New laws were recently signed to reduce red tape, paperwork and regulations for real estate businesses—burdens that put business owners and Illinois at a disadvantage.
The new licensing program created by House Bill 5210 is expected to save the state money by reducing a duplicative and unnecessary licensure structure that provides no benefit to the public and discourages business creation and growth.
Additionally, it clarifies that a licensed individual may establish a limited liability company to receive commissions directly, allowing them more flexibility in selecting a business entity that fits their needs. The new practice will also allow the individual to derive more favorable tax treatment than they would receive when operating as an individual.
"The licensing requirements for professionals in Illinois, especially those in the real estate field, are often times too burdensome and redundant," said State Senator Pamela Althoff, R-McHenry, who co-sponsored the bill. "In an effort to untangle some of the red tape in these processes, this bill no longer requires brokers to obtain a license from each branch of office they operate in, but instead they will only need one license and will simply just need to notify IDFPR of each office."
The bill was supported by the Illinois Department of Financial and Professional Regulation (IDFPR).
“On behalf of more than 47,000 realtors throughout Illinois, we support this effort and appreciated the opportunity to work with IDFPR in crafting and passing this legislation,” said CEO of Illinois Realtors Association, Gary Clayton. “This is a sound policy initiative that will streamline the regulatory process for Illinois businesses.”
Finally, the legislation pushes back continuing education deadlines, establishes one basic standard for all business entities, simplifies the business entity license application, establishes common sense ownership requirements, and reduces barriers to industry.
The governor also signed House Bill 5502 removing an unnecessary testing requirement to encourage new real estate appraiser trainees to enter the industry. Proponents say that because of the increased costs of education and mandates, licensure has been in the decline. The new law will reduce a barrier to entry for real estate-related businesses and their employees, and increase labor market liquidity within the industry.
As of April 2018, there were 1,195 active branch office licenses, according to the IDFPR.