(JULY 2000)


By Steven B. Bashaw

McBride Baker & Coles

10th Floor - One MidAmerica Plaza

Oakbrook Terrace, Illinois  60171-4710

Tel.: (630) 954-7588

Fax.: (630) 954-7590

e-mail:  SBashaw @MBC.COM

(Copyright 2000 - All Rights Reserved)



(EDITOR’S NOTE:  In addition to my firm’s support, that of the Illinois State Bar Association’s Real Estate Section Council, and the Illinois Institute of Continuing Legal Education, it should be noted that Chicago Title Insurance Company helps underwrite the monthly production of these real estate law Keypoints. Chicago Title is committed to the role of attorneys in real estate transactions and their continuing education in this area. Its staff attorneys are pleased to offer their view points on various developments in the law as set forth below.)




In Federal National Mortgage Association v. Kuipers, (2nd Dist., June 28, 2000), the issue of relative lien priority was examined in a situation where the assignee of a priority mortgage failed to record the assignment until after the perfection of a judgment lien.  As a consequence, the judgment lien creditor argued, the mortgagee under the unrecorded assignment was subordinate to the judgment lien.  The trial court rejected this somewhat unique argument, and the appellate court affirmed.


The first mortgage between Kuipers and Medallion Mortgage was recorded properly on August 1, 1994 to secure a note in the principal sum of $100,000.  On August 3, 1994, Medallion assigned the mortgage and note to FNMA, but the assignment was not recorded until October 2, 1998.  In the interim, Lisa Fortney obtained a judgment against the Kuipers for $650,000, and recorded a memorandum of judgment on June 25, 1997; i.e., after the mortgage but prior to the assignment recording. Fortney was made a party defendant to FNMA’s complaint to foreclose its mortgage with an allegation that her lien was subordinate.  She counterclaimed, however, alleging that her judgment lien was recorded prior to the assignment of the mortgage to FNMA, and therefore had priority inasmuch as the transfer of the mortgage “extinguished” Medallion’s interest.  FNMA countered with the argument that the Medallion mortgage was not released and the assignment did not operate to extinguish the lien and its lien remained as notice to third parties of the existence of a first mortgage. Therefore FNMA simply “stood in the shoes” of Medallion as its assignee, and it was not necessary to record the assignment to retain the priority position of Medallion’s mortgage lien.


Noting that a recorded mortgage remains a lien on real estate until such time as the release is recorded under 765 ILCS 905/2, the decision in this case finds that the assignment of a mortgage note carries with it an equitable assignment of the mortgage by which it is secured, and therefore the assignee stands in the shoes of the assignor-mortgagee with regard to the rights and interests under the mortgage and note. The subject mortgage specifically provided that it was assignable, and therefore third parties such as Lisa Fortney examining the chain of title to the real estate were on notice of the existence of the debt and lien. Because no release had been filed, there was no basis upon which third parties could reasonably believe the mortgage had been extinguished.  The assignment by Medallion to FNMA did not create a new lien that required recording or a new priority position. The original lien and its priority position remained in tact, and the Court held that absent a recording of a release, the assignee of a mortgage is entitled to the same priority position established by the original mortgage.




In a scenario all too familiar to transactional lawyers, the Lundquists purchased a new home in Oregon, Illinois before selling current residence in Rockford. The Rockford property was on the market for a number of months and they had signed a contract to sell, but had not yet closed, when the Lundquist’s Rockford home was destroyed by a fire caused by vandalism.  The fire occurred on December 5, 1996.  The Lundquists moved into their new home in Oregon, Illinois in August 1996.  The Allstate Insurance policy contained an exclusion for coverage of loss caused by “vandalism or malicious mischief if your dwelling is vacant or unoccupied for more than 30 consecutive days immediately prior to the vandalism or malicious mischief.”  Allstate denied coverage based on the exclusion.  The Lundquists offered evidence to support their contention that the house was neither “vacant” nor “unoccupied” because Mr. Lundquist stayed overnight at least once in mid-November, their sons stayed overnight on various weekends during the same period, Mrs. Lundquist visited and cleaned the home weekly, and there were a number of personal items and appliances left on the property even though it was not fully furnished.  Reversing the trial court’s grant of summary judgment in favor of Allstate based on the policy exclusion for “vacant” and “unoccupied” property, the a Second District offers a decision which contains some very powerful language and reasoning on behalf of homeowners in a position similar to these owners in Lundquist v. Allstate Insurance Co., (2nd Dist., June 19, 2000).


