Illinois real estate disclosures for the broker exam

A late no-agency notice cannot undo earlier assistance

An Illinois listing agent with an executed seller brokerage agreement is already showing the seller’s home to a buyer who is expressly a non-client. No written no-agency notice was given. The buyer begins to explain the highest price the buyer can pay.

1. The supplied non-client role is explicit; it is not inferred merely from a missing buyer form.
2. Rule 1450.770(i)(1) required the written no-agency notice before this listing-side licensed assistance. That point has already been missed.
3. Stop before inviting or receiving the confidential negotiating information and address the notice failure. Section 15-35(c)’s outside offer-preparation deadline does not excuse the earlier rule.

Answer: Provide the required notice and correct the procedure promptly. Giving it now does not retroactively cure the earlier failure.

Two competing buyer clients of one designated agent

One designated agent represents two buyer clients preparing offers for the same condominium and knows the seller will consider both offers that evening.

1. The same designated agent, same property and expected simultaneous consideration satisfy the supplied contemporaneous-offer facts.
2. Every affected client receives written disclosure.
3. Refer a client who requests it to another designated agent; do not invent automatic cancellation or seller-only consent.

Answer: Give written disclosure to both buyer clients and arrange referral on request under Rule 1450.830.

A late initial report reveals a roof defect

For a covered transfer, all parties sign the purchase contract before the seller delivers the initial statutory report. The buyer receives it Monday. It discloses a material roof defect; no exclusion or conveyance has occurred.

1. The initial report was due before contract signing.
2. The material roof defect fits the supplied Section 40(a) route; the exception for report items 1 and 2 does not describe this roof defect.
3. The buyer has five business days after receipt, subject to the statute. Effective written termination notice must be delivered to at least one seller using the Section 50 contact procedure before conveyance.

Answer: The qualifying five-business-day right runs after Monday’s receipt. No private calendar deadline or automatic termination is calculated from these limited facts.

A garden apartment outside the FEMA area

A landlord will lease a garden apartment. The property flooded twice from heavy rainfall in the last ten years, but it is outside a FEMA Special Flood Hazard Area. No statutory exemption applies.

1. A garden apartment is a lower-level unit.
2. Subsection (c) reaches flooding of the unit or any portion of its property during the last ten years.
3. Outside-FEMA status does not remove that separate duty.

Answer: Disclose the two flooding events in writing before signing. The disclosure belongs in the lease or renewal and must be signed by both landlord and tenant.

Consent is not the last dual-agency document

A permitted dual agent has prior informed written consent from all clients. The purchase contract embeds the statutory dual-agency confirmation. No ownership-party prohibition applies.

1. Prior consent and later confirmation serve different purposes.
2. Written confirmation is mandatory, although Section 15-45(c) describes execution as the time it should be obtained.
3. For confirmation embedded in the contract, each client signs the document and initials the confirmation.

Answer: Do not treat earlier consent or a contract signature alone as completion of the embedded confirmation procedure.

A small ownership interest is still an ownership interest

A licensee proposes to act as dual agent in a transaction in which an entity holding the licensee’s current 0.5% ownership interest is a party. Everyone offers written consent.

1. The ownership-party dual-agency prohibition uses any current or future ownership interest.
2. The 1% provider-referral threshold belongs to another disclosure rule.
3. Client consent does not remove this prohibition.

Answer: The proposed dual-agent role is prohibited on these supplied facts; disclosing the interest does not make it permitted.

Profit sharing below a 1% ownership interest

A licensee refers a client to a privately held provider for services related to the transaction. The licensee owns 0.5% but also receives dividends or profit sharing from that provider.

1. Section 10-10(c) has alternative triggers: ownership above 1%, or dividends or profit sharing received or potentially received.
2. The supplied private provider is not within the statute’s publicly held or publicly traded company exclusion.
3. Rule 1450.760 separately addresses written disclosure when its expected-compensation and ownership conditions are met.

