Category: Residential Transactions

Landlord Leases: How to Protect Your Property and Finances

Landlord Leases: How to Protect Your Property and Finances

Being a landlord includes many challenges. While facing those challenges, it is critical to protect your property and your finances. Bad tenants can result in damages to your property which will incur costs, sometimes in the thousands. However, you can protect your property and finances from bad tenants by writing a good lease.

The Basics

First, remember to have your basics in the lease.

  1. Who is the Lessee?
  2. What time period is the lease for?
  3. How much are you to be paid?
  4. When will you be paid?
  5. Who is responsible for the utilities?

Those are only a few of the basic questions you must ask yourself when preparing a lease. After the basics are laid out, it is time to go into detail.

Always Be Specific.

Beyond the basics, it is important to be specific in the lease just like any other contract. For example, if you do not want pets on your property at all, then make sure that is explicitly stated in the lease. In order to deter tenants from doing what you do not want them to do, make sure the consequences are clearly outlined. For example, if you say that no pets are allowed on your property, then stipulate that there will be a fine for breaking this rule if that is the consequence you choose.

Attorney’s Costs and Fees

The biggest deterrent, and a clause that should always be present in a lease, is that the tenant will be responsible for attorneys’ costs and fees if you must use the legal route to recover money or compensation for damages done by the tenant. Without this clause, you could end up paying for the legal fees out of pocket. The tenant will not be obligated to pay this unless it was stated in the lease. This clause in the lease protects you financially and should always be included in the lease.

Like any other contract, it is in your best interest to have the lease in writing and signed by all parties living on the property.  While many landlords choose to write their own leases, it is never a bad option to have a lawyer write up a lease for your protection.

If you are interested in having an attorney draft a release for your rental property or properties, local attorney Andrew Szocka provides thorough lease writing 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.

MyDec – Real Property Transfer Tax Declaration

MyDec – Real Property Transfer Tax Declaration:

During any real estate transaction, a tax is imposed to transfer the title of real estate (35 ILCS 200/31-10). In order to facilitate this transaction, a real property transfer tax declaration must be completed by the sellers. The transfer declaration must be presented when the deed or trust document is presented for recording, or within 3 business days after the transfer takes place.

The Illinois Department of Revenue recommends the use of the online filing program called MyDec (MyDec – Online Real Property Transfer Tax Declarations – Property tax (illinois.gov)) to calculate these taxes and to make the declaration.

Through MyDec, the transfer taxes for both the state and the county are automatically generated based on the purchase price of the property. You can review and verify declarations as well as authorize and print real estate transfer tax stamps. You will also be able to run reports on the declarations in your jurisdiction. However, each county has their own requirements for transfer taxes, so always confirm with the county what must be done prior to the closing. Regardless of individual county requirements, MyDec can be used for any county in Illinois.

Title companies, lawyers, individuals and settlement agencies are able to use MyDec too. Title companies use this to calculate the taxes when closing on a property. Title companies can submit, approve, or reject declarations. However, the MyDec tax calculations are paid at the closing. Once the sale is complete, the title company approves the MyDec filing. Attorneys can file the MyDec on behalf of their clients, the sellers.

Information included in the transfer declaration includes:

(a) value of the property

(b) parcel number (PIN),

(c) legal description of the property,

(d) the date of the deed, the date the transfer was affected, or the date of the trust document

(e) the type of deed, transfer, or trust document

(f) the address of the property

(g) the type of improvement if applicable

(h) information as to whom the transfer is between

(i) the lot size or acreage

(j) the value of the personal property sold with the real estate

(k) the year the contract was initiated if any installment sale

(l) any homestead exemptions

(m) the name, address, and telephone number of the person preparing the declaration

(n) whether the transfer is pursuant to compulsory sale

 

If you need assistance with a real estate transaction, local attorney Andrew Szocka provides thorough and speedy real estate transaction assistance 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.

SLANDER OF TITLE: YOUR PROPERTY’S TITLE HISTORY CAN BE PROTECTED.

SLANDER OF TITLE: YOUR PROPERTY’S TITLE HISTORY CAN BE PROTECTED.

If you are an individual who owns real estate in Illinois, you should be aware of your property’s title history.  The title history is a list of all documents recorded against the property in the county where the property sits.

Recorded documents are submitted to the county’s Recorder’s Office and are assigned a document number.  Documents recorded against your property are usually available to view on your county Recorder’s website.

A typical title history for a residential property likely includes only deeds and mortgages.  For example, when one party sells a house, they convey it to another party with a deed.  The party buying the house may get a mortgage that secures the loan used to buy the house.  In this case, the mortgage is recorded against the property in favor of the lender that loaned the other party the money to purchase the home.  When the property is sold again, the previous mortgage is usually paid off and released.  In this way, a title history may only reflect a series of deeds, mortgages, and released mortgages.

But not all title histories are clear.  It is possible for someone to record a document against your property with bad intent.  Illinois courts may consider this a “slander” of your property’s title and award monetary damages.

Slander of title generally occurs when someone maliciously records a false document against your property’s title.  If you are damaged by this recording, you pay to have it removed, or it affects your ability to sell the property, you may be entitled to damages.

An Illinois court may even award damages that are punitive, or meant as a punishment, against the person who slandered title.  This depends on the level of maliciousness of the individual who slandered title and the damage actually done to your property’s title.

For example, many people have disputes with creditors.  If you pay what is owed and the creditor still records a lien against your property, the creditor may be slandering your title.  More common is a dispute with an acquittance or relative when they record a deed that affects your property and purports to convey it to somebody else.

As a result, it is prudent to periodically check your title history.  If you believe someone recorded an inappropriate document against your property, local attorney Andrew Szocka provides thorough and speedy real estate help in the Chicagoland area.  To schedule a free initial consultation, visit Andrew Szocka, P.C. online or call the office at (815) 455-8430.

 

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.