The start of a new year brings change and for Illinois REALTORS® it also means that new state laws go into effect that could affect you and your real estate business. A few of the top statutory changes that go into effect on Jan. 1, 2024, that you need to be aware of are: radon disclosure, immigration status, revisions made to the Illinois Real Estate License Act (RELA), security deposit returns and prohibitions on video conferencing in your vehicle.

The Illinois Radon Awareness Act (RAA) has been amended making radon disclosure mandatory for most leases of dwelling units. In the past, the Radon Awareness Act only required disclosure if there is an outstanding test result showing a hazard that has either not been remediated or retested showing no hazard. The new Radon Awareness Act will apply to leases entered on or after Jan. 1, 2024.

Here is a list of the substantive changes to Radon Awareness Act, all dealing with residential lease situations (provisions related to residential sales remain the same).

Additional Definitions:

• Dwelling unit
• Lease
• Lessor
• Mobile home
• Radon
• Radon Contractor
• Tenant

Leases on the third floor or above are excluded (no disclosure required)

Adds new Section 26 (removes Section 25)

• Outlines the disclosure process for lessors to prospective or existing tenants requiring lessors to provide.
  • Illinois Emergency Management Agency pamphlet – Radon Guide for Tenants
  • Copies of any records or reports that indicate a radon hazard, AND
  • A disclosure report (language is included in subsection (f) of the Radon Awareness Act)
• A tenant gets 90 days to conduct a radon test in their unit.
  • Tenant shall provide results to lessor within 10 days.
  • If a hazard results from the test, tenant may terminate the lease if lessor does not mitigate using a radon contractor.
  • After 90 days, the tenant may conduct a test but may not terminate the lease.
  • If, during the 90 days, a radon hazard is indicated, lessor may hire a radon contractor to do another test.
    • If the test result is negative, this can be used as proof of no hazard for two years.
    • If the test does show a hazard, the lessor may elect to mitigate.
• There is no requirement or obligation for tenant or landlord to choose to test and/or to mitigate.
• If the lessor does not provide documents at the beginning of the lease, the tenant may conduct a test and if there is a hazard, the lessor may hire a radon contractor to mitigate or to perform another test.
  • If the lessor does not dispute the test result or mitigate within 60 days, the tenant may hire a radon contractor at tenant’s expense but must have the lessor’s express consent regarding the installation of the system, or the tenant may terminate the lease. (Only in situations where the lessor does not give all the documents and disclosures at the beginning of the lease).

Subsection (f) contains the statutory language for the disclosure report.

The new Radon Awareness Act will apply to leases entered on or after Jan. 1, 2024.

Home rule is preempted by this statute.

The Illinois Human Rights Act (HRA) was amended to add “Immigration Status” as a protected class. Immigration status is defined in the Human Rights Act to mean a person’s actual or perceived citizenship or immigration status. This means that housing may not be limited or denied based solely on a person’s immigration status.

Most of the changes to the Illinois Real Estate License Act (RELA) were non-substantive, such as changing pronouns or the way to which something was referred.

The cumulative time limit for a member of the Real Estate Administration and Disciplinary Board was changed from 10 to 12 years and terms remain four years long.

The Real Estate License Act was amended in three ways to clarify a prohibition against locking a seller into an agreement to list their home for a very long time and a prohibition against filing a lien, or anything purporting to be a lien against the property, to assure payment of a residential commission or compensation. There are no property lien rights for residential sales transactions in Illinois.

Section 1-10 definition of “brokerage agreement” inserts the clause “or the performance of future activities” into the existing definition:

“Brokerage agreement” means a written or oral agreement between a sponsoring broker and a consumer for licensed activities, or the performance of future licensed activities, to be provided to a consumer in return for compensation or the right to receive compensation from another….

Section 10-25 is amended to say that a written brokerage agreement must either have a definite termination date, or in any event, if it is effective for longer than one year, the client must receive an annual right to terminate by giving no more than 30 days’ written notice.

No licensee shall obtain any written brokerage agreement that does not either provide for automatic expiration within a definite period of time, and if longer than one year, provide the client with a right to terminate the agreement annually be giving no more than 30 day’s prior written notice. Any written brokerage agreement not containing such a provision shall be void.

Section 20-20(a) adds new subparagraph (47) which states that it is a violation of the Real Estate License Act to file liens or record written instruments for non-commercial, residential real property that relates to the broker’s compensation for license activity under the Act. Note that there have not ever been property lien rights for residential transactions.

The Illinois Security Deposit Return Act was amended to remove the requirement that a property contain five or more units. This will make many more rental units subject to the Act:

• Lessor may not withhold any part of the security deposit for property damage unless the lessor has provided to the lessee an itemized statement of the damage allegedly caused and the estimated or actual cost to repair or replace the items.
• This statement must be provided to the lessee within 30 days of the date the lessee has vacated the property or within 30 days of the date the lessee’s right of possession ends, whichever is later.
• If no such statement is delivered to the lessee, the lessor shall return the security deposit in full within 45 days of the date that the lessee vacated the property.

It should be noted that if the lessor does not comply with the Act, they may be liable for an amount equal to twice the amount of the security deposit due, along with court costs and reasonable attorney fees.

The Illinois Residential Real Property Disclosure Act was amended Aug. 4, 2023, to clarify the definition of a Seller. As you will recall, Seller is a defined term in the Act and means…” every person or entity who:

(1) is a beneficiary of an Illinois Land Trust; or

(2) has an interest, legal or equitable, in residential real property as:

(i) an owner.

(ii) a beneficiary of a trust.

(iii) a beneficiary pursuant to testate disposition (with a will), intestate succession (without a will), or a transfer on death instrument; or

(iv) a contract purchaser or lessee of a ground lease.

Including the unmodified “beneficiary of a trust” produced the unintended consequence of requiring many more folks to fall under the definition of seller if not otherwise excluded under the Section 15 exemptions.

The Section 15 exemptions remain the same. The amendment provides that the definition of seller now does not include a beneficiary who both (i) never occupied the residential real property AND (ii) never had management responsibility for it. (Emphasis added and, as a special note, this language did appear in the original act but did not get picked up in the revision.)

The bottom line here is if a seller is a beneficiary who does not fall under one of the exemptions and has never lived in the property and never had management responsibility for it; that beneficiary does not have a duty to complete a disclosure report. However, if the beneficiary is not otherwise exempt, and the beneficiary does live in the property, or doesn’t live there but does manage the property, i.e., as an absentee owner, that beneficiary will be a seller by definition and need to complete a disclosure report to the best of the beneficiary’s actual knowledge.

About the writer: Victoria Munson is the Illinois REALTORS® Legal Hotline Attorney.