To become a managing broker in Illinois you need two consecutive years of broker licensure out of the preceding three, 165 hours of education, and a pass on a state exam of 50 items with a 75 percent passing score. Section 5-28 of the Real Estate License Act of 2000 (225 ILCS 454) sets those terms, and 68 Ill. Adm. Code 1450 supplies the application steps.

This guide follows the order you would live it in. First the requirements, then the exam, then the application and sponsorship, then what the license costs to keep. If you are earlier in the process and still picking where to start, read how to choose your first brokerage first.

What Section 5-28 Requires

Section 5-28 lists seven requirements for a managing broker applicant. They are short, so here they are in plain order.

• Be at least 20 years of age.
• Be of good moral character.
• Have been licensed as a broker for at least 2 consecutive years out of the preceding 3 years.
• Have completed a 4-year course of study in a state-approved high school, or hold a State of Illinois High School Diploma. You verify this under oath.
• Show evidence of at least 165 hours of education.
• Personally take and pass a written examination on Illinois-specific real estate brokerage laws.
• Submit a valid application with the fees set by rule.

Two of those need a closer look. The first is the experience test. The Act counts years licensed as a broker. The administrative rule repeats this in the application itself. Under Section 1450.520, the applicant must certify that he or she has been actively licensed and in good standing as a broker for 2 consecutive years out of the last 3.

The second is "good moral character." The Act lists it as a requirement. The section does not define the phrase. If you have a question about how the Division of Real Estate applies it to your history, the Division is the office to ask.

The 165 hours are really two blocks

The 165 hours are not 165 new hours. Section 5-28(a)(5) splits them. Of the total, 120 are the hours required before and after licensure to obtain a broker license. The other 45 are additional hours, and they must be completed within the year immediately preceding the filing of your managing broker application.

Those 45 hours have a stated subject. The Act says they must focus on brokerage administration and management and on residential leasing agent management. At least 15 of the 45 must be taken in a classroom, by live interactive webinar, or by online distance education.

The exam booklet that PSI publishes for the Division describes the same 45 hours in two parts. Managing Broker Pre-License Topics takes 30 hours. Managing Broker Pre-License Applied Management and Supervision-Interactive takes 15 hours. The booklet also says a current Illinois broker is presumed to have completed the 120 broker hours. So a current Illinois broker is looking at the 45-hour block.

PSI's Category A-1 is the 165-hour route, and it lists seven courses.

• Broker Pre-License Topics, 60 hours
• Applied Real Estate Principles-Interactive, 15 hours
• Post License Transactional Issues, 15 hours
• Post License Risk Management/Discipline, 15 hours
• Post License Applied Broker Principles, 15 hours
• Managing Broker Pre-License Topics, 30 hours
• Managing Broker Pre-License Applied Management and Supervision-Interactive, 15 hours

Those add up to 165. Category A-1 still requires an active real estate license for 2 of the past 3 years. Category A-2 is the 45-hour route, and it requires an active valid Illinois broker license.

Two time limits to keep straight

Two clocks run on the education. Section 5-35(a) says approved pre-license education is valid for 2 years after the date you finish all of it. Section 5-28(a)(5) says the 45 additional hours must fall within the year before you file the application. The sources read for this article do not explain how those two limits fit together. Before you pay for coursework, ask the Division of Real Estate how it counts the dates on your transcript.

Lawyers get one exception

Section 5-28(b) says the education requirement in item (5) does not apply to an applicant who is currently admitted to practice law by the Supreme Court of Illinois and is in active standing. The other requirements still apply. PSI's category for attorneys adds the broker license requirement of 2 of the past 3 years and 20 years of age.

The Managing Broker Exam

The managing broker exam is a state-law exam. The PSI summary table lists a State portion only for the managing broker, with 50 items, a 75 percent passing score and 90 minutes. The managing broker exam does not.

The Division uses PSI Services to run the testing. The exam fee listed in the booklet is 58 dollars. It is not refundable or transferable, and it is forfeited if you do not test within one year of the date PSI receives it. Section 5-35(a) adds that a failure to appear on the scheduled date and time forfeits the fee once your application for examination has been received and acknowledged.