Finding that there is a potential for ambiguity in the interpretation of ‘reside’, ‘vacant’, and ‘unoccupied’ in the policy exclusion language, the Court notes that: “Where competing reasonable interpretations of a policy exist, a court is not permitted to choose which interpretation it will follow. Rather, in such circumstances, the court must construe the policy in favor of the insured and against the insurer that drafted the policy. Accordingly, we hold that Allstate cannot deny coverage based upon its definition of ‘reside’ “. The decision also distinguishes cases holding for the insurance company where the owner had not visited the home for a number of months and where the owner had sold a home under an installment contract and relinquished the right of possession as factually different than the Lundquist situation where they continually visited, cleaned, stayed overnight and kept articles of personal property on the premises. In Illinois, a person may reside in a particular location without being continuously physically present and one may have more than one residence according to this case.


Moreover, the Court noted that the Illinois  “Standard Fire Policy”, promulgated pursuant to the Illinois Insurance code (215 ILCS 5/397) as the minimal coverage allowable by law in this state, provides for an exclusion of coverage for fire loss if a building is vacant or unoccupied beyond a period of sixty consecutive days rather than the thirty day period in the Allstate policy. Any conflict between the statutory and insurance policy minimal provisions for coverage is to be resolved in favor of the statutory provisions as minimal, and therefore Allstate cannot exclude coverage under its policy in a manner more restrictive or inconsistent with the Standard Policy.  Therefore, the Allstate exclusion could not conflict with the state policy provision requiring the property be vacant or unoccupied for more than 60 consecutive days. “Any conflict between statutory and insurance policy provisions is resolved in favor of the statutory provisions.  Rules and regulations promulgated pursuant to authority delegated by specific provisions of the Insurance Code have the force of statute. Thus, the policy must conform to the Standard Policy.”



3. Illinois Power of Attorney Act Amendment:


The Illinois law governing powers of attorney (755 ILCS 45) was amended almost without notice and becomes effective on June 9, 2000.  The Act now requires additional witnesses, the notary must notarize the signature of the witness, and there is an attestation clause for the witness to complete and sign in the new form contained in the Act as amended.  If the power relates to the ability to deal with real estate, the names of the preparer must also appear.


These changes, and others which require an accounting by the agent, were made effective by the language of the amendment on the date the Act was signed by the Governor, which was June 9 2000.  This amendment was covered by the legislative alert sent out by the ISBA and the new statutory Power of Attorney form can be downloaded from the ISBA website (


If you prepared and had a Power of Attorney executed since June 9th it may be necessary to review the document to make sure it is in compliance with the new provisions, since the Act clearly states that the Power of Attorney is ineffective unless there was an additional witness. Of great concern to practitioners is that there now is a new requirement calling for at least one additional witness. The notary must notarize the signature of the witness in addition to notarizing the signature of the principal, and the amendment provides that  "The power of attorney will not be effective unless it is notarized and signed by at least one additional witness."  There also is an attestation clause that must be signed by the witness.


(Thanks for noting the importance of the is relatively unnoted amendment goes to Myles Jacobs of Joliet, Illinois, (Vice-Chair of the ISBA Real Estate Section Council), who stated in a memo to the Section discussion group at  “I can tell you that hardly anyone is aware of this change which was effective upon the signing of the bill (June 9, 2000). I must call at least one of my clients to have their power of attorney altered.   It is bad business to make such an Act effective on the date signed since hardly anyone is aware of the change. How many powers of attorneys were executed since the June 9th date without anyone being aware of this change?  There should have been some reasonable lead-time built into the effective date so everyone could have been notified.  I am going to have the secretary of the Will County Bar Association send a fax to all Will County attorneys on Wednesday so that they and their clients are not blindsided.”)


