Category: Real Estate Contract Disputes

Understanding Attorney Review and Its Place in Your Real Estate Transaction

Understanding Attorney Review and Its Place in Your Real Estate Transaction

Many who purchase real estate often ask why they would need to involve an attorney. They say things like “well were not going to court over this” or “I’m not suing anyone” or most commonly “Is the attorney really something I need to spend money on, I already have a realtor”.

The answer to those questions, is yes, an attorney is vital to your real estate purchase and to bring immense value to the transaction. The lions share of that value comes in the form of Attorney Review. Attorney Review is a period of 5 business days following the date you and the other party sign your real estate purchase or sale contract. This period is one where attorneys from both the seller and buyer side review the contract between the parties and identify any issues. A realtor cannot perform this service for you, it must be an attorney.

Common issues that can occur during attorney review are when a defect in title is discovered, an encumbrance is brought to light, or the financing for the property has fallen through. The benefit of attorney review is that it allows for the attorney for either transacting party to cancel the contract. While listing price and closing date are not usually valid reasons for cancelling the contract, there is a very broad range of reasons that an attorney may state as justification to cancel the contract on behalf of their clients. Examples include clients being unable to obtain proper financing, the property having an easement on it, or if there is another area of the contract such as removal of certain property or a requested repair that the parties cannot come to agreement on,

It is very important to get your real estate contract over to your attorney as soon as absolutely possible. While there is always the ability to request extensions to the 5-day period, they have to be agreed to. Requesting an extension is often very easy for a seller’s attorney to do, especially if they have a motivated buyer, however it can be a different case for a buyer’s attorney. When a buyer does not meet the attorney review deadline they are forfeiting almost all of their bargaining power on the purchase of their new home and can often be locked into the purchase of the home even if issues are discovered in the contract. While we expect most attorneys and sellers of real estate to act in good faith and be reasonable in their negotiation tactics, that isn’t always the case, which is why having an attorney that is familiar with contract provisions and local laws is invaluable.

Giving yourself that extra added security is something that people may wonder if it is truly necessary. However, a real estate purchase is often one of the biggest purchases a person will make in their life. When you are about to sign a contract to spend often over $100,000.00 on a property, you want to be sure that what you are signing is legitimate, fair, and that you are in agreement with it. Attorney Review is your tool to ensuring that you are receiving a fair deal on your very important purchase and Attorney Review is your method of exit if you discover that you are not receiving a fair deal. It is ALWAYS worth the price.

The Law Office of Andrew Szocka P.C. is experienced with all manner of Real Estate Contracts and would be happy to assist you during your Attorney Review period. If you have a real estate contract you would like reviewed by our office, or assistance with any part of your transaction please contact us by email at szocka@sockza.com or by calling 815-455-8430.

RECENT DEVELOPMENTS IN ILLINOIS LAW: WHAT TO KNOW IF YOU ARE SELLING A CONDOMINIUM

RECENT DEVELOPMENTS IN ILLINOIS LAW: WHAT TO KNOW IF YOU ARE SELLING A CONDOMINIUM

Condominium properties in Illinois are generally governed by the Illinois Condominium Property Act, 765 ILCS 605/1 et seq (the “Condo Act”).  The Condo Act sets standards for what is allowed by both condominium owners, and the associations of which the owners are members.  A relative recent case in Illinois provides an important interpretation of the Condo Act.  It is known as Harry Channon v. Westward Management, Inc. and is cited as 2022 IL 128040.  The Court’s opinion was filed on November 28, 2022 by the Supreme Court of the state of Illinois.

Channon revolves around rules as to the owner of a condominium when he or she sells the unit.  Condominium sellers are almost always required to provide certain condominium documents related to the association to the buyer.  The documents often include the condominium declaration and bylaws.  Naturally, the condominium association charges fees to provide the seller with these documents.  It is usually the condominium seller that bears these fees at the real estate closing.

In Channon, the Supreme Court decided whether the Condo Act provides an implied cause of action in favor of a condominium unit seller against the association, the association’s property management company, or even the association’s board of directors, based on allegations that the latter parties charged excessive fees for the production of the required documents.  The Court stated that it would construe the Condo Act in order to ascertain and effectuate the legislative intent by applying the plain language contained within the Act.

The Illinois Supreme Court found that the Condo Act does not create an implied private right of action by a condominium unit seller against an agent of the condominium association, or the association’s board of managers, for charging allegedly excessive fees.

In making its decision, the Supreme Court applied its test from Metzger v. DaRosa, 209 Ill.2d 30, 36 (2004).  This is a four factor test that determines whether 1) plaintiffs are members of the class that the statute was intended to benefit, 2) the statute was designed to prevent the plaintiffs from suffering the incurred injury, 3) the statute’s purpose is consistent with the creation of a private right of action, and, 4) it is necessary to imply a private right of action to provide an adequate remedy for the statutory violation.

