Question

Tim, an interior decorator, has developed a website for his business. One section of the website shows consumers how to "stage" their home to make it sell faster. Is it legal, under Illinois License Law, for him to collect these "leads" and sell them to a friend who is a real estate broker?

a) Yes, but Tim can receive no more than $25 per lead
b) Yes, as long as the friend's managing broker approves this arrangement
c) No, Tim cannot receive a referral fee, as he is not a licensed real estate broker
d) No, Tim cannot receive cash, but could accept gift certificates

Answer 1

Under Illinois License Law, Tim, an interior decorator, cannot legally collect referral fees for selling leads to a real estate broker, as he is not a licensed real estate broker. Engaging in this activity without a license would be performing services of real estate which is prohibited under the Real Estate License Act of 2000.

Step-by-step explanation:

The legality of Tim, an interior decorator, collecting leads on his website and selling them to a real estate broker friend depends on specific state laws regarding the real estate industry. Under Illinois License Law, unlicensed individuals are generally prohibited from performing licensed real estate activities, which typically includes the solicitation of business for real estate purposes. Selling leads, or potential clients, could be considered an act that requires a real estate license.

In Illinois, according to the Real Estate License Act of 2000 (225 ILCS 454/), one must be a licensed real estate broker to collect referral fees for activities that require a real estate license. Therefore, the correct answer is: c) No, Tim cannot receive a referral fee, as he is not a licensed real estate broker. Accepting compensation for the referral of leads who intend to buy or sell property constitutes performing services of real estate without a license unless specific exemptions apply, which is not the case if Tim is purely an interior decorator.