By Gary S. Mueller, Three Rivers Association of REALTORS® Attorney
As I type this, Spring has officially arrived---though apparently with a whimper as it is 40 degrees outside! Equally important is that Loyola Men’s basketball team is still in the NCAA tourney! Also, Spring training is in full swing (pun fully intended) and roster moves are actually occurring which means the start of professional baseball is right around the corner. The primary elections are done, so we can expect the ads and mailers for the general election to start soon as well. Add to that the start of the Spring real estate sale timeline and it is apparent that we have a great deal of exciting things happening.
Concerning updates or concerns in the law, I am a member of the State Bar Association. As such, I receive inquiries from attorneys throughout the state on various real estate issues. The following are some of the more pressing and relevant recent topics. First, around this time of year, there are typically questions about how to handle property tax prorations during this time right before actual tax bills are issued. For many, you may find that clients are unaware that a) real estate property taxes in Illinois are paid in arrears (meaning, in June of this year, we pay the real estate property tax obligation for the first ½ of LAST YEAR), and b) that, though the seller escrows money for his/her/their taxes, at closing, they will have to provide a credit to buyer (and then receive their escrow rebate about 45 days after the closing). A question was posed by an attorney in Chicago, citing the 6.1 contract, about a way to negotiate the escrow or tax credit at closing. As we know, the contract suggests either a percent based on the last ascertainable bill or a percentage of the purchase price (2%) in the situation where there is no prior bill. Note that these are effective for a vast majority of situations. Also note, however, that some increases in real estate taxes are already proposed to be 8 or 9%. In those areas, one needs to be careful to ensure the seller provides the correct credit and the buyer understands the basis for the credit provided.
Second, in my opinion, one cannot be too cautious about the reoccurring scams that pop up each Spring time-----the Nicor guy that needs to come into the home to check out the pipes, or the Com Ed guy that needs to have an owner complete a questionnaire while a partner of his/hers ransacks the house, or the mail that is sent to the new homeowner indicating that he/she/they NEED to have a certified copy of their deed to make sure that he/she/they can confirm that ownership has truly passed to the new owner (NOT needed and definitely does NOT cost $89.99). Be leery of the “repair” crews that walk throughout the subdivision indicating that the crew can complete repairs or improvements and that the owners’ insurance will pay because there has been a recent hail storm or wind event or other natural weather event; the crew “offers” to take over the repair project, for a fee, and will be paid through the insurance claim proceeds.
Third, I am still actively involved in the 7.0 Multi-Board Residential Real Estate Contract committee. We are pouring through the many thoughts and suggestions of agents throughout the state where the contract is used. We are currently laboring over the attorney review and the inspection contingency paragraphs. Concerning the inspection provision, for example, the committee is trying to decide if the timeline in the contingency actually intends to/actually does afford a Safe Harbor time----in that, unless both parties agree to all repairs or both parties agree to void the contract, neither party can pull the plug on the deal during the inspection contingency. I will keep you posted on where the committee lands on this issue. Also, concerning the attorney review contingency, the committee WILL stress to all attorney/practitioners that the subsections of the review paragraph are worded the way they are/will be ON PURPOSE. The verbiage is the direct result of caselaw that was handed down by the appellate court----so “deal-breakers” are deemed counter-offers so that, if not accepted or negotiated, the parties can void the deal while modifications that are NOT deal-breakers are changes that, even if NOT agreed, would not empower either party with the ability to void the deal. The aspiration remains that the revised contract will be available for the Summer real estate season.
We will continue to push to make sure our industry remains vigilant. Make sure you continue to offer quality and unique services to clients to separate yourself from other agents who work in the same area. Thank you for allowing our office to work with you on any deals. Thank you for allowing me to serve as Attorney to the Association. Take care and keep plugging away. Go Ramblers!!!