Will the woes of landlords never cease? It has been a difficult year for everyone, and residential landlords are in no better shape than anyone else, particularly when their tenants are not paying rent. Since March of 2020, the governor has issued a number of orders staying evictions. The latest of these orders, issued early this month, extends the eviction moratorium through May 1, 2021. To determine if a tenant can be evicted, there is a four-part test. If the tenant cannot answer yes to each part, he can be evicted: Part One: a. Did the tenant earn no more than $99,000 in annual income in 2020 (or no more than $198,000 if filing jointly)? OR b. Was the tenant not required to report any income in 2019 to the U.S. Internal Revenue Service? OR c. Did the tenant receive an Economic Impact Payment pursuant to Section 2001 of the… read more →
We all know Illinois is bleeding residents. With our high taxes and high cost of living, residents are fleeing. So it’s not unusual that Illinois is trying to be creative to bring people back in. The Illinois Housing Development Authority (IHDA) has developed the SmartBuy program, which not only provides a loan of $5,000 for closing costs, but also helps pay off student loans. And the state isn’t just paying off small amounts of student loan debt, either. They are paying off up to $40,000 of debt, or 15% of the purchase price of the home, whichever is less. If the student buys a home for $266,700 or more, they would get the full $40,000 in student debt relief. What do you need to know? Here’s a simple list: There are income and purchase price limits, which you can find here. For example, if you live in the Chicago area,… read more →
Many first-time homebuyers, especially in competitive markets, end up in starter homes as a part of their first foray into the real estate market. The idea of a “starter home” goes back to World War II. After veterans completed their service, they returned home and took advantage of a provision in the G.I. Bill that guaranteed them affordable mortgages. The increased demand caused a housing boom, specifically for smaller, low-cost homes where the veterans could start their families. Historically, these properties tend to be smaller in size than one might expect from a single-family unit, but the idea behind them is two-fold: these smaller properties help introduce individuals to the responsibilities of homeownership, while also serving as a launching pad– something to help a homeowner build equity before eventually moving on to a bigger and better property. What to look for in a starter home If you think you might… read more →
Foreclosure is a bad thing right? Families being uprooted from their homes – bad. People losing their life savings when the value of their home tanks – bad. Empty homes attracting mischief – bad. Unkempt properties creating an eyesore – bad. Credit scores plummeting — bad. Sure, all of those things are bad. No one wants to be in that situation. Heck, most people don’t even want to be living on the block where all that is happening. It may not seem like it, but there is an upside to foreclosure. Sometimes foreclosure can be the kick in the pants you need to get your finances back on track. Let me explain how: Foreclosures typically take a long time to process. Cook County is particularly slow. It’s not unusual for a foreclosure to take 6-12 months, sometimes even more. So how is this a good thing? Well, if you were… read more →
So what happens if someone deeds real estate to another person, but makes a mistake in the deed? If the proper language is not used in a deed, can it still be used to convey real estate? The answer is: Maybe. A Deed may be black and white on its face, but the interpretation of the deed can be far from black and white. Per statute, quit claim deeds are required to include the legal description of the property conveyed. 765 ILCS 5/10 (West 2014). But back in 1935, the Illinois court determined that even if there is some uncertainty, a deed should not be declared void so long as “it is possible, by any reasonable rules of construction, to ascertain from the description, aided by extrinsic evidence, what property it is intended to convey.” Brunotte v. DeWitt, 360 Ill. 518, 528 (1935). How do we reconcile the statute with this… read more →
Using money from your IRA to purchase real estate has quite a few pitfalls. Here are the risks: If you use IRA money to buy real estate, you cannot live or work on the property. There can be no “self-dealing”. You can’t physically invest your personal efforts into fixing or rehabbing the property. Even if you normally do your own construction work, you can’t do that if you used IRA funds to purchase the property. Losses from the sale of real estate are not tax deductible. Loss of rent is not deductible. You can’t claim depreciation and amortization on your tax returns. The cost of any repairs to the real estate must be paid from IRA funds. You can’t use your own money to pay for repairs. You can’t even loan money to your IRA to pay for repairs. If you are using the property for rental purposes, you MUST… read more →
Single-member limited liability companies, or LLCs, can be a great tool for real estate investments. Here’s what you need to know: 1. You don’t have to file separate tax returns for your single-member LLC. The LLC becomes a disregarded entity for purposes of federal income tax. If you own rental property in a single-member LLC, it gets reported on your personal income tax return (Form 1040). And if the single-member LLC is owned by some other entity, like a partnership, the LLC’s taxes are reported on the partnership’s income tax return. 2. You do, on the other hand, have to file federal payroll tax returns for your single-member LLC. If you have employees on payroll, you’re treated just like a corporation for purposes of payroll tax returns. 3. You have liability protection, similar to the liability protection you would get it if you were a corporation. If you own an… read more →
The Cook County Assessor’s office has posted its 2017 exemption applications for Cook County homeowners. The following 2017 exemption applications can be found there now: Homeowner’s exemption Senior exemption Senior freeze Disabled person’s exemption Disabled veteran’s exemption If you qualify for any of these exemptions for 2017, you should apply immediately. To qualify, you must fall into the relevant category as of the 1st day of 2017. For example, if you are trying to claim the homeowner’s exemption, you must have lived in the home on the 1st day of 2017. If you are trying to claim the senior citizen’s exemption, you must have lived in the home on the 1st day of 2017, and you must have been born in 1952 or earlier. If you are trying to claim a senior freeze, then in addition to meeting the senior exemption requirements, your household income for… read more →
A recent appellate court case, Gelinas v. Barry Quadrangle Condominium Ass’n, 2017 IL App (1st) 160826 (February 14, 2017) Cook Co., 1st Div., revolves around a dispute between a condominium owner and the condominium association. Gelinas owned a unit in the Barry Quadrangle Condominium Association. In June of 2012, a fire started in his unit which resulted in six-figure damage to the condominium association. There was no dispute as to the origin of the fire. The association filed a claim against its insurance and paid the $10,000 deductible. The insurance company reimbursed the association for the claim. The association’s bylaws state the following: “If, due to the act or neglect of an Unit Owner, or of a member of his family or household pet or of a guest or other authorized occupant or visitor of such Unit Owner, damage shall be caused to the Common Elements or to a Unit… read more →
Last week, we looked at a case about whether a loan as valid when the lender was never licensed under the Residential Mortgage License Act. This week, let’s look at a similar case — Nationstar Mortgage LLC v. Missirlian, 2017 IL App (1st) 152730 (February 10, 2017) Cook Co., 5th Div. – which discusses whether a loan is valid when it’s assigned by an entity that was not licensed. The facts are straightforward: The defendant borrowed money from Lehman Brothers Bank FSB in 2007. The original mortgagee was Mortgage Electronic Registration Systems, Inc. (MERS). The defendant stopped making payment in March of 2009, and in June of that year, MERS assigned the mortgage to Aurora Loan Services. Aurora Loan Services filed a foreclosure action against the defendant. In 2012, Nationstar took over the servicing of the loan in question, although Aurora Loan Servicing did not formally assign the loan to… read more →