Jim Weston, Special Counsel of First American Title Insurance Company’s Illinois Regional Office, however, notes: “Section 3-3 of the Illinois Power of Attorney Act continues to contain language relating to other forms of powers of attorney: "Nothing in this Article shall invalidate or bar the use by the principal of any other or different form of power of attorney for property." The statutory form does carry benefits with it that may not be available to others. Also, in Myle's comment he indicates that both the signatures of the principal and the witness must be notarized. It may well be that such practice is advisable. However, as the amended form is drafted, an argument can be made that the legislature did not intend to require the notarization of the witness' signature. The witness signature line is added after the notary block; the parenthetical instructions add the direction for the witness signature after the requirement for notarization of the principal's signature and the amended language in the notary block itself speaks only to the appearance before the witness and is silent as to subscription. To my way of thinking, it would have been better to have had the witness line appear above the notary block and to amend the notary block to require acknowledgement of both signatures.”


Finally, Brian Mooty, of Peoria and also a member of the ISBA Real Estate Section Council, noted:  ”A quick response to Myle's comments about the POA act.  I would agree that POA's executed after the effective date of the amendment that purport to use the statutory form may be in jeopardy but I would appreciate some commentary on the amendment's effect on other non-statutory forms of POA's.  Even some estate planning attorneys do not use the statutory form.   I believe that IL law was clear, and the statute so stated, that a POA could be valid if it did not utilize the statutory form, only some basic elements are necessary.  I do not believe that the recent amendment was so sweeping in scope as to invalidate all POA's not using the statutory format.”)





In 1996, Charles Burch prepared a warranty deed to convey the Smith farm owned by his uncle, Carl H. Wittmond, into a land trust at Carrollton Bank and Trust Company.  Wittmond appeared in Burch’s law office, executed the deed, and left in Burch’s possession with instructions that it not be recorded because, Burch explained, Wittmond did not want this deed to be the topic of “public discussion”.  Burch placed the deed in a safety deposit box.  He did not deliver the deed to Carrollton Bank, and only recorded the deed after this dispute arose.  The dispute related to the fact that Wittmond’s will left the Smith Farm to Jane Stewart, Wittmond’s companion of 30 years.  Jane filed a petition asking the trial court to direct Burch as the Executor of the estate to execute Wittmond’s bequests to her.  Burch filed a petition for citation for recovery of assets, and argued that because of the deed to the land trust, the Smith farm was not a part of the estate. Stewart argued that because Wittmond never completed delivery, the deed to the land trust was ineffective and title remained in the estate.

The Fourth District agreed with Stewart in its opinion In re Estate of Wittmond, (4th Dist., June 22, 2000).


A conveyance of real property does not occur merely because the grantor executes a deed. The grantor must also deliver the deed in a manner that evidences an intent to pass title at the time of the delivery. Delivery of a deed is essential to complete a conveyance, although no particular method of delivery is required.  In this case, Burch was a beneficiary of the land trust to which title was to be conveyed, and therefore, he argued, delivery of the deed to him was tantamount to delivery to the trustee.  The Court rejected that argument stating, “The transaction passing title occurs exclusively between the grantor/trust settlor and the grantee/trustee.  A beneficiary’s possession of the deed is, at best, ambiguous regarding the question of whether the grantor intended title to pass to the trustee.”




Personally, In Re Estate of Wittmond is an extremely timely case, in that attorneys have contacted me twice in the last two months to inquire about "dresser drawer deeds."


"Dresser drawer deed" is a common euphemism for the deed mentioned in this case.  No doubt its name comes from a version of the following scenario:


Owner telephones one of his children and asks him to come to his house to see him.  When the child arrives, he tells him, "Look, you have always been my favorite son.  This is a deed to my house.  I want you to have this house when I die.  I will keep the deed right here in my dresser drawer.  When I die, all you have to do is take the deed out of the dresser drawer and record it, and you will own the property."


There are, of course, two things wrong with this scenario.  The first was discussed in the Wittmond case-that is, there is no delivery of the deed to the grantee.  The second is that Owner is essentially attempting to use a deed to create a testamentary transfer of land.  But since the deed is not executed with all the formalities of a will, the attempted transfer is invalid.


