Illinois Leasing Agent Practice Exam

What governs the relationship between a real estate licensee and the property owner who hired them?

1. The state license act

2. Common law principles

3. The terms of the contract

4. Local real estate regulations

The correct answer is: The state license act

The relationship between a real estate licensee and the property owner who hires them is primarily governed by the terms of the contract. When a property owner engages a licensee to act on their behalf, they usually enter into a listing agreement or other contractual arrangement that outlines the rights, responsibilities, and obligations of both parties. This contract specifies the duties the licensee must perform, any fees or commissions to be paid, and other essential aspects of the professional relationship. While the state license act provides the legal framework licensing real estate professionals and ensures they meet certain standards, it is the actual contract between the licensee and the property owner that delineates the specifics of their relationship. It defines how the engagement is structured and what is expected from both sides. Thus, the most direct influence on their relationship comes from the terms of the contract established between them.