, color, ancestry, religion, national origin, sex, handicap, or familial status. Breaking fair housing laws in IL is ground for discipline. Violating provisions or restriction of the Act can result in suspension, nonrenewal, or revocation of the violator's license or censure, reprimand, or fine imposed by IDFPR.
According to the ACT when a judgement in either a civil or criminal proceeding has been made against a licensee for illegally discriminating his license must be suspended or revoked unless an appeal is active. if found guilty of discrimination board must penalize the licensee.
Many cities and villages have their own fair housing law and take precedence over state and federal laws if the laws are substantially equivalent to state and federal laws. Licensees should be familiar with all local, state and federal laws. |
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Term
| Prohibition of promoting racially and religiously segregated housing |
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Definition
The ACT expressly prohibits
influencing or attempting to influence, by any words or acts, a prospective seller, purchaser, occupant, landlord or tenant of RE in connection with viewing, buying, or leasing RE, so as to promote or tend to promote the continuance of maintenance of racially and religiously segregated housing or so as to retard, obstruct, or discourage racially integrated housing on or in any street, block, neighborhood, or community. |
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Term
| IL Environmental Protection Agency (EPA) |
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Definition
IEPA is responsible for maintaining and enhancing the state's air, land, and water quality thru education, inspection, regulation, enforcement, recycling, and prevention activities. IL IEPA regulations are required to be similar to U.S. EPA
Licensees must encourage seller/clients to make full, honest disclosure and rely on outside expertise for testing and information about hazardous substances. Licensees should be aware of rules and regulation environmental laws to ensure safety of their clients. |
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Term
| Abatement or mitigation activities |
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Definition
| In IL anyone who performs lead abatement or mitigation activities without a license is guilty of class A misdemeanor. The Department of Public Health oversees the qualifying, training, and licensing of lead abatement contractors and lead abatement workers in IL. |
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Term
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Definition
IL Radon Awareness ACT requires a seller to provide to a buyer before the buyer is obligated under any contract to purchase residential real property, a Disclosure of Information on Radon Hazards along with the pamphlet Radon Testing Guidelines for RE transactions stating that the property may present the potential for for exposure to radon. Radon disclosure is also required if a previous tenant tested and found radon levels over 4 pCi/L.
The disclosure document states that
elevated levels of radon may pose a health threat and allow all homes to be tested for radon.
Provide pamphlet of Il Emergency Management Agency, general radon information, disclose all info available of documentation of radon levels of the property to buyers.
licensee/agent need to sign the disclosure to confirm that seller was made aware of their obligations to a prospective buyer and all parties involve sign the disclosure for acknowledging they have received any and all such information.
disclose they have no knowledge of radon levels at the present time and prior elevated levels have been mitigated or remediated. |
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Term
| Carbon Monoxide detectors |
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Definition
| IL requires that all residences be equipped with working CO detectors. Doctors must be located within 15 feet of all bedrooms. |
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Term
| Leaking underground Storage Act |
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Definition
| In IL The Leaking Underground Storage Tank section of the IEPA govern the detection, identification, monitoring, mitigation, and removal of buried underground storage tanks(particularly those containing petroleum products). The program reserves a special fund to assist property owners in complying with mandatory remediation activities. |
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Term
| Pursuant to "Good Funds"2010 amendment of the Title Insurance Act |
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Definition
A title Insurance agent or independent escrow acting as the closing agent may not make disbursements at closing when the the amounts held for disbursement include funds from any single party in excess of 50,000 unless those funds (called good funds)
are wired funds unconditionally held by and credited to the closing agent
are in the form of a check issued by the state of IL , the United States, or a political subdivision of IL or United States
are in the form of a check drawn on the fiduciary account of another title insurance company or title insurance agent s long as there are reasonable grounds to believe the funds are available to back the check
have been received by the closing agent and are finally settled and credited to the account of the closing agent.
