Great news for homebuyers! Congress voted to extend the $8,000 tax credit for first-time homebuyers, which was initially slated to expire on November 30, 2009. Not only that, Congress expanded the credit to existing homeowners — if you are an existing homeowner, you can qualify for a credit of up to $6,500 if you buy a new home. In order to qualify for the first-time buyers credit, you must not have owned a home in the last three years. For the existing homebuyer credit, you must have owned your home for at least the last five years. To qualify for either credit, you must sign a purchase contract by April 30, 2010, and close by June 30, 2010. Furthermore, the home must be your principal residence, and must cost less than $800,000. Vacation homes are ineligible for the credit. If you are single and earn less than $125,000, you are… read more →
The Department of Housing and Urban Development (HUD) did not allow FHA financing for condominiums which were part of an association that had a “right of first refusal” in their condominium declaration. Effective November 2, 2009, however, HUD will allow FHA financing for condominiums in associations that have a right of first refusal on their books, so long as the association otherwise meets HUD’s eligibility requirements. In order to assist potential buyers of such condominiums, the Illinois legislature has amended the Illinois Condominium Property Act to clearly state that no association may exercise its right of first refusal just because the buyer is obtaining FHA financing. These new laws are, of course, good news for many condominium buyers who seek to take advantage of the FHA’s low down payment requirements!
Despite decreased home values, the collective total tax burden for Cook County property-owners will rise approximately 4.2% for the 2008 tax year. It appears that overall, the city’s taxes will increase more than suburban taxes, because the collective tax burden for city property-owners will be about 6% greater than last year. Because of the way real estate taxes are calculated, collective property values (for tax purposes only) increased 9.96% in the city and 8.23% in the suburbs. Both the suburbs and the city are comprised of multiple taxing bodies, such as schools, libraries, park districts, governmental bodies, etc. Even though the value of your home may have gone down, and you may have even had a successful assessed value appeal, the various factors that go into determining your tax rate may have gone up. For example, the Chicago Board of Education increased its tax requirements by over five percent, and… read more →
If you are being foreclosed, the Homeowners Rights Act (Public Act 095-0961) applies to you. Under this act, which took effective at the start of 2009, lenders must attach a Homeowner Notice to residential suits filed in Illinois. The Homeowner Notice should advise homeowners of the options available to them — i.e. homeowners have the option to (i) have the loan reinstated if they can bring it current within 90 days, (ii) sell the home, or refinance the loan to pay the loan off within the applicable redemption period, and (iii) collect surplus funds if the bank forecloses and then sells the home for a profit. Additionally, the Homeowner Notice must clearly state how the homewoners may contact the lender to discuss a workout package or demand a payoff amount. The Homeowner Notice should also ask the homeowners to consider seeking legal assistance. What happens if your lender violates the… read more →
If you are an Illinois landlord, and you rent apartments where utilities are not separately metered, you should be aware of the Tenant Utility Payment Disclosure Act (765 ILCS 740/1). Under the Tenant Utility Payment Disclosure Act, the landlord must disclose, the formula he uses for determining each tenant’s share of utilities when he has multiple tenants and the utilities are not individually metered. The landlord should disclose this information prior to demanding payment for utilities. The disclosure can be written into the lease, or consist of a separate document. The landlord’s formula should take into account the usage of all of the units metered together. Upon a tenant’s request, the landlord should also provide a copy of the whole utility bill. Condominium associations are also required to clarify how they are billing common utilities; however, in the case of most condominium associations, utilities are billed as per the condominium… read more →
If you are an Illinois landlord, you may have had the misfortune to come across a tenant who refuses to pay rent. What should you do? Serve a five-day notice. How should you serve the notice? Properly. What does service of a proper notice involve? 1) The notice should be worded properly. For more information on the proper wording of a five-day notice, click here. 2) The notice should be served properly. According to the Illinois Forcible Entry and Detainer Statute, a five-day notice must be served by a) personal delivery, b) leaving the notice with a person who is at least 13 years old and resides at the property, or c) sending the notice to the tenant via certified or registered mail. In the event that the tenant has vacated the premises and no one is living there, you can also post notice on the tenant’s door. Before sending… read more →
In a recent case, Anderson v. Klasek (2009 Ill.App.LEXIS 708, 5th Dist., 2009), the Buyers sued the Seller, the Seller’s real estate agent, and their own home inspector after closing on a home that was infested with termites and had purportedly been treated for the same. The home inspector settled the case outside of court, but the Seller and the Seller’s real estate agent decided to proceed to trial. The real estate agent demanded a trial by jury, which the judge granted. Subsequently, the Buyers lost the case. They filed an appeal on the grounds that the Residential Real Property Disclosure Act, which was the basis of part of their claim, did not allow for trial by jury. The appellate court agreed, stating that the Illinois legislature had not allowed for trials by jury when drafting the Residential Real Property Disclosure Act. Cases that fall within the purview of this… read more →
Buyers and lenders take note! In an effort to prevent deceptive and/or fraudulent loan practices, new federal regulations modifying the Truth and Lending Act took effect at the end of July 2009. Under these new requirements, lenders may not collect upfront application fees from the borrower until the borrower has received the Truth in Lending Disclosure and the Good Faith Estimate. Furthermore, closing cannot take place until at least seven business days after these two disclosures have been issued. Moroever, after the two disclosures are issued, if there are any further changes to the closing figures that would result in an APR change of greater than .125% (for a fixed-rate loan) or .250% (for an adjustable rate mortgage), the lender MUST redisclose the Truth in Lending Disclosure and Good Faith Estimate, reflecting the changes in the fees and closing figures, to the borrower. Three additional days are required between redisclosure… read more →
In Skarin Custom Homes, Inc. v. Ross, No. 2 08 0061 (Ill. App. Ct., 2nd Dist., February 26, 2009), the court stated that just because a buyer intended to tear down a home did not mean that the seller was exempt from the provisions of the Illinois Residential Real Property Disclosure Act. In that case, the seller-defendant did not clarify the extent of flooding damage to the home being purchased; in court, the seller-defendant argued that the severity of the flooding was in fact irrelevant, because the buyer intended to destroy the residence on the property and build a new home. The court did not agree, even though in a prior case, Grady v. Sikorski, 349 Ill. App. 3d 774 (2004), the court had held that if a buyer intends to destroy the home he is purchasing, the Illinois Residential Real Property Disclosure Act serves no purpose. The court distinguished… read more →
Yesterday the Cook County Circuit Clerk announced that Cook County is holding $18 million dollars in mortgage surplus money. This money has accumulated as a result of profits made when foreclosed homes were sold by the lender who owned them. Approximately 1900 people who were foreclosed, most of whom are probably not aware of it, own this surplus money. Unfortunately, most of the money is for people who were foreclosed in the early 1990s, up to about 2006 or 2007. Homes foreclosed in the last few years were typically not sold for a profit by the banks, and many remain unsold. When banks made a profit on foreclosed homes in Cook County, they turned over the money to the Cook County Clerk. While the clerk’s office does not track down people whom profits are owed to, it does hold the unclaimed monies for their benefit. When a person makes a… read more →