Question 1
Under the Chicago Residential Landlord and Tenant Ordinance (RLTO), a landlord wishes to terminate a month-to-month tenancy for a tenant who has resided in the unit for exactly 18 months. What is the minimum advance written notice the landlord must provide under the RLTO?
- A. 30 days' written notice.
- B. 60 days' written notice. ✓ Answer
- C. 90 days' written notice.
- D. 120 days' written notice.
Explanation: Under the Chicago Residential Landlord and Tenant Ordinance, the landlord's advance written notice to terminate or decline renewal depends on the tenant's length of occupancy: generally 30 days for less than 6 months, 60 days for at least 6 months but less than 3 years, and 120 days for 3 years or more. A tenant who has lived in the unit for exactly 18 months falls in the middle category, so the landlord must provide at least 60 days' written notice.
Question 2
A sponsored broker in Illinois handles the day-to-day management of a 16-unit apartment building under a written management agreement between the property owner and her sponsoring brokerage. Which of the following actions would violate the Illinois Real Estate License Act of 2000 if she carried it out on her own, outside the control of her sponsoring/managing broker?
- A. Showing vacant units to prospective tenants and collecting completed rental applications
- B. Negotiating lease terms with applicants within the limits set by the management agreement
- C. Opening a trust account in her own name and depositing tenant security deposits and rents into it ✓ Answer
- D. Arranging routine repairs with maintenance vendors approved by the owner
Explanation: Under 225 ILCS 454, all licensed activity by a sponsored broker (the license that replaced the former salesperson license) must be conducted through, and under the supervision of, the sponsoring broker, and Section 10-5 provides that a licensee may accept compensation for licensed activities only from his or her sponsoring broker. IDFPR rules at 68 Ill. Adm. Code 1450.750 require that escrow moneys (including tenant security deposits and rents collected on behalf of an owner) be deposited in an escrow account established and maintained by the sponsoring broker, who is responsible for the account; a sponsored broker may not maintain her own escrow or trust account for client funds. Showing units, taking applications, negotiating leases within the management agreement, and coordinating approved repairs are ordinary property management tasks a sponsored broker may perform under the sponsoring broker's supervision.
Question 3
A licensed property manager oversees a 12-unit residential apartment building in Illinois. A tenant who paid a $1,200 security deposit moves out and returns the keys on April 10. The manager inspects the unit but never sends the tenant any itemized statement of damages. Under the Illinois Security Deposit Return Act (765 ILCS 710), what is the LAST day on which the full deposit may be returned to the tenant without violating the Act?
- A. April 25
- B. May 10
- C. May 25 ✓ Answer
- D. June 9
Explanation: The Illinois Security Deposit Return Act (765 ILCS 710/1) applies to residential property containing 5 or more units, so a 12-unit building is covered. If the lessor intends to withhold any portion of the deposit, an itemized statement of damage (with paid receipts or written estimates) must be furnished within 30 days after the tenant vacates. If NO such statement is furnished within that 30-day period, the lessor must return the deposit in full within 45 days of the date the tenant vacated. Counting 45 days from April 10 yields May 25. April 25 (15 days) and May 10 (30 days) are earlier than required; May 10 is the deadline for the itemized statement, not the full-return deadline. June 9 (60 days) is too late. A lessor who fails to comply in bad faith is liable for twice the deposit plus court costs and reasonable attorney's fees.
Question 4
Under the Illinois Rent Control Preemption Act (50 ILCS 825), which of the following statements is accurate regarding a home-rule municipality's authority to enact residential rent control in Illinois?
- A. Home-rule municipalities may enact rent control ordinances only if approved by a referendum of local voters.
- B. The Illinois Rent Control Preemption Act prohibits any unit of local government, including home-rule municipalities, from enacting a rent control ordinance. ✓ Answer
- C. Non-home-rule municipalities may enact rent control, but home-rule municipalities are preempted from doing so.
- D. Rent control is permitted statewide under IDFPR regulations but must be administered by the managing broker of each property.
Explanation: The Illinois Rent Control Preemption Act (50 ILCS 825/5) expressly prohibits any unit of local government — including home-rule municipalities — from enacting, maintaining, or enforcing any ordinance or resolution that would have the effect of controlling the amount of rent charged for leasing private residential or commercial property. Illinois is therefore a state that fully preempts local rent control laws, and no Illinois municipality may impose rent regulation regardless of its home-rule status.
Question 5
An Illinois real estate contract includes a financing contingency. The buyer fails to obtain financing and timely delivers a written notice of termination with supporting documentation from the lender to the sponsoring broker. The seller refuses to sign a release of the earnest money. Under Illinois law, which of the following best describes the broker's proper course of action?
- A. Release the earnest money to the buyer immediately upon receipt of the termination notice, because the financing contingency failure entitles the buyer to a refund as a matter of law.
- B. Continue to hold the funds and not disburse them to either party absent written mutual agreement or a court order, even if the broker believes the buyer is legally entitled to a refund. ✓ Answer
- C. Release the earnest money to the seller, because the seller's refusal to sign a release constitutes a counter-demand that overrides the buyer's termination notice.
- D. Hold the funds for 60 days and then automatically return them to the buyer if the seller has not filed a lawsuit within that period.
Explanation: Under the Illinois Real Estate License Act of 2000, a sponsoring broker may not disburse earnest money based solely on the broker's personal legal interpretation of which party is entitled to the funds. Even when a contingency failure appears clear-cut, without written mutual agreement of all parties or a court order, the broker must continue to hold the funds. The broker's role is not to adjudicate disputes. The buyer's remedy is to seek the seller's cooperation or pursue legal action.
Question 6
Under IDFPR rules, an Illinois sponsoring broker who conducts property management activities receives security deposits from residential tenants. Which of the following correctly describes how these security deposits must be handled in relation to the broker's sales trust account?
- A. Security deposits may be held in the same trust account as earnest money, provided they are tracked in separate ledger entries.
- B. Security deposits and sales earnest money must be maintained in entirely separate trust accounts. ✓ Answer
- C. Security deposits do not need to be held in a trust account because they are governed exclusively by the Illinois Residential Landlord and Tenant Act, not IDFPR rules.
- D. Security deposits may be held in the broker's operating account because they are not earnest money deposits.
Explanation: IDFPR rules require that funds held for different purposes be maintained in separate trust accounts. Security deposits from property management activities and earnest money from sales transactions must not be commingled in the same account, even if separate ledgers are maintained. Each category of funds requires its own distinct trust account.