More good news for distressed Cook County homeowners: The Cook County Sheriff's Department announced this week that they are suspending service of evictions notices on people who are being foreclosed, as well as renters in buildings that are being foreclosed because the landlord has been unable to make mortgage payments.
Particularly with respect to renters, the Cook County Sheriff is requesting that banks give tenants notice of the foreclosure and time to leave voluntarily if the landlord has not paid the mortgage; while landlords routinely get such notices from their banks, they usually do not share them with tenants. As a result, tenants often know nothing about having to vacate the property until the sheriff shows up at their door.
The Cook County Sheriff's Department has chosen to take this course of action despite the fact that it violates numerous foreclosure decrees issues by Cook County courts. It is yet to be determined if the sheriff's office will continue to suspend foreclosure-related evictions, or if they will be held in contempt of court. In the meantime, distressed Cook County homeowners who have been foreclosed can stay in their homes!
Friday, October 10, 2008
Wednesday, October 8, 2008
Good news for distressed Illinois homeowners with Countrywide mortgage loans!
Finally, some good news for the thousands of people who are being foreclosed and losing their homes: Countrywide (now part of Bank of America) recently entered into an $8.4 billion settlement with 11 states, including Illinois. Illinois' share of this settlement amounts to $190 million, and these funds will be used to assist approximately 21,000 distressed Illinois homeowners who obtained loans from Countrywide Mortgage prior to December 31, 2007.
Specifically, these homeowners can expect to have their interest rates reduced; in some cases, even the principal of the loan may be reduced. The goal is to make their monthly payments more affordable, ideally 32% or less of a family's income. Additionally late fees, loan modification fees, and prepayment penalties will be waived. Certain families that already lost their homes as a result of foreclosure proceedings shall receive cash payments. Countrywide/Bank of America will also suspend ongoing foreclosure proceedings for those homeowners who qualify for assistance as a result of the settlement.
To see if you qualify, call the bank at 800-669-6607; make sure you have all of your loan information handy when you call. You can also call the hotline set up by the attorney general's office, at 866-544-7151.
Specifically, these homeowners can expect to have their interest rates reduced; in some cases, even the principal of the loan may be reduced. The goal is to make their monthly payments more affordable, ideally 32% or less of a family's income. Additionally late fees, loan modification fees, and prepayment penalties will be waived. Certain families that already lost their homes as a result of foreclosure proceedings shall receive cash payments. Countrywide/Bank of America will also suspend ongoing foreclosure proceedings for those homeowners who qualify for assistance as a result of the settlement.
To see if you qualify, call the bank at 800-669-6607; make sure you have all of your loan information handy when you call. You can also call the hotline set up by the attorney general's office, at 866-544-7151.
Thursday, October 2, 2008
Tenant Troubles: How to Get Rid of Bad Residential Tenants
I have quite a few clients who own residential investment property, such as condominiums or townhomes or even single family homes that they rent out. On occasion, I get a phone call from a client who has a "bad" tenant -- in other words, a tenant who is not paying rent or is breaking the lease in some other way. What should you do if you are a landlord and this happens to you? Well, you should start simple and hope that you can resolve the problem without having to file an eviction.
So how do you start simple? I always recommend that you call or visit your tenant and try to talk the issue through -- give them a day or two to fix the problem. Sometimes that's the easiest way to resolve the matter.
If that doesn't work, you need to hone in on your specific problem so you can provide the appropriate notice pursuant to Illinois law:
1. The tenant is not paying rent. If your tenant is not paying rent, you need to provide a Five Day Notice. A Five Day Notice should clearly state "Landlord's Five Day Notice" at the top. It should go on to detail the name of the landlord and the tenant, the address of the rental property, and the amount of rent outstanding. The notice should clearly state that the in the event rent is not paid within five days, the lease will be terminated. The following language should also be written into the Five Day Notice: Only FULL PAYMENT of the rent demanded in this notice will waive the landlord's right to terminate the lease under this notice, unless the landlord agrees in writing to continue the lease in exchange for receiving partial payment.
Contact your attorney to make sure the Five Day Notice is prepared and served properly; in case you end up having to formally evict the tenant through court proceedings, it will be necessary to show proper notice. If the tenant does not pay up within five days of receiving the Five Day Notice, you may file an eviction under the relevant forcible entry and detainer statute.
2. What happens when your tenant is paying rent, but is violating the lease in some other way? In this case, you need to provide a Ten Day Notice to the tenant. The notice should be clearly labeled "Ten Day Notice". Again, the landlord, tenant, and rental property should be identified. The notice much clearly state how the tenant is in violation of the lease, and should further state that if the tenant does not conform to the lease within ten days, the lease will be terminated. Again, you should contact your attorney to make sure your Ten Day Notice is prepared and served properly. If the tenant does not rectify the situation within ten days, you may commence eviction proceedings.
