Illinois buyer representation: clients, customers and dual agency

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Kooky

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A home buyer in Illinois who walks into a showing with a real estate licensee is, in the eyes of state law, one of two things: a client or a customer. The difference is not a courtesy title. The Illinois Real Estate License Act of 2000 attaches one list of duties to the first and a much shorter list to the second, and it decides which information the licensee must keep quiet and which the licensee must pass on.

This guide follows the text of the Act as the Illinois General Assembly publishes it in the Illinois Compiled Statutes, at 225 ILCS 454. It covers five sections: the definitions in Section 1-10, the duties to clients in Section 15-15, the relationship with customers in Section 15-25, dual agency in Section 15-45, and brokerage agreements and designated agency in Section 15-50. It describes the general rule in each. How a rule applies to one transaction depends on the documents signed and the facts of that case, and the last section lists what the pages read for this guide do not answer. Where a passage is this guide's own reading of the text and not a statement in the Act, it says so.

Illinois General Assembly, 225 ILCS 454, Sections 1-10, 15-15, 15-25, 15-45 and 15-50, as published on 10 October 2026.

The words the Illinois Act gives each party

The Act builds its rules on a small vocabulary, set out in Section 1-10, and the rest of the law only makes sense once those words are fixed.

A consumer is a person or entity seeking or receiving licensed activities. Every buyer who deals with a licensee is a consumer; so is every seller. A client is a person who is being represented by a licensee. A customer is a consumer who is not being represented by the licensee. The two words are therefore relative to one licensee: the same buyer is the client of the licensee who represents them and the customer of the licensee who represents the seller.

A licensee is any person licensed under the Act. A sponsoring broker is the broker who certifies to the Department that it sponsors a licensed managing broker, broker or residential leasing agent, and the Department is the Illinois Department of Financial and Professional Regulation. In everyday terms the sponsoring broker is the firm, and the licensees it sponsors are the people a buyer meets.

Agency, in the Act's definition, is a relationship in which a broker or licensee, directly or through an affiliated licensee, represents a consumer by the consumer's consent, whether express or implied, in a real property transaction. Consent, in other words, can be implied.

A brokerage agreement in Illinois must be in writing

Section 1-10 defines a brokerage agreement as a contract between a sponsoring broker and a consumer for licensed activities, or for the performance of future licensed activities, provided to the consumer in return for compensation or the right to receive compensation from another party. Two points in that sentence matter to a buyer.

First, the contract is with the sponsoring broker, not with the individual licensee. A buyer who signs with one person at a firm has contracted with the firm.

Second, the definition covers both ways a buyer's representative is paid. Compensation may come from the consumer, or the agreement may give the broker the right to receive it from another party. The definition treats both arrangements as a brokerage agreement.

The definition then says, in a short sentence of its own, that all brokerage agreements shall be in writing. It adds that an agreement may be bilateral or unilateral depending on its content, and that it may be exclusive or non-exclusive. Section 15-50 repeats the requirement from the broker's side: a sponsoring broker who enters into a brokerage relationship must set out the terms of that relationship in a written brokerage agreement.

The source notes printed under both sections end with Public Act 103-1039, effective 1 January 2025. Section 1-10 also lists Public Act 102-970, effective 27 May 2022, and Public Act 103-236, effective 1 January 2024. The published sections give the text as it stands after those amendments; they do not show, line by line, which words each Public Act added.

What the definition does not contain is a checklist. Beyond the writing requirement and the exclusive or non-exclusive choice, Section 1-10 lists no further required or optional terms. The one term Section 15-50 does require is the name of the agent, covered next. Other sections of Article 15, Section 15-75 among them, were not available for this guide and may add to that picture.

Designated agency: a named licensee, not the whole firm

The sections read give a central place to the designated agent. Section 1-10 defines designated agency as a contractual relationship between a sponsoring broker and a client under Section 15-50 in which one or more sponsored licensees are designated as agent for the client. A designated agent is a sponsored licensee named by the sponsoring broker as the legal agent of a client.

Section 15-50 turns the definition into a drafting rule. The written brokerage agreement must name the licensees affiliated with the sponsoring broker who will act as the client's legal agents, and they act in that role to the exclusion of all the other licensees affiliated with the same sponsoring broker. The buyer's agent is the person or persons named. The colleague at the next desk is not the buyer's agent, even though both work under the same firm name.

The consequence is spelled out in the same subsection. A sponsoring broker is not considered to be representing more than one party in a transaction if the licensees it has designated are not themselves representing more than one party. The definition of dual agency in Section 1-10 says the same thing from the other direction: in a designated agency, the question of whether there is a dual agency is settled by the agency relationships of the designated agents, not by those of the sponsoring broker.

A worked illustration, with its assumptions stated. Assume one sponsoring broker sponsors two licensees. The broker's written agreement with a buyer names the first licensee as the buyer's designated agent. The broker's written agreement with a seller names the second licensee as the seller's designated agent. The buyer makes an offer on that seller's home. Under Section 15-50, neither designated licensee represents more than one party, so the sponsoring broker is not considered to represent more than one party, and under Section 1-10 no dual agency arises from the firm's position alone. Change one assumption, so that the same licensee is named in both agreements, and the definition of dual agency is met: one licensee represents both buyer and seller in the same transaction.

