Author: Law Office of Andrew Szocka

PURCHASING OR SELLING A HOME: HOW TITLE INSURANCE RELATES TO THE TRANSACTION

PURCHASING OR SELLING A HOME: HOW TITLE INSURANCE RELATES TO THE TRANSACTION

If you bought or sold a home, you almost certainly worked with a title insurance company.  But you may not fully understand the reason for the company’s involvement, or how the company protects both the buyer and seller in the transaction.

If you are the seller, a typical real estate sale contract requires you to provide your buyer with an “owner’s title insurance policy.”  This is an insurance policy that protects the buyer from any problems that exist related to the real estate’s title history.

Your attorney will work with the title company to study the real estate’s title history.  The title history for real estate property should be free of any liens, encroachments, or other issues that would delay the sale.  In that case, the sale may proceed without delay.  However, often times your attorney and title company may discover a “title defect.”

Title defects come in many forms.  As a seller, you may have paid off a previous mortgage on your home, but the bank that held the mortgage did not advise the local county government that the mortgage was satisfied and should be removed from the property’s title history.  Or perhaps you built a work shed, fence, or installed a swimming pool over a utility company easement that runs along your property.

Mortgages that you paid off can often be resolved by talking to the bank that held the mortgage but failed to contact the local government to have the mortgage removed from the property’s title.  A structure built on a utility easement may be more complicated.

Depending on the type of structure, the title insurance company may provide insurance to your buyer that covers any damages your buyer may incur as a result of the structure.  For example, if a cable company wanted to dig under a fence to repair wires, the insurance company would pay to remove and replace the fence.  An insurance company may not cover your buyer’s cost to remove and replace a more permanent structure, such as a swimming pool.  As a result, the insurance company would indicate on your buyer’s new owner’s insurance policy that the pool’s encroachment on the utility easement is “excepted,” or not insured, by the policy.

If you are purchasing a home or piece of property, you should be sure to review, and have your attorney review, the real estate’s title history.  The history will reveal any title defect, like a lien or encroachment.  If there are utility easements that run along the property, you should be aware not to build a fence or other structure that covers that easement.

As a buyer, you will almost always have the option to decline to purchase property based on a title defect that you find unacceptable and if the defect cannot be cured.

Having a good attorney can help further understand how the title insurance company works with that attorney to ensure you know the risks, if any, related to certain real estate.  This is true whether you are buying or selling.

Planning on buying or selling property?  Local attorney Andrew Szocka provides thorough and speedy real estate, estate planning, and business organization help in the Chicagoland area.  To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

 

Do You Need a Will If You Already Have Life Insurance?

Do You Need a Will If You Already Have Life Insurance?

If you already have life insurance, you may wonder why people keep saying that you need to make a will. Life insurance sounds like it will help your family out if you are not around. There are many reasons to make a will in addition to paying for life insurance.

  1. Life Insurance Provides a One-Time Payout to One Person

Life insurance requires you to make premium payments to an insurance company over time. If you pass away while the policy is in effect, the insurer will pay a lump sum to your chosen beneficiary. You can choose one or maybe more beneficiaries, but they only receive one payment. Depending on the type of policy, your family may only receive enough money to replace your income or pay expenses for a year or two. After that, the insurance will no longer help them.

In contrast, you can use a will to make gifts to many people. You are not limited to one or a few beneficiaries. Further, you can even use a will to roll your assets over into a trust. The trust can make payments to your family over time, and the trust assets may even grow in value.

  1. No Premium Payments or Term Required for a Will

To maintain life insurance, you have to make premium payments on a regular basis. These payments may not seem expensive at first. But if you fall on hard times, you could lose the insurance. You do not need to make regular payments to “afford” a will. Once you and your witnesses sign it, it will remain in effect until you die or change the will.

Further, many younger people purchase term life insurance, which stays in effect only for a specified term (such as 10 years). After the term ends, you are no longer covered. Older people often buy policies that last longer but end up costing a lot of money in premiums. Again, a will stays in effect for as long as you want with no extra cost.

  1. Dispose of All Your Assets with a Will

Life insurance assures a payment from the insurance company to a beneficiary. It has no effect on distribution of your assets after you die. You may not think you have many assets to distribute. But if you have a house, own stock, have valuable jewelry, or own a car, you have assets. Further, you might want those assets to go to specific people after you are gone. A will can give you peace of mind that your wishes will be carried out.

Want to start planning your estate? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

CONDOMINIUM LIENS: WHAT EVERY CONDOMINIUM OWNER SHOULD KNOW

CONDOMINIUM LIENS: WHAT EVERY CONDOMINIUM OWNER SHOULD KNOW

If you are a member of a condominium association, or thinking about purchasing a condominium, it is important that you understand condominium assessments and liens.  Condominium associations typically have monthly assessments, which is a monthly payment that each member makes to the association.  Monthly assessments are used by the association to maintain common areas, which are areas in the association where all members share an ownership interest.  This could be a lobby, pool, or garden.

A condominium may also assess a special assessment.  This special assessment is usually a way for an association to pay for a large repair or improvement project, the cost of which the monthly assessments would not cover.

