A sponsored licensee in Illinois begins working with a consumer, but no written brokerage agreement has been executed. Under the Illinois Real Estate License Act of 2000, how is that consumer classified by default?
Correct Answer
C) The consumer is treated as an unrepresented customer, because full fiduciary-style duties of representation attach only upon formation of a written brokerage agreement.
Under the Illinois Real Estate License Act of 2000 (225 ILCS 454), a brokerage relationship — and the client status that comes with it — is established through a written brokerage agreement. Without that agreement, the consumer has not entered a client relationship and is therefore treated as a customer. A licensee owes customers honest treatment and disclosure of known latent material adverse facts, but does not owe the full duties of representation (promoting best interests, confidentiality, etc.) that attach only to clients.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
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