New IDFPR portal emphasizes need for managing brokers to review independent contractor agreements

A new Web portal created by the Illinois Department of Financial and Professional Regulation will allow licensees and managing brokers to use an online system to deactivate or transfer licenses.

IDFPR’s portal reinforces the importance and role of independent contractor agreements between licensees and their sponsoring brokers.

The online portal will allow licensees to initiate the transfer of their license without any corresponding notice to their current managing broker. Only upon the acceptance of the transfer by the new sponsoring broker will the new website provide immediate notice to the licensee’s current brokerage.

For this reason, Illinois REALTORS® believes it is critically important that managing brokers review with their licensees the specific terms in their independent contractor agreements regarding termination or transfer of licenses. All independent contractor agreements are required to contain language related to the transfer or termination of licenses.

The language in one independent contractor agreement may vary from one company to another. One example may be that a licensee must provide their current managing broker a minimum number of days’ notice prior to transferring their license. The Department’s new website does not alter the rights of the parties to the independent contractor agreement. Thus, while the online portal provides a new mechanism to transfer or terminate license sponsorships, it does not serve as a replacement of or modification to the private contractual rights of sponsors and their licensees.

Best practices for managing brokers

While the Department’s new online system is intended to make the license management system more efficient, it is important to understand the impact the new portal may have on private contracts between sponsors and their licensees. With that in mind, below are some best practices that managing brokers may consider:

  • Managing brokers should insure that all of the independent contractor agreements are up to date and readily available for each of their sponsored licensees
  • Managing brokers should ensure that each of their sponsored licensees is reminded of their obligations under their independent contractor agreements (and provided a copy of the same if that has not already been done).
  • Managing brokers should follow existing written office polices or create and implement office policies that effectively manage company property, files, and other information in the event a sponsored licensee terminates a relationship with the company (Note: written office policies are required for most brokerage companies).
2018-04-12T15:45:13-05:00April 12th, 2018|Legal|0 Comments

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