Expect a long wait at the Illinois Property Tax Appeals Board

The Illinois Property Tax Appeals Board is short-staffed, and as a result nearly 87,500 Illinois real estate tax payers have a long wait ahead of them.  One of the auditors estimated two years to process the pending cases.

In 2012 alone, 42,871 appeals were filed, nearly a 36% increase over 2011, and a whopping 226% increase since 2002, when the agency had twice as much staff as it does now.  Back then, applications were fewer, and despite the larger staff, it still took a while to process files, though not as long as it does now. 

The state legislature has set aside more funds to increase the staff at the appeals board, but even so, the staff won't reach 2002 levels. 

So if your tax appeal is not getting processed, it's probably sitting in a pile somewhere with 42,000 other tax appeals in the same boat.  It will get processed eventually, so sit tight.

Low Sales Price for Half-Interest in Real Estate Okay

A recent case, NAV Bank . LaSalle Bank, N.A., 2013 IL App (1st) 121147 (January 22, 2013) Cook Co.,1st Div. found that it was fair to sell a half-interest in a home at a forced sale at a price significantly below half of the market value of the home.

NAV Bank revolves around a dispute over a single family home that began in the 1990s.  After much litigation, one family, the Toms, won against the other party, Adeline Moy.  Ms. Moy has since passed, and the Toms attempted to enforce the judgment against Ms. Moy by going after her interest in the home that she and her husband, Mr. Moy, owned.

After much maneuvering, Ms. Moy's half-interest in the home was sold.  The Toms purchased the half-interest for $20,000, even though the house appraised at $280,000.  No one else placed a bid.  Mr. Moy asked the court to set aside the sale on the grounds that the sales price was too low.

In the end, the court did not agree.  What it boils down to is this:  Buying a half-interest in a house is nowhere near buying the entire house.  Any such ownership will be fraught with difficulties and disputes.  No one would pay half the market value of a house for buying only a half-share in the house.  By its very nature, such a purchase must be significantly discounted.  Therefore, the sales price of $20,000 is fair.
 

Community Association Managers Require Licensing

If you are involved in community association management, or if you are a member of or on the board of a community association looking for a new manager for your association, you need to know that effective October 2012, community association managers in Illinois must be licensed under the Community Association Manager License and Disciplinary Act (CAMLDA).

Community association managers are not the same as property managers.  To fall under the purview of the CAMLDA, a manager must be managing one or more community associations.  A community association is a group that 1)  individual unit owners must be a part of as a result of their ownership in a condominium association or other such homeowners' association, and 2) the association must have a right to impose assessments on unit owners.

Moreover, a community association manager may have a lot of responsibilities that a property manager doesn't have, such as collecting assessments, organizing and assisting with association and board meetings, maintaining association documentation and other records, dealing with unit owners selling their property in the association (as well as prospective buyers), and preparing budgets for board approval. 

If all the manager is doing is managing rental apartments on behalf of an owner, he doesn't need a license under CAMLDA (although if it's not his own building, he may need a real estate license, but that's the subject of a separate post)!  

What is a Special Assessment?

If you own or are buying a condominium, you may come across the term "special assessment".  What does that mean?  Well, there's a regular assessment, usually monthly, that you are paying towards the association's general maintenance expenses.  But when there's a large scale improvement or repair that wasn't budgeted for, the association needs to get the money from somewhere.  So what do they do?  They assess it to the homeowners.  It's not a part of the regular expense; hence, it's "special". 

Often when you see a special assessment, it's for a big-ticket items like a roof repair, tuckpointing, sudden damage to the building, or some other large renovation or repair.  Special assessments can be a few dollars or thousands of dollars, so make sure you do your diligence if you're buying .  A Section 22.1 Disclosure is key to help you determine what costs you may be looking at in the near future.  Even if you do all the diligence you possibly could, you may end up owing a special assessment anyway if there's an emergency repair needed. 