Answer: The below-1% ownership fact does not erase the separate dividend or profit-sharing disclosure trigger at referral.

A seller’s No answer does not erase broker knowledge

The seller’s agent actually knows a latent material adverse physical fact that a reasonably diligent buyer-customer inspection would not discover. The seller checks No on the report and asks the agent to keep the physical defect quiet.

1. The exercise supplies actual knowledge, latency, physical adversity and the customer-inspection condition.
2. Section 15-25 creates the broker’s separate disclosure duty.
3. A seller form or confidentiality request does not erase that duty; this is not a request to reveal a client’s negotiating limit.

Answer: The broker must disclose the supplied fact to the buyer customer. This does not turn every public record or suspicion into actual knowledge.

A paid mine claim has two recipients

The current transferor received a paid insurance claim for statutory mine-subsidence damage. The covered transfer agreement is written, and no statutory waiver is supplied.

1. The trigger is a paid claim to the current transferor, not merely a nearby mine, pending claim or earlier owner’s payment.
2. Section 3 requires written disclosure to the transferee and lender when the transfer agreement is made.
3. The disclosure is incorporated in the written agreement. A Section 3(c) waiver, if used, requires the transferee’s and lender’s signatures.

Answer: Disclose to both required recipients at the agreement stage; seller-buyer signatures alone are not the statutory waiver pair.

Do not transfer the lead deadline to radon

A covered pre-1978 Illinois home sale is subject to both federal lead disclosure and Illinois radon-sale disclosure. No exemption or written change or waiver of the lead evaluation opportunity is supplied.

1. Each law requires its own covered information package before the buyer becomes obligated or bound.
2. The covered lead sale provides a ten-day inspection or risk-assessment opportunity.
3. Illinois’s radon-sale Act requires disclosure but does not itself require testing or mitigation or create the same universal ten-day opportunity.

Answer: Apply each package and deadline separately. A written waiver of lead evaluation would not waive the mandatory lead disclosure package.

A Yes answer that is expressly excepted

All parties sign before receiving the initial statutory seller report. Its only affirmative answer is report item 2, and no other material defect or independent termination ground is supplied. Conveyance has not occurred.

1. Section 40(a) expressly excepts report items 1 and 2 from its late-initial-report material-defect route.
2. A late report still missed the pre-contract duty; the exception does not make late delivery proper.
3. Other law and remedies remain separate, but the exercise does not supply another termination ground.

Answer: Do not award an automatic five-business-day Section 40(a) termination right solely from this item-2 answer.

Two flood remedies, two notice triggers

Consider two otherwise covered rental examples with no exemption. In the first, a landlord failed subsection (b), and the tenant later learns the property’s undisclosed FEMA Special Flood Hazard Area status. In the second, the landlord failed (b) or (c), and a later flood damages the tenant’s personal property or affects habitability or access.

1. The first notice deadline is no later than the thirtieth day after awareness of the landlord’s subsection (b) failure.
2. The second notice deadline is no later than the thirtieth day after the qualifying flood. These are separate statutory routes.
3. For either supplied termination route, advance rent and fees are returned no later than the fifteenth day after the tenant gave notice. The second route also addresses an action for flood-damaged personal property.

Answer: Do not restart the refund period at move-out or keys return, or replace both notice clocks with a general discovery deadline. An actual lease, damage claim or notice still needs its facts.

1. Which statement correctly treats Section 15-35(c)’s no-agency deadline together with the listing-assistance rule?

1. Offer preparation excuses all earlier assistance without notice
2. Notice is intended to prevent confidential disclosure and due no later than offer preparation; Rule 770(i)(1) can require it before assistance
3. Every notice can wait until closing
4. A seller request is the only trigger

2. One designated agent prepares contemporaneous offers for two buyer clients on the same property and knows they will be considered together. What is required?