Associations provide themselves the power to collect monthly and special assessments when they are formed.  Condominium formation includes the drafting of a Declaration of Covenants, Conditions, and Restrictions (“Declaration”).  If you own a condominium, you should familiarize yourself with your association’s Declaration.  If you are planning to purchase a condominium unit, you will receive a copy of the association’s Declaration prior to the actual closing.

The Declaration will almost always allow the association to set monthly and special assessments that each member of the association must pay.  In addition, the Declaration will nearly certainly state that any individual that owns property included in the association is an association member, and responsible for payment of the monthly and special assessment.  Finally, the Declaration will provide processes that the association can use to collect unpaid monthly and special assessments from its members.

Although the Declaration provides for an association’s collection means, association collection of unpaid assessments is also supported by Illinois law.  The Illinois Condominium Property Act (765 ILCS 605/9(g)) states that any unpaid monthly or special assessments that are unpaid by a unit owner, shall be a lien on that unit owner’s property.  The amount of the lien includes interest, late charges, and attorney fees that the association spends in an effort to collect the unpaid assessments.

The association’s lien on your property is superior (prior in right) to any other liens recorded against your property, except 1) your first mortgage and 2) any unpaid local, state, or federal taxes.  If you have a second mortgage on the property, the association’s lien can obtain priority over that mortgage if it meets certain requirements within the Illinois Condominium Property Act.

If you have a condominium lien on your property, you will want to resolve it by paying the unpaid assessments.  Otherwise, you will not be able to sell your condominium, or the association may foreclose its lien and be entitled to even more interest, late charges, and attorney fees for which you will be responsible.

Planning on buying or selling a condominium?  Or concerned about a condominium lien on your property?  Local attorney Andrew Szocka provides thorough and speedy real estate and estate planning help in the Chicagoland area.  To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.

How to Deal With Quiet Title Actions

Oftentimes the meaning of a “Quiet Title Action” is unclear. The term is used frequently when there’s a defect or dispute in the ownership or title of a property. A conflict of ownership can occur when multiple parties have an interest or claim in the title.

Sometimes referred to as “clouds”, these claims must be discharged from the title in order for a property to be considered a “marketable title” (clear from outside defects and claims).

Clouds

When Would Filing a Quiet Title Action in Chicago Be Necessary?

If you consider yourself the owner of a piece of land, eliminating any claims someone else may have on your land is vital. Filing a Quiet Title Action will involve having a hearing before the Master of Equity to resolve ownership of the land.

After filing for a Quiet Title Action, anyone who has a claim on the property has to defend such claims by attending the hearing and presenting their arguments. The commonly mistaken phrase “quiet title” uses quiet as a verb and not an adjective describing the title.

You’re quelling additional claims someone else places on the asset itself.

What Will Quieting a Title Achieve?

The accused parties in a quiet title lawsuit can be either unknown or known. If the claimant is unknown, publishing an open notice of the case in the local press is enough to move ahead with the lawsuit. Known defendants are entities or individuals that have an interest, possession or claim of the property.

The action will ideally be uncontested and you can obtain a quitclaim deed, stating that the other party’s claim is abdicated. If this is the case, you can then record your claim in the real county reports to fix your ownership of the property into place.

With contested actions, however, a trial would then be held to settle which ownership claim is the strongest.

If you fall on either side of an ownership conflict in the Chicago metropolitan area, the Law Office of Andrew Szocka is on your side. We recognize how confusing title law can be and that striving to “go it alone” gets overwhelming. Call us today to schedule a consultation — we’ll do everything in our power to mitigate your stress and deliver the best possible results.


***This is not intended to be legal advice and you should consult with an attorney.

When Should You Update Your Estate Plan?

If you already have an estate plan, you may not realize that you need to update it regularly. But how often do you need to update the plan, and how will you know that it needs some changes? We recommend that you revisit your estate plan just before or just after any major life changes, or at least every few years.

Man and Women holding hands

Major Life Changes Often Require Estate Plan Updates

The most frequent reason you will need to update your estate plan is because of major life changes. Lawyers customize wills, trusts, and other estate planning documents to fit each client’s individual circumstances. When those circumstances change, the plan may no longer match the client’s wishes.

Major life changes that may trigger the need for an estate plan update could include:

  • Marriage
  • Divorce
  • Birth or adoption of a child
  • Death of a relative
  • Major financial problems
  • Receiving an inheritance
  • Moving
  • Buying a house or other property
  • Changing jobs

Everyone’s circumstances are different, and you may experience other changes that lead you to change your plan. For example, some people decide to edit their wills after major disagreements with relatives or losing touch with family.

Other Reasons to Update Your Estate Plan

In addition, you may need to update your plan (but not know it!) if the laws change in your state or nationwide. In particular, many changes to the federal tax laws went into effect at the beginning of 2018. The new estate tax provisions could affect your plan.

Another reason to change your plan could arise over time. As you increase retirement savings or begin thinking about your legacy to your relatives, you may want to set up more estate planning. You could start a family trust, decide to open a foundation, or want to sign a medical directive. Updating your estate plan every few years will keep your planning in line with your goals.

Want to update your estate plan today? Local attorney Andrew Szocka, Esq. provides thorough and speedy estate planning help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.