So how do you start simple? I always recommend that you call or visit your tenant and try to talk the issue through -- give them a day or two to fix the problem. Sometimes that's the easiest way to resolve the matter.
If that doesn't work, you need to hone in on your specific problem so you can provide the appropriate notice pursuant to Illinois law:
1. The tenant is not paying rent. If your tenant is not paying rent, you need to provide a Five Day Notice. A Five Day Notice should clearly state "Landlord's Five Day Notice" at the top. It should go on to detail the name of the landlord and the tenant, the address of the rental property, and the amount of rent outstanding. The notice should clearly state that the in the event rent is not paid within five days, the lease will be terminated. The following language should also be written into the Five Day Notice: Only FULL PAYMENT of the rent demanded in this notice will waive the landlord's right to terminate the lease under this notice, unless the landlord agrees in writing to continue the lease in exchange for receiving partial payment.
Contact your attorney to make sure the Five Day Notice is prepared and served properly; in case you end up having to formally evict the tenant through court proceedings, it will be necessary to show proper notice. If the tenant does not pay up within five days of receiving the Five Day Notice, you may file an eviction under the relevant forcible entry and detainer statute.
2. What happens when your tenant is paying rent, but is violating the lease in some other way? In this case, you need to provide a Ten Day Notice to the tenant. The notice should be clearly labeled "Ten Day Notice". Again, the landlord, tenant, and rental property should be identified. The notice much clearly state how the tenant is in violation of the lease, and should further state that if the tenant does not conform to the lease within ten days, the lease will be terminated. Again, you should contact your attorney to make sure your Ten Day Notice is prepared and served properly. If the tenant does not rectify the situation within ten days, you may commence eviction proceedings.
Thursday, September 25, 2008
Illinois Landlords, Tenants and Residential Security Deposits
Landlords know how important security deposits are in residential leases. The threat of losing their security deposit can keep tenants honest. Good landlords don't want to hold back the security deposit after the tenant leaves; they would much rather have their home or apartment back in good shape. Tenants, too, look forward to the return of their security deposit when they move out. Illinois has two laws governing security deposits, and it is easy to run afoul of them:
1. The Security Deposit Interest Act: This law requires all landlords who have 25 or more units in one building or complex to pay interest on security deposits to their tenants, so long as the landlord hold the security deposit for more than 6 months. The interest rate is calculated based on the savings account interest rate payable by the state's largest bank at the end of the year preceding the year in which the tenancy commences. For leases that started in 2007, that interest rate is .5%; for leases that started or will start in 2008, that interest rate is .35%. For leases that will start in 2009, the security deposit interest rate will be calculated on December 31, 2008.
But be careful! Chicago and certain other municipalities have different rules regarding security deposits and calculate the security deposit interest in a different manner. For example, in Chicago, the interest rate on security deposits for leases entered in 2007 is 1.68%; for 2008 leases, it's 1.26%. If you are a landlord, before paying any interest, you should check with the municipality in which your units are located to determine the correct interest rate. Fortunately, most municipalities do follow the Security Deposit Interest Act and will not have their own interest rate on security deposits.
2. The Security Deposit Return Act: Landlords who have 5 or more units may withhold all or a portion of a tenant's security deposit if the following conditions are met:
a) Within 30 days after the tenant leaves, the landlord must give the tenant an itemized list of the damage the tenant caused, along with the cost (either actual or estimated) of repairing the same.
b) If the actual cost is provided in the notice, the landlord should include a copy of the paid bills and receipts for the repairs. If an estimated cost is provided in the notice, then the landlord must provide paid bills and receipts for the repairs within 30 days after the notice in (a) above is provided.
c) The notices to the tenant shall either be hand-delivered or mailed to the tenant's last known address.
If the landlord follows the rules above, and if the cost of the repairs is reasonable, the landlord may withhold the portion of the security deposit necessary to complete the repairs, or, if the cost of repair meets or exceeds the security deposit, the landlord may withhold the entire security deposit. If the landlord fails to comply with the requirements of (a), (b) and (c) above, the landlord must return the entire security deposit to the tenant within 45 days after the tenant leaves.
Landlords beware: If you hold back all or part of the security deposit and a court finds that you acted in bad faith or did not follow the provisions of the Security Deposit Return Act, you could be liable to your tenant for twice the amount of the security deposit, in addition to the tenant's court courts and attorneys' fees.
Please note: The rules for security deposits for City of Chicago landlords are different! City of Chicago landlords are subject to the Chicago Residential Landlord Tenant Ordinance. It is important for Chicago landlords to comply with the provisions of that ordinance. For more information on the City of Chicago's rules pertaining to security deposits, click here.
