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During the first quarter, members contacted the Legal Hotline with a wide variety of questions, and a large number of issues could be grouped in five categories. Here’s the Top 5 and a sample question from each category so you can test your knowledge too.
1. Scope of Real Estate License
What license do I need for leasing activities? The answer is a properly sponsored real estate license if you’re performing leasing activities for another and for compensation.
2. Purchase Contract Questions
May I continue to show a listing that is subject to a purchase contract? The answer is yes, if your seller client permits you to do so even though you don’t have a continuing duty to show once an accepted contract is pending. You have a responsibility to post notice in the MLS (if you are an MLS participant) that a contract is pending on the listing.
3. Business Practices
May I use electronic files to store my transaction records? Generally speaking, the answer is yes, and you can go to the Administrative Rules under the IL Real Estate License Act, Section 1450.755 for more guidance. Note where a statute requires a consumer to receive written notice or disclosure, providing that form electronically is not permitted unless – and until – you have written consent.
4. Agency Question
Must I make written designated agency disclosure to a commercial brokerage tenant client? Yes, the IL Real Estate License Act requirements apply in the commercial real estate brokerage practice as well as residential real estate brokerage.
5. Listing Agreements
Isn’t it true that “pocket listings” are illegal? Not necessarily, but you need to take care that you are serving your seller clients’ best interests. For this example, the term “pocket listing” is usually a term to describe an exclusive listing that will not be placed in the broker’s MLS. If the listing broker (who belongs to an MLS) explains the function and benefits of the MLS to the seller client, and the seller client still elects to keep the listing “private” or as a “pocket listing,” there is no per se violation in withholding the listing from the MLS. However, the listing broker should have the seller sign a waiver – or other MLS-required form – if the seller wants to keep the listing out of the MLS. If the pocket listing is withheld from the MLS for some illegal purpose, that will be problematic.
