Congress passed a new bill last week, and if you’re buying a home and meet all of the following requirements, you’re in for a sweet deal: 1) You don’t own a home now, and have not owned a home in the last three years;2) You closed on the home you’re buying after April 9, 2008, or, if you haven’t closed yet, you will close before June 30, 2009;3) You are a U.S. Citizen or resident alien;4) You did not finance the property using a tax-exempt bond mortgage; and5) You are using the property you are buying as your primary residence. If you meet all of these requirements, you can can claim a credit of up to 10 percent of your purchase price, up to $3,750 (or up to $7,500, if you are married filing taxes jointly), on your 2008 or 2009 taxes. If your adjusted gross income is over $75,000… read more →
As more and more of my clients are buying foreclosed properties, the question of who is responsible for paying unpaid condo assessments keeps coming up. Buyers feel that it should not be their problem; after all, they didn’t own the property when the assessments became due. Associations, on the other hand, want their money; they don’t particularly care where it comes from. Because homeowners’ associations require payment of assessments by all unit owners in order to meet their budget and keep their property in good repair, the Illinois legislature has sided with them on this issue. The Illinois Condominium Property Act states that if you buy foreclosed property from the bank, you are responsible for assessments for the six months immediately prior to when the association instituted legal action to collect the assessment, assuming that such assessment is still unpaid. Take note: if the homeowner did not pay assessment for… read more →
The law states that if the seller of residential property in Illinois fails or refuses to provide the Illinois Residential Real Property Disclosure prior to the sale of the property, the buyer has the right to terminate the contract (765 ILCS 77/55). This is bad news for sellers — what if they simply forgot to provide the disclosure? The law doesn’t care. It doesn’t matter why the seller didn’t provide the Residential Real Property Disclosure or whether he was acting in good or bad faith. As long as the seller did not give the disclosure to the buyer, the buyer can opt out of the transaction. While this issue is not litigated often, it did come up just recently. In Muir v. Merano, 378 Ill.App.3d 1103 (5th Dist. 2008), the buyer repeatedly asked the seller for the disclosure statement, but the seller never delivered it. The buyer then terminated the… read more →
Typically, even when you buy property “as-is”, the seller has a duty to disclose latent material defects. Furthermore, if the seller misrepresents facts to the buyer, the buyer has the right to sue after closing. But buyers beware, a recent Illinois case has held that if you agree to buy property as-is, you are really buying it as-is, and if you learn something about the condition of the property after closing and decide to go after the seller for failing to tell you about it, you may very well lose. Kopley Group V, LP v. Sheridan Edgewater Properties, Ltd., 376 Ill.App.3d 1006 (1st Dist. 2007) illustrates this point. In Kopley, the buyer purchased a large residential/commercial building as-is. The contract allowed the buyer time to inspect the property, and if the buyer was not satisfied after his inspections, he could cancel the contract and receive a full refund of his… read more →
Because of the severe storms, flooding and tornadoes in the midwest, the IRS is providing extensions to people or entities attempting a 1031 exchange in certain affected counties in Illinois, Indiana, Iowa, Missouri and Wisconsin. These extensions will allow people to search for or close on appropriate exchange properties without missing the strict IRS deadlines (45 days from the date of your original sale to identify exchange property, and 180 days from the date of your original sale to close — for more general information on the 1031 exchange process, click here). So who is eligible for these extensions? Well, first of all, you must be an affected potential exchangor. An affected potential exchangor is anyone (a) who lives in or has its primary place of business in one of the affected counties (see the list below) or (b) who keeps his books or records in an affected county, or… read more →
It’s been a while since I posted any legal humor. Most of us lawyers can take an occasional jab at our profession. Here’s one someone sent me recently, though I have no idea who wrote it!After his graduation from college, the son of a reknowned lawyer was considering his future. He went to his father and asked if he might be given a desk in the corner from which he could observe his father’s practice. His observations would help him decide whether or not to become a lawyer. His father thought this was a great idea and immediately agreed. The first client the next morning was a tenant farmer — a rough man with calloused hands who was dressed in workman’s clothing. He said, “Mr. Lawyer, I work for the farm on the east side of town. For many years I have tended their crops and animals, including some cows.… read more →
Recently I heard about a case that made its way to appellate court last year. The case involved an Enterprise Zone. What is an Enterprise Zone? Well, the City of Chicago has designated certain geographical areas in the city as Enterprise Zones. If you are a business in the Enterprise Zone, the city provides you certain benefits, including tax incentives, in order to encourage the growth of your business. If you purchase commercial property in an Enterprise Zone and continue to use it for commercial purposes, you are typically exempt from paying the hefty City of Chicago transfer tax. Some time ago, a Buyer in Chicago bought commercial property within an Enterprise Zone. Under the Enterprise Zone Program, the Buyer did not pay any transfer tax to the city. He also did not take occupancy of the property at closing. Rather, he leased it back to the Seller for a… read more →
This question comes up a lot in my practice, both in terms of real estate and estate planning. For most people, their home is their largest investment. Moreover, people are often emotionally attached to their home. They want to make sure that their home is protected as much as possible, and they want to be certain that it passes to their spouse, children or other family members. The simplest way to control who gets your home or the proceeds from its sale upon your death is to prepare an estate plan. Your attorney will explain which estate planning options are best for you based on your individual needs. You can control the distribution of your home within a properly drafted will, trust, or land trust. In most situations, you will not need to re-draft your will or trust if you sell your home and purchase a new one. Additionally, as… read more →
Real estate buyers will soon have to contend with new procedures regarding predatory lending in Cook County. Because of the increasing numbers of homeowners falling behind on mortgage payments and record foreclosure rates, the Illinois legislature has enacted a new measure, Public Act 95-691, aimed to protect the borrower in certain loans that can be considered “high-risk”. This new measure is effective July 1, 2008. Even if the new procedures do not apply to your loan, in order to record a mortgage in Cook County you will still need to file a Certificate of Exemption, stating that the loan is exempt from the requirements of Public Act 95-691. Your attorney and the title company will assist you with this at closing. So what kind of loans do fall within the purview of the Cook County predatory lending program? Will it affect you as a buyer? It may, if you and/or… read more →
Almost every real estate contract that comes across my desk includes a mortgage contingency clause. My clients always have tons of mortgage-related questions for me, many of which I am not qualified to answer since I am not a mortgage broker or in the lending business. But when I represent a buyer during a real estate transaction, I always explain the legal ramifications of the mortgage contingency to him. Moreover, I have to protect my client’s interests with respect to their loan, and it helps if they understand why. The mortgage contingency period (also known as the mortgage commitment period or the mortgage approval period) is extremely important to the buyer. Just like the attorney approval and inspection periods, a mortgage contingency period is just that — a contingency. The contract is contingent on the buyer obtaining a loan, typically within three to five weeks after the contract is executed… read more →