Articles Posted in Real Estate & Property Law

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The Attorney General filed a complaint in which Count IV alleged that Wildermuth, an attorney, and Kleanthis, a veteran of the real estate business, engaged in acts and practices that violated section 3-102 of the Illinois Human Rights Act by a pattern and practice of discrimination in the offering of loan modification services to Illinois consumers. The complaint alleged that defendants advertised that they would succeed where other loan modification providers had failed, help consumers save their homes and obtain significant reductions in their monthly payments. The circuit court of Cook County denied defendants’ motion to dismiss but certified for interlocutory appeal the question: “Whether the State may claim a violation under the Illinois Human Rights Act pursuant to a reverse redlining theory where it did not allege that the defendant acted as a mortgage lender.” The appellate court answered the question in the affirmative. The Illinois Supreme Court affirmed in part, stating that it is not necessary to allege that one is a mortgage lender to sustain a claim for a violation of the statute. The court concluded, nonetheless, that Count IV should have been dismissed, rejecting the state’s argument that the defendants engaged in a “real estate transaction” by providing “financial assistance for ... maintaining a dwelling.” Defendants’ services cannot be considered necessary; they were not “necessary conduits” through which funds flow, nor did they act as real estate brokers. View "Madigan v. Wildermuth" on Justia Law

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Plaintiff (Carle Foundation) owns four Urbana parcels of land that are used in connection with the operation of plaintiff’s affiliate, Carle Foundation Hospital. Before 2004, the parcels were deemed exempt from taxation under the Property Tax Code (35 ILCS 200/15-65(a) because their use was for charitable purposes. From 2004-2011, the Cunningham Township assessor terminated plaintiff’s charitable-use tax exemption. For tax years 2004-2008, plaintiff filed unsuccessful applications with the county board of review to exempt the parcels. Plaintiff filed no applications for tax years 2009-2011. In 2007, plaintiff filed suit. In 2012, Public Act 97-688 (section 15-86) took effect, establishing a new charitable-use exemption specifically for hospitals. Plaintiff argued that section 15-86 applies retroactively. The court agreed, but held that it was “obvious that resolution of the question of whether the standard established by section 15-86(c) applies to plaintiff’s claims will not resolve the merits of those claims.” The appellate court reversed, finding that section 15-86 violated the Illinois Constitution. The Illinois Supreme Court vacated, holding that the court lacked appellate jurisdiction because the trial court erred in entering an order under Rule 304(a). Plaintiff’s exemption claims and plaintiff’s request for a declaration as to what law governs those claims matters are “so closely related that they must be deemed part of a single claim for relief.” View "Carle Foundation v. Cunningham Township" on Justia Law

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Plaintiff lived in a Klein Creek condominium in Carol Stream. After a 20-inch February 2011 snowstorm, the association's landscaping service cleared the complex’s sidewalks. Eleven days later, plaintiff left her unit and fell on a sidewalk, breaking her leg, knee, and hip. She filed suit, claiming that she fell on an unnatural accumulation of ice. She alleged negligence in failing to properly direct the drainage of water and melted snow, failing to repair defective sidewalks, and failing to repair downspouts to prevent an unnatural accumulation of ice on the sidewalk, and noncompliance with construction and maintenance codes. The condominium association's president stated that he was aware of water collecting on and around sidewalks in other areas of the complex, especially during heavy rainstorms, but was not aware of water pooling in the area behind the building where plaintiff fell. The property managers stated that they were unaware of drainage issues at the back of the buildings. The court found the claim barred by the immunity provided to residential owners and operators under the Snow and Ice Removal Act. 745 ILCS 75/0.01. The appellate court reversed, reasoning that the immunity did not apply because there were no allegations of negligence relating to snow or ice removal efforts. The Illinois Supreme Court affirmed. The Act provides immunity from claims for injuries allegedly caused by icy sidewalks resulting from negligent snow and ice removal efforts, but it does not extend to claims for injuries allegedly caused by icy sidewalks that result from an otherwise negligent failure to maintain the premises. View "Murphy-Hylton v. Lieberman Management Services, Inc." on Justia Law

