Author: Law Office of Andrew Szocka

QUIET TITLE: A USEFUL TOOL IN RESOLVING PROPERTY TITLE ISSUES

QUIET TITLE: A USEFUL TOOL IN RESOLVING PROPERTY TITLE ISSUES

The act of Quieting Title on property is intended to produce clear and marketable title.  If a property’s title is not clear and marketable it likely has a title defect, also known as a “cloud.”  Title defects are called clouds because the defect may obscure the property’s true owner or reflect that a party has an interest in property when it actually does not.

Clouds on title include deeds that break an otherwise clear chain of conveyances or an unreleased mortgage that secures a loan that was actually paid off.

Clouds on title are often discovered when property is being sold.  Sellers almost always have a contractual obligation to transfer clear title to the buyer.  As a result, the seller obtains a title insurance company to search the property’s title history.  If a cloud on title appears, it may need to be resolved with an action to Quiet Title.

The seller, often through an attorney, files a Complaint to Quiet Title in the Illinois Judicial Circuit where the property is located.  The Complaint explains the cloud on title and why it should be removed.  The court then determines whether or not the cloud is a legitimate claim on the property.  If the cloud is not legitimate, the court issues an order removing the cloud from the property’s title history.

For example, you attempt to refinance the current loan that you used to buy your property.  The new loan will be secured by a new mortgage.  But before your lender provides the new loan, it uses a title insurance company to check your property’s title.  Although unlikely, it is possible that the lender’s title insurance company finds an old mortgage recorded against your property that was given by a previous owner.

A Complaint to Quiet Title would allege that the loan secured by the old mortgage was actually paid off.  As a result, the holder of the old mortgage should have released it from your property’s record.  The old mortgage is still of record by mistake.

In this case, the court hearing your Quiet Title action is highly likely to order the old mortgage released from your property’s title history.

Having a good attorney can help further understand how to Quiet Title and whether it is necessary to resolve any clouds on your property’s title.

 

Getting a Real Estate Lawyer in Illinois

Real Estate is a Key

For most area families, real estate represents major purchases and investments. It is important to use the purchase or sale of real estate for residence or business purposes to improve financial security. Purchase arrangements are critical, and most sellers and buyers benefit from the assistance of an experienced real estate attorney. Unlike all other parties in the transaction, your attorney is on your side, and he or she is there to protect and promote your interests. Business or commercial real estate transactions can be complicated involving important details about business structures, taxes, regulations, liens, and obligations.

Getting a Real Estate Lawyer in Illinois

Estate Planning

Estate planning should begin early in one’s work career. The goals of accumulating wealth and creating a comfortable lifestyle include preparation for taking care of the family during work and into retirement.

  • Real Estate is an essential element of estate planning. It is often a major investment for an individual, family, or business. Our expertise in managing estate assets includes our experience in real estate law.
  • Trusts and asset protection is a vital concern for high net worth individuals and business owners. The proper use of trusts can protect businesses, insulate assets from creditors, and lay a foundation for a beneficial estate plan.

Business Law

We can work with business clients to form an effective team of expertise. Contracts, sales arrangements, and agreements of nearly every type need thorough examination. Errors and oversights can be costly to a business. Every business should have an examination of its methods to reduce potential liabilities and this includes privacy rules. The 2018 tax changes require to study for every business owner. There may be advantages in the type of business structure and organizational choices.

We Know the Area
We serve the Greater Chicago area. Many of our clients reside in locations within Mc Henry and Kane Counties. We work with individuals, families, and businesses in Crystal Lake and Algonquin along with the pleasant communities in Cary, Huntley, Barrington, and Fox River Grove.

We Know the Law
Real estate, business law, and estate planning are complex areas of the law. Clients should be assured that their legal representatives have the necessary types of experience and training to meet the challenges. We have many years of experiencing handling complex matters and look forward to sharing that expertise with each client.

Call Us…We Can Help

We will apply the entire range of our expertise in business, real estate, estate planning and other related areas to protect our clients and help them reach their goals. Don’t wait, call for an appointment to discuss the ways that our services can help you reach your business and personal goals. The Law Office of Andrew Szocka has real estate lawyers, estate planning, and business law attorneys serving the areas of Crystal Lake, Algonquin, Cary, Fox River Grove, Huntley, and Barrington, Illinois.

 


 

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

REFORMATION: WHEN COURTS WILL CHANGE A WRITTEN CONTRACT

REFORMATION: WHEN COURTS WILL CHANGE A WRITTEN CONTRACT.