As a condominium owner or condominium purchaser, make sure you are setting a little something by for a rainy day (i.e. a special assessment) in case you ever need it!

Home Inspections: What to Look For

If you are buying residential property, you are probably aware that you should get a home inspection.  This means you should hire a licensed home inspector to check out the house for you.  Typically this is done within the first 5 days after the contract is signed by the seller.  If you are not happy with the way the inspection turns out, your attorney can cancel the transaction or try to negotiate the repairs or a credit for you.

Keep in mind, however, that a typical home inspection is not meant to cover cosmetic items.  If you are walking through the house and notice chipped tiles or peeling paint, take all of that into account when you make your initial offer.  The purpose of the inspection is to make sure that the home's structure and systems are in good condition, not to find peeling wallpaper or dirty carpets.

Make sure your home inspector focuses on the following:

1)  Roof condition and water-tightness
2)  Foundation condition and water seepage
3)  Mechanicals and HVAC
4)  Plumbing and internal water damage
5)  Electrical panel and system
6)  Exterior walls
7)  Exterior slope

If you are concerned that there might be mold that is not visible, or radon, you may have to ask your inspector to run specialized tests.  Not all inspectors are able to do mold and radon testing, however, and you might need to contact someone else for assistance.

If your inspection reveals conditions that are unacceptable to you, or will cost too much to fix, you can back out as long as you do it in a timely manner.  If the flaws are manageable, you can move forward.

Chicago Named Strongest Buyer's Market in the Country

According to data recently released by Zillow, Chicago was the best buyer's market in the United States in the third and fourth quarters of 2012.  Zillow studied 142 metro areas across the country, and found that buyers in Chicago have far stronger bargaining positions than sellers do.  Cleveland came in second place, and the top five were rounded out by by Philadelphia, Cincinnati, and New York City.

The top three seller's markets, meaning metro areas in which the sellers had greater bargaining power than the buyers, were all in California:  San Jose, San Francisco, and Sacramento.  The top five were rounded out by Las Vegas and Phoenix.

The formula Zillow used to determine the best markets had three components:  1) A comparison of how much a house sells for as compared to its last listed price; 2) the amount of time a house stays on the market; and 3) the percentage of homes in any metropolitan area that have had at least one price reduction. Chicago is the strongest buyer's market because in order to sell their homes, sellers are not only having to reduce prices more often than sellers in other metro areas, their homes are on the market longer, and the final price they accept is a smaller percentage of the asking price than the prices accepted in other metropolitan areas.

What does this mean for you?  Well, if you're looking to buy, according to Zillow, it's a great time to do it.  On the other hand, if you're looking to sell, you have a lot of competition out there!

Changes to the Security Deposit Return Act

Landlords and tenants often end up fighting, and sometimes the arguments continue well past the end of the tenancy.  You may have had a bad landlord, or a bad tenant, but the fact is, not all landlords are bad, and neither are all tenants.  Periodically the state legislature makes little tweaks to various laws to acknowledge either or both of these assertions.

Recently, for example, the legislature tweaked the Security Deposit Return Act.  Pursuant to this Act, the landlord must give the tenant an itemized list of the damage the tenant caused to the landlord's property within 30 days after the tenant leaves, along with the cost (either actual or estimated) of repairing the same.  This notice must be given to the tenant personally, or at his last known address.  Effective January 1, 2013, however, landlords have the option of sending this notice via electronic mail to an e-mail address that has been previously verified by the landlord (perhaps an e-mail address on which the landlord and tenant communicated with each other earlier -- the statute uses the word "verified" but does not state exactly what that means).

Regardless, this revision helps get around an argument often used by tenants, namely that the tenant did not receive the notice.  In many cases, the tenant truly has not received the notice because he had left the landlord's property before the notice was prepared, and he is not living at the address he lived at prior to moving to the landlord's property.  If the notice is sent via electronic mail, the landlord can have a greater degree of confidence that it will actually be received by the tenant.

For more information on the Security Deposit Return Act, click here.