The new TILA-RESPA Integrated Disclosure (TRID) Rule went into effect October 1, 2015 and is already delaying residential real estate closings. TRID requires loan documentation consisting of two new forms: the Loan Estimate and the Closing Disclosure to ensure compliance. These new forms consolidate the TILA-RESPA forms and are meant to give consumers more time to review the total costs of their mortgage.
The Loan Estimate is due to consumers three days after they apply for a loan, and the Closing Disclosure is due to them three days before closing. However, the three day rule is only applicable if the disclosure is delivered personally. If the disclosure is delivered any other way, the Rule “deems” the disclosure was made three business days later, making the disclosure period six or more days before the closing.
Because there are huge potential penalties to mortgage lenders if they do not make the required disclosures on a timely basis, mortgage lenders are interpreting the new rules very conservatively and are adding additional days for the disclosures as a cushion. Thus, rather than using three days before closing as a cutoff, the cutoff for a particular transaction might be 7 – 10 days or more.
Feel free to contact an Illinois attorney experienced in handling all aspects of real estate closings for both buyers and sellers at Kreisler Law if you have questions about sale of your Chicago area real estate or any other area of the laws governing the purchase or sale of real estate.
The Consumer Financial Protection Bureau (“CFPB”), a new federal agency created in 2010, is imposing new financial disclosure rules for residential mortgage loans applied for on and after August 1, 2015. The new rules will eliminate the HUD-1 settlement statement which has been part of residential closings for many years and replace it with new forms, one of which, the Closing Disclosure, must be sent to the borrower/buyer a fixed number of days in advance of closing. Because large fines of as much as $1,000,000 per day can be imposed on lenders for violating the new rules, it is expected that lenders will err on the side of caution in following the new rules.
Under the new rules the Closing Disclosure, which contains all of the financial information about the closing must be received by the buyer/borrower at least three days before closing. Since it is expected that most lenders will mail the disclosure and because of the time periods for receipt of mailings imposed by the new rules, the Closing Disclosure will have to be mailed more than a week before a closing can occur. Adding to that period, the additional time to be imposed by national lenders for preparation and processing of the form, many lenders are likely to require final closing figures as much as 12 to 14 days in advance of closing.
Thus, for a real estate deal which today could be closed a day or two after final “clear to close” loan approval, the new rules will likely push off that same closing for two weeks after final loan approval.
Feel free to contact an Illinois attorney experienced in handling all aspects of real estate closings for both buyers and sellers at Kreisler Law if you have questions about the sale of your Chicago area real estate or any other area of the laws governing the purchase or sale of real estate.
The legal definition of real property is land and anything growing on it or affixed to it or built upon it. That is, man made buildings are real property as are crops. Real property can be characterized as property that is stationary or it doesn’t move. It can also be classified as real property if it is attached to the land. Real estate is the same as real property and both terms can be used in the same sense. Real estate or real property also includes anything that might be under the property. This might include oil or gases or even minerals that can be found under ground.
Real property, as well as personal property, can be transferred. All sales involving real estate or real property need to be in writing. That way there is a record of the transfer. Real property cannot be moved, so there is a symbolic transfer that needs to occur before the transfer is recognized. In most situations, this is done by a deed transfer.
Private property is property that is commonly owned by an individual or in some cases a group of people. Public property is real property that is owned by a city, county, state or federal government. There are different laws governing private property and public property.
If you have any questions or concerns with property conflicts, you might want to hire an attorney. We are Kreisler Law and we understand real estate law and stand prepared to represent you. We pride ourselves in providing Chicago residents with expertise and sophistication without the hassle some other firms have.
Commonly available printed form contracts for the purchase and sale of real estate in the Chicago Metropolitan area contain a paragraph which is very useful for both buyers and sellers. The paragraph is commonly referred to as “Attorney Review” or “Attorney Modification”. Under the terms of the paragraph, attorneys for both buyer and seller have a set period of time after the contract is signed by both buyer and seller and initial earnest money is deposited to review the contract and propose changes. The period is usually five to ten business days. This allows the buyer and seller to agree on the basic terms of the deal, such as purchase price, closing date and mortgage contingency, before going to the expense of employing an attorney.