 

Illinois Courts do not favor changing written contracts between parties – also known as reformation of a contract.  Kolkovich v. Tosolin, 19 Ill.App.3d 524, 527-28 (4th Dist. 1978) (stating that “courts should proceed with great caution in reforming written instruments”).  Nevertheless, reformation is within the jurisdiction and duty of a court of equity if the contract does not reflect the parties’ mutual intent.  Id.

A contract is presumed to express the parties’ intent and will not be reformed without clear and convincing evidence of mutual mistake.  U.S. Bank Trust, N.A. v. Colston, 2015 IL App (5th) at ¶ 26.  Reformation is generally based on mistakes of fact.  Patrick Media Group, Inc. v. City of Chicago, 255 Ill.App.3d 1, 5 (1st Dist. 1993).  However, in some circumstances reformation can be based on a mistake of law.  CitiMortgage, Inc. v. Parille, 2016 IL App (2d) 150286 at ¶ 31.

Despite Courts’ conventional reluctance to reform written instruments, one instance where reformation is more routinely granted is correcting minor mistakes in the legal description of property encumbered by a mortgage.  See Colston, 2015 IL App (5th); First Midwest Bank v. First Midwest Bank, 2016 IL App (1st) 151930-U (unpublished); CitiMortgage, Inc. v. Vinarov, 2018 IL App (1st) 170279-U (unpublished).

In Colston, the Court found clear and convincing evidence of mutual mistake in a mortgage’s legal description when the description did not include the house, detached garage, and all five acres of the property.  Colston, 2015 IL App (5th) at ¶ 26.  The Court used an appraisal prior to the mortgage and defendants’ bankruptcy schedules (that listed the house) to reform the legal description.  Id.

The First Midwest Bank Court used the legal description from previous deeds and a survey of the property as grounds to reform a legal description in a mortgage that included the terms “Northwest” and “Block L,” rather than the correct “Northeast” and “Block 1.”  First Midwest Bank, 2016 IL App (1st) 151930-U at ¶ 27.  Vinarov also used the legal description from previous conveyances to correct typographical errors in a mortgage legal description.  Vinarov, 2018 IL App (1st) 170279-U at ¶ 21.

In addition, most mortgages today also refer to the encumbered property’s common address and permanent index number (“PIN”).  Along with a tax map, the common address and PIN can be used to correlate the property to its correct legal description.

Other fact patterns make it more difficult to meet the clear and convincing standard that a mortgage should be reformed.  See Parille, 2016 IL App (2d) 150286.  In Parille, a husband and wife owned the property as tenants by the entirety.  Id. at ¶ 3.  The wife’s signature on the subject mortgage was not qualified with any additional language.  Id. at ¶ 7.  However, the husband executed the mortgage “for the sole purpose of waiving homestead rights.”  Id.

Plaintiff argued that the mortgage should be reformed to remove the qualification on the husband’s signature.  Id. at ¶ 29.  After a 735 ILCS 5/2-615 motion to dismiss the plaintiff’s reformation count, the Court outlined elements required to plead reformation:

(1) The existence and substance of an agreement between the parties and the identity of the parties to the agreement; (2) that the parties agreed to reduce their agreement to writing; (3) the substance of the written agreement; (4) that a variance exists between the parties’ original agreement and the writing; and (5) the basis for reformation (e.g. mutual mistake).”  Id.

Although the Parille Court overturned the lower Court’s dismissal of the plaintiff’s reformation count, it did note that its reversal was not a suggestion that the plaintiff could establish reformation of the mortgage by clear and convincing evidence.  Id. at ¶ 29.  Indeed, this would be a difficult standard for plaintiff to meet with the husband claiming no mutual mistake and that he intended to execute the mortgage only to waive homestead rights.

Illinois Courts appear more willing to reform a contract to correct small or typographical errors.  Reformation of a contract to change the capacity in which one of the parties executed the document seems a steeper hill to climb.  Especially if the other party denies any mutual mistake occurred.

For additional reading on reformation see:

 

Quist v. Streicher, 18 Ill.2d 376 (1960);

Shelor v. Witt, 69 Ill.App.3d 172 (3rd Dist. 1979); and

Goodwine State Bank v. Mullins, 253 Ill.App.3d 980 (4th Dist. 1993).

SURVEYS: A DETAILED LOOK AT A PIECE OF LAND

SURVEYS: A DETAILED LOOK AT A PIECE OF LAND

If you previously bought or sold property you likely saw a Survey.  A Survey is a detailed description of real estate that includes the land’s boundaries, building lines, improvements, and any easements or encroachments recorded on the property.

Every property in Illinois is identified by a common address and a legal description.  The common address is mostly associated with a mailing address.  Legal descriptions are more exact.  They identify the specific lot number, location, and property measurements.

