the wasserblawg

The concept of exchanging a deed & keys for money still remains the same, but the steps to the crazy tribal dance we perform while helping buyers buy and sellers sell keep changing. Whereas closings ten years ago could best be thought of as graceful arm in arm waltzes and minuets, todays closings are more akin to post-modern amalgams of sudden thrusts, breaks, pops, and martial arts-flavored acrobatics. The dance just keeps on changing and anyone who's lawyer is not prepared to embrace these changes is going face a heck of a time trying to get their closings done.

Cook County real estate professionals will soon need to follow new protocols and procedure in the reporting of property transfer taxes due in their client's transactions. The new EZ Dec system is said to be going live next week, and in the new year, it will become the only way to do so. Transfer taxes are assessed against just about every real estate transaction. The State, County, and City each levy a tax based on the sales price. In 2008, the City tax was famously increased to give a new revenue stream to the CTA. At present, we file three separate forms - one to pay each transfer tax. Frankly, the process is a collosal pain. The forms each ask for a whole lot of common information, but each form is (predicatbly enough) worse than the next. The County gets all the data it needs in a 2 page form. The State form runs 4 pages. The City's 7. Data idata input is sloppy, often inaccurate. I cannot even begin to speculate how cumbersome it is for the tax revenue agents to unsp...

Nothing should be simpler than a real estate closing. The buyer shows up with money. The Seller has a deed and some keys. They shake hands and trade. Nice. Turns out (over and over) that in the Venn Diagram of life, "simple" and "closing" seldom intersect. We learned of yet closing-related complication this week, courtesy of our friends at the City of Chicago, Department of Revenue . The Department is charged with "maximizing revenue collections to support the City's "vital" infrastructure. One way they are doing this is by scrutinizing tax declarations filed with the County Recorder , every time a deed or other document is recorded of record. The Department is, apparently, checking the transfer tax declarations to see when they are dated and then comparing them to the dates when the transfer tax stamps are actually purchased.... and they going after purchaser's who may not being paying the tax in a "timely" fashion. For better or ...

Kudos to fellow lawyer / blogger Peter Olson for uncovering this nugget. He hit a home run on this one. I have been cry-giggling about it since I read his post last night Real Estate in Chicago: Chicago " CTA Portion" Transfer Tax Refund? Yes, yes. City Transfer Tax increased effective April 1. Yes, yes, the City Council made a last minute switch so that Sellers are paying the increase, not buyers. Yes, yes, the revised tax declaration form may be the worst, most confused tax form ever. Yes, yes, in the short term many Buyers will be forced to pay the seller's share of the tax based on the contract language they agreed to months ago, before anyone ever considered the increase or the fee shift. The absurdest cherry on top turns out to be the " CTA Portion Refund." Recall that refund, was proposed and passed as part of the original ordinance, in February, 2008, when the entire transfer tax was going to be borne by Purchasers. At that it made good political...

Well that didn't take long. Chicago's City Council reconsidered yesterday, and by a 49-0 vote, passed a revised ordinance on the municipal transfer tax increase passing it off from buyers to sellers. The new seller-paid $3/$1,000 transfer tax can be added on to increased recording fees, and water department full payment certification fees. And, based on recent history anyway, stand by for title companies fee increases which seem to hit every spring....

Now that the State legislature approved the Hamos bill (our mass transit bail out) all eyes turnb to the City Council who must now vote on the proposed transfer tax increase . As realtors and others in the industry wring their hands with worry about how the increased fee will effect the already slow market, it looks like our neighbor to the north in Evanston may well get into the act themselves. I'll explain in a minute, if you'lll indulge me this digression about my closing this morning. Most of the parties late to arrive, as they all had trouble finding nearby parking. One of the real estate agent proudly announced that she avoided that problem by riding the el. She proceeded to grimace, look the buyer in the face, and comment to the effect that at least she (the buyer) saved money by closing before the City raised the transfer tax. She proceeded to lambast the legislature for making her poor buyers bear the brunt of saving the transit workers pension funds. I, rather smugl...

Until this morning, few of us would have made a direct connection between the funding of public transportation in the metropolitan Chicago area and real estate conveyancing. But now the link has been established and it spells bad news for anyone wanting to buy or sell real estate in the City of Chicago. Buyers about to absorb the brunt of yet another closing cost increase; a possible (likely) 40% increase in the amount of the City of Chicago Real Property Transfer Tax. With just five days left until the 3rd public transit funding "doomsday" in the last six months, the cat has finally jumped out of the bag. This morning, we all woke to the news that the proposed transit "bail out" will be funded by a combination of local county sales tax increases, state general funds, and that transfer tax increase. Never mind that the transfer tax is levied by a completely different body of government - the City of Chicago and not the State. We must all prepare for the coming rea...