1. Only oral notice to the seller
2. Written disclosure to all affected clients and referral on a client’s request
3. Consent from the seller alone
4. Automatic cancellation of both relationships

3. Which fact alone does not determine whether an Illinois agency relationship exists?

1. The actual designated-agency relationship
2. The source of paid or promised compensation
3. The applicable representation agreement
4. The applicable statutory agency default

4. A covered seller has no actual knowledge of defects and has not hired an inspector. What does the seller-report Act require about knowledge?

1. Refuse the report until a new inspection is purchased
2. Complete the required report from actual knowledge without a specific investigation duty under that Act
3. Have the broker certify unknown conditions as the seller
4. Wait until after signing to answer the form

5. In a covered pre-1978 housing sale, which federal lead opportunity generally applies unless changed or waived in writing?

1. A ten-day opportunity for a lead inspection or risk assessment
2. A new lead test by the listing agent
3. Automatic cancellation whenever lead exists
4. Mandatory seller-paid abatement in every sale

6. Under Section 15-35(a), how must the required designated-agency disclosure be given to the client when the brokerage agreement is entered into?

1. Only by posting an anonymous office notice
2. Only orally at closing
3. In writing, identifying the designated agent or agents
4. Only if the client later pays a commission

7. A buyer has not yet signed a buyer brokerage form. Does that fact alone establish that the buyer is a non-client?

1. No; all buyers automatically consent to dual agency
2. No; apply the designated-agency default, actual relationship and agreement duties
3. Yes; every buyer without a form is a neutral customer
4. Yes; missing paperwork automatically eliminates every agency duty

8. Before acting in a legally permitted Illinois dual-agent role, whose informed written consent is required?

1. All clients in the dual-agency transaction
2. Only the seller
3. Only the party paying the commission
4. Only the sponsoring broker

9. A permitted dual-agency confirmation is embedded in a contract. What does Section 15-45(c) require of the client?

1. Sign the document but never initial the confirmation
2. Sign the document and initial the confirmation
3. Rely only on the earlier consent
4. Wait until after conveyance to decide whether any writing is needed

10. A licensee owns 0.5% of an entity that is a party to the transaction. Can consent alone authorize that licensee to act as dual agent?

1. No; the ownership-party prohibition covers any current or future ownership interest
2. Yes; the seller alone can waive the prohibition
3. Yes; commission payment removes the ownership issue
4. Yes; every interest below 1% is exempt

11. A licensee will act in a specified direct or indirect personal-interest role covered by Section 10-27 and Rule 1450.765. When and to whom is written licensee-status disclosure due?

1. Only to the licensee’s spouse
2. To all parties before initiating the transaction
3. Only to the lender after closing
4. Only after an offer is accepted

12. An Illinois sponsoring broker will receive compensation from both buyer and seller in one transaction. What does Section 10-10(d) require?

1. Only a notice to the recorder after closing
2. Automatic authorization for dual agency
3. No disclosure if both payments are small
4. Written disclosure of that fact to the client

13. A licensee refers a client for transaction-related services to a private provider that pays the licensee dividends or profit sharing, although the licensee owns only 0.5%. Does that low ownership percentage alone remove Section 10-10(c)’s trigger?

1. Yes; all private providers are excluded
2. Yes; only ownership above 1% ever matters
3. No; dividends or profit sharing are a separate trigger
4. No; this automatically proves every federal payment is lawful

14. Rule 1450.760’s specified referral for the client to obtain transaction-related services involves expected compensation and an interest above 1% held by the licensee or sponsoring broker. In what form is its disclosure required?

1. No disclosure because the provider is separate
2. Only a verbal statement to a coworker
3. Only an unsigned private mental note
4. In writing, physical or electronic

15. For a nonexempt transfer covered by the residential seller-report Act, when is the written report due to the prospective buyer?

1. Only if an inspection finds a new defect
2. Only after conveyance
3. Before the contract is signed
4. Only after the buyer pays for it

16. All parties signed before an initial seller report arrived. It reveals a material roof defect, the buyer has received it, and conveyance has not occurred. Which Section 40(a) period applies to the supplied qualifying defect?

