The Illinois Second District Appellate Court affirmed the Illinois Department of Financial and Professional Regulation's (IDFPR's) ability to sanction attorneys who provide legal services and act as real estate brokers in the same transaction. It found that a Lake County Trial Court erred in reversing the findings of an Administrative Law Judge (ALJ) and the Secretary of the IDFPR that an attorney acted as both realtor and attorney in the same real estate transaction and violated the Real Estate License Act of 2000 (Act) (225 ILCS 454/20-20(34).

Among the conduct at issue was the sending of two emails, the contents of which amounted to the providing of legal services. The attorney sent the first email to the following parties: title company, lender, opposing counsel, and the clients. The attorney sent the second email to these parties: opposing counsel, seller's realtor, and the clients. The attorney used his legal knowledge to interpret and enforce the contract terms on behalf of his clients. He required the title company to change the closing statement so it accurately reflected contract terms, assessed closing costs to the proper parties and corrected pro-rations. He contacted seller's counsel to make sure his clients received proper credits, a timely survey, and were compensated for missing items they were to receive, all per the terms of the contract.

Before filing its complaint, the IDFPR offered to settle the matter with a non-disciplinary order if the attorney would complete 12 hours of continuing broker management education courses. The attorney declined; the IDFPR filed the complaint, which later went to trial. Eventually the Secretary of the IDFPR sanctioned the attorney to an indefinite suspension of his real estate license for at least one year and a $9,500 fine. (Curielli v The Department of Financial and Professional Regulation, Bryan A. Schneider, Secretary, 2018 IL-App (2d) 170832-U No. 2-17-0832).

The attorney appealed the decision and also instituted a separate action, Curielli v Quinn, et al, 2015 IL App (1st) 143511, 38 N.E. 3d 159, 395 Ill. Dec. 282, in which he challenged Section 454/20-20(34) of the Act on the basis that it violates the Special Legislation Clause, the Equal Protection Clause and the Separation of Powers Clause of the Illinois Constitution. In both cases, he was unsuccessful. However, while the Second District Appellate Court affirmed the original finding that the attorney did act as both attorney and realtor and affirmed the $9,500 fine, it found that the suspension was too harsh for a first-time offender and that the actions taken by the attorney were "not so egregious as to warrant an indefinite suspension." 2018 IL App (2d) 170832-U ¶186.

If the aforementioned teaches us anything, it's these two things: Attorneys who are also real estate brokers must play only one role in any given real estate transaction; and, if the IDFPR offers a non-disciplinary option to address those situations in which attorneys have played both roles — take it.

Never a dull moment with real estate transactions.

ATG Member Agents: Contact an Underwriter if you have any questions.

EDITOR'S NOTE: See also the November 23, 2018, Cook County Record article, "Appeals panel: State OK to fine attorney who acted as lawyer, real estate agent on same property sale."