1. The Security Deposit Interest Act: This law requires all landlords who have 25 or more units in one building or complex to pay interest on security deposits to their tenants, so long as the landlord hold the security deposit for more than 6 months. The interest rate is calculated based on the savings account interest rate payable by the state's largest bank at the end of the year preceding the year in which the tenancy commences. For leases that started in 2007, that interest rate is .5%; for leases that started or will start in 2008, that interest rate is .35%. For leases that will start in 2009, the security deposit interest rate will be calculated on December 31, 2008.
But be careful! Chicago and certain other municipalities have different rules regarding security deposits and calculate the security deposit interest in a different manner. For example, in Chicago, the interest rate on security deposits for leases entered in 2007 is 1.68%; for 2008 leases, it's 1.26%. If you are a landlord, before paying any interest, you should check with the municipality in which your units are located to determine the correct interest rate. Fortunately, most municipalities do follow the Security Deposit Interest Act and will not have their own interest rate on security deposits.
2. The Security Deposit Return Act: Landlords who have 5 or more units may withhold all or a portion of a tenant's security deposit if the following conditions are met:
a) Within 30 days after the tenant leaves, the landlord must give the tenant an itemized list of the damage the tenant caused, along with the cost (either actual or estimated) of repairing the same.
b) If the actual cost is provided in the notice, the landlord should include a copy of the paid bills and receipts for the repairs. If an estimated cost is provided in the notice, then the landlord must provide paid bills and receipts for the repairs within 30 days after the notice in (a) above is provided.
c) The notices to the tenant shall either be hand-delivered or mailed to the tenant's last known address.
If the landlord follows the rules above, and if the cost of the repairs is reasonable, the landlord may withhold the portion of the security deposit necessary to complete the repairs, or, if the cost of repair meets or exceeds the security deposit, the landlord may withhold the entire security deposit. If the landlord fails to comply with the requirements of (a), (b) and (c) above, the landlord must return the entire security deposit to the tenant within 45 days after the tenant leaves.
Landlords beware: If you hold back all or part of the security deposit and a court finds that you acted in bad faith or did not follow the provisions of the Security Deposit Return Act, you could be liable to your tenant for twice the amount of the security deposit, in addition to the tenant's court courts and attorneys' fees.
Please note: The rules for security deposits for City of Chicago landlords are different! City of Chicago landlords are subject to the Chicago Residential Landlord Tenant Ordinance. It is important for Chicago landlords to comply with the provisions of that ordinance. For more information on the City of Chicago's rules pertaining to security deposits, click here.
Friday, September 19, 2008
Cook County Real Estate Taxes -- More Bad News for Homeowners
As if the real estate market hasn't had it bad enough this year, Cook County's real estate tax bills will be coming out soon and will be due on November 3, 2008, and unfortunately, the taxes are going up.
While home prices are plummeting, real estate taxes are not. In fact, Cook County's north and northwest suburban homes were reassessed last year. The second installment tax bill that homeowners will soon receive will include these increased assessments. Unfortunately, the increased assessments are valued as of January 1, 2007, before the housing market crashed. Therefore homeowners will be paying taxes based on home values inflated beyond where they are today.
The City of Chicago will not be reassessed until 2009. In the meantime, their property taxes are still based on home values as on January 1, 2006, when the housing market was peaking. Some Chicago homeowners will thus see large increases in their tax bills this fall.
Southern Cook County suburbs are being reassessed this year; therefore tax increases in that area based on assessed value increases should be negligible, if any. Additionally, when the new assessed values for southern Cook County are complete, homes should be valued as of January 1, 2008. It remains to be seen what sort of tax increase southern Cook County homeowners will face in coming years.
If your taxes have gone up, you still have options! You can appeal the property taxes and attempt to get a reduction. If the time for filing an appeal has passed, the property can still be appealed through the Board of Review. Filing deadlines are strict and must be stringently adhered to. You can also contact an attorney specializing in real estate tax reductions to assist you.
While home prices are plummeting, real estate taxes are not. In fact, Cook County's north and northwest suburban homes were reassessed last year. The second installment tax bill that homeowners will soon receive will include these increased assessments. Unfortunately, the increased assessments are valued as of January 1, 2007, before the housing market crashed. Therefore homeowners will be paying taxes based on home values inflated beyond where they are today.
The City of Chicago will not be reassessed until 2009. In the meantime, their property taxes are still based on home values as on January 1, 2006, when the housing market was peaking. Some Chicago homeowners will thus see large increases in their tax bills this fall.
Southern Cook County suburbs are being reassessed this year; therefore tax increases in that area based on assessed value increases should be negligible, if any. Additionally, when the new assessed values for southern Cook County are complete, homes should be valued as of January 1, 2008. It remains to be seen what sort of tax increase southern Cook County homeowners will face in coming years.