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Plaintiffs, a class of property owners, sought compensation from the Metropolitan Water Reclamation District of Greater Chicago, alleging flooding on their properties caused by the District’s diversion of stormwater into nearby creeks. The District cited a 1948 Illinois Supreme Court decision, Pratt, as holding that a temporary flooding cannot constitute a taking under the Illinois Constitution. The trial court denied a motion to dismiss and certified a question based on the U.S. Supreme Court’s 2012 holding that temporary flooding can constitute a taking under the federal constitution, Arkansas Game & Fish Comm’n v. United States. The appellate court held that Arkansas Game overruled Pratt. The Illinois Supreme Court reversed. The Illinois takings clause provides greater protection for property owners than its federal counterpart, in providing a remedy for property that is damaged, but, what constitutes a taking is the same under both clauses. The holding in Arkansas Game is relevant to the determination of whether government-induced temporary flooding is a taking under the Illinois Constitution. That holding, however, does not conflict with Pratt. Pratt did not hold that temporary flooding can never constitute a taking, but only that the flooding, in that case, did not amount to a taking. Similarly, the facts alleged by plaintiffs are not sufficient to allege a taking. The complaint does not allege that the flooding “radically interfered” with use and enjoyment of the properties. The parties did not address whether the properties were "damaged." View "Hampton v. Metro. Water Reclamation Dist." on Justia Law

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In 2005, Masterklad built a house in Glenview, including a brick patio that extended off the rear of the house. Because the ground underneath the patio sloped down, dirt and gravel were placed underneath it to support the bricks and make them level with the house's rear entrance. A retaining wall was built to contain the fill. In 2007, the house was sold by Masterklad to a Lubeck for $1,710,000. In the contract Lubeck “knowingly, voluntarily, fully and forever,” waived the implied warranty of habitability in exchange for an express warranty provided by Masterklad, with a one-year term. In 2010, Lubeck sold the house to Fattah, for $1,050,000, with a document stating that the house was being sold “as is” and that the seller made no representations or warranty regarding its condition. In 2011, parts of the retaining wall around the rear patio gave way and part of the patio collapsed. The owner sued. The circuit court found that the patio wall had given way due to latent defects in its construction, but that plaintiff could not recover because Masterklad had executed a valid, enforceable waiver of the implied warranty of habitability with Lubeck. The appellate court reversed. The Illinois Supreme Court reversed. The implied warranty of habitability may not be extended to a second purchaser of a house when a valid, bargained-for waiver of the warranty has been executed between the builder-vendor and the first purchaser. View "Fattah v. Bim" on Justia Law

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In 2011, Henderson Square Condominium Association sued, alleging: breach of the implied warranty of habitability, fraud, negligence, breach of the Chicago Municipal Code’s prohibition against misrepresenting material facts in marketing and selling real estate, and breach of a fiduciary duty. The defendants were developers that entered into a contract with the city for a mixed use project, the Lincoln-Belmont-Ashland Redevelopment Project. Sales in the project had begun in 1996. The trial court dismissed, finding that plaintiffs failed to adequately plead the Chicago Municipal Code violation and breach of fiduciary duty and that counts were time-barred under the Code of Civil Procedure (735 ILCS 5/13-214). The appellate court reversed. The Illinois Supreme Court affirmed. A condominium association generally has standing to pursue claims that affect the unit owners or the common elements. A question of fact remains as to whether defendants’ failure to speak about construction deficiencies or to adequately fund reserves, coupled with earlier alleged misrepresentations, amounted to fraudulent concealment for purposes of exceptions to the limitation and repose periods. It is possible that minor repairs, along with the limited nature of water infiltration, reasonably delayed plaintiffs’ hiring of professional contractors to open the wall and discover latent defects. The date when plaintiffs reasonably should have known that an injury occurred and that it was wrongfully caused was a question of fact. View "Henderson Square Condo. Ass'n v. LAB Townhomes, LLC" on Justia Law

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The petitioner, DG Enterprises, LLC-Will Tax, LLC, purchased the 2007 delinquent real estate taxes for a property at 716 Henderson Avenue, Joliet, Illinois, from the Will County collector at a public auction on November 6, 2008. On February 4, 2009, in accord with requirements of section 22-5 of the Tax Code, petitioner drafted and then requested that the Will County clerk send by certified mail the completed "Take Notice I" form to the respondent Lorrayne Cornelius, the owner of record and the party in whose name taxes were last assessed. Petitioner filled in all of the required information for the Take Notice I except the address and phone number for the Will County clerk. The certified mail notice was returned by the post office unclaimed. On July 6, 2011, the same day it filed its petition for tax deed, petitioner placed the take notices required by section 22-25 for mailing with the clerk of the circuit court of Will County. The notice was sent by the clerk of the court by certified mail, and was mailed to “Lorrayne M. Cornelius, Melvin R. Cornelius and Occupants,” at the 716 Henderson Avenue address. Three attempted certified mailings were later returned unclaimed to the clerk by the postal service. The petitioner also took additional steps to complete personal service on the respondent and all other interested parties. On March 14, 2012, the respondent filed an appearance through counsel and a combined motion to dismiss, arguing that petitioner's take notices and publication notices were fatally defective under the applicable statute and failed to comply with due process, depriving the court of jurisdiction and rendered the order for the tax deed void so that it could be attacked at any time. The principal issues presented for the Supreme Court's review in this case were: (1) whether an order issuing a tax deed is void and subject to collateral attack because of the failure to include the address and phone number of the county clerk in the publication and certified mail take notices that were required to be sent to the delinquent owner prior to the issuance of the tax deed; and (2) whether due process standards were violated where certified mail notices to the owner were return unclaimed. The Supreme Court answered both questions in the negative. The Court reversed the appellate court's decision to affirm the circuit court's order vacating petitioner's tax deed. View "DG Enterprises v. Cornelius" on Justia Law

