Illinois Real Estate Laws Effective 2015

On January 1, more than 200 new laws took effect in Illinois.  Here is a brief synopsis of these laws related to Real Estate.

Real Estate/Property

PA 98-1106 (SB 2952) “Last known address” now includes e-mail
E-mail addresses are now included in the definition of the term “last known address” in the Self-Service Storage Facility Act. This law provides that notice under the Act shall be delivered by verified mail or by electronic mail to the last known address of the occupant. It provides that a notice sent by electronic mail is presumed delivered when the owner receives a receipt of delivery to the occupant’s last known address. It further provides that a sale shall be deemed to be held at the self-service storage facility where the personal property is stored if the sale is held on a publicly accessible online website.

PA 98-1109 (SB 3044) Amendments to the Real Estate License Act of 2000
This bill amended the Real Estate License Act of 2000 to add the definition of “Broker price opinion” and “Comparative market analysis” to the Act. It provides requirements and reasoning for broker price opinions and comparative market analyses. It provides what must be included in written/electronic broker price opinion/comparative market analysis and requires a criminal background check, including fingerprinting to Illinois State Police, for each new applicant for licensure by examination or restoration.

PA 98-0735 (HB 4784) E-mails for condo associations
Allows condo boards to deliver notices electronically to unit owners with their permission in order to facilitate more effective communication with their members.  Also allows a condo owner to designate an e-mail address, postal address, or both, for official purposes and for an association’s records

PA 98-0754 (SB 2597) Seller disclosure in residential sales
A technical change to include “windows” and “doors” in what a seller must include in known material defects when selling residential property.  Previously, the law specified “walls”; that language was intended to cover windows and doors as well.  This law makes clear that inclusion.

PA 98-0933 (HB 5709) Real estate valuation waiver
Since county engineers are already exempted from having a license for valuation on property under $10,000 this would allow municipal engineers to be equal to county engineers for the purposes of a valuation of property under $10,000.

PA 98-0966 (SB 3286) Access to gated communities for process servers
Requires employees of gated communities provide access to process servers showing legitimate credentials to serve process on a resident of that gated community.

PA 98-0996 (HB 4782) Condo Board Lease
The civil code is amended to allow a condo board of managers to take possession of a property under authorized judgment and within 8 months after the month of termination, may permit or extend a lease for additional terms not to exceed 13 months.

PA 98-1068 (HB 4783) Condo association preventing suing developers
Condo association bylaws are often written with clauses that prevent a property owner from suing a developer.  In many cases, there are defects to the condos and the owner must seek the approval of the association to seek legal action.  This law does not allow such clauses in association bylaws.

PA 98-0821 (SB 2656) Power of attorney during condominium transfer after death
During any transfer of a condominium residential unit after the death of the owner, any parking or amenity owned and used by the owner is to be included. The law revises the Illinois Residential Real Property Transfer on Death Instrument Act to restrict the agent from exercising certain decision making powers, however it does not restrict the agent from the ability to sell.

PA 98-0836 (SB 2985) Changes regulations for small estate affidavits
Amends the Probate Act of 1975 to requiring anyone executing a small estate affidavit to list and classify the debts of the decedent. Should a decedent’s estate be insufficient to cover the costs of the affidavit, then it shall be paid pro rata. Allows the executor of a small estate affidavit to examine and remove the contents of the safety deposit box of the decedent of the affidavit.

PA 98-1062 (HB 4123) Protections for mobile home owners
Mobile home owners used to run the risk of mobile park owners going out of business or filing for bankruptcy and not being told until the day they are required to leave.  The law requires more transparency about who the park owner is and notice requirements should the mobile home owner have to leave.

PA 98-1042 (HB 5322) Electronic voting for condo associations
Amends the Common Interest Community Association Act to allow condo associations with more than 10 units and up to $100,000 in assessments to allow voting, required notices, signatures, consent or approvals through electronic transmission. Associations must make reasonable accommodation, at its expense, for any person to conduct business with the association without the use of electronic or other means.

PA 98-0842 (SB 3057) Amends the Common Interest Community Association Act
Exempts certain provisions of the Act requiring a common interest community unit owner leasing a unit to deliver a copy of a lease to the association if the community instruments provide otherwise.

Source: http://www.thecaucusblog.com/2014/12/new-laws-effective-2015.html

Types of Business Structures in Illinois

Starting a new Illinois business can be both exciting and challenging. Whenever you start a business, you will have to select one organizational type from out of all the different business structures. This choice determines how your business will be set up and organized. Making the right choice for your business will generally depend upon the type of business, how you want the business to be run, how many owners the business will have, and the financial situation of the business.

Below are the types of business structures in Illinois that you can organize your new business, along with a brief description of each.

