Author: Law Office of Andrew Szocka

PROPERTY OWNERSHIP: THE OPTIONS AND ASSOCIATED ADVANTAGES.

PROPERTY OWNERSHIP: THE OPTIONS AND ASSOCIATED ADVANTAGES.

If you are an individual who owns real estate in Illinois, you may have questions about how your ownership is classified under Illinois law.  Illinois has many categories of land ownership, and each may have advantages or disadvantages depending on your situation.

The most common types of real estate ownership are 1) Individually, 2) Tenants in Common, 3) Joint Tenants, 4) Tenants by the Entirety, and 5) in a Trust.

An individual with property is probably the simplest form or ownership.  However, this form of ownership does come with potential complications.  If you own property individually, you may have been conveyed the property in “Fee Simple,” or as a “Life Estate.”

Fee simple ownership provides absolute control.  Your rights to the land are indefinite and can be conveyed at any time and by any means.  If you were granted only a Life Estate in property, your ownership rights are more limited.  Upon your death, the property will revert back to another individual or entity, often called the “remainderman.”  As a result, almost all property transactions made by the owner of a Life Estate interest must be approved by the remainderman.

Just as common as individual ownership is ownership by two or more people who own together as a group.  This is when the distinction between Tenants in Common, Joint Tenants, and Tenants by the Entirety is important.

Tenants in Common own portions of property.  If there are two Tenants in Common, each generally owns one half of that property.  Three Tenants in Common typically own portions of the property in thirds.  It should be noted that Tenants in Common can decide to own the land in any percentage they deem appropriate, e.g. 80%/20%, etc.

Upon the death of one Tenant in Common, his or her interest goes to the decedent’s estate.  For example, if A, B, and C own land as Tenants in Common with equal interests, and C dies, the property is now owned a third by A, a third by B, and a third by C’s estate.

Joint Tenants own land in a significantly different manner than Tenants in Common.  The most important distinction is called the “Right of Survivorship.”  If two Joint Tenants own property, and one dies, the whole land automatically transfers by operation of law (no written deed required) to the other Joint Tenant.

Tenants by the Entirety are similar to Joint Tenants.  As with Joint Tenants, Tenants by the Entirety enjoy the Right of Survivorship.  When one Tenant by the Entirety dies, the land automatically goes to the other Tenant.

But there are unique characteristics of Tenants by the Entirety.  First, it is only available to married couples.  Second, spouses are protected from certain creditors if they own property as Tenants by the Entirety.  If one spouse owes a debt to a creditor that is solely in his or her name, the creditor cannot attach a judgment for that debt to the other spouse’s interest in the property.  As a result of these benefits, many married couples prefer to own property as Tenants by the Entirety.

Finally, real estate can be owned in a Trust.  You can convey real estate into a Trust during your lifetime, or your Last Will and Testament can convey the property into the Trust at your death.

The advantage of putting real estate in a Trust can be significant.  Illinois law requires all estates that own land to go through a process called “Probate.”  This is procedure when a court appoints someone to distribute the property owned by your estate.  Probate can be a relatively long and expensive process.  Estates without real estate may be exempt from Probate, saving time and money.

If you are interested in learning more about options regarding ownership of your real estate, or whether keeping property in a Trust is appropriate, 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.

 

DEEDS: DIFFERENT WAYS TO TRANSFER OR ACQUIRE REAL ESTATE.

DEEDS: DIFFERENT WAYS TO TRANSFER OR ACQUIRE REAL ESTATE.

If you are buying or selling a home, the Deed is one of the most important documents.  The Deed is the only document that actually transfers title to the property from you (as a seller), or to you (as a buyer).  Four of the more common types of Deeds that you may see are a 1) Quit Claim Deed, 2) Warranty Deed, 3) Special Warranty Deed, and 4) Deed in Trust/Trustee’s Deed.

A Quit Claim Deed merely removes an individual from a property’s title.  In other words, the individual that executes a Quit Claim Deed is simply disclaiming any interest in the property.  The individual obtaining the property via the Quit Claim Deed receives no assurances or warranties as to ownership, or whether the property is free of the interests of any third parties.

Quit Claim Deeds are not generally used in real estate transactions.  The contract between the buyer and seller often requires that the seller provide the buyer with “clear and marketable title.”  A Quit Claim Deed does not deliver clear and marketable title because it makes no warranties as to property ownership or any encumbrances on the property.

The Warranty Deed is a more common method of conveyance in a real estate transaction.  Under Illinois law, any deed that simply states that “seller warrants to buyer,” is guaranteeing the buyer that 1) the seller is the lawful owner of the property, 2) the property is free from encumbrances, 3) the buyer is entitled to possession of the property, and 4) the seller will defend the buyer in court against certain claims to the property.  If you are purchasing property, ensure that you are receiving a Warranty Deed.

Special Warranty Deeds are less common, but you may encounter one if you buy property from a bank that recently foreclosed on certain property.  The Special Warranty Deed only provides guarantees during the time that the bank owned the property.  It does not provide any warranties related to the time period when the previous owner, who lost his or her interest due to foreclosure, owned the property.

Finally, both buyers and sellers of property may see conveyances that are labeled as a Deed in Trust or a Trustee’s Deed.  A Deed in Trust is simply one that conveys the property into a certain trust.  A Trustee’s Deed is a conveyance from the trustee of a certain trust, to another individual or entity.  Both a Deed in Trust and a Trustee’s Deed can be either a Quit Claim Deed, or a Warranty Deed.  You can tell the form of the conveyance by whether the Deed in Trust or Trustee’s Deed states that “seller quitclaims to buyer” or that “seller warrants to buyer.”  Based on that language, the Deed in Trust or Trustee’s Deed will contain the same basic characteristics of a Quit Claim Deed or a Warranty Deed.