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Defendant Deutsche Bank National Trust Company, as Trustee for Loan Tr. 2004-1, Asset-Backed Certificates, Series 2004-1, purchased a condominium unit at a judicial foreclosure sale in 2010. On March 27, 2012, plaintiff 1010 Lake Shore Association mailed defendant a demand for payment of the unit’s assessments for common expenses. After defendant filed its answer, plaintiff moved for summary judgment arguing there were no questions of material fact on the amount owed or defendant’s failure to pay the assessments. Based on section 9(g)(3) of the Condominium Property Act (Act, 765 ILCS 605/9(g)(3) (West 2008)), plaintiff asserted that the lien against the property for the prior owner’s unpaid assessments had not been extinguished because defendant failed to pay the assessments accruing after it purchased the unit at the judicial foreclosure sale. Defendant responded that it could not be held liable under section 9(g)(3) of the Act for unpaid assessments that accrued before it purchased the unit at the judicial foreclosure sale. Following a hearing, the trial court granted summary judgment for plaintiff, and awarded plaintiff possession of the property. On appeal, defendant contended that the trial court misconstrued section 9(g)(3) of the Act, arguing that a purchaser of a condominium unit at a foreclosure sale is only required to pay the common expenses that accrued following the sale. The appellate court affirmed the trial court, with one justice dissenting. Finding no error in the majority's judgment, the Supreme Court affirmed. View "1010 Lake Shore Ass'n v. Deutsche Bank National Trust Co." on Justia Law

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Christopher B. Burke Engineering, Ltd. (Burke Engineering) filed a complaint to foreclose on a mechanics lien on property owned by Carol and Glen Harkins. Heritage Bank of Central Illinois had a mortgage interest in the property. The circuit court invalidated the lien on grounds that the requirements for a mechanics lien set forth in section 1 of the Mechanics Lien Act were not met. Specifically, the court found that the services provided by Burke Engineering did not constitute an improvement to the property and that the provision of services was not induced or encouraged by the property owner. The appellate court affirmed. Burke Engineering argued on appeal to the Supreme Court that the circuit court erred in granting Heritage Bank’s motion for summary judgment. After review, the Supreme Court reversed. Because Burke Engineering’s services were done for the purpose of improving the property, the services were lienable. However, it was unclear whether Carol Schenck, owner of the property at the time the contract for services was entered into, knowingly permitted Harkins to enter into contracts regarding the property. Because the resolution of this issue involved unanswered material questions of fact, Heritage Bank was not entitled to summary judgment. View "Christopher B. Burke Engineering, Ltd v. Heritage Bank of Central Illinois" on Justia Law

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Henderson Square Condominium Association sued the developers, alleging: breach of the implied warranty of habitability, fraud, negligence, breach of the Chicago Municipal Code’s prohibition against misrepresenting material facts in the course of marketing and selling real estate. The court dismissed with prejudice, finding that plaintiffs failed to adequately plead the Chicago Municipal Code violation and breach of fiduciary duty and that those counts were time-barred. The appellate court reversed the dismissal of those counts and the Illinois Supreme Court affirmed. The claims at issue are construction-related and governed by the limitation and repose of section 13-214 of the Code of Civil Procedure, but the fraud exception applied and issues of material fact remained concerning misrepresentations or actions that could support a finding of fraudulent concealment. The defendants were alleged to be “more than silent” regarding insulation and funding of the reserves. The Municipal Code allows private parties to seek damages under its provisions and there were allegations that defendants had a fiduciary duty to budget for reasonable reserves, given allegedly known latent defects. View "Henderson Square Condo. Assoc'n v. LAB Townhomes, LLC" on Justia Law