Monies less than 50,000 have less restrictions as long as there are reasonable grounds that there are enough money to cover the funds. Checks upto 49,999.99 fall under this category and will be considered good funds. |
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Term
| Estimated closing statements |
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Definition
| In IL the closing statement is customarily prepared by the seller' s attorney. Although RE licensees are prohibited from completing formal closing statements, estimated statements are often needed when preparing a comparative market analysis when filling out an offfer for a buyer, or when presenting an offer to a seller. Hence licensee mus understand the preparation of a closing statement which include the expenses and prorations of costs to close the transaction. |
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Term
| Transfer Taxes State and county, maybe municipality |
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Definition
| In Il state and county transfer taxes are usually paid by the seller in accordance with most sales contracts. Some local ordinances establish additional municipal transfer taxes tat are to be paid for by the seller, the buyer or both. |
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Term
| Good Faith Title Insurance Policy and Lender policy |
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Definition
| In IL the seller usually is required by the contract to furnish evidence of good title, the seller customarily pays for the owner's title insurance policy. The buyer customarily pays for the lender's policy, which ensures that the lender ha a valid first lien. |
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Term
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Definition
| Most RE contracts in IL require that that the seller furnish a current survey to the buyer. As a result, the expense of preparing a survey usually borne by the seller. |
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Term
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Definition
Statutory month variation, a third method is acceptable in IL for proration. Yearly charge is divided by 12 to determine the monthly amount. the monthly amount is divided by actual # of days in the month in which the closing occurs.
statutory year = 30days/month for 12 month 360 days
calendar year = 28 to 31 days/month for 12 month 365 days |
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Term
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Definition
In Il taxes are paid in arrears and roles reverse (buyer credit, seller debit) but math is same.
The buyer must be credited for any taxes that still will be paid in the future for time in the "past" (up until closing) when the seller is occupied the property.
Following formula for calculating taxes:
Last annual tax bill divided 360 x number of days from January 1 to closing date = tax proration (the amount seller owes buyer) |
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Term
| Assumed Mortgage Loan Interest Charge |
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Definition
the terms of some assumed mortgage loans provide that interest is charged at the beginning of the month (in advance) without this provision, interest is always charged at the end of the month (in arrears).
When charged at beginning of month the unearned portion (that is, the part that is prepaid from the date of closing to end of the month) must be credited to the seller and debited to the buyer. If charged end of month, it is accrued expense and allocated visa versa. |
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Term
| Penalties for unlicensed practice of RE services |
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Definition
| In IL it is illegal for any person to practice, offer or attempt to practice, or to hold oneself out to practice as a RE broker, managing broker, or leasing agent without being licensed. Anyone who does so will be fined (in addition to any other penalties by law) by IDFPR after a court hearing for every offense a fine of 25,000 which is due within 60 days of the order. |
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Term
| What if sponsoring broker's license gets revoked or is uncooperative? |
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Definition
| If a sponsoring broker's license is revoked or rendered inoperative, all licensee working under that sponsoring broker will be considered inoperative until such time the sponsoring broker license is reinstated or licensee changes employment and works for another sponsoring broker. |
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Term
| Expiration/Renewal, change of address and other info, sponsoring broker role, sponsor card, pocket card, |
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Definition
Expiration dates and renewal periods are set by rule, and licenses can be renewed within 90 days before expiration upon completion of CE and payment of required fees
Residential Leasing agent can engage in residential leasing activities for 120 days without license, as long as they are working under a licensed managing broker and the managing broker has notified IDFPR about that the person is pursuing licensure. Person must finish all education, examination and fee requirements during the 120 day period. (this cannot be repeated after 120 days.
For a person who has passed the RE exam, they are given a blank sponsor card with their picture on it which when completed by a sponsoring broker allows them to practice RE for 45 days while the wall license and pocket card are being processed.
Once brokerage company is selected, the sponsoring broker signs the blank sponsoring card, make copy for new license and for office record and sends the original to IDFPR within 24 hours of issuing the sponsor card.
IDFPR issues a pocket card to each licensee and also license which will specify whether it is for a broker, managing broker or leasing agent.
The broker must send IDFPR a copy of a signed license within 2 days of termination.
Any change in address, name or business information must be reported in writing within 15 days of change.
Licenses can be renewed 90 days of expiration.
