(December 2000 – January 2001)


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: The last month of the new Millennium, (or is it the last month before the new Millennium?), came a little too quickly for me, and there was no installment last month.  My apologies to any of you who were looking to see if they had been “unsubscribed”; (isn’t it interesting…the nuance of language that this technology brings to us and all that it means…can you imagine being “unsubscribed” from the Chicago Tribune or Time magazine???)


This month’s offering includes a welcome relief from the IRS relating to reporting of payments to lawyers at closings that was supposed to go into effect on January 1, 2001, a couple of good foreclosure cases, two prior reported cases re-visited, (the Illinois Supreme Court upholds the Cook County Collector’s sale rules and the Third District modifies its ruling on non-conforming use by emphasizing the abandonment issue), Dick Bales gives us the “title company perspective” on the Permanent Survey Act discussed earlier, the statute allowing partial payment of real taxes on an underlying parcel is mentioned, and  on these cold winter days, there is even a case about a tropical island to get you through to February!


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.)





If you are on as many mailing lists as I am, (e-mail and otherwise), you probably began receiving advice from the various title companies in October or November that the IRS Regulations would go into effect on January 2, 2001 requiring the reporting of all payments made to attorneys or law firms in connection with real estate transactions on Form 1099-MISC.  They were, understandably, concerned about compliance.  The source of the concern was to be found in 26 USC 6045(f) of the Taxpayer Relief Act of 1997.


Early explanations were pointed and nothing short of fear-inspiring:  “The IRS has fixed its focus on attorneys.  They believe that a substantial number of them are underreporting their income.  The aim is to collect the taxes from attorneys they believe are not being paid.”  (First American Title Company memo from James Weston dated December 15, 2000.)  In order to accomplish this, the regulation removed the $600 per year minimum reporting sum as well as the exception for attorney corporations, and then required reporting even “If a check is delivered to an attorney who is not the payee, under circumstances where it is reasonable for the payor to believe that the attorney is receiving part of that sum for legal services.” The regulations require reporting that would allow the IRS to determine the amounts of money passing through attorneys during transactions, and the reporting criterion was switched from being “income driven” to one which was to be all inclusive “payment driven”.  Accordingly, all monies paid to an attorney as the payee, whether for fees, or for the benefit of a client, or in some other capacity, or simply delivered to an attorney were going to have to be reported…. and then potentially “explained” by the attorney or law firm in an IRS audit. This promised to place not only a tremendous reporting obligation on the title companies as the “middleman” of the payment, but also seemed to assure a most uncomfortable conflict of interest (i.e., between self preservation for the attorney and disclosure of client financial information in an audit to avoid having to pay tax on non-income proceeds) for the attorney at “audit time”.  Attorneys who refused or declined to provide the reporting information would subject themselves or their clients to a 31% backup withholding.


All of this resulted from an IRS “sting operation” in New Jersey that the IRS stated netted a number of attorneys who substantially underreported their income. (What else should we expect from the “Land of The Sopranos”?)  The Taxpayer Relief Act of 1997 was the vehicle in which the IRS planted the seed to require information returns for all payments to attorneys to fuel their investigations and audits.  The initial reporting was to have begun in 1998, but the IRS proposed rules for implementation were delayed into 1999, and then 2000.  The regulations were to become self-executing on January 1, 2001 unless the IRS further deferred implementation. With the waning days of 2000 passing and no action coming forth from the IRS, the title companies began preparing themselves for the inevitable ire of their attorney clientele in the New Year with memos of impending reporting doom. We even got to the point of receiving requests for taxpayer identification numbers in the middle of December from some title companies.


Then, a with mere THREE business days remaining, accompanied by a great sigh of relief, the title companies reported the IRS issued Notice 2001-7 on December 26, 2000, which indefinitely delays the implementation of the Section 6045(f) regulations until “the first calendar year that begins at least two months after the date of the publication of the final regulations in the Federal Register...Because the Service is continuing to study the many comments regarding the NPRM (Notice of Proposed Rulemaking) under Section 6056(f),”.  The Notice concludes indicating that Sara Paige Shephard, of the Office of the Associate Chief Counsel, Procedure and Administration, is the principal author of the notice and giving her non-toll-free telephone number. (Should we call to thank Ms. Shephard for her effort and vision?)