EJECTMENT: THE STATUTE AND CASE LAW BEHIND THE CAUSE OF ACTION

EJECTMENT: THE STATUTE AND CASE LAW BEHIND THE CAUSE OF ACTION

An ejectment action can be a useful tool to help a client recover real estate when another party is wrongfully in possession.  Ejectment is based in statutory law.  See 735 ILCS 5/6-101, et seq.

A complaint for ejectment must contain certain allegations.  735 ILCS 5/6-109.  Plaintiff must plead that 1) he had possession of the premises after obtaining legal title, 2) defendant subsequently took possession of the premises, 3) at present, defendant continues to unlawfully hold possession from the plaintiff, and any damages suffered by plaintiff as a result of the ejectment, which could even be a nominal sum.  Id.

The complaint must also describe the property with sufficient certainty.  735 ILCS 5/6-110.  This may be as simple as the property’s common address.  However, it is probably safer to include the property’s legal description and parcel identification number.  At least one older Illinois case held that a legal description was sufficient to identify the property.  See Parr v. Horn, 38 Ill. 226 (1865).

Other Illinois case law on ejectment has stated that a “a plaintiff in ejectment must recover on the strength of his own title rather than the weakness of his adversary’s title.”  Bulatovic v. Dobritchanin, 252 Ill.App.3d 122, 128-29 (1st Dist. 1993).  In other words, plaintiff’s interest must be “higher and better” than that of defendant.  Whitham v. Ellsworth, 259 Ill. 243, 246 (1913).

The best way for plaintiff to prove an interest in the property may be with a recorded conveyance.  Bulatovic, 252 Ill.App.3d at 128.  Bulatovic states that the plaintiff “must show proof of title under a deed sufficient to entitle him to possession.”  Id.  However, the ejectment statute provides for an action brought by an heir or legatee.  735 ILCS 5/6-102.  So, it is at least necessary for the plaintiff to show a link between himself and the holder of the property’s legal title.  Department of Conservation ex rel. People v. Fairless, 273 Ill.App.3d 705, 711 (5th Dist. 1995).

As far as proof of defendant’s possession, it is not necessary for the plaintiff to prove this element for ejectment unless the defendant files a verified answer that specifically denies possession.  735 ICLS 5/6-118.

Note that ejectment can apply to defendant’s unauthorized possession of an entire parcel of property, or only a portion of the parcel.  See Tatham v. Fields, 2013 IL App (5th) 130179-U.

In Tatham, plaintiff permitted defendant to put a temporary boat lift on plaintiff’s property, but specifically prohibited defendant from installing the lift as a permanent structure.  Id. at ¶ 10.  Despite this instruction, defendant upgraded the boat lift to become permanent.  Id. at ¶ 11.  Plaintiff demanded that defendant remove the structure from his property.  Id. at ¶ 13.  Defendant refused and plaintiff filed an ejectment action to remove defendant’s possession from that portion of plaintiff’s property.  Id. at 4.  The court granted plaintiff’s ejectment request.  Id. at ¶ 33.

Although grounded in statutory law, there are a number of Illinois cases related to ejectment that further interpret the ejectment statute and provide guidance for an attorney looking to successfully plead and prove an ejectment action.

For additional reading on ejectment actions see:

Cree Development Corp. v. Mid-America Advertising Co., 294 Ill.App.3d 324 (5th Dist. 1997);

Parks v. Parks, 2019 IL App (3d) 170845;

Dagit v. Childerson, 391 Ill. 611 (1945).

 

Law Office of Andrew Szocka, P.C. can be contacted online or by phone at (815) 455-8430.

 

EJECTMENT LAWSUITS: OR, “GET OFF MY PROPERTY.”

EJECTMENT LAWSUITS: OR, “GET OFF MY PROPERTY.”

In Illinois, it is not unusual for two or more parties to fight over who is the rightful owner of real estate, and as the owner has the right to possession of that real estate.  When this happens, one party may file a lawsuit for “ejectment.”

An ejectment action asks a court to determine the property’s rightful owner.  If the party possessing the land is determined to not be the rightful owner, the court will “eject” that party from the property so that the rightful owner can take possession.

The party bringing the ejectment litigation is called the “Plaintiff.”  The Plaintiff must demonstrate to the court that he obtained title to the property and subsequently took possession of that property.  Then, that the other party, called the “Defendant” took possession of the land.  Finally, the Defendant continues to unfairly possess the property by occupying it.

The best way for a Plaintiff to show a court that he obtained lawful title to property is to produce a deed that conveys the property to the Plaintiff.  However, there may be other ways for the Plaintiff to establish that his right to possession of the property is “better” than that of the Defendant.  It is a good idea to consult an attorney if you believe you have right to possession of land that another party is occupying.

Keep in mind that the other party’s improper possession may not be total possession of your property, but only a portion of that property.  For example, if your neighbor were to build something on your property without your permission, an action for ejectment may be appropriate.  Your neighbor is possessing your whole property, but he is unlawfully possessing a portion of it.

Having a good attorney can help further understand if an ejectment lawsuit may be appropriate in a certain situation.

Local attorney Andrew Szocka is experienced in many real estate matters, including ejectment actions.  In addition, Andrew provides thorough and speedy estate planning, probate, 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.

 

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.