New license -30 hours of Advisory Council approved post licensing education, fifteen must be classroom or some type of interactive, pass an examination provided by education provider and approved by IDFPR. this 30 hr satisfies the 12 hr CE requirement.
All brokers, managing brokers, leasing agent can renew their license (provided they have paid the fees and satisfied the education and CE requirements) up to TWO years following license expiration. Beyond two years they would be required to fulfill the requirements as a new licensee. |
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Term
Nonresidents and License by Reciprocity
License Fee and Expiration date and renewal fees
Continuing Education CE requirements |
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Definition
For Reciprocity In IL following conditions need to be met.
1. Broker or managing broker must hold license in their home state. 2. Licensing standards are greater or substantially equivalent to minimum standards in IL. 3. Broker has been actively practicing for at least two years immediately before the application date. 4. The broker furnishes IDFPR with an official statement under seal, from her home state's licensing authority is in good standing and no complaints pending. 5. brokers home state grants reciprocal privileges to IL licensee.
6. Managing broker completes course education and passes a test specific to IL RE brokerage laws.
Currently IL has reciprocity with: COLORADO, CONNECTICUT, GEORGIA, INIDANA, IOWA, NEBRASKA, SOUTH DAKOTA, WISCONSIN.
Before issuing a reciprocal license, the applicant must file a designation in writing to act as their agent in IL. They must also agree that all judicial or other process, legal notice directed to nonresident may be served on the designee. Service upon the agent so designated is equivalent to personal service on the nonresident licensee.
Non resident must provide proof of licensure in their home state, pay all appropriate fees, and give in writing to IDFPR to abide by all rules and regulations of IDFPR jurisdiction.
Once they acquire the reciprocal license they are NOT required to take local examination to get a local RE license in respective field.
Initial Licensing Fee: Broker -125, Leasing Agent- 25, Broker's license for partnership,LLC, corporation 125
(Included in initial RE fee isReal Estate Recovery Fund -$10 and RE education $5).
Broker License Expire - April 30th -even numbered year Renewal fee 150
Managing Broker -April 30th-odd numbered year Renewal fee 200.
Leasing Agent Expires July 31-even numbered year renewal fee $100
Licenses for Branch Office expires October 31st -even numbered year
Broker and Managing Broker applying for renewal fee - 6hrs/yr approved by Advisory Council
Managing Brokers - In addition of above Brokers must take 12 hour IDFPR approved CE course and pass the examination provided by the course educator. |
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Term
| Renewal without fee and CE requirements |
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Definition
RE licensee who are on active duty with the US armed services, studying under US supervision for induction into military services, serving as coordinator of RE in Il or as IDFPR employee.
A person who receives their initial license within 90 days of renewal date is exempt from taking CE requirements for the first renewal.
CE 6 hr requirements must cover courses that
Core A -which addresses license law, agency, fair housing and escrow
Core B - which addresses legal issues.
6 hrs must be on elective topics such as appraisal, property management, residential broker, farm property management, rights and duties of sellers, buyers, and brokers, commercial brokerage and losing, financing, or any other currently approved CE courses. |
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Term
| Branch Office, Written Agreement with Sponsoring Broker, |
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Definition
Any Sponsoring Broker who wants to establish a branch office must apply for a branch office license for each branch. Branch office name should be similar to primary office and any change in name or location of primary or branch IDFPR needs to be notified within 15 days of change
A Broker licensed in IL by reciprocity with another state may be exempt from maintaining a definite place of business in IL if the broker maintains an active broker's license in their home state, has an office in home state and has filed an written statement with IDFPR appointing the secretary to act as the broker's agent for service of process and other legal notices, agreeing to abide by provisions made by RE ACT of 2000 and submitting to IDFPR's jurisdiction.