If your taxes have gone up, you still have options! You can appeal the property taxes and attempt to get a reduction. If the time for filing an appeal has passed, the property can still be appealed through the Board of Review. Filing deadlines are strict and must be stringently adhered to. You can also contact an attorney specializing in real estate tax reductions to assist you.
Thursday, September 11, 2008
Joint Tenants and the Deceased Joint Tenant Affidavit
What happens if you own real estate jointly with someone (i.e as joint tenants with right of survivorship or as tenants by the entirety) and the other property owner dies? Who gets his or her half of the property? Did they want you to have it? How do you get it?
Don't worry, if the joint tenant dies, the property is yours. That is the purpose of joint tenancy -- if one owner dies the other owner(s) automatically get the ptoperty. But when it comes time to sell the real estate, the title company will be looking for proof that the joint owner has passed on, and a death certificate is not enough.
Fortunately, the process of removing a deceased joint tenant from title is simple. A form called a Deceased Joint Tenant Affidavit needs to be prepared by someone with knowledge of the facts (typically the surviving joint tenant), signed, notarized, and filed with the county recorder along with a death certificate.
If you fail to have this procedure completed after the death of the deceased joint tenant, you can do it at the time of the sale of the real estate. However, it is best to handle this immediately after the joint tenant's death to avoid complications in case you die before you sell the real estate, or in case you want to add another joint tenant to the real estate or modify title in any other way. Preparing a Deceased Joint Tenant Affidavit is simple and inexpensive, and can clear the way for a simple transition to your buyers or heirs.
Don't worry, if the joint tenant dies, the property is yours. That is the purpose of joint tenancy -- if one owner dies the other owner(s) automatically get the ptoperty. But when it comes time to sell the real estate, the title company will be looking for proof that the joint owner has passed on, and a death certificate is not enough.
Fortunately, the process of removing a deceased joint tenant from title is simple. A form called a Deceased Joint Tenant Affidavit needs to be prepared by someone with knowledge of the facts (typically the surviving joint tenant), signed, notarized, and filed with the county recorder along with a death certificate.
If you fail to have this procedure completed after the death of the deceased joint tenant, you can do it at the time of the sale of the real estate. However, it is best to handle this immediately after the joint tenant's death to avoid complications in case you die before you sell the real estate, or in case you want to add another joint tenant to the real estate or modify title in any other way. Preparing a Deceased Joint Tenant Affidavit is simple and inexpensive, and can clear the way for a simple transition to your buyers or heirs.
Tuesday, September 2, 2008
Home Inspections for New Construction
Many buyers think that a professional inspection for a newly constructed home is unnecessary. After all, it's a new house -- everything is brand new and absolutely perfect, right? Wrong. I strongly urge all of my clients to obtain a professional inspection of any home they are purchasing, even it's just been built.
In the course of my work, I see inspection reports on homes that have been previously lived in, as well as new construction homes. The lists of defects, however, are pretty much the same in length regardless of the age of construction. In fact, new construction homes sometimes have a longer list of defects because there is no one living there to have found and fixed those defects yet. For example, a switch that is supposed to be wired to an outlet may not be working properly, or a shower diverter may leak. While the builder probably checked these items upon installation, he may well have missed them, especially if it is a large construction project with many units or homes. A professional home inspection, however, should uncover these issues and bring them to the seller's attention before it's too late.
Many builders do not include inspection contingencies in their contracts; however, these can be negotiated into the contract by your attorney. Larger builders, however, may not allow any inspection contingency in the contract at all. In such cases, the buyer should be wary. While most builders, large and small, encourage a pre-closing walkthrough to nail down any outstanding punchlist items, sometimes this is not enough. If a unit or home is ready for occupancy when you make your offer, I strongly recommend you schedule a home inspection immediately!
In the course of my work, I see inspection reports on homes that have been previously lived in, as well as new construction homes. The lists of defects, however, are pretty much the same in length regardless of the age of construction. In fact, new construction homes sometimes have a longer list of defects because there is no one living there to have found and fixed those defects yet. For example, a switch that is supposed to be wired to an outlet may not be working properly, or a shower diverter may leak. While the builder probably checked these items upon installation, he may well have missed them, especially if it is a large construction project with many units or homes. A professional home inspection, however, should uncover these issues and bring them to the seller's attention before it's too late.
Many builders do not include inspection contingencies in their contracts; however, these can be negotiated into the contract by your attorney. Larger builders, however, may not allow any inspection contingency in the contract at all. In such cases, the buyer should be wary. While most builders, large and small, encourage a pre-closing walkthrough to nail down any outstanding punchlist items, sometimes this is not enough. If a unit or home is ready for occupancy when you make your offer, I strongly recommend you schedule a home inspection immediately!
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