Designation has a second effect, on information. Section 15-50 requires the sponsoring broker to take ordinary and necessary care to protect confidential information that a client discloses to a designated agent. It also lets the designated agent share that information upward: a designated agent may disclose a client's confidential information to the sponsoring broker, or to persons the sponsoring broker specifies, for the purpose of seeking advice or assistance for the benefit of the client in regard to a possible transaction. Those who receive it may not disclose it further unless the Act requires it, or the client requests or permits it.

When the agreement was never put on paper

A rule that agreements must be written raises an obvious question: what happens to a buyer whose licensee never produced one? Section 15-50 answers it in a subsection of its own, numbered (a-5) in the published text.

The subsection adds that a court may still impose legal or equitable remedies. Read together, the three statements point one way. The duty to write the agreement down sits with the sponsoring broker, and the Act does not let the failure to do so be used to deny that a relationship existed or that the licensee carried out licensed work. What a court would order in a given dispute depends on the evidence and is not something the section sets out.

The pages read for this guide do not state what disciplinary consequence the Department attaches to a broker who has no written agreement. That question belongs to other parts of the Act and to the Department's rules.

What an Illinois licensee owes a client

Section 15-15 lists the duties of a licensee representing a client. Its source note gives Public Act 101-357, effective 9 August 2019. In the published text the duties come in five numbered groups.

1. Perform the terms of the brokerage agreement between the sponsoring broker and the client.
2. Promote the best interest of the client. The section breaks this into six parts, described below.
3. Exercise reasonable skill and care.
4. Keep confidential all confidential information received from the client.
5. Comply with the Act and all applicable laws, including fair housing and civil rights statutes.

The second group is the heart of the list. To promote the client's best interest, the licensee must seek a transaction at the price and terms stated in the brokerage agreement, or at a price and terms otherwise acceptable to the client. The licensee must present all offers to and from the client in a timely way, unless the client has waived that duty. The licensee must disclose to the client the material facts about the transaction of which the licensee has actual knowledge, unless the information is confidential information. The licensee must account in a timely way for all money and property received in which the client has an interest. The licensee must obey the client's specific directions where they are lawful. And the licensee must act in a way that puts the client's interests ahead of the licensee's own interests or those of anyone else.

Read from a buyer's side, and as this guide's reading of the wording, the parts point in one direction. The price and terms sought are those of the buyer's agreement or those acceptable to the buyer. The duty to present offers covers offers "to and from" the client. The duty to obey directions is limited to lawful ones, and the fifth duty separately binds the licensee to fair housing and civil rights laws.

The material-facts duty carries exclusions in the text of Section 15-15. The item says material facts do not include three listed categories, which it names as certain physical conditions, fact situations, and occurrences and acts. Their full wording and scope were not captured for this guide, so they are not set out here.

Confidential information, as the Act defines it

The duty of confidentiality only reaches what the Act calls confidential information, and Section 1-10 defines the term with some care. It is information obtained by a licensee from a client during the term of a brokerage agreement that falls into one of three kinds: information the client made confidential by a written request or written instruction; information that deals with the client's negotiating position; or information whose disclosure could materially harm the client's negotiating position.

On this guide's reading, a buyer's maximum price is an example of the second kind: the dual agency form described further down names it among the things a dual agent may not reveal without permission.

The definition then sets three ways the protection ends. Information stops being confidential when the client permits its disclosure by words or by conduct, when disclosure is required by law, or when the information becomes public from a source other than the licensee.

Finally, the definition sets one limit. Confidential information does not include material information about the physical condition of the property.

What a licensee owes a customer in Illinois

A customer is covered by a shorter list. Section 15-25, which carries the same 2019 source note as Section 15-15, says that licensees shall treat all customers honestly and shall not negligently or knowingly give them false information.

It adds one duty of disclosure that concerns buyers. A licensee engaged by a seller client must disclose in a timely way to prospective buyer customers all latent material defects in the physical condition of the property that are actually known to the licensee and that could not be discovered by a reasonably diligent inspection. Each condition narrows the duty. The defect must be latent and material. It must concern physical condition. The licensee must actually know of it. And it must be the kind of defect that a reasonably diligent inspection of the property would not bring to light.

Two protections for the licensee complete the section. A licensee is not liable to a customer for false information that the licensee's own client supplied, where the licensee had no actual knowledge that it was false. And no cause of action arises against a licensee for revealing information in compliance with the section.

Section 15-15 has a mirror rule for information flowing the other way: a licensee is not liable to a client for false information supplied by a customer unless the licensee knew or should have known that it was false. The same section states that it leaves untouched the common-law liability of a licensee for negligent or fraudulent misrepresentation of material information.

Set against the client list, Section 15-25 is shorter. It gives the customer honest treatment and the disclosure of known latent defects. It does not list the duties of Section 15-15, such as promoting the person's best interest or keeping their confidential information. On this guide's reading, information a buyer customer gives to the seller's licensee is given to a licensee whose listed duty is to seek the price and terms acceptable to the seller client.