When talking about deeds to new title examiners, I often tell them about the perils of dresser drawer deeds.  I point out, for example, that a grantee might surreptitiously take the deed from the dresser drawer and record it after the grantor tells him that he no longer wants to convey the property to him.  Of course, this has resulted in many of these examiners wanting to reject every deed that is recorded a few months after the date of the document-and so I tell them, "but how do you know that this deed wasn't the culmination of an installment agreement to purchase the land?- but at least it has 'em thinking.


While both of the phone calls concerning dresser drawer deeds described the same basic set of facts, the first call was by far the most interesting.  As I recall, the circumstances were as follows:  Owner of Blackacre is dying.  A few days before his death, he signs a deed, conveying the land to just one of his several children.  Owner dies.  Now, three months later, I am asked whether or not I would be willing to insure the transaction.  The first question I asked the attorney was, "where has the deed been since the grantor died?"  The attorney admitted that he did not know.  Of course, all kinds of issues immediately came to mind: Was the deed ever delivered? What if Owner changed his mind immediately after signing the deed?  Was Owner competent when he signed the deed? Might the deed have been altered after it was executed?  Since the grantee was one of several children, what about the possibility of undue influence?  And finally:  who says that real estate law is boring?


It is possible that I could insure the grantee of this deed, assuming that I was satisfied with the answers to these questions.  My biggest concern would be the possibility of subsequent litigation by one of Owner's other children.  Before agreeing to insure it, I would have to think seriously about requiring quitclaim deeds from these children.


Dick Bales, Chicago Title Insurance Company, Wheaton, Illinois





Even Real Estate lawyers have to know a little bit about tort and personal injury law from time to time, and the case of King v. NLSB, (3rd Dist., June 7, 2000), is a good example with some very clear statements of the law in Illinois relating to a property owner’s duty to warn of the existence of an open and obvious hazard.


Janice King was a customer of New Lenox State Bank (NLSB) and visited the lobby of their banking facility on only a second occasion when she was injured.  As she was preparing to leave the building, she turned, thinking that a teller had called out to her, and then walked into the clear glass panel located immediately to the right of the door breaking her nose and bruising her arm.  She filed suit and NLSB filed its affirmative defenses alleging that she failed to keep a proper lookout, failed to avoid an object within plain view, and walked through the premises at a greater speed than was reasonable under the circumstances.  The Bank moved for and was granted summary judgment based on its allegation that the glass panel was an open and obvious hazard from which the Bank had no duty to protect King.  The Appellate Court reversed finding that there was a material issue of fact, and sent the case back to the trial court with instructions that: “On remand, the circuit court should instruct the jury consistent with sections 343 and 343A of the Restatement (of Torts) and direct that its verdict should be consistent with its findings in that regard.”


Section 343 of the Restatement (Second) of Torts (1965) is the standard adopted by the Illinois Supreme Court relating to a property owner’s duty to a person lawfully on the premises, (the distinction between invitee and licensee having been abrogated by 740 ILCS 130/2), and provides that the possessor of land has a duty only if he (a) knows or should know of the condition and that it involves an unreasonable risk of harm, (b) should expect that persons on the property will not discover or realize the danger or will fail to protect themselves against it, and (c) fails to exercise reasonable care to protect them against the danger.


Illinois has further adopted Section 343A of the Restatement which sets forth the “open and obvious hazard” exception to the duty of care set forth in Section 343. Under the exception, there are two considerations to the “open and obvious hazard” exception: (1) the person on the property will not discover or will forget what is obvious or fail to protect himself against it, and (2) the owner has reason to expect that the person will proceed despite the open and obvious danger because the perceived advantages outweigh the perceived risks.


Accordingly, “a premises owner is under a duty to warn of existing hazards under certain circumstances, but is relieved of such a duty under other circumstances…Thus the issue is a mixed question of law and fact.” in Illinois under the Restatement of Torts (Second).


(The Court specifically noted at the conclusion of its opinion that “…we caution that our holding is a limited one.  Importantly, we are not holding as a matter of law that glass panels can never be open and obvious hazards or that such panels are always in need of warning.”)





