Ethical Practices and Consumer Protection
The statutory floor
Ethics questions on this exam are mostly statutory. The Illinois Real Estate License Act lists disciplinary grounds that include fraud or misrepresentation, false promises, commingling or failing to account for trust funds, acting for more than one party without written consent, accepting compensation from more than one party without disclosure, failing to disclose an ownership interest in the property, failing to provide required agency disclosures, discriminatory conduct, unlicensed activity, and failing to respond to IDFPR inquiries. Discipline can include fines, suspension, revocation, and required education.
Consumer protection overlay
Beyond the Act, the Illinois Consumer Fraud and Deceptive Business Practices Act reaches deceptive marketing, and the Illinois Human Rights Act reaches discriminatory conduct. Consumers harmed by a licensee's violation may file a claim against the Real Estate Recovery Fund. A leasing agent must protect applicant information - credit reports, pay stubs, IDs - and use it only for the stated screening purpose.
Money and referrals
Referral fees and finder's fees may be paid only to licensed brokers, never to unlicensed persons such as a doorman, a current tenant, or a friend who sends applicants. A gift or bonus offered directly by a landlord should be disclosed and routed through the sponsoring broker. Any compensation from both sides must be disclosed in writing.
Worked example
A concierge at a managed building offers to send prospective tenants for $200 per signed lease. Paying him is unlicensed-activity facilitation and a disciplinary violation; the leasing agent should decline and explain that referral compensation can flow only to licensees through their brokers.