Illinois Real Estate License Act Updates: What You Need to Know for 2025

The Illinois Department of Financial and Professional Regulation (IDFPR) recently released its quarterly newsletter, highlighting important updates to the Real Estate License Act of 2000.

The amendments signed into law by Governor JB Pritzker (Public Act 103-1039) will go into effect on January 1, 2025.

What Does This Mean for Illinois Real Estate Professionals?

For real estate professionals across Illinois, these changes are important to understand as they directly affect brokerage practices, licensing procedures, and continuing education requirements. Here’s a breakdown of the key updates:

Written Brokerage Agreements

Starting in 2025, all brokerage agreements between consumers and a Sponsoring Broker must be in writing, whether they are exclusive or non-exclusive. Failing to have a written agreement when representing a client will now be a disciplinary violation of the Act. This update emphasizes the importance of formal documentation in real estate transactions, ensuring transparency and accountability.

Non-Exclusive Brokerage Agreements

The new law also defines “non-exclusive brokerage agreement” to help consumers better understand this form of written agreement. This is aimed at reducing confusion and protecting both clients and brokers.

Compensation Disclosures

Licensees will now be required to disclose their Sponsoring Broker’s compensation policies, including any amounts offered to cooperating brokers. This allows clients to fully understand how their broker is compensated, fostering trust in the brokerage process.

License Reciprocity Changes

For those licensed in other states, Illinois is shifting from Reciprocal Agreements to an Endorsement process. This streamlined approach will allow real estate professionals in the other 49 states to obtain an Illinois license without the need for Illinois to have a specific reciprocal agreement with their home state, making it easier for out-of-state licensees to transition to Illinois. Note that this change does not alter the process that Illinois licensees must follow when seeking to become licensed in another state. Requirements are determined by the state issuing the license.

Recovery Fund Requirements

The new law mandates that the Recovery Fund maintain a minimum balance of one million dollars, ensuring that there are sufficient resources to protect consumers in the event of damages caused by real estate licensees.

Managing Broker Licensing

The Managing Broker license exam is no longer required to include a portion focused on national brokerage laws and practices. In response to this amendment, the IDFPR will soon update the pre-license course curriculum and exam requirements.

New Core CE Requirement for Brokers and Managing Brokers

Brokers and Managing Brokers will see an increase in their Core CE hours, from 4 to 6, with 2 of those hours specifically focused on Fair Housing training. This change aligns with new requirements for all REALTORS® that go into effect next year.

New Continuing Education (CE) Topics

Diversity, equity, and inclusion (DEI) were added to the list of topics that may be included in elective CE courses.

Pre-License Education Validity

The updates clarify that Pre-License education is only valid for two years following the completion of all required coursework.

Real Estate Institute – Your Compliance Partner

Navigating changes in licensing laws can be complex, but Real Estate Institute is here to help. We provide up-to-date information on compliance and Illinois real estate laws. If you have any questions about the upcoming changes, don’t hesitate to reach out to our knowledgeable student support team at 800-995-1700. We’re always ready to assist you in staying on top of your professional requirements.

These updates ensure that Illinois real estate professionals continue to offer the highest level of service, transparency, and compliance. Keep these changes in mind as you prepare for 2025, and let Real Estate Institute support you along the way!