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from Local Attorney, Michael H. Wasserman

Wednesday, November 11, 2009

CITY CLERK DEBUT'S NEW TIF PROPERTY SEARCH

WHY EVERY CHICAGO PROPERTY OWNER OUGHT TO CHECK IT OUT

Those property tax bills every Cook County owner received over the last week or two? Did you notice how they have that very detailed table that shows you "who gets what" from your tax dollars? Pretty detailed, right?

Well maybe not so much, if your property is in one of the City's Tax Increment Financing districts (TIFs). TIFs cover nearly one third of the City now. TIF districts divert money from the regular property tax stream to help "combat blight" in those areas.

For years, there has been no public accountability or accounting of its use. Property tax bills do not show any amount of directed being directed to the TIFs (nothing). In reality, TIFs fund a budget nearly 1/6 as big as the "official" city budget. Some quirk in the law or other allows them to hide the numbers from us.

A stunning Chicago Reader expose on TIF financing here. Among the many revelations - City funds will be used to refurbish the Willis (fka Sears) Tower and to help new tenant United Airlines move in. The Chicago Tribune editorial board opines on the matter, here.

Enter City Clerk David Orr. The Clerk''s web site has a new TIF property search function. Enter any property tax identification number, and see how what portion of a tax bill is diverted from the City's budget through the TIF programs.

Progress Illinois took a look at the Mayor's property tax bill in the context of the TIF controversy. It's report, here. (a whopping 92 percent of his property taxes were redirected into the Near South TIF last year. By contrast, cash-strapped schools get a mere 3.9 percent of the Daley's property tax dollars).

Thursday, November 5, 2009

THANK YOU

More than 2,300 new Illinois lawyers will be admitted to the bar today, nearly 1,900 more for the Chicago area. Welcome to the fraternity - make sure they show you the secret handshake.

That swells our ranks to roughly 86,000 souls.

Collectively, we only closed 76,800 or so home and condo sales in the first 9 months this year - which works out to fewer than one contract per counselor - ok - 2 per, if you allow for a buyer's lawyer and a seller's lawyer on each deal.

I have been fortunate to work with a good many terrific buyers and wonderful sellers this year. There are obviously a great many lawyers to choose from. Thank you, for everyone's kind referrals, and Thank you to everyone who has referred a client or two along the way.

Tuesday, November 3, 2009

NOVEMBER MONTH END CLOSINGS - A Warning

Many are first time home buyers trying to squeak "under the wire" in hopes of closing contracts before November 30th - the sunset date for the Federal First Time Home Buyer's Tax Credit. The impending deadline presents some unique challenges for Buyers and Sellers.

That November 30th deadline comes smack dab at the end of the Thanksgiving day weekend. (What genious in Washington did that?) That means a host of closings are being scheduled for Friday the 27th and Monday the 30th the last two possible days to get closings done.
  • Will the title companies and lenders cancel all holiday vacations and work at full capacity to get these closings done expeditiously, or will be have to sit for hours at the closing table while closers handle multiple simultaneous closings?
  • Will loan officers and processors get files to the underwriters with time enough for review and to satisfy conditions before the inevitable holiday slowdown, or will some Buyers be disappointed when there lenders "blow" the November 30 deadline?
  • What about those pesky property tax bills?
That last one worries me a bit more than the others. Don't forgot the interplay between the federal tax credit deadline and Cook County's Property Tax Deadline.

Cook County taxes are, of course, theoretically mailed in August to be due on September 1st. This year, as in what 16 of the last 17 before it, the taxes came out late; Mailed last week and due December 1st.

Sellers are going to have to pay those taxes at or before closing. If the Seller's mortgage lender pays the taxes from an escrow, the Seller is going to have to somehow prove to the title company that they in fact did so. We may be able to prove payment three different ways:
  1. Show a paid receipt
  2. Confirm payment on the County Treasurer's web site.
  3. Show proof on the lender's mortgage payoff statement that the tax payment was disbursed (even if not posted paid by the County).
Lenders do not all pay tax bills as soon as they are received (do you?) Most wait until the deadline nears before sending the payments in. The Treasurer does not report payments to her web site in real time. No title company is obligated to accept that payoff statement as a proof of payment. Many might refuse them altogether. Others may require sellers (or their attorneys) to sign "personal guaranties or hold money aside from the closings.

Sellers, Attorneys, and Real Estate Agents are strongly encouraged to coordinate property tax payments with mortgage lenders as possible to minimize the possibility of a title clearance problem or a hold back of seller proceeds.