5 practical lessons learned through IAR’s Legal Webinar

Advice regarding surveillance videos, commercial drones, state real estate licenses, medical marijuana and tenant foreclosure rights were among the topics addressed during the Feb. 19 Illinois Association of REALTORS® Legal Webinar.

Although IAR Members were able to get answers to a number of other questions from the IAR Legal Services team, anyone interested in real estate could benefit from these questions, answers and news updates.

1. Q.  The federal ‘Protecting Tenants at Foreclosure Act’ expired on Dec. 31, 2014. Is there a similar Illinois law that protects tenants when their leased property is foreclosed?

A. Yes. In 2013, an Illinois law was enacted, giving tenants similar rights to the federal law. Generally, bona fide leases for residential property must be allowed to go to the end of term, or if the lease is month-to-month, it must give a 90-day notice before eviction. The Illinois law contains specific definitions and some exceptions.

2. Q. A company website/portal has Illinois real estate for sale and is soliciting bids for property it does not own. The company is licensed for real estate and auctioneering in California but not Illinois. Must this company be licensed in Illinois to auction the sale of real estate?

A. Based on these facts, the California company doing business with regard to Illinois real estate would need an Illinois real estate broker license to auction property owned by others for compensation. Complaints would need to be filed with the Enforcement Section of the Illinois Department of Financial and Professional Regulation (IDFPR) at http://wwwidfpr.com/Banks/CONSUMER/FORMS/RealEstateComplaints.pdf.

3. Q. How do we advise tenant clients that qualify for medical marijuana when their landlord prohibits smoking indoors?

A. Landlords may still prohibit smoking indoors. Properly certified patients wishing to use medical marijuana indoors may need to use a smokeless form of the drug. See www.iar.org/publications for articles and webinars on this subject.

4. News on eavesdropping. The only type of eavesdropping allowed in Illinois without consent is video in public areas (it is prohibited in private areas like a bathroom). Effective Dec. 30, 2014, when conversations are expected to be private, audio recording requires the consent of all parties. However, it is unclear whether a conversation in a listed home should be considered private, even if a sign about surveillance recording is posted. Practically speaking, IAR recommends REALTORS® representing sellers get consent or post a sign. REALTORS® representing buyers should not discuss anything with regard to the listed property until off the premises.

5. News on commercial drones. Although the commercial use of drones is presently prohibited by the Federal Aviation Administration (FAA) without an FAA-issued permit, it has proposed new rules that should provide for permitted commercial use of small drones if certain requirements are met. Those proposed rules are in the comment period, so they are not in effect, and it will still be quite some time before the rules become final.

Remember to tune in to IAR Legal Webinar Thursday morning

IAR members can get the latest update on real estate related issues and get their questions answered during IAR’s Legal Webinar at 9:30 a.m. Thursday.

This webinar will be hosted by IAR Legal Hotline Attorney Betsy Urbance and IAR Legal Helpline Attorney Jeffrey T. Baker (both of Sorling Northrup Attorneys).

Questions received in advance will be given priority.

New Wisconsin law could affect IAR members?

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Illinois REALTORS® – On Jan. 1, a new provision in Wisconsin’s real estate licensing law clarified the need for a Wisconsin license to list Wisconsin properties. However, the provision does allow for out-of-state licensees to cooperate with Wisconsin licensees under a statutorily required cooperative agreement.

According to the Wisconsin REALTORS® Association (WRA), the law keeps Wisconsin brokers in charge of transactions but allows Illinois-licensed brokers to have a limited involvement in the selling or leasing process.  The association states that the law was passed because of the negative impacts out-of-state licensees were causing for clients and Wisconsin brokers.

A few basics of Wisconsin Statute 452.137:

  • Only Wisconsin-licensed brokers can decide if they want to have a cooperative or referral agreement;
  • The agreements are voluntary and are made on a case-by-case basis;
  • The law covers residential, commercial, farm and vacant land transactions involving real estate brokers;
  • Out-of-state licensees must agree that all earnest money and client funds will be held by Wisconsin brokers and Wisconsin law governs all disputes between brokers.

Need more information?

Know the answer to the IAR Legal Hotline’s most frequently asked question?

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One of the most popular questions posed to the IAR Legal Hotline in 2014 was worded something like this: “Must I have a real estate license to engage in property management or rental activities?”

That kind of question isn’t surprising since the Hotline has received more inquiries in the last four years about activities governed by real estate license law than any other category. Our answer to this question has always been “yes” if:

  • those activities are included in the Illinois Real Estate License Act of 2000, Section 1-10, under the definition of “Broker” and
  • you perform the activities for another person and for compensation.

To clarify what Broker activities are included in our answer, here are the pertinent examples listed in the Illinois Real Estate License Act:

(1)  … rents or leases real estate.
(2)  Offers to … rent or lease real estate.
(3)  Negotiates, offers, attempts or agrees to negotiate the … rental or leasing of real estate.
(4)  Lists, offers, attempts or agrees to list real estate for … lease …
(6)  Supervises the collection, offers, attempts or agrees to collect rent for the use of real estate.
(7)  Advertises or represents himself or herself as being engaged in the business of … renting or leasing real estate.
(8)  Assists or directs in procuring or referring of leads or prospects, intended to result in the … lease or rental of real estate.
(9)  Assists or directs in the negotiation of any transaction intended to result in the … lease or rental of real estate.
(10) Opens real estate to the public for marketing purposes.
(11) … leases or offers for … lease real estate at auction.

 

Are you following these 2 residential disclosure tips?

To help IAR members avoid problems when representing sellers, Jeffrey T. Baker, Sorling Northrup Attorneys, and IAR Transaction Helpline Attorney, offers two tips regarding completion of the Residential Real Property Disclosure Report.

In the January issue of D.R. Legal News, Baker begins by reminding that the Residential Real Property Disclosure Act requires sellers to provide these disclosure reports in residential real estate transfers, including: transfers by sale, exchange or installment land sales. But he says sellers should take extra caution when reviewing and before signing these reports.

No. 1, Baker says the Report is a legal document and thus sellers should consult legal counsel before completing the form. Real estate brokers should not provide advice on whether the report is required, how it should be completed, or who should sign it.

No. 2, he says the investor-sellers exemption is rarely applicable despite the seller never having lived in the home. Investor-sellers may be exempt from signing reports only when they meet both of the following conditions: (1) they’ve never occupied the house and (2) they never possessed or delegated management responsibility for the property.

Read more about Residential Real Property Disclosure Reports and more in the January D.R. Legal News.