Late last week, Governor J.B. Pritzker signed SB 1872 into law, which is effectively an update to The Real Estate License Act of 2000. That means many changes made to real estate license law are technically effective now. But while some provisions will need to be complied with immediately, other portions of the law will require legislative committees to hack out the details in the coming months.
What’s effective now
The previous license law didn’t address the idea of teams at all. That’s changed with the newly signed legislation. In some ways, the day-to-day life of real estate professionals isn’t changing a great deal with this new law, because individual licensees were always subject to the same rules, whether they were on a team or not.
“As a practical matter, honestly it really doesn’t mean anything super different,” Illinois Realtors Chief Legal Counsel Betsy Urbance said in a recent podcast recorded before the law was signed. “The license law applies, period.”
One important element is a new list of “inherently misleading terms” that team names must not contain. Urbance noted that the reason this list was added was to ensure the public understood teams to be teams, and not real estate brokerages. The list includes the following terms:
- Company
- Realty
- Real estate
- Agency
- Associates
- Brokers
- Properties
- Property
Urbance warned team members to make sure they’re currently complying with these new advertising rules. “When the governor signs the bill … it will be effective,” she said. “Know what those are [and] have a plan to comply.”
Opening the industry to digital offices and younger, less experienced agents
The new version of the law also reduces the minimum age for obtaining a real estate license from 21 to 18. Urbance noted this was something Realtors lobbied for. “At 18 there are some people who are ready to make a career,” she said. “The industry was asking for the allowance to be made.”
Alongside this change came an effort to balance out some of the educational requirements and put more responsibility in the hands of managing brokers when it comes to guiding new agents.
The law reduced the number of pre-license education hours from 90 to 75 hours, but then added more hours to post-license education, increasing from 30 hours to 45. It also enhanced and more clearly specified the responsibilities of managing brokers when it comes to supervising licensees, particularly new ones.
Another change that will require some implementation work is the provision that allows for virtual offices. In the past, “there was a requirement for a definite physical office,” Urbance noted. In some ways, that’s changed in that brokerages do not have to have a “brick and mortar door” anymore. But they’ll still have to have a sort of virtual door that can “protect the confidential information” and offer the Illinois Department of Financial and Professional Regulation access to company information in the case of audits or investigations.
Since these changes will require a bit more work, Urbance urged patience in this transition period, particularly when it comes to new educational and oversight rules. “Obviously, courses will need to be developed,” she said. “It’s safe to say they’re not going to happen overnight.”