Once the contract is signed, the executed contract is delivered to the attorneys for the buyer and seller. They can then review the contract, confer with their client as to any issues, clauses or wording of concern to them and then propose appropriate changes in the contract to the attorney for the other side. In most cases, proposed changes can be worked out and the contract then proceeds to closing. However, if the parties’ attorneys cannot reach agreement, either attorney can terminate the contract, in which case the initial earnest money is returned and the property put back on the market. As a kind of safety blanket to real estate buyers and sellers allowing them to sign otherwise binding agreements before they hire an attorney, the Illinois courts have held that the attorney may disapprove the contract during the attorney review period for basically any reason.
Feel free to contact an Illinois attorney experienced in handling all aspects of real estate closings for both buyers and sellers at Kreisler Law, if you have questions about the sale of your Chicago area real estate or any other area of the laws governing the purchase or sale of real estate.
The Chicago Residential Landlord and Tenant Ordinance (“RLTO”) applies to all Chicago residential properties in which the owner does not reside or which contain more than six residential units. For landlords who are subject to RLTO, accepting a security deposit means the landlord must literally cross a minefield of possible penalties. The situation is so extreme that it has led a number of Chicago landlords to discontinue the time honored practice of requiring the traditional security deposit in the amount of one month’s rent, in favor of requiring a non-refundable move-in fee usually equal to a fraction of a month’s rent.
The reason for this extreme reaction is that RLTO basically imposes absolute liability in the amount of two times the security deposit, plus the attorney fees of the tenant’s attorney, for violation of each of a variety of technical rules as to the receipt, handling and return of security deposits. The provision of attorney fees for the tenant’s attorney has even given rise to a group of attorneys who make most or all of their income from suing landlords.
The rules are many:
1. Security deposits must be held in a federally insured interest bearing account in an Illinois financial institution.
2. Security deposits must be in an account completely separate from and not commingled with any funds of the landlord.
3. The name and address of the financial institution holding the deposit must be conspicuously disclosed in the written rental agreement signed by the tenant or if there is not a written rental agreement, by a written notice given to the tenant within 14 days of receipt of the deposit.
4. The tenant must be given a receipt when the deposit is received which specifies the amount of the deposit, the name of the person accepting the deposit, and if that person is an agent, the name of the landlord, the date of receipt and a description of the dwelling unit rented.
5. If a security deposit is retained for more than six months, the landlord must pay interest on the security deposit, at the rate specified by the Chicago Comptroller each year, within 30 days after the end of each anniversary of the beginning of the lease term.
6. When the tenant vacates the dwelling unit, the landlord is required to return the security deposit within 45 days after the tenant has vacated.
The landlord may deduct from the returned deposit any unpaid rent and a reasonable amount to repair damages to the unit. If any amount is deducted for damage, the landlord must deliver to the tenant within 30 days an itemized list of the damages and the estimated or actual costs of repair or replacement. If an estimate is provided, then within 30 days, the landlord must provide copies of paid receipts or if the work is performed by the landlord’s employees, a certification of the actual costs of the repairs.
Feel free to contact an experienced Illinois landlord attorney at Kreisler Law if you have questions about the handling of security deposits for properties subject to RLTO or any other area of the laws governing landlords and tenants.
Sellers of Illinois properties improved with one to four residential dwelling units are required to disclose to buyers any knowledge they have of building defects. The Illinois Real Property Disclosure Act requires sellers to complete, execute and deliver a residential Real Property Disclosure Report before any contract to sell real estate is executed.
The Disclosure Report requires Illinois real estate sellers to disclose any knowledge they have of any building defects, including but not limited to flooding, recurring leakage, defects in basements roofs, foundations, plumbing or electrical problems as well as defects in the heating, ventilation or air conditioning systems. If prior to closing the real estate, the seller becomes aware that the Disclosure Report is in any respect inaccurate, the seller has a duty to supplement the Report in writing.
An Illinois real estate seller is not liable for errors, omissions or inaccuracies in the real estate Disclosure Report if the seller had no knowledge of the inaccuracy, reasonably believed the defect had been corrected or if the inaccuracy was based upon information furnished by a public agency, licensed professional or by a competent contractor which relied upon by the seller.
Feel free to contact an Illinois attorney experienced in handling all aspects of representing real estate sellers in Chicago area real estate closings at Kreisler Law, if you have questions about sale of your Chicago area real estate or any other area of the laws governing the purchase or sale of real estate.