Sole Proprietorship and General Partnership

When a business name is different from the owner(s) full legal name(s), the Illinois Assumed Name Act requires sole proprietorships and general partnerships to register with their local county clerk’s office for registration under the Assumed Name Act. Sole proprietors must have a Federal Employer Identification Number if they pay wages to one or more employees, or file any pension or excise tax returns including those of alcohol, tobacco or firearms.

Limited Partnership

A Limited Partnership is an organization made up of a GENERAL PARTNER, who manages a project, and limited partners, who invest money, but have limited liability and are not involved in day-to-day management. Typical limited partnerships are in real estate, oil and gas, and equipment leasing and family partnerships.

Limited Liability Company

A Limited Liability Company (LLC) is the non-corporate form of doing business that provides its owners with limited liability, flow-through tax treatment and operating flexibility through participation in management of the business. The LLC is well suited for every type of business venture, except banking and insurance, which are prohibited by Statute. Examples of acceptable businesses are: farming, agricultural services, mining, construction, manufacturing, transportation, wholesale and retail trade, investment companies, insurance agents, real estate brokers, all types of real estate ventures, hotels, personal and business services, automotive sales and services, amusement and recreation, health services, accounting, architecture and other professions…

Limited Liability Partnership

If organized as a Limited Liability Partnership under a specific section of the General Partnership Act, partners are not liable for the debts, obligations and liabilities of, or chargeable to the partnership arising from negligence, wrongful acts, omissions, misconduct or malpractice committed while the partnership is a Limited Liability Partnership.

“C” Corporation

A corporation is a distinct legal entity and is the most complex form of organization. A corporation may sell shares of stock, which are certificates indicating ownership, to as many people as is desirable. The shareholders then elect a board of directors, which elects a president and other officers who run the company on a day-to-day basis. Among the advantages of corporate formation are limited liability of the shareholder and ease of transferring ownership. If the name of the business includes the word “Corporation,” “Inc.”,”Incorporated” or “Corp.”, then the business must be incorporated.

“S” Corporation

Electing S Corporation status is an option that must be made through the Internal Revenue Service (IRS) when starting a business. In general, an S Corporation passes through income and expenses to its shareholders, who then report them on their own income tax returns. To qualify for S Corp. status, a corporation must meet several requirements, one of which limits the number of shareholders.

Before selecting a business structure for the business you’re planning on starting, it is highly recommended to consult an attorney with business law knowledge and/or accountant for assistance in determining which Illinois business structure is best suited for your business objectives.

Basic Estate Planning

It doesn’t matter your net worth is or isn’t… What’s important is to have a basic estate plan in place, which ensures that your family and financial goals are met after you die.

A proper estate plan has contains several elements, which include: a will; a power of attorney for property; and a living will and a health care power of attorney. For some people, a trust may also make sense. When putting together a plan, you must be mindful of both federal and state laws governing estates.

The following are few things you need to get your affairs in order.

  1. Assets Inventory: Your investments, retirement savings, insurance policies, and any real estate or business interests. Ask yourself three questions: Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you’re ever incapacitated? Whom do you want making medical decisions for you if you become unable to make them for yourself?
  2. A Will: A will states exactly where you want your assets distributed when you die. It’s also the best place to name guardians for your children if you have any. Dying without a will can be costly to your heirs and leaves you no say over who gets your assets as the whole matter will end up on Probate Court. Even if you have a trust, you still need a will to take care of any holdings outside of that trust when you die.
  3. A Living Will: Also known as an advance medical directive, is a statement of your wishes for the kind of life-sustaining medical intervention you want, or don’t want, in the event that you become terminally ill and unable to communicate.
  4. A Trust: Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court, which administers wills. Some also offer greater protection of your assets from creditors and lawsuits.

In all cases, it is highly recommended that your seek the advise of an attorney who is well versed in Estate Planning Law. They will guide you though the process of creating a personalized Estate Plan that will properly take care of matters as you wished after your death.

The Real Estate purchase agreement

The Real Estate purchase agreement is the most important document in the transaction. Although standard printed forms are useful, it is recommended that you have a lawyer with Illinois Real Estate transaction knowledge explaining the form and making changes and additions to reflect the buyer’s and or the seller’s desires.

There are several issues that may need to be addressed in the purchase agreement; below are some common examples:

  • If the property has been modified or there has been an addition to the property, was it done lawfully, with permits?
  • If the buyer has plans to change the property, may what is planned for the property, what are the zoning restrictions, etc.?
  • What happens if a buyer has a home inspector inspect the property and discovers termites, asbestos, radon, or lead-based paint is found?
  • What if the property is found to contain hazardous waste?
  • Is the closing appropriately conditioned upon the buyer obtaining financing?
  • What are the legal consequences if the closing does not take place on time, and what happens to the down payment?

Most buyers finance a substantial portion of the purchase price for a home with a mortgage loan from a lending institution. The purchase agreement should contain a carefully worded provision that it is subject to the buyer’s obtaining a commitment for financing.

Mortgage loan commitments and mortgage loan documents are complex. Seek advise from an Illinois Real Estate Lawyer and let them review and explain the importance of these various documents.

