The Joint Committee on Administrative Rules (JCAR) met recently and approved Administrative Rules under the Illinois Real Estate License Act (Rules). The revised regulations will be published in the Illinois Register soon. The Rules will eventually be referenced in the Register under the section entitled “Adopted.” For the full text showing Rules revisions, see Rules Draft on Second Notice.

For this article’s purposes, the sections are not presented in numerical order but perhaps in order of interest. This synopsis hits the highlights. Many amendments were non-substantive cleanups and/or were to make the Rules language consistent department-wide amongst the divisions of the Illinois Department of Financial and Professional Regulation.

The title of these provisions clarifies the application of these Rules to not only sales transactions but also to property management and other forms of real estate brokerage. Remember that the license act governs all real estate brokerage activities, such as residential sales and rentals, commercial sales and rentals, property management when real estate licensed activities are performed, farm management, etc.

The contents required for all brokerage agreements have not changed much from prior Rules iterations. However, there are now provisions to be sure that amounts due and timing for payments are clearly set forth.

• In listing agreements, any amount to be offered to a cooperating broker must be specifically noted. (Listing agreements might also not include any provision or requirement for the seller to pay a buyer’s broker). This can be negotiated by the parties to the purchase contract.
• All exclusive agreements must still state that the required minimum services are owed to the client by their broker.

The key question for real estate licensees is when must the written brokerage agreement be in place? Look at Section 1450.770 (g).

• (g) Licensees shall enter into a written brokerage agreement with a client as soon as reasonably practical but not later than:
  • (1) showing or marketing the property of a seller or owner; or
  • (2) prior to initiating the purchase or lease of a property for a buyer or tenant.
• On the seller’s side, this is very straightforward, and it is quite common to sign the written listing agreement prior to marketing property for sale or rent.
• On the buyer’s side, the license act and requirements for brokers and brokers who are REALTORS® might differ. The rule says as soon as reasonably practical (which will be a fact-based analysis), but on the buyer/tenant side, no later than initiating the purchase or lease. Depending on the facts, it is arguable that the written brokerage agreement could be signed closer in time to entering into a purchase or lease contract.
  • HOWEVER, brokers who are REALTORS®, pursuant to the NAR Settlement Agreement, must enter into a written agreement before they take a client on a physical or virtual showing or tour a residential property for sale. Note that as a practical business matter, this is a great time to get an agreement signed.
    • Per the Rules, the written agreement may be non-exclusive or exclusive and must contain all the terms for a written agreement under the rules, e.g. the basis or amount of compensation and the timing for payment, identity of the brokerage company and the designated agent(s) for the buyers, signatures of the parties, duties of the broker and the clients, and the duration of the agreement.
    • Brokers should check their individual brokerage office policies relating to written brokerage agreements.

The Rules, consistent with a recent change to the license act clearly state that 2 CE hours (50 minutes for each clock hour) related to the topic of Fair Housing are added to the core requirement for both brokers and managing brokers.

So, instead of 4 hours of core CE and 8 hours of elective courses, the 12 hours are now 6 core, and 6 elective required hours.

Section 1450.1225 contains transition provisions for these new requirements.

• Managing broker licensees are unaffected until they renew their licenses in 2027. At that time, they will need 6 core and 6 elective courses, together with their 12-hour broker management course, to renew.
• Broker licensees who have not yet completed their continuing education must complete 6 hours of core courses which include 2 hours of Fair Housing and 6 hours of elective courses by April 30, 2026.
• However, broker licensees who completed their 4-hour core courses before June 30, 2025 (the current education curriculum’s expiration), may complete 8 hours of elective courses to meet their CE obligation before their 2026 renewal.

Among the other requirements to apply for a managing broker license which remain unchanged, the managing broker exam will now be limited to Illinois-specific brokerage laws.

Currently Illinois has reciprocity agreements with several states that will no longer be recognized as of December 31, 2025. Reciprocal licenses will be renewable like any other license.

Starting January 1, 2026, the new endorsement program will replace reciprocity.

• To summarize, any licensee with an equivalent license from another state can apply for licensure in Illinois. They must complete a 30-hour endorsement course and pass an endorsement exam on Illinois-specific brokerage laws.
• They must also be in good standing in their respective jurisdictions, among other requirements.
• If the applicant for endorsement has not held a real estate license in their state for at least 2 years, they will be required to complete the 45-hour broker post license education.

Stay tuned to Illinois REALTORS® channels for updates on the publication of Rules Adoption that is due very soon.