The Illinois Supreme Court’s decision hinged on who the Condo Act was attempting to protect when it defined the documents that condominium sellers had a duty to disclose.  The Court decided that the requirements are not a protection for the condominium seller, but for the condominium buyer.  As a result, the first element of Metzger test was not met.

The Court also noted that a certain standard must be met to imply a private right of action in a statute, including the Condo Act.  The Court would take this step only when it is clearly needed to advance the statute’s purpose and when the statute would be practically ineffective unless a private right of action was implied.  In Channon, this “high” bar was not overcome.

As a result, if you are the seller of a condominium, you may be unhappy with the fees that the association charges for you to provide required documents to the buyer.  Unfortunately, under current Illinois law, you probably do not have a legal remedy.

Nevertheless, if you need information or assistance in selling a condominium unit, local attorney Andrew Szocka provides thorough and speedy real estate assistance in the Chicagoland area.  To schedule a free initial consultation, visit Andrew Szocka, P.C. online or call the office at (815) 455-8430.

 

SLANDER OF TITLE: POTENTIAL CONSEQUENCES OF RECORDING A FALSE DOCUMENT.

SLANDER OF TITLE: POTENTIAL CONSEQUENCES OF RECORDING A FALSE DOCUMENT.

Illinois recognizes a cause of action if a document is falsely recorded against your real estate property’s title.  This cause of action is referred to as “slander of title.”  Depending on the intent of the individual or entity that slandered your property’s title, it can result in a significant award of monetary damages in your favor.

In order to win a slander of title lawsuit, you must first correctly plead the required elements.  Generally, slander of title involves the recording of a document in the county where your property is located that subsequently damages the property’s title.  However, the recording of a document is not necessary required.  Written or even oral words can rise to the level of slander of title.  Jody D. v. Bank of America, N.A., 2018 IL App (3d) 170558-U.

Elements for slander of title are 1) oral or written words that falsely disparage the property’s title; 2) damages suffered by the individual that owns the property, and 3) a degree of malice.  Jody D., 2018 IL App (3d) 170558-U; Nelson v. Bayview Loan Servicing, LLC, 2014 IL App (5th) 120419-U.

Any document that is inappropriately recorded, or any words or writings that disparage the property’s title and damage the property owner could form the basis for a slander of title claim.  The issues that arise in Illinois case law related to slander of title tend to focus more on damages suffered by the property owner and the degree of malice that motivated the other party.

First, damages must actually exist.  In Nelson, plaintiff brought an action against a loan company for failure to release a mortgage after the underlying loan was paid off.  Id. at ¶ 77.  The plaintiff failed to show how he was monetarily damaged by the unreleased mortgage.  Id.  As a result, judgment was granted in favor of the loan company.

An example of damages may have been that the plaintiff was not given a loan, or was not given a loan at a lower interest rate, due to the presence of the unreleased mortgage.

The failure to show any malice on the part of the individual or entity that purportedly slandered your title can also ruin a cause of action.  In Roy Zenere Trucking & Excavating, Inc. v. Build Tech, Inc., 2016 IL App (3d) 140946, a group of contractors recorded mechanics’ liens against a property owner’s title.  Id. at ¶ 49.  But the property owner failed to establish any fraudulent intent on the part of the contractors.  The court stated that “To prove malice, a plaintiff must show that the defendant knew that the disparaging statements were made with reckless disregard of their truth or falsity.  The law in Illinois is that if a party has reasonable grounds to believe that he had legal or equitable title or even a claim, then assertion of this claim does not amount to slander of title.”  Id.  As a result, judgment was entered in favor of the contractors.  Id.

Yet when malice exists, it can result in a monetary award to the property owner, including punitive damages.  See Chicago Title and Trust Co. v. Levine, 333 Ill.App.3d 420, 422 (3rd Dist. 2002).  In Levine, an individual recorded a lien against property despite an existing court order not to further encumber the property.  Id. at 424.  The property owner also showed that the lienholder knew of the existing court order.  Id.  The court awarded the property owner $3,929.60 in attorneys’ fees and $30,000.00 in punitive damages.  Id. at 422.

It is clear from the Illinois case law that a slander of title cause of action is difficult to bring and maintain.  However, in the presence of actual damages and malice, a property owner can prevail.

For additional reading on slander of title see:

 

Gambino v. Boulevard Mortg. Corp., 398 Ill.App.3d 21 (1st Dist. 2009);

Contract Development Corp. v. Beck, 255 Ill.App.3d 660 (2nd Dist. 1994);

Home Investments Fund v. Robertson, 10 Ill.App.3d 840 (2nd Dist. 1973).

 

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

 

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.

 

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