Prepare for Meeting your Attorney to Discuss Estate Plan

SOME THINGS YOU NEED TO KNOW BEFORE YOU MEET WITH YOUR ESTATE PLANNING ATTORNEY…

it can help save you money.

You are ready to finally go ahead and get that Will done.  Everyone has been nagging you about it, but you never wanted to deal with it.  You never had enough money, you didn’t know who you wanted to leave it to, and you were afraid to talk about dying.  But, now you are ready to do it.  There are a few things you will want to do prior to meeting with your attorney.  These few steps will save you both time and money.

The first thing you need to do is to collect and organize all of your documents that:

1. Show where your money and property are located.

2. Show how much that property is worth and how much it costs.

3. Show who owns these assets and how they are owned.

These documents can and should include bank statements, insurance papers, employment benefit papers, deeds, business records, titles to property and tax records.  In addition, you will also want to bring any contracts or agreements you have entered into regarding your finances, i.e. divorce agreement or pre-nuptual agreement.  These papers assist your attorney in deciding what estate planning documents are necessary to provide you and your heirs the greatest opportunity to retain your money within the family, and not lose it to attorneys, taxes or the courts.

In addition, you should prepare a list of all your assets and debts.  While this may seem time-consuming now, it will need to be done at some time.  Either you can prepare it now, while you are alive and know where everything is… or you can let your heirs and attorneys prepare it later at a tremendous cost, with the risk that not everything will be found, thereby leaving your heirs without their proper inheritance.

Finally, prepare a list indicating who you want to receive your property after you die.  You should also begin to think about who you would want to manage your affairs when you die, and who you would want to care for your minor children.

Bank of America Halting Foreclosures

Bank of America halting foreclosure is 23 states including Illinois. http://www.huffingtonpost.com/2010/10/01/bank-of-america-foreclosures-halt-23-states_n_747669.html.  We are starting to see a trend.  This is now the third major lender to make this announcement in recent weeks.  GMAC and Chase have also halted foreclosure proceedings.

While this will assist homeowners who were facing foreclosure, by giving them the gift of time to stay in their homes, the interesting thing to watch will be the impact of these announcements on current short sale negotiations with lenders, as well as the impact on the real estate market itself. On the one hand, this may make short sales easier to negotiate as these banks have no fall back position to proceed with a foreclosure proceeding.  On the other hand, the longer these defaulted properties sit without going through the foreclosure process and going back on the market as a bank owned property, the longer it will be until we can truly hit rock bottom prices in the market and expect any meaningful turnaround in prices.  Stay tuned and see how this all plays out.

Mortgage Fraud

Effective June 1, 2009 all residential properties (single family homes, condominium units and buildings with up to four units) in Cook County, Illinois will become subject to the amendments to the Illinois Notary Public Act contained in Illinois Public Act 095-0988 (the “Act”) in an effort to combat mortgage fraud in Illinois residential real estate transactions. The practical effect of the Act is that Illinois notaries will have to comply with the Act for all covered Cook County conveyances.

The Act is a pilot program applicable only to Cook County real property conveyances from June 1, 2009 through July 1, 2013. The Act will require Illinois notaries to take and save a copy of the right thumbprint of all individuals selling residential property in Cook County. The Act provides that if a right thumbprint is not available, alternative digits can be used. The thumbprint record must be saved by the notary for seven years and is not subject to copying or inspection under the Freedom of Information Act. The Act proscribes a Notarial Record form for the collection and retention of the record of the thumbprint. The Act does not exclude developers of individual condominium units in multi-unit projects from the fingerprinting requirements. Developers who do not want their in-house notaries to be bothered with the Act’s record retention requirements should plan on attending closings at a title insurance company for at least the next five years !

Effective June 1, 2009 all residential properties (single family homes, condominium units and buildings with up to four units) in Cook County, Illinois will become subject to the amendments to the Illinois Notary Public Act contained in Illinois Public Act 095-0988 (the “Act”) in an effort to combat mortgage fraud in Illinois residential real estate transactions.  The practical effect of the Act is that Illinois notaries will have to comply with the Act for all covered Cook County conveyances.The Act is a pilot program applicable only to Cook County real property conveyances from June 1, 2009 through July 1, 2013.  The Act will require Illinois notaries to take and save a copy of the right thumbprint of all individuals selling residential property in Cook County.  The Act provides that if a right thumbprint is not available, alternative digits can be used.  The thumbprint record must be saved by the notary for seven years and is not subject to copying or inspection under the Freedom of Information Act.  The Act proscribes a Notarial Record form for the collection and retention of the record of the thumbprint.  The Act does not exclude developers of individual condominium units in multi-unit projects from the fingerprinting requirements.  Developers who do not want their in-house notaries to be bothered with the Act’s record retention requirements should plan on attending closings at a title insurance company for at least the next five years !

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