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Recent Blog Posts
What Protections Does Title Insurance Give Commercial Real Estate Investors?
Title insurance is part of virtually every commercial and residential real estate transaction. Usually, it is the lender that insists on the formalities of title insurance. However, title insurance can give commercial real estate investors a great of protection, even if nothing ever goes wrong.
What Title Insurance Does
Before a title insurance policy is issued, the title company does a thorough examination of the title history of a property. This will include not just any sales, but also any liens on the property. Title insurance protects policyholders from any defects that are not discovered during the title search. If a defect later arises, title insurance covers the cost of defending claims from rival titleholders and pays out damages should those rivals prevail in court.
The issuance of title insurance is a key part of the due diligence process. Commercial real estate investors are able to make sure the property is as the seller claims. Any problems with zoning, title, or liens are usually discovered during the title search. If any issues arise, investors can either pull out of a deal without risking further resources or work with the seller to find satisfactory solutions.
What Happens When a Commercial Tenant Files for Bankruptcy?
One of the biggest headaches of any commercial landlord is finding high quality, reliable tenants. When one of your tenants files for bankruptcy, it can be frustrating and alarming. It is essential that you understand your rights and take action to minimize any losses.
Notice of Bankruptcy
The first the landlord usually hears about a tenant's bankruptcy is when he or she receives a form letter from a bankruptcy court. This piece of paper contains important information about the case. It will have the case number, the dates for any scheduled hearings, and instructions about something called the automatic stay.
When a person or business files for bankruptcy all collections activity against them is frozen. This is called the automatic stay. Even an attempt to collect past due rent is against the automatic stay.
Residential Evictions or Forcible Detainer Suits
By agreeing to rent property from a landlord, a tenant enters into a lease arrangement with that person. From a security perspective, it is preferable to establish such a agreement in writing, and a large number of landlord-tenant agreements are completed as such. However, the state of Illinois also recognizes verbal leases, which are much more informal, and are normally considered month-to-month arrangements for a unspecified period of time. Violations of written or verbal lease agreements can force a landlord to pursue eviction action against a tenant, and properly doing so often involves several steps.
Notice Requirements
Before moving forward with eviction, a landlord in Illinois is required to notify the affected tenant in writing. The amount of notice given is dependent on the situation and the violated terms of the lease propagating the eviction:
Commercial Real Estate: Triple Net Leases
Finding the right location for a business is vital to its growth and success. Finding the right leasing arrangement can be equally important. Whether the business is brand new or simply relocating, a business owner must negotiate a commercial real estate lease that appropriately balances the physical needs of the company with the costs required to lease the property. Among the most common types of commercial leases is one known as a "triple net lease" which can potentially offer benefits to both the landlord and the tenant.
Triple Net Lease Defined
A triple net lease, or triple N lease, is an arrangement in which the tenant, in addition to rent, is also responsible for covering the cost of three extra expenses, thus the name triple net. Property taxes, insurance, and building maintenance are paid by the tenant, thus allowing the landlord to often require a lower monthly rent. While property taxes and insurance rates are not typically within the tenant's control, the tenant may be able to control other expenses related to utilities and other consumption charges.
Perfecting Your Mechanic's Lien in Illinois
A mechanic's lien, also called a materialman's lien, is intended to prioritize the rights of contractors and suppliers to be paid for the construction or improvement of property. A claim filed on a mechanic's lien generally takes precedence over mortgages, leases, and other financial obligations of the property owner or lessor. A mechanic's lien can be a valuable tool for contractors and subcontractors, but only if the proper procedures have been followed.
Perfecting a Mechanic's Lien
A contractor or other party looking to enforce a mechanic's lien will often be limited in their ability to do so unless the lien has been perfected. To begin this process, subcontractors and material suppliers must follow a few steps under Illinois law, since such individuals and companies often do not have a direct contract with the owner of the property. The specifics of the notice required for perfecting the lien depend on the type of project, with different mandates for single-family residences and all other properties.
Buying Residental Real Estate For Retirement Days
As times and people progress, old traditions are updated. Retirement is one of the things that is going through constant evolution. Nowadays, not everyone wants to stay in their age-old home of 30 years for their retirement. That is why we are going to discuss the purchase of residential real estate for your retirement for a little bit. Information on retiring with real estate can be found, for example, in this article in Forbes.