This may well be a “shot delayed”, rather than a “bullet dodged”, however.  The Taxpayer Relief Act of 1997 is in place and the regulations still pending that may implement what could be both a reporting tedium and a IRS audit nightmare for some law firms and attorneys.  Jim Weston of First American Title, (who has kept many of us abreast of the developments and was originally going to speak about implementing the regulations until the December 26, 2000 delay notice), will speak to the membership of IRELA, (Illinois Real Estate Lawyers Association), at the upcoming meeting on January 10, 2001 at Canting 8:00am.  He will discuss the subject generally and what we as an industry can and should be doing to exempt ourselves from these types of regulations. (Another good example of Irena’s leadership and contribution to real estate transactional attorneys in Illinois!)





In October, we discussed the decision in Village of Plainfield v. American Cedar Designs, Inc., (3rd Dist., September 12, 2000),  relating to an 11 acre parcel of land located in the Village of Plainfield as the subject of a village complaint against the owner to cease the use of its property for cedar fence manufacturing.  The Third District opinion held that although there was a discontinuance of the prior owner’s use for a period of just over a year, this did not constitute an “abandonment” of the non-conforming use.  An abandonment must be the result of a voluntary intention to abandon the use, and not a mere cessation of the use, in order to prohibit reestablishment. There must be evidence of voluntary conduct that indicates the owner intended to abandon the nonconforming use.


The decision was slightly modified and was re-published on November 20, 2000 (using the same html address --- an interesting dilemma for those technology lawyers considering electronic case citation with unique addresses!)


I recently came across a situation in a Lake County case in which a village attempted to argue that because foreclosed property was vacant for a period of 30 days, it lost its status as a non-conforming, grandfathered use and would have to be deconverted from a two-flat to a single family residence.  Presuming the application of the “abandonment” criterion in this case, the Third District opinion appears to be a good one for attorneys for keep at their fingertips.





World Savings and Loan Association v. AmerUs Bank,(1st Dist., November 16, 2000), is a case that visits familiar territory to mortgage foreclosure attorneys, but with a different result than some recent case law;  pointing out that sometimes it is most important to consider whose interests are being affected at confirmation of sale to determine what the courts may do.


A junior mortgagee took the appeal from the confirmation of the sale to a third party bidder. The sale publication notice and judgment provided that the terms of the sale were to be “Cash”.  When the Plaintiff sought to confirm the sale, AmerUs Bank opposed the confirmation and alleged that the sheriff failed to follow the terms of the sale by allowing the third party bidder, Dorota Wasik, to pay 10% of the sale price at the time of the sale and the balance within 24 hours, while rejecting the higher bid of AmerUs because its attorney did not have cash-on-hand at the sale.  (AmerUs Bank had wired transferred sufficient funds to bid to its attorney, but his own bank inadvertently delayed crediting the law firm’s account until the day following the sale, and as a result he had no “cash” at sale.)  Even though AmerUs Bank’s attorney had obtained the plaintiff’s permission to bid without cash on hand, provided he obtained the cash before 5 pm of the same day, the sheriff’s deputy determined the inability to tender cash at the time of sale invalided the AmerUs bid and held the sale over; resulting in the sale to Wasik on a second round of bidding.  At the hearing on confirmation, Dorota Wasik filed an affidavit stating that in reliance upon her successful bid at the sale, she contracted to sell her current home in anticipation of moving into the subject premises as her new home. The deputy sheriff testified that the policy of his office was to require 10% down in the form of cash or a certified check at the time of the sale and payment of the balance within 24 hours, and that this policy was announced before commencing each sale.  AmerUs argued on appeal that the sheriff’s conduct deprived it of its interest in the subject property without due process of law and that the trial court erred in considering Wasik’s affidavit.


Section 15-1507(b) of the Illinois Mortgage Foreclosure Law provides that the sale officer derives his authority to hold the sale from the judgment, and  it is his duty to conform to the court’s order.  Justice Barth, (who had last served in the trial courts in the Chancery Division of Cook County where he regularly presided over foreclosure cases and confirmation of sales), nonetheless notes that there was no specific requirement of a cash sale in the judgment in this case, and reviewing cases where deviation from the trial court’s order provided cause for setting aside a judicial sale, holds that there was no clear departure from the sale terms set forth in the judgment here.  “To give a party in [AmerUs]’s position the ability to delay a sale any time the order does not directly address an issue which arises at the sale could have serious implications for the orderly administration of judicial sales…Had the judgment contained more specific terms of sale…this dispute could have been avoided.  In any event, the circumstances surrounding this sale did not give rise to irregularities which would have required the trial court to set it aside.”  While the trial court should not have considered the disputed evidence regarding the sale of Wasik’s residence in reliance upon the sale, “The trial court’s consideration of this evidence does not warrant a reversal here, however… It is proper for a trial court to balance the hardship that would result to a third party bidder if the sale is not confirmed against the hardship which would result to other interested parties if the sale to the third-party is confirmed.”  Noting that “…because [AmerUs] could attempt to recover the debt from the [owners] through other means. The hardships which [AmerUs] and the [owners] allegedly have suffered are a natural result of any sale to a third-party bidder.”.   Justice Barth concludes that “Therefore, this is not a situation where the actions of the sheriff’s department had the effect of unilaterally depriving [AmerUs] of its property rights without notice or an opportunity to be heard.”, and affirmed the confirmation of the sale.