One licensee, two buyers, one house

A licensee may be working with two buyers who like the same kind of home, or the very same home. Section 15-15 deals with that case directly.

A licensee representing a buyer does not breach a duty merely by showing alternative or similar properties to other prospective buyers. Nor does the licensee breach a duty merely by preparing contemporaneous offers, meaning offers from more than one buyer client for the same property. The section attaches two conditions to the second situation. The licensee must give written disclosure to the clients affected. And a client who asks must be referred to another designated agent.

The same section addresses fees that rise with price. A licensee representing a buyer or tenant is not presumed to have breached a duty to the client simply because the licensee's compensation would be higher if the price or rent were higher. The duty to put the client's interests first remains on the list in the same section.

Dual agency and the written consent form

Dual agency is defined in Section 1-10 as an agency relationship in which a licensee is representing both buyer and seller, or both landlord and tenant, in the same transaction. Section 15-45 permits it, on conditions.

The first condition is consent. A licensee may act as a dual agent only with the informed written consent of all clients. Consent is presumed to have been given by any client who signs the disclosure form set out in the statute. Section 15-45 also fixes when the form must be presented.

The confirmation at the third stage may sit inside another document, such as the contract, but the section requires the client to initial the provision. A client who signed the form earlier therefore confirms it again when the offer or contract is signed.

The form itself tells the client what will change. According to Section 15-45, it lists what a dual agent may do, which includes treating all clients honestly and disclosing latent material defects known to the licensee. It also lists what a dual agent may not reveal without permission, which includes the seller's bottom-line price and the buyer's maximum price. Those two examples are the negotiating positions that the definition of confidential information protects. The complete wording of the form is in the statute and was not reproduced in the material gathered for this guide.

The section then settles several points of liability and knowledge:

• No claim for required disclosures. No cause of action arises against a dual agent for making the disclosures the section allows or requires, and making them does not end the agency.
• Actual knowledge only. Each client and the licensee are treated as having only the knowledge they actually have. Knowledge is not imputed between clients, brokers or affiliated licensees.
• Withdrawal. A licensee may withdraw, without liability, from representing a client who has not consented to disclosed dual agency. The withdrawal does not prevent the licensee from continuing to represent the other client. If the licensee receives a referral fee after withdrawing, that fee requires written disclosure to both clients.
• A bar where the licensee has a stake. A licensee cannot act as a dual agent in a transaction if the licensee is a party to it, or if an entity in which the licensee has or will have an ownership interest is a party.

On this guide's reading of Section 15-45, the form signed at the start is followed by a second, initialled confirmation at the offer stage, and where a client has not consented the section provides for the licensee's withdrawal from that client.

In Illinois the buyer's agent is a name written in an agreement, and everything the Act promises a client follows from that name.

How the Act defines compensation

Compensation appears in the definition of a brokerage agreement, so its own definition in Section 1-10 marks how wide that agreement reaches. The Act defines compensation as the valuable consideration given by one person or entity to another in exchange for the performance of some activity or service.

The list of what counts is long. It includes commissions, referral fees, bonuses, prizes, merchandise, finder fees, the performance of services, coupons or gift certificates, discounts, rebates, a chance to win a lawful game of chance, retainer fees and salary. A rebate to a buyer and a retainer paid by a buyer are both compensation in the Act's vocabulary, as is a referral fee passing between licensees.

The sections read for this guide touch compensation at three further points, all noted above: a brokerage agreement may rest on the right to be paid by another party; a higher fee from a higher price creates no presumption of breach; and a referral fee received after withdrawing from a dual agency must be disclosed in writing to both clients.

What these five sections leave open

Several questions a buyer might bring to the subject are answered elsewhere in Article 15 of the Act, in sections that could not be read for this guide. They are named here so that the limits of the text above are clear.

• Whom a licensee is taken to represent before anything is signed. The five sections read do not say, and the rule is not reported here.
• Ministerial acts. The term does not appear among the definitions of Section 1-10 as returned for this guide, and the section that deals with it was not read.
• The notice a licensee gives a customer about not being their agent, and its timing. The five sections read do not set it out.
• Rules on disclosing who pays the licensee, and on whether payment by one party creates an agency with that party.
• Any minimum terms or minimum services a brokerage agreement must carry beyond the writing and the named agent. Section 15-75 was not read.
• The exact words added on 1 January 2025. The published sections show Public Act 103-1039 in their source notes without marking its changes.

One date applies to every section covered. The published text of Sections 15-15, 15-25, 15-45 and 15-50 each carries a note that the section is scheduled to be repealed on 1 January 2030. The note states a date already set in the statute; the pages do not say what the legislature will do before then.

Within those limits, the structure the Act gives a buyer is consistent from one section to the next. The agreement is written and names the agent. The named agent owes the five groups of duties in Section 15-15, including confidentiality over the buyer's negotiating position. Everyone else at the table owes the buyer honesty and the disclosure of known hidden defects. And the same person may act for both sides only after written consent, confirmed again with the buyer's initials when the offer is signed.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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