The Home Repair and Remodeling Act, Public Act 97-235, has been revised once again! The new changes will kick in on January 1, 2012. Here is what you need to know:
1) Roofing contractors must put their licensing number and the licensee's name on their commercial vehicles. Failure to do this will result in a $250 penalty. However, a hearing will be scheduled, and if the problem is corrected before the hearing, no penalty will be imposed.
2) Contractors may not accept any compensation (monetary or otherwise) for allowing out-of-area contractors to use their name or license.
3) Contractors may not advertise, or promise, that they will pay an insurance deductible on behalf of their customers. They may also not advertise or promise that they will rebate or reimburse an insurance deductible to their customers.
4) A customer may cancel his contract with his contractors if the contractor is supposed to be paid from proceeds of an insurance policy. Specifically, a customer may cancel his contract up to the thirtieth (30th) business day after he receives an executed proof of loss, OR, if earlier, by the fifth (5th) business day after the customer receives written notice that all or any part of the loss will not be covered by insurance.
Thursday, August 25, 2011
Wednesday, August 17, 2011
When does your lease guaranty expire?
A recent case in New Jersey, Montpen SC, L.L.C. v. Mathews Art, Inc., Superior Ct. New Jersey, No. A 5036 09T3 (March 30, 2011), highlights the importance of negotiating, and knowing, the terms of your lease.
In Montpen, the principal owner of a commercial lessee signed a lease with a guaranty, in which he guaranteed up to one year's rent for any default during the initial term of the lease, or during an extension or renewal of the lease. The lease specifically stated that if the tenant were simply to "holdover" after the expiration of the lease, without an "extension" or "renewal" of the lease, then the lease was neither extended nor renewed.
The lease was extended multiple times, but at one point, when it came time to renew or extend, the parties could not agree on the rent. The tenant stayed in the space for a year, making monthly payments to the landlord. Eventually the tenant stopped making payments. By the time the tenant vacated the premises, he owed nine months of rent.
As a result, the landlord sued based on the guaranty. However, the court held that the terms of the lease were clear and did not leave room for interpretation. The guaranty only applied during the term of the lease, or during an extension or renewal of the lease. The "holdover" period, without a written extension or renewal, did not constitute a renewal or extension, and was therefore not covered by the guaranty.
Whether you are the landlord or the tenant, if your lease has a guaranty, it is important to understand its terms and how and when it can come into play!
In Montpen, the principal owner of a commercial lessee signed a lease with a guaranty, in which he guaranteed up to one year's rent for any default during the initial term of the lease, or during an extension or renewal of the lease. The lease specifically stated that if the tenant were simply to "holdover" after the expiration of the lease, without an "extension" or "renewal" of the lease, then the lease was neither extended nor renewed.
The lease was extended multiple times, but at one point, when it came time to renew or extend, the parties could not agree on the rent. The tenant stayed in the space for a year, making monthly payments to the landlord. Eventually the tenant stopped making payments. By the time the tenant vacated the premises, he owed nine months of rent.
As a result, the landlord sued based on the guaranty. However, the court held that the terms of the lease were clear and did not leave room for interpretation. The guaranty only applied during the term of the lease, or during an extension or renewal of the lease. The "holdover" period, without a written extension or renewal, did not constitute a renewal or extension, and was therefore not covered by the guaranty.
Whether you are the landlord or the tenant, if your lease has a guaranty, it is important to understand its terms and how and when it can come into play!
Wednesday, August 10, 2011
Updated FHA Rules for Condominiums
The Federal Housing Administration (FHA) has updated its lending guidelines regarding condominiums. Here are the most significant changes:
1) Previously, FHA approval was available to condominium associations if no more than 15% of units had fallen behind on their assessment payments. Moreover, since many lenders are notorious for not paying assessments on bank-owned properties, the FHA exempted bank-owned units from this 15% guideline. Now, however, the FHA will look at all units in the association, even if they are bank-owned, to make sure that no more than 15% of units are past due.
2) If a condominium association is new construction (not a gut rehab or remodel), only 30% of the units must be owner-occupied. Previously, the requirement was 50%.
3) At least 30% of the units must be sold before the FHA wil provide any FHA loans at the association.
If you are buying a condominium and trying to get FHA financing, or if you are part of an association trying to get FHA approval, be on the lookout for these new requirements!
1) Previously, FHA approval was available to condominium associations if no more than 15% of units had fallen behind on their assessment payments. Moreover, since many lenders are notorious for not paying assessments on bank-owned properties, the FHA exempted bank-owned units from this 15% guideline. Now, however, the FHA will look at all units in the association, even if they are bank-owned, to make sure that no more than 15% of units are past due.
2) If a condominium association is new construction (not a gut rehab or remodel), only 30% of the units must be owner-occupied. Previously, the requirement was 50%.
3) At least 30% of the units must be sold before the FHA wil provide any FHA loans at the association.
If you are buying a condominium and trying to get FHA financing, or if you are part of an association trying to get FHA approval, be on the lookout for these new requirements!
Monday, August 1, 2011
The new Tenants Radon Protection Act
The Illinois legislature recently passed the Tenants Radon Protection Act. Under this new Act, landlords are not required to conduct any radon testing. However, if the landlord is leasing a unit that is on or below the third floor of a building, and if the landlord does in fact have a radon test disclosing hazardous radon conditions, then the landlord must disclose the results of that test to the tenant or prospective tenant. If the landlord mitigates the radon hazard and obtains a radon test showing that the hazard is no longer present, the landlord need not disclose the past radon hazard to prospective tenants.
If the tenant tests for radon, finds it, and presents the results of the test to the landlord, the landlord then has 30 days to obtain another radon test. Moreover, the landlord must then disclose the radon hazard to subsequent lessees, until a radon test proves that the radon hazard is no longer present.
Lastly, before signing any lease with the prospective tenant, the landlord must also provide a state-issued radon guide for tenants (known as the Illinois Emergency Management Agency Radon Guide), along with the standard radon disclosures.
While these requirements may seem onerous for landlords, keep in mind that landlords are not required to conduct radon testing. They must, however, provide the radon guide and the radon disclosures to prospective tenants regardless.
The Tenants Radon Protection Act takes effect on January 1, 2012!
If the tenant tests for radon, finds it, and presents the results of the test to the landlord, the landlord then has 30 days to obtain another radon test. Moreover, the landlord must then disclose the radon hazard to subsequent lessees, until a radon test proves that the radon hazard is no longer present.
Lastly, before signing any lease with the prospective tenant, the landlord must also provide a state-issued radon guide for tenants (known as the Illinois Emergency Management Agency Radon Guide), along with the standard radon disclosures.
While these requirements may seem onerous for landlords, keep in mind that landlords are not required to conduct radon testing. They must, however, provide the radon guide and the radon disclosures to prospective tenants regardless.
The Tenants Radon Protection Act takes effect on January 1, 2012!
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