It is clear that the position of AmerUs as a junior mortgagee, (which probably did not prove-up in the judgment and therefore could not “credit bid”), was the most important aspect of this case.  The mortgagor/owners were served with process by publication and therefore their interests were really not at issue as in the Espinosa and Deal decisions where the confirmation of third-party sales was denied in order to avoid an unjust result. Not to be overlooked is the potential for the precedent in this case to combine with that in Phoenix Bond and Indemnity Co. v. Pappas, (1st Dist., January 25, 2000), discussed below, to stand for the proposition that the sale officer has significant implied powers to set reasonable grounds for the conduct of the sale.





In the April, 2000 installment of these Keypoints, we considered the case of Phoenix Bond and Indemnity Co. v. Pappas, (1st Dist., January 25, 2000), where the First District ruled that the Cook County Collector’s power to hold tax sales necessarily carries with it the power to set reasonable ground rules for the sales.  The Collector, in response to an anti-competitive practice among bidders to make multiple, simultaneous bids in order to force sales for the maximum interest, promulgated a rule resulted in the property being forfeited rather than sold.  The bidders obtained a temporary restraining order preventing enforcement of the rule from the trial court, and the First District reversed, finding that implied in the authority to conduct the sales is the ability to promulgate rules for the conduct of the sales that are congruent with the legislative purpose.


On December 1, 2000, Justice Harrison, writing for the Illinois Supreme Court, affirmed the First District, in an opinion that is clear and concise.  The preliminary portion of the opinion is worthwhile reading for the statement of the law it contains relating to tax sales and redemptions; (although the distinction that what is sold at a tax sale is the lien of the county rather than the real estate itself is not perfectly clear when it is stated that “the bidder…is allowed to purchase the property” rather than that the bidder purchases the lien and the right to obtain title through a petition for a tax deed).  Stating that the appellate court was correct in its finding, Justice Harrison found that the power to conduct tax sales necessarily carries with it the powers to set reasonable rules for the sale, provided that the rules are consistent with the statutory scheme erected by the legislature. Since the Tax Code directs that the properties are to be sold to the lowest bidder in an effort to foster competitive bidding, and none of the bidders met the qualification of the statute of being the “lowest”, the Collector was acting within her power to treat the property as though it did not attract a proper bidder and declare it forfeited in order to avoid the subversion of the legislative goal in providing for the sale.


(This case and the reasoning in the prior case of World Savings and Loan Association v. AmerUs Bank certainly seem to suggest the proposition that a sale officer has significant implied powers to set reasonable grounds for the conduct of the sale, and perhaps the connection should not to be overlooked as developing the precedent in this area.)





Last month, an article on the Illinois Permanent Survey Act that appeared in the May 2000 issue of The ATG Concept was the topic of one of the Keypoints.  That article was particularly timely in my practice because of an action to quiet title that I was completing, so I included it, thinking that it might be somewhat novel and of interest to all of you.   As is so often the case, however, my friend Dick Bales not only was conversant with the statute, but has some other thoughts from his perspective that takes my beginning point and carries it forward with some meaningful and critical thinking:




I read last month's "Key Points" with more than a passing interest, because Steve happened to discuss the Illinois Permanent Survey Act (765 ILCS 215 et seq.)  This Act provides for the re-establishment of the corners and boundaries of properties when said corners and boundaries are lost, destroyed, or are in dispute.  Among other things, a commission of three surveyors is appointed to survey the land and then report its findings to the court.


I was recently asked to give my opinion concerning the findings of one such commission.  What has always disturbed me about this Act is the possible over-emphasis on the surveyor's role in this proceeding.