Firstly, not being able to maintain a big, old house by yourself is not a reason to rush into a retirement home. You can switch to a more convenient location where you don’t need go on a lawnmower frenzy for two hours every two weeks. A condominium might be a better choice than a huge house.
Of course, buying real estate for retirement is not only about buying a home for yourself. Investing in real estate is a good way to keep a steady income while retired. Just bear in mind that purchases of this caliber will also involve some legal aspects. Whenever there are larger amounts of money exchanging hands, there is a need for contracts. Real estate is bought and sold constantly, so it has its own set of rules and laws. Fortunately, there are attorneys who focus mainly on real estate law, so you don’t have to go through all the legal issues alone and no guesswork is necessary.
Home Prices on the Rise
According to Bloomberg, home prices in some of the best areas of Chicago are on the rise again. These prices are better than a lot of the homes in southern Chicago and reflect the changing scene in some of the area.
Homes in areas such as the West Loop and Lincoln areas are coming along nicely with the price increases. These areas offer homes with many high end appliances as well as other fixtures in the homes. This also helps with the price rebounds and making the best amounts with these homes.
The prices in the homes that are in the higher end areas are also climbing because there are more people looking at buying homes that work for them. They may be looking for homes that have these great appliances as well as some of the items that make a home really nice in general. They may also have a home to sell and are now able to sell it so they can purchase a new home that is nicer like this.
Homes on the south side of the city are not seeing the price jumps that are being enjoyed in the rest of the city because of the common problems that go with the area. These homes are lower priced, but the homes are also priced lower because of the area they are in and the crime rates that are associated with the neighborhood.
Appealing Your Property Tax Assessment
As a property owner, whether residential or commercial, you may be shocked when you open your latest property tax bill and see yet another hike in the tax assessment of your property and, as a result, a higher bill to pay. In response, it is common to wonder how your property tax bill has been calculated, and why your property has been assessed for such a high value. Plus, if your property is assessed incorrectly, what can the average Illinois resident do about it?
Illinois property tax rates are calculated according to the assessment of your property and the amount of money that your local taxing district needs in order to operate for the upcoming tax year. County taxing officials determine the assessment of your property. In Cook County, the County Assessor sets your property assessment, whereas in other Illinois counties, a township assessor or supervisor of assessments sets your property assessment.
Governor Quinn Extends Enterprise Zone Tax Breaks
Illinois has maintained a tax incentive program for businesses in enterprise zones since 1982. The law authorizing this program had been set to expire next year. According to the Chicago Sun-Times, Governor Pat Quinn signed a law, effective immediately, which extends the Illinois Enterprise Zone Program for another 25 years.
Illinois currently has 97 enterprise zones in which businesses can obtain tax breaks pursuant to the Illinois Enterprise Zone Program. Essentially, the enterprise zone tax break program gives businesses that locate or expand within certain designated areas tax breaks. These tax breaks include the following:
- exemption on the retailers’ occupation tax paid on building materials
- investment tax credit of 0.5 percent of qualified property
- tax credit for any jobs that the businesses create
According to the Illinois Department of Commerce and & Economic Opportunity, businesses locating or expanding in enterprises zones that meet certain requirements, such as creating or retaining a certain amount of jobs, also may be entitled to additional tax breaks, such as:
Holding Title to Illinois Real Estate
When you take legal title to real estate as an individual, there is no question as to how title to the real estate is held. However, when one or more persons take legal title of real estate, Illinois law allows title to be held in three different ways. A knowledgeable real estate lawyer can help you determine which type of ownership best suits you.
The first option for multiple owners is that parties can hold real estate as “tenants in common.” This is the most typical and basic type of joint ownership. If no other type of joint ownership is specified, then it is presumed that the property is held as tenants in common. The joint owners can hold the property in equal or unequal shares, but they both or all have the legal right to utilize all of the property.
Another option for when more than one owner is involved is that joint owners can hold title to property as “joint tenants with right of survivorship.” In this situation, the owners must take title to the property at the same time, by the same document or deed, in equal shares and having equal rights to possession. If one of the owners dies, then the remaining owners are entitled to the shares of the deceased owner. In Illinois, the Joint Tenancy Act governs joint tenancies.
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