The Illinois Security Deposit Return Act, (765 ILCS 710/1), prohibits a lessor of residential property of five or more units from withholding any part of a security deposit unless the lessor, within 30 days of the date the lessee vacates, furnishes the lessee with an itemized statement of damage and an estimate or actual cost of repair, attaching the paid receipts.  If the lessor provides an estimate of the cost of repair, the lessor must provide paid receipts within 30 days of giving the estimate. If the lessor does not provide a statement of damages and paid receipts, the security deposit must be returned in full within 45 days of the date the premises are vacated. The act provides a penalty for failure to comply of an award of an amount equal to twice the security deposit together with court costs and reasonable attorney’s fees “upon a finding by a circuit court that a lessor has refused to supply the itemized statement required…or has supplied such statement in bad faith, and has failed or refused to return the amount of the security deposit due within the time limits provided...”  The tenants in Ikari v. Mason Properties, (2nd Dist., June 14, 2000), were found to have returned the apartment rented while they were students and Northern Illinois University to the lessor in the same or better condition than they received it, ordinary wear and tear excepted, and were entitled to a full refund of their security deposit. The landlord, Mason Properties, however, retained $259.90 of the $709.00 security deposit as payment for itemized damages.  The trial court also found that Mason had acted in bad faith in not returning the entire security deposit and awarded the tenants $519.80 as “double damages”, reasoning that Mason had failed to conduct an inspection at the termination of the lease that would have provided the tenants with an opportunity to correct any defects in the apartment, although requested to do so in ample time prior to the end of the lease term by the tenants.


The landlord argued on appeal that the trial court erred in assessing the penalty inasmuch as the “failing” here was relating to providing an exit inspection, and that it did not fail to provide an itemized statement of damages as required by the statute as a basis for the penalty.  The Appellate Court affirmed the trial court holding that the record supported a finding of bad faith generally that would not be overturned because it was not against the manifest weight of the evidence.  The decision also held that the proper interpretation of the penalty clause of the statute was to award twice the “security deposit due” (i.e., $519.80) rather than twice the “security deposit”, ($1,418.00), and held that the trial court erred in not awarding attorney’s fees because the tenants were represented without cost by NIU’s Students’ Legal Assistance Office; (“Whether an attorney charges a fee is not a basis upon which to deny attorney fees where a statute clearly and unambiguously requires an award of reasonably attorney fees upon a finding that a party acted in bad faith.)





In King v. Ashbrook, (4th Dist., June 12, 2000), the purchaser of residential real estate (King) sued the seller (Ashbrook) in small claims court more than one year after the closing and surrender of possession of property based on the fact that their contract had a Residential Real Property Disclosure Report attached which disclosed leaking in the basement and roof. The contract provided in handwritten interlineations on the addendum indicating that the report was attached and that these items would be repaired.  Within two weeks of taking possession the purchasers experienced problems with the areas to have been repaired. The Seller indicated he had made repairs and would do no more.


The trial court found in favor of the Purchaser stating “If it were not for the notation on the contract, I would say the disclosure report would relieve the defendant from any liability…(but)…Because the notation was made on the contract, and both parties acknowledge its presence, that means they agreed to repair the items and they were not repaired.” The trial court awarded the Purchaser $2,684.00 plus costs based upon an estimate for the repair of the basement wall and roof.


The Seller filed a post trial motion arguing that the claim was barred by the one year limitation of actions under the Residential Real Estate Disclosure Act, he was not liable under the Disclosure act, having disclosed and undertaken repairs, and that the damages awarded were based on inadmissible estimates.  These same arguments were made on appeal after the denial of the post trial motion.  Turning first to the statute of limitations issue, the Appellate Court’s decision acknowledged that the Residential Real Property Disclosure Act requires an action be commenced no later than one year from the earlier of the date of possession, occupancy or recording, (765 ILCS 77/60), but noted that the trial court’s decision was based on a cause of action for breach of contract, (which has a 10 year statute of limitations under 735 ILCS 5/13-206), rather than the Disclosure Act.  Noting, “The Disclosure Act does not limit or change a purchaser’s common-law remedies,” it ruled the action was brought within the appropriate statute of limitation period.  Based on the same reasoning, (i.e., that the case proceeded under a contract theory at common law rather than the statutory remedy of the Disclosure Act), the Court also dismissed the Seller’s argument that the Purchaser’s failed to prove his liability under the Act.  The Court also affirmed the breach of contract decision below, holding the contract sufficiently definite and finding that “common sense dictates the repairs had to be made in a ‘reasonable fashion’” so that they would last more than two weeks after closing.