In my particular instance, it appeared that the surveyors' findings, while technically accurate, might disrupt long-standing property interests.  While talking with the attorney who called me, I was reminded of one of my favorite cases, WESTGATE V. OHLMACHER, 251 Ill. 538 (1911), and I wondered how this case fits into the scientific approach that seems to be contemplated by this Act.  In WESTGATE the court made this observation:


"In case of a disputed boundary line in a town, city or village, where the monument from which the town, city or village was platted is lost or destroyed, the courts ought not to disturb boundary lines between lot owners which have been acquiesced in for years and upon which the lot owners have erected improvements, upon uncertain evidence, or upon the mere conjecture of a surveyor or a number of surveyors who have made a re-survey of the town, city, or village, and who admit upon the witness stand, as was admitted by the surveyors who re-surveyed block 15, that they did not know and could not tell whether the point from which the re-survey started corresponded with the point from which the original survey was made.  It is undoubtedly true that the determination of the location of a disputed boundary line is usually a question of fact, and manifestly such is the case here; and where the monument from which the original plat was made is lost or destroyed, the supposed boundary lines practically acquiesced in by the owners of lots in the municipality, as evidenced by their conduct in building houses, business blocks, fences, etc., should, in a case of doubt, control."


The court then went on to quote Michigan Supreme Court Justice Cooley, who, from what I have been told, is essentially the "patron saint" of surveyors.  The following passage is certainly memorable:


"Nothing is better understood than that few of our early plats will stand the test of a careful and accurate survey without disclosing errors.  This is as true of the government surveys as of any others, and if all the lines were now subject to correction on new surveys, the confusion of lines and titles that would follow would cause consternation in many communities.  Indeed, the mischief that must follow would be simply incalculable, and the visitation of the surveyor might well be set down as a great public calamity."


It just seems to me that when utilizing the provisions of the Permanent Survey Act, we attorneys cannot just sit back and let the surveyors work their digital magic.  We cannot forget Cooley's admonitions.  In this respect, I do recognize (and am somewhat comforted by) Section 4 of the Act, which provides that "any person whose interest may be affected by the survey shall be at liberty to enter his objections to the report, and the court shall hear and determine the objection."  And I see that Section 2 provides that notice shall be served on the owner or owners of any adjacent tracts of land.  Nonetheless, if I represented a client whose property was being adversely affected by the findings of a surveyors' commission, I would probably want to tell the judge about WESTGATE and any other similar cases.


Dick Bales, Chicago Title, Wheaton





(Ed. Note:  I simply couldn’t resist including the case that follows this month.  While it is from the District Court for the District of Columbia and concerns an action to quiet title to lands claimed by the federal government, (something most of us are unlikely to encounter), the attempt to elevate a “revocable license to mine guano” (you all know what that is, right?) to title by the Appellant, and the Court’s decision dismissing the claim, was just too good to pass up. 


Some of you may also know that my wife has two parrots, and accordingly, the mining of guano is something that goes on in our house during most Saturday morning house cleaning sessions…so there is some personal relevance here.  And…. I have also been talking to another author of these monthly updates, Donna Cunningham, about the possibility of providing material of a more national scope, so you may see more federal court cases like this in the future…. not likely that we’ll see many topical island or guano issues coming forth, though.)


In William A. Warren v. United States of America, (Dist. D.C., 12/26/2000), , Warren appealed from the District Court’s dismissal of his suit to quiet title to Navassa Island, (an island of less that three square miles in the Caribbean between Haiti/Dominican Republic and Jamaica approximately one hundred miles south of Guantoanomo Bay, Cuba), and its deposit of guano, (“bird droppings rich in nitrogen and phosphate”), based on the expiration of the 12 year statute of limitations period in the Quiet Title Act, 28 USC 2409a(g) relating to federal lands.   Under the Guano Islands Act of 1856, (48 USC 1411-1419), a United States citizen who discovers an island, rock or key not within the jurisdiction of any other government with a deposit of guano, and who provides notice of the discovery to the Department of State, may be allowed, at the pleasure of Congress, the exclusive right of occupancy to obtain the guano in order to sell and deliver the same to citizens of the United States. (Really!)  In 1859, then-Secretary of State, Lewis Case granted Edward Cooper, the assignee of Peter Duncan who discovered Navassa Island, all of the privileges intended by the Guano Islands Act.  (We know this because in the case of Jones v. United States, 137 U.S. 202, the United States Supreme ruled that the Act was constitutional, and that Navassa Island is within the jurisdiction of the United States. This ruling was necessitated by the fact that in 1889, an employee of the Navassa Phosphate Company, the assignee of Edward Cooper, was tried and convicted for the murder of his supervisor while on Navassa Island, and argued on appeal that a federal court in the United States did not have jurisdiction to try him because the island was not within the court’s jurisdiction.  (Many “bird-people” will tell you that lengthy exposure to guano is hazardous to your mental health.)  He lost twice.  This case has *everything* bird droppings, murder, intrigue, betrayal and topical locations for movie rights…) 