What the exam application needs

Under Section 1450.510, the application for examination includes four things. They are a certification that you are at least 20, proof of high school or equivalency, the fee, and proof of one of two things. Either you are currently admitted to practice law by the Illinois Supreme Court, or you completed 165 credit hours of Division-approved instruction.

PSI describes the practical steps. You go to test-takers.psiexams.com/ilrep, choose Sign In or Create Account, create the account and upload the course certificate. PSI approves it and sends an email confirmation. A candidate in the managing broker category has up to four attempts during a 2-year eligibility period.

What the exam covers

PSI's content outline gives a percentage for each topic area on the managing broker exam. The numbers matter because they show where the weight sits.

• Licensing requirements: 5 percent
• The Illinois Real Estate License Act: 30 percent
• Additional Illinois laws and regulations affecting real estate practice: 15 percent
• Disclosures: 10 percent
• Managing broker and instructor only topics: 40 percent

That last block is the largest, and it is the reason this exam is not a rerun of the broker exam. It covers sponsoring broker and designated managing broker responsibilities, including training and supervision, with specific duties related to newly licensed brokers. It covers special accounts, record examination, entity licensure, the Real Estate Recovery Fund, rental finding services, rental property management and virtual and branch offices. It also covers real estate calculations, financing and lending.

Some topics inside the shared sections are marked managing broker only. They include ownership by business entities, deed restrictions and CC&Rs, title insurance policies and searches, settlement procedures, foreclosed property, short sales, probate transactions and the effect of the Statute of Frauds. The outline also marks unauthorized appraisal practice as a managing broker topic.

If you do not pass

A failed portion means you repeat only that portion. The score report gives diagnostic scoring information and reapplication instructions. After four consecutive failures the rule changes. Section 5-35(c) says you must repeat the pre-license education, and the fifth attempt counts as a first attempt with a new application for examination.

PSI spells out which education. A managing broker candidate with an active Illinois broker license retakes the 45-hour managing broker pre-license education. A candidate without an active broker license retakes the 165-hour education. Candidates who are education exempt do not have to. For the broker-level version of these same rules, see our guide to what happens if you fail the Illinois real estate exam.

Applying for the License and Getting Sponsored

Passing the exam does not make you a managing broker. It earns you the right to apply. Section 5-35(b) and Section 1450.520(b) agree on the deadline. You have one year from the date you receive a passing score to submit an application and meet every requirement. After that, credit for the exam terminates and you may make a new application for examination.

To illustrate with invented dates, suppose you pass the exam on a Tuesday in March. The one-year clock starts that Tuesday. If you reach the following March without a complete application on file, you take the exam again.

What goes in the application

Section 1450.520(a) lists what each applicant submits to the Division.

• A signed and completed application in the format the Division provides
• The required fee
• Proof that you passed the Illinois-specific brokerage law exam
• Proof of sponsorship or self-sponsorship, if you want an active license
• A transcript, if applicable
• A completed consent to examine and audit special accounts form, if you will be self-sponsored
• A certification that you were actively licensed and in good standing as a broker for 2 consecutive years out of the last 3
• Any other documentation the Division prescribes

The fee for an initial managing broker license is 175 dollars under Section 1450.130. That is separate from the exam fee and from your course tuition. Course tuition is not part of the Division's fee rule.

Sponsorship has its own 24-hour clock

An active license needs a registered sponsor. Section 1450.110(b) sets the timing. The sponsoring broker notifies the Division within 24 hours after establishing the sponsorship. The applicant then submits the transcript, if applicable, the pass score report, the signed application and the fee within 24 hours after establishing sponsorship.

A sponsoring broker may sponsor an applicant only after receiving one of four things. One is a pass score report. The others are a termination of sponsorship from a previous sponsoring broker, a current inactive license, or a license that expired less than 2 years ago.

The Act's definition of a managing broker includes one more feature. A managing broker may act as one's own sponsor. That is self-sponsorship, and the application list above asks self-sponsored applicants for a special accounts audit consent form. If you are moving from one sponsoring brokerage to another, see our guide to changing sponsoring brokers in Illinois.