Finally, applying civil procedure rules, the trial court’s award of damages based on estimates was upheld due to the fact that the Seller failed to raise a hearsay objection at trial and thereby waived the problem relating to the estimates, but reduced the award by $34 noting that the damages awarded must be based on the amount supported by the evidence; (at least mathematically).


(This case is the latest link in a growing chain of post-closing decisions relating to the Residential Real Property Disclosure Act, and certainly illustrates the importance of pleading multiple counts, including common law breach of contract…although the issue of “merger” seems to have been missed here….)





In addition to the simple calendar calculations that go into determining if a subcontractor or contractor has complied with the notice provisions of the Illinois Mechanic’s Lien Act by filing a timely notice of claim for lien, often the issue revolves around whether certain work was “substantial” in order to be used as a date of completion, or “trivial” so as to not extend the time for filing notice of claims for lien as the last date of work.  The court considered the various tests for the “substantial” vs “trivial” work issue in Merchants Environmental Industries, Inc. v. SLT Realty, (1st Dist., June 6, 2000). In this case, the HVAC subcontractor completed work on a restaurant project by installing 8 ceiling air diffusers on August 29, 1997.  Prior to that work, the last substantial work done on the project was invoiced on June 3, 1997 with a “final bill” and “final lien waiver”. Accordingly, the filing of the notice of claim for lien was either proper or untimely depending on which date the final, substantial work was completed under the Act.  To make the determination that a genuine issue of fact was raised that the work on August 29, 1997 was not trivial, the Court reviewed various theories and remanded the case.  Under Illinois law, work that is trivial, insubstantial, and not essential to the completion of the contract does not extend the time to file under the Mechanics Lien Act. That which is in the nature of maintenance or correction of a completed job rather than work need for the completion of the contract will not extend the time in which to file a lien.  A contractor who does work at his own initiative, (rather than at the request of the owner), purely in order to revive a lien claim will not be countenanced with an extension of the period to file. Whether the owner requested the work will be an important consideration, and work done at the request or demand of the owner will most likely extend the time to file. Work that, as in the case at issue, is part of the “base contract work” and is required to complete the contract will be included in the period from which the lien must be filed. Work necessary to make something operable is not trivial or inconsequential and will also come within the time period of substantial work.


This decision also considered the argument made by the contractor that there was a factual issue as to whether the owner relied upon the mechanic’s lien waivers given.  The owners argued that the contractor supplied lien waivers that were clear and unambiguously a full release and therefore served as a bar to the action. The Court noted that “While a clear unambiguous waiver of mechanic’s lien rights bars an action under the Mechanic’s Lien Act, this rule is only applicable where an innocent party has relied upon the waiver in making payments to the general contractor.”  Here, while the lien waivers were clear and unambiguous, extrinsic evidence relating to the dealings of the parties could and should have been be considered by the trier of fact to determine if the waivers were actually relied upon by the owners.  If the facts could have shown that the owners did not actually believe that the lien waivers represented a full release of the lien rights at the time given, then the waivers would not serve as a bar to recovery. “Hence, the question becomes whether custom and usage would be helpful in determining how the waivers of lien to date were viewed by the parties. If so, it should be considered, and we think that it should.”


Finally, the Court held that since the Notice of Claim for Lien did not include a completion date, the claim was unenforceable against third parties.  Section 7 of the Act requires that a claim for lien be recorded within four months of the completion of work in order that third parties be able to determine from the claim itself whether it can be enforced.  Inasmuch as the subject claim for lien did not set forth the date of completion, it was not susceptible to review and determination of validity by third parties on its face, and therefore not effective as to them.  “While Section 7 itself does not expressly require inclusion of the completion date in the lien claim, nevertheless that requirement must be inferred. One of the primary purposes of that section’s four-month requirement is that third parties be enabled to learn from the claim whether it is enforceable. Without a completion date, a person examining the lien claim would not know whether the four-month filing requirement had been met.”





The new Harry Potter book wasn’t available yet as I gathered up some stuff to read over the July 4th holiday, so I took a look at the following newsletter articles and found them worth recommending for you to keep up to date on real estate for the summer. (And, I even managed to find some intrigue, greed and at least communal living in the process.)


