Illinois real estate agents and Realtors® live in an age of disclosure. They are governed by laws that require them to disclose, disclose, disclose.
That seems easy enough, right?
Well, not always…
For example, did Bob the Broker do the right thing in the following scenario?
- Bob the Broker had a vacancy in an apartment building that he owns with his sister. Bob’s sister is not licensed. Bob and his sister signed a one-year lease with a tenant. Bob did not disclose his status as a real estate licensee to the tenant.
Many real estate agents would do the same as Bob the Broker – not feel the need to disclose their status as a real estate licensee in a personal transaction involving a rental property. There seems to be a lot of confusion on when to disclose your status as a licensee.
What does Illinois law say about disclosure of real estate license status?
- The Real Estate License Act states, “Each licensee shall disclose, in writing, his or her status as a licensee to all parties in a transaction when the licensee is selling, leasing, or purchasing any interest, direct or indirect, in the real estate that is the subject of the transaction.”
How does Illinois law apply to our hypothetical scenario?
- Even though his sister is not licensed, Bob the Broker is in violation of the law for failing to disclose his status as a licensee.
What, if anything, could have been done to prevent the problem?
- Bob the Broker could have disclosed his status as a licensee in writing to the tenant.
Unfortunately, many licensees learn the law the hard way by getting reprimanded by state regulators.
Real estate agents and Realtors® are faced with dilemmas on a daily basis. It’s critical that they understand the possible pitfalls. The state-required real estate post-licensing course is one way for new broker licensees to review real-world scenarios.
Learn more about post-license education at Real Estate Institute, where the goals are to help you become better prepared to handle these challenges, avoid disciplinary actions taken against you, and succeed in your real estate career.