What self-sponsorship carries with it

A self-sponsored managing broker may sponsor other licensees if he or she meets all of the requirements for a sponsoring broker. A sole proprietor must be licensed as a managing broker. Section 1450.520(c) adds that a self-sponsored managing broker must meet the office requirements in Section 1450.610.

That section says a licensee's place of business is the physical office or the virtual office of the sponsoring broker. A motor vehicle used primarily for transportation, a post office box and a mail drop are not an office. A residence is not an office either, unless it is held out to the public as a location where licensed activity happens and meets all the other elements of an office. A virtual office for a self-sponsored managing broker carries its own license. The fee schedule lists 200 dollars initially and 100 dollars at renewal, on top of the managing broker fees.

Entities work differently. A managing broker may practice as a sole proprietor. A corporation, LLC or partnership has to confirm which person is its designated managing broker before it does any licensed work. The Act defines a designated managing broker as a managing broker with supervisory responsibilities for licensees in one office, or more than one in a multi-office company, appointed by the sponsoring broker. For the difference between the two licenses, see broker versus managing broker in Illinois.

If you are licensed in another state

Managing brokers licensed in another state have a separate path. PSI describes it as licensure by endorsement. The candidate must be licensed as a managing broker or its equivalent in another state or jurisdiction, hold an active license in good standing, and have been actively practicing as a managing broker or its equivalent during the preceding two years. The candidate also completes a 30-hour Managing Broker Pre-License Endorsement Course.

Keeping the License

A managing broker license has a fixed cycle. Under Section 1450.140, managing broker licenses expire on April 30 of each odd-numbered year. Broker licenses expire on April 30 of each even-numbered year.

The renewal fee is 250 dollars. A license that expired no more than two years ago carries a 75 dollar late fee. A license that has been expired for more than two years cannot be renewed. The rule says a person who receives an initial license during the first renewal period does not pay the initial renewal fee and is issued a license that expires on the second renewal deadline.

Continuing education for managing brokers

Section 5-70(b) requires 12 hours of continuing education per license term. Those who are renewing or obtaining a managing broker license must also complete a separate 12-hour broker management continuing education course. That course must be completed in the classroom, in a live interactive webinar, or in an online distance education format.

Section 5-70(e) sets the structure of the 12 general hours. The core curriculum is 6 hours and includes at least 2 hours of fair housing training. The rest is elective. Section 1450.540 adds two relief provisions. A managing broker renewing for the first time may use the 45-hour managing broker pre-license brokerage administration and management course to satisfy the 12-hour broker management requirement. And if the term of a new license ends within 90 days of issue, no continuing education is due for that term, though all of it must be done before the next deadline. The Division audits compliance.

Our guide to the 12 hours of Illinois broker continuing education covers the general block in more detail.

Stepping back to a broker license

Illinois lets a managing broker step back. Under Section 5-27(e), a managing broker may permanently and irrevocably place the license on inactive status and receive a broker license in exchange. Section 1450.550 lets an active managing broker exchange the license when it is eligible for renewal. The managing broker license is canceled, any prior discipline is reflected on the new broker license record, and you become subject to broker continuing education.

The way back is a new application. Anyone who wants the managing broker license again after the exchange has to meet the requirements of a new applicant. Treat the exchange as a one-way door.

Bottom Line

The Illinois path is short to list and long to finish. You need to be 20, hold a broker license for two consecutive years out of three, finish the 45-hour managing broker block inside the year before you apply, pass a 50-item state exam at 75 percent, and file within one year of the pass. A sponsor or self-sponsorship has to be registered before the license is active. Each of those has a date attached. A missed date can forfeit the exam fee or end the exam credit.

Plan the order. Confirm the experience test first, because it is a requirement separate from the courses. Ask the Division how it counts the education dates before you pay for the 45 hours. Then book the exam so the application can follow within the year. Gambino Realtors has been in business in Rockford since 1923. If you are still at the first-license stage, how to choose your first brokerage is the place to begin.

Those are the steps. Here are the questions that come up once you start planning them.

Frequently Asked Questions