“The Age of Aquarius Revisited: Communal Living Today” by James M. Byers, appears in the “Title Issues” newsletter published by Chicago Title Insurance Company, Vol. 9, Number 3, May/June 2000.  Mr. Byers discusses the developing needs and conflicts among communal living arrangements; condominiums, townhomes, and such.  After dealing with the definition of condominiums, administration and control, declarations and bylaws (with statutory references to the Illinois Condominium Property Act), the articles looks at Age Restrictions, Pet Restrictions, Leasing Restrictions, Use, Improvements and Intrusions on Common Elements, Driveways, Balconies and Parking Spaces.  Illinois law is cited where it exists, but what may be most helpful here is the reference to other state case law where Illinois has not yet spoken. (Copies of the articles mailed to attorneys and customers may be obtained from Bill Glewicz, at the Chicago office, , or via


The June, 2000 issue of the ISBA Real Estate Section Council newsletter, “Real Property”, Vol 45, No. 6, contains a detailed discussion of the developments in tenancy by the entirety and fraudulent conveyance,  (Premier Property v. Chavez, E.J. McKernan, and In re Marriage of Del Guidice), in an article by Robert H. Rappe, Jr. and Steven C. Lindberg entitled “Supreme Court provides some guidance for advising clients on holding title as tenants by the entirety”.  Jordan Shifrin and Laurence B. Hirsch also have some interesting perspectives on the case law developments noted in recent months relating to the fiduciary duties owed by a developer to fund capital reserves in townhome and condominium projects.  In “Saving for a rainy day; The developer’s fiduciary duty to fund capital reserves” the cases of Maercker v. Point Villas Condominium Association, Board of Managers of Weathersfield Condominium Association v. Schaumburg Limited Partnership, and Seven Bridges Courts Association v. Seven Bridges Development, Inc. are analyzed noting that: “it is imperative to keep in mind that condominium declarations are essentially contracts. Because they are contracts, the caselaw seems to draw a line in the sand…and…although the courts have drawn lines, it is clear that condominium and homeowner associations must wait for the next move to be taken by real estate developers.”  Finally, this same issue has an excellent article for those real estate lawyers who do not often see the seamier side of the business entitled “FLIP! Not just another four-letter word” by Lynn W. Wilburn.  Lynn coaxes us all to do some late night TV watching with her note that the proliferation of fraudulent transactions can be attributed to Informercials on how to buy real estate with no money, notes that “the primary culprit for the majority of these frauds currently under investigation is the mortgage broker”, and then gives us the “ABC’s of FLIP transactions”.





The controversy between the Illinois Real Estate Lawyers Association and Koenig & Strey over the memo Koenig & Strey circulated among its offices advising real estate sellers that they do not need representation by attorneys at closing has it a new crescendo.  The IRELA response to the memo advising seller’s that Koenig & Strey’s title company would prepare closing documents and provide the seller with “everything except a bill for attorney’s fees” has been firm and steadfast; even in the face of a “counter-memo” directed to the “The Officers, Directors and 192 Members Illinois Real Estate Lawyers Association” dated June 22, 2000.  In that memo, President of Koenig & Strey, Christopher J. Eigel, states that “our internal e-mail of February 9, 2000 that touched off this issue has been wholly repudiated, (but) early attempts to clarify it were not perceived to have been successful.”  IRELA President, John O’Brien, countered that his Association now numbers in excess of 700 members, (a dramatic increase not unrelated to the stance IRELA has taken on this issue), and notes that “…our members have reported…the sudden increase in occurrence of unrepresented sellers…”  IRELA is vowing to institute legal proceedings in the immediate future because of the high incidence of Koenig & Strey transactions in which closing documents, with the exception of the deed, are being prepared by Koenig & Strey Title and the deed is prepared by a private attorney without regard to the provisions indicating that such conduct is an ethical violation and aids the unauthorized practice of law found in ISBA Ethics Opinion No. 94-1.  The Illinois State Bar Association Board of Governors voted on May 19, 2000 to file an amicus curiae brief in support of IRELA’s position in litigation. The announcement of this position and an article dealing with the situation was printed in the June 15, 2000 ISBA BAR NEWS, Vol. 48 No. 23.