CHEAT SHEET: Practice & Fair Housing (Chapter 5)

FEDERAL vs. ILLINOIS PROTECTED CLASSES

|---|---|

High-yield: Illinois adds 8 protected classes—more than federal. Questions often ask what IHRA covers that FHA doesn't.

---

PROHIBITED CONDUCT (Fair Housing Act)

|---|---|---|

Exam tip: Steering is the most tested violation.

---

FAIR HOUSING ENFORCEMENT

|---|---|---|---|

SB 3740 Note (eff. Jan 1, 2025): Enhanced fair housing training required; disciplinary action for non-compliance now stricter.

---

TRUST ACCOUNTS (Critical for Exam)

Rules:

• Deposit: Next banking day (earnest money, tenant deposits, client funds)

• Commingling: ❌ Prohibited (broker's money + client money in same account)

• Conversion: ❌ Using client funds for broker's benefit

• Records: 5-year retention (checkbooks, ledgers, reconciliation)

• Interest: No—keep in non-interest account (unless written client consent)

Exam pattern: "Broker deposits earnest money in her operating account" = VIOLATION (commingling).

---

ADVERTISING RULES

|---|---|

Trick: "For sale by owner" ads = agent still must use brokerage name if licensed agent involved.

---

ANTITRUST VIOLATIONS (Price-Fixing & Market Allocation)

|---|---|---|

Rule: Price-fixing and market allocation = per se (automatically illegal), no defense.

---

SB 3740 (EFFECTIVE JAN 1, 2025)—MUST-KNOW FOR EXAM

|---|---|

Exam high-yield: "Agent shows property without written buyer agreement" = VIOLATION.

---

DISCLOSURE RULES (Quick Ref)

|---|---|---|

Exam trap: "No Representation" clause ≠ shield for known defects (affirmative duty to disclose).

---

IDFPR DISCIPLINE OUTCOMES

|---|---|

Federal FHA (7)	Illinois IHRA Adds (8 Total)
Race	Ancestry
Color	Marital Status
Religion	Military Status/Unfavorable Discharge
National Origin	Sexual Orientation
Sex	Gender Identity
Familial Status
Disability
Violation	Definition	Red Flag
Steering	Directing buyers/sellers to/away from areas based on protected class	"Better for your people"
Blockbusting	Inciting panic sales by claiming racial/ethnic change coming	Soliciting listings via scare tactics
Redlining	Refusing credit/services to areas based on protected class makeup	Loan denial by zip code
Advertising Discrimination	Ads excluding or preferring protected classes	"No families" or "senior community only" (unless age-55+)
Agency	Jurisdiction	Deadline	Authority
IDHR (Illinois)	State complaints	180 days	Investigates; can file before HUD if needed
HUD	Federal complaints	1 year	Final authority; can award damages
Requirement	Example
Brokerage name required	"Sold by ABC Realty" (not agent's personal name alone)
No blind ads	Must identify brokerage, not just phone #
Internet = print	Same standards apply to web, email, social media
Fair Housing comply	No protected-class preferences
Disclosure language	"Equal Housing Opportunity" statement encouraged
Violation	Example	Severity
Price Fixing	Brokers agree to charge 6% commission across board	Per se illegal
Market Allocation	"You take downtown, I'll take suburbs"	Per se illegal
Tie-in	"Must use my closing attorney"	Rule of reason (fact-dependent)
Requirement	Details
Written Brokerage Agreements	ALL agreements (listing, buyer rep, non-exclusive) must be in writing; NO oral agreements
Buyer Rep Agreement	Must be in writing BEFORE showing properties or providing services
Buyer Termination	Buyer has unilateral 30-day annual termination right
Disciplinary Consequence	Failure to have written agreement = license violation
NAR Settlement Overlap	Also prohibits MLS compensation offers (buyer broker commission cannot be "held hostage")
Item	Rule	When
Agency	Written, at 1st substantive contact	Before price/terms/motivation discussed
Residential Disclosure	765 ILCS 77/1 form (1–4 units)	BEFORE offer made
Lead Paint	Federal (pre-1978 only)	10-day inspection period
Radon	Illinois Radon Awareness Act	Disclose if known
Defective Drywall	Included in residential form	Before offer
HOA/Condo Docs	Provide to buyer	Before or with offer
Level	Examples
Reprimand	Minor violations (sloppy paperwork, late CE)
Fine	Up to $500–$5,000+ depending on violation
Suspension	Temporary license loss
Revocation	Permanent license loss
Recovery Fund Claim	Client compensation for broker fraud/theft

Pattern: Trust account violations & fair housing breaches = serious discipline.

---

EXAM QUICK HITTERS

✓ "Steering" = most tested fair housing violation ✓ Illinois protects 8 classes (federal + 4 state additions) ✓ SB 3740 = written agreements MANDATORY as of Jan 1, 2025 ✓ Trust account next banking day = deposit deadline