Surveys in Illinois must be performed by Professional Licensed Surveyors.  Surveyors start with the legal description to identify the boundaries for the parcel of property.  The legal description will also allow the Surveyor to search the history of documents recorded with the county in which the property is located.  This search reveals any building lines, easements, or encroachments that are related to the property.

Next, the Surveyor is likely to visit the property and perform measurements.  He or she wants to obtain precise information on all the property’s buildings, where they are located, and if they violate any building lines or easements recorded on the property that were revealed by the county search.

A building line prohibits structures from being constructed within a certain distance from the street or neighbor’s property.  Building lines are usually mandated by the municipality where the property is located and prevent a newly erected structure from damaging the market value of nearby properties.

Easements give another party certain rights to the searched property.  A common example of an easement is for utility or cable companies.  Modern technology allows electrical, cable, and other wires to be placed underground.  These wires may run underneath portions of property.  Utility and cable companies need to be able to fix, repair, or update their equipment.  As a result, they may be granted an easement to perform this work.

Encroachments can be violations of a building line or easement.  There may be a bay window added to the house or a shed that was constructed over a building line.  Alternatively, someone may have built a fence that runs along an easement designated for a public utility company.  It is also possible for an encroachment to come from the surveyed property onto that of a neighbor.

All these potential issues will be raised on a Survey when the specific property is bought or sold.  Insurance related to marketability of the property is unlikely to cover encroachments over a building line or easement.  As a result, you may be responsible for removing the encroachment if it causes an issue with the municipality that imposed the building line or holder of the violated easement.

It is generally a good idea to obtain a Survey when buying property.  First, most property sales have the seller pay for the Survey (approximately $500).  Second, the Survey will alert you to any encroachments over building lines or easements that you might be responsible to remove.

Sometimes Surveys come back “clear.”  In other words, there are no encroachments over a property’s building lines or easements.  But the only way to be sure is to demand the property’s seller provide a Survey for your attorney to review.  Surveys allow negotiations over how to resolve any encroachments, and you will be familiar with the rules of home additions or structures that may or may not be built upon the property.

Having a good attorney can help understanding the details of a Survey.  It can clear up confusion you may have as a property owner so you do not have to face a lawsuit down the road.

INJUNCTIONS: ANOTHER TOOL A COURT CAN USE TO SOLVE A PROBLEM.

INJUNCTIONS: ANOTHER TOOL A COURT CAN USE TO SOLVE A PROBLEM.

In its most basic terms, an Injunction is an order from a Court that forces an individual to either do something, or stop doing something.  A Court may issue an Injunction after a plaintiff files a lawsuit that requests one of three types: 1) a Temporary Restraining Order, 2) a Preliminary Injunction, or 3) a Permanent Injunction.

Temporary Restraining Orders and Preliminary Injunctions share much in common.  Both are granted only for a specific length of time.  In addition, five factors are considered by the Court in its decision to grant a Temporary Restraining Order or a Preliminary Injunction.

To obtain a Temporary Restraining Order or Preliminary Injunction, the plaintiff must have a right in need of protection.  Second, the plaintiff must be likely to eventually succeed in obtaining a Permanent Injunction.  Third, the plaintiff must face harm without the Injunction (this could be to plaintiff’s person, property, or other type of harm).  Fourth, the plaintiff must not have another way to obtain relief from the other party’s actions.  Finally, the Court must balance the hardship on the plaintiff if the Injunction were not granted, against the hardship placed on the other party is an Injunction is ordered.

Permanent Injunctions are similar to Temporary Restraining Orders and Preliminary Injunction, but a Permanent Injunction lasts for an indefinite period of time.

Before the Court will grant a Permanent Injunction, a plaintiff must demonstrate at trial that 1) plaintiff has a right in need of protection, 2) plaintiff will be harmed without the Injunction, and 3) an Injunction is plaintiff’s only way to obtain relief from the other party’s actions.

For example, assume that your neighbor constructs a large television satellite on his roof.  The neighbor will not remove the satellite and part of the satellite hangs off the neighbor’s house over your property.

A Temporary Restraining Order will not help at this point – the satellite was already built.  A Preliminary Injunction is similarly problematic because you want the satellite removed permanently.

As a result, you seek a Permanent Injunction.  You have a right in need of protection, namely the right to not have your property encroached upon by your neighbor’s satellite.  You suffered harm due to the satellite because of its encroachment and possible loss to your property’s value.  Finally, a Permanent Injunction is the only way you can obtain relief from the Court.  There are likely no money damages you incurred yet, and the effect on your property’s value is difficult to measure.

You may be entitled to a Permanent Injunction where the Court orders your neighbor to remove the satellite and not have it re-constructed.

Having a good attorney can help understanding how Injunctions may affect you or your property in a situation where money damages may not be available.