During the Spanish-American War, President McKinley ordered all inhabitants off the island, and the Navassa Phosphate Company was placed in receivership and dissolved in 1924.  In 1913, however, President Woodrow Wilson declared the island “reserved for lighthouse purposes…in the public interest”.  A lighthouse was built, manned by the U.S. Coast Guard for a time and then operated by automation until September 1995, when the equipment was removed.  In July 1996, Warren requested permission from the Coast Guard to land on the island and shoot a documentary film. (Can you see this coming?)  On September 11, 1996, Captain B.W. Handley, U.S. Coast Guard, granted him permission subject to a waiver of liability and acceptance of responsibility for his personal safety while on the island.  The day following, Warren sent a letter to Secretary of State Christopher giving “notice of his discovery, occupation and possession of Navassa Island.”  The letter noted the Coast Guard had abandoned the island and requested recognition of his claim of discovery under the Guano Islands Act of 1856.  In January 1997, the Department of State responded to Warren indicating that Navassa Island was already under the jurisdiction of the United States.  On February 13, 1997, Warren filed a pro se complaint in the U.S. District Court for the Southern District of California seeking “full and complete title to the Island, buildings and guano.”  (I love this guy!  His third amended complaint sought the imposition of penalties against three members of Congress and the President of the United States for failing to represent his interests in the island adequately.)


The District Court eventually dismissed Warren’s claims for lack of subject matter jurisdiction, finding that the Guano Islands Act only created a revocable license, not fee ownership, and that the license had been revoked by President Wilson’s declaration of reservation of the island for navigational purposes in the public interest.


In addition to good factual reading, the decision in this case is helpful in its background on the Quiet Title Act as the “exclusive means by which adverse claimants [may] challenge the United States’ title to real property” and a waiver of sovereign immunity as to certain quiet title actions That waiver, however, has a twelve year limitation from the time the plaintiff or his predecessor in interest knew or should have known of the claim of the United States.  (28 USC 2409a(g).  Congress revoked the revocable license to mine guano by passing the appropriation bill for the construction of the lighthouse in 1913 on Navassa Island, and the removal of the lighthouse did not amount to “abandonment”, (as argued by Warren in support of his position that this triggered a new statute of limitation period), because the Coast Guard restricted and controlled access to the island even up to the day Warren stepped foot on or near the guano with their prior written permission. In the end, Warren’s interest was neither one of  “discovery” under the Guano Islands Act, nor had he a fee ownership interest to assert. (One can only wonder what will become of Navassa Island now that there is no one to mine or remove the guano in the future.)





The United States Government is not always afforded such deference as seen in the case of Warren v. United States.  Where appropriate, the United States is not only denied the relief it requests, but can be sanctioned as well.  This occurred in United States of America v. William McCall, (10th Cir, 12/15/00), a mortgage foreclosure proceeding.  The United States filed the appeal after judgment was entered against it in a foreclosure suit that it filed against William McCall in the District Court of New Mexico to foreclose property pledged to secure several notes on which McCall had defaulted.  The judgment dismissed the foreclosure suit after a bench trial, and also imposed sanctions in the form of an award of attorney’s fees, costs and other expenses in favor of McCall.  The ruling against the United States was based on a finding of bad faith in filing the foreclosure in light of what the District Court found to be a binding settlement agreement that served as an accord and satisfaction of the debt owed, and therefore barred the action.


Prior to the filing of the suit, McCall entered into prolonged settlement negotiations with Asst. U.S. Attorney Manuel Lucero.  Lucero had received a referral package from the Farmers Home Administration (FmHA) recommending foreclosure based upon the monetary default, and which had a statement in the “Special Remarks” section stating, “…the amount the agency will settle this account for is $76,894.00.” Settlement negotiations between McCall and Lucero culminated in a June 26, 1995 letter from Lucero to McCall which, after rejecting a number of counteroffers from McCall stated:


“I have contacted the agency regarding your officer to settle this matter for $70,000; however the Farmers Home Administration would like me to proceed with the foreclosure action unless you can pay to this office on or before July 15th $84,000.  If that is not possible, I will file the foreclosure action on July 17th.”


Thereafter, Lucero stipulated on July 17th, he extended the offer expiration date to September 6, 1995.


On September 5