All salesperson, brokers, or leasing agents, all licensed personal assistants need a written agreement with a sponsoring broker. Licensee can have only one Sponsoring broker at a given time. Managing brokers also need to have a written agreement with sponsoring broker and their agreement should signify aspects of their professional relationship such as supervision,duties,compensation, and grounds for termination, and must address the employment or independent contractor relationship terms. |
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Term
| Agency Relationship, Client, Personal Assistant Licensed or Unlicensed. |
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Definition
Licensees shall be considered to be representing the consumer they are working with as designated agent for the consumer unless
there is written agreement between the sponsoring broker and the consumer providing that there is a different relationship
the licensee is performing only ministerial acts on behalf of the consumer.
The statutory duties by a licensee towards their client by fulfilling -performing terms of brokerage agreement between a sponsoring broker and client and by promoting the best interest of the client.
Before a listing agreement, buyer agency agreement, or any other brokerage agreement may be created, a consumer must be told in writing
that a designated agency exists, the name or names of designated agents, the sponsoring broker's compensation policy insofar as cooperating with, brokers who represent other parties in a transaction, that the licensee is not acting as the agent of the customer at a time to intended to prevent disclosure of confidential information.
A client is any consumer with whom a licensee works unless all parties agree in writing.
The ACT - clients must be made aware of compensation, source of compensation, and the sponsoring broker's policy of sharing commission with cooperating brokers.
According to ACT personal assistants may be licensed or unlicensed. Unlicensed assistant duties are limited to typing filing, and answering phones.
For compensation: 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. |
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Term
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Definition
Licensees must
never advertise only in their name
always include the firm's name
never advertise another sponsoring broker's listing without permission
always keep advertisements up to date and clear
All ads should include
licensee's name, the company's name and location of office and the city of area of the advertised property.
Blind Advertisement to sell RE, hire licensees or any other RE activities are prohibited by law. (does not brokerage firm, not representing RE Licensee status, offering only box number, street address, phone # for response)
A licensee must always disclose agent owned place a sign agent owned on the sign of FSBO (for sale by owner).
Licensees must not place their own names under the heading Real Estate is a telephone directory or otherwise advertise their services to the public thru any media without listing the business name of the sponsoring broker with whom they are affiliated. The rule is consistent with all advertising media.
Online Advertising may not employ deceptive or misleading URLs or domain names, frame the website of another real estate brokerage or multiple listing service without permission or with the intent of deceiving the consumer or engage words to direct traffic flow online. Links to listing information from other websites are permitted without approval unless owner of website demands otherwise. All advertising must be updated periodically and kept current.
It is illegal to advertise a property that is subject to exclusive listing agreement with a sponsoring broker unless u have permission from listing broker and identify the listing broker in the advertisement
Failure to remove advertising of a property within reasonable time .... pg 288 |
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Term
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Definition
Making a false or fraudulent representation for obtaining or renewal of a license.
Being convicted of a felony or of a crime involving dishonesty, fraud, larceny, embezzlement, or obtaining money, property, or credit by false pretenses or by means of a confidence game
Practising as a licensee in a r detail sales establishment from an office, desk, or space that is not separated from the main retail business and a separate and distinct area
Engaging in RE brokerage without a license or with an expired or inoperative license
Making any substantial misrepresentation or untruthful advertising
Acting for more than one party in a transaction without providing written agency disclosure
Representing or attempting to represent a broker other than the sponsoring broker
Engaging in dishonorable, unethical, or unprofessional conduct of a character likely to deceive, defraud, or harm the public
Commingling the money or property of others with one's own
Displaying a For Rent or For Sale sign on any property without the written consent of the owner.
Failing to provide info requested within 30 days of complain against a licensee based o ACT
Intending to promote racial segregation
Negotiating directly with the client of another agent.
Habitual use or addiction to alcohol, narcotics,stimulants, or any other chemical agent that results in licensee's inability to practice with skill and safety.
Being subjected to disciplinary action by another state, District of Columbia, a foreign nation or government agency
Forcing client to give compensation for releasing of earnest money
Acting as a attorney in the same transaction in which they are RE agent.
If merchandise or service are advertised for free, any conditions or obligation for receiving the free merchandise or services must be in the same advertisement.
Failure to make available all escrow information during normal business hrs within 24 hrs of request.