1. No period because a late initial report can never create a right
2. Five business days after receipt of the report
3. Thirty days after the buyer moves in
4. Five calendar days after the seller fills it out

17. Which statement correctly describes Section 40(b)’s supplemental-report termination grounds?

1. They are alternatives; the five-business-day seller repair-response condition belongs to the repairable-defect ground
2. A repair promise always defeats a prior-known-omission ground
3. The buyer always has five calendar days after any supplement
4. Every supplement automatically rescinds the contract

18. Does Illinois’s radon-sale disclosure Act itself require a new test and mitigation in every covered sale?

1. No; it also eliminates the disclosure package
2. Yes; every seller must install a system
3. No; the required package and known elevated results are separate from a universal test or mitigation mandate
4. Yes; the broker must personally conduct the test

19. Under Section 26(b), what event starts a covered tenant’s ordinary 90-day radon testing period?

1. Any date the tenant later chooses
2. Commencement of the agreed leasing period
3. The date a seller signs a purchase contract
4. The date the lease ends

20. Does the federal lead disclosure rule give a tenant in a covered lease the same ten-day evaluation opportunity provided for a covered sale?

1. Yes; it is a universal federal rent-withholding period
2. No; covered lease disclosure remains, but that federal ten-day opportunity is a sale rule
3. No; covered leases never require a lead package
4. Yes; all covered rentals automatically get that sale period

21. Which supplied event triggers the Illinois Mine Subsidence Disclosure Act’s paid-claim disclosure?

1. Only an earlier owner’s claim, with no payment to the current transferor
2. An insurance claim paid to the current transferor for statutory mine-subsidence damage
3. A pending claim that has not been paid
4. A mine shown on a map with no supplied paid claim

22. For a covered paid mine-subsidence claim, who receives the written disclosure and when?

1. Only the seller after closing
2. Only the recorder five years later
3. The transferee and lender when the transfer agreement is made
4. Only the insurance company when a claim is filed

23. A seller actually knows of an underground fuel tank. Does an exemption from a particular OSFM regulatory category automatically erase the seller report’s tank question?

1. No; regulatory coverage and the actual-knowledge condition report are separate
2. Yes; regulatory exemption proves no tank exists
3. No; every tank must therefore have identical registration duties
4. Yes; every heating-oil tank is legally nonexistent

24. A covered first-floor rental property flooded during the last ten years but is outside the FEMA mapped area. What follows under Section 25(c)?

1. The separate lower-level flood-history disclosure still applies
2. The tenant must first purchase insurance to receive notice
3. Only the parking-area map is relevant
4. No flood disclosure can ever be required

25. Under Section 3(c) of the Mine Subsidence Disclosure Act, whose signatures are required on its written waiver?

1. The transferee and lender
2. The listing broker and seller only
3. The insurer and recorder only
4. The transferor and transferee only

26. A late initial seller report has only an affirmative item-2 answer and no other material defect or independent ground is supplied. Does that answer alone establish the five-business-day Section 40(a) termination route?

1. No; late delivery is therefore always proper
2. No; Section 40(a) expressly excepts report items 1 and 2
3. Yes; every affirmative answer automatically rescinds the contract
4. Yes; the buyer always receives thirty days instead

27. A tenant validly uses one of Section 25’s supplied rental-flood termination routes. What event starts its fifteen-day deadline to return advance rent and fees?

1. The tenant gave the termination notice
2. The tenant later returns the keys
3. The landlord eventually relets the unit
4. The next lease anniversary

28. For a covered radon sale, the buyer submits an offer before receiving the required materials. What must happen before the seller accepts?

1. Automatically replace the rule with a ten-day federal lead period
2. Give an adequate opportunity to review the materials and possibly amend the offer
3. Accept first and disclose only at closing
4. Require the buyer to waive every disclosure