Using or making any untruthful or misleading advertisements
Offering a guaranteed sales plans without complying with the act requirements of such agreements. ( guaranteed sales plans - any RE purchase or sales plan in which a sponsoring broker enter into a unconditional contract with a seller, promising to purchase the seller's property for a specified price if the property does not sell within an agreed time or terms acceptable by the seller) |
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Term
Nonpayment of Income Tax, Student Loans and Child Support
Violations, RE recovery fund. |
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Definition
Anyone who fails to file a tax return or pay any tax penalty, interest, or final assesment required by IL Dept. of Revenue may have license withheld or suspended until any such tax requirements are met
If student loans were provided or guaranteed by any government agency of the state, IL student Assistance commission and not paid back IDFPR will not grant a RE license to that individual.
If you are 30 day delinquent on child support IDFPR will refuse to renew or issue, may revoke or suspend the individual's license.
if the licensee is involved in a civil or criminal trial and is found to be engaged in a illegal discrimination during course of licensed activity, IDFPR -- MUST SUSPEND OR REVOKE the licensee's license unless the adjudication is in appeal.
The case if filed to the Board.
Once the order to suspend or revoke a license has been put through. the licensee is required to immediately hand over their license, if licensee fails to surrender, IDFPR has power to seize it.
Any person who practices RE without a valid license is guilty of Class A misdemeanor ( fine 8000 and 1-2 yrs prison) and on conviction of second or subsequent offense is guilty of Class 4 felony (fine 25,000 & 1-3 yrs prison)
The RE recovery fund provides a means of compensation for actual monetary losses (as opposed to losses in market value)
for violation of RE license ACT of 2000 (rules and regulation)
act of embezzlement of money or property, obtaining money or property by false pretense, forgery, fraud, misrepresentation, deceit or discrimination by a licensee or licensee's unlicensed employee
Maximum Refund for one act 25,000
Combined Act by one licensee - 100,000
Maximum to Attorneys 15% of award
Additionally legal action must have commenced no later than 2 years of the act or commission that gave rise to possible right of recovery from the fund.
Before restoration of license from IDFPR by a licensee against whom a judgment was given and was paid by the recovery fund the licensee needs to reimburse all funds with interest at the statutory annual rate to IDFPR.
The recovery fund has to have a minimum balance of 800,000.
if it anytime falls below 750,000 the RE License Administration Fund is used to upgrade to minimum. All monies received from licensing fee, renewal fee application and penalties are deposited from into the RE recovery fund. |
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Term
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Definition
Licensee should immediately provide any earnest money checks to their sponsoring broker for proper deposit in a special account. The Act states that the sponsoring broker's escrow account is to be non-interest bearing account "unless the character of the deposit is such that payment of interest thereon is otherwise required by law or unless the principle to the transaction specifically require in writing that the deposit be placed in an interest bearing account.
Sponsoring broker must maintain a separate account for escrow funds, receipts must be made of deposits, duplicates must be kept by sponsoring broker and deposited within one day of contract or lease acceptance unless the contracts dictates a different timeframe. If there is any dispute between parties regarding earnest money, sponsoring broker responsible to hold the deposit until an agreement in writing is made by all parties involved or a court order.
Sponsoring broker must be accountable for client escrow funds and any other pertinent info at all times. If IDFPR audits for records of escrow fund they must be provided within 24 hrs of the request to IDFPR. Escrow records must be maintained for 5 years. Escrow records for the immediate prior 2 years must be at the office location, and balance of records can be maintained at another location. |
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Term
| Acts that do not breach statutory duties to a client |
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Definition
It is ok to show a given property to various prospects without breaching duty to a client. However written disclosure must be made to all clients for whom the licensee is making contemporaneous offer or contract to purchase or lease rental property and must refer to another licensee if requested by a client.
it is not considered a conflict for a buyer's agent to show homes wherein the commission is based ultimate sales price of the property
Unless a licensee "knew or should have known the info was false" he/she cannot be held liable for false info passed on by client
The licensee remains responsible under common law "as to negligent or fraudulent misrepresentation of material info"
A licensee must deal honestly will all customers and shall not negligently or knowingly give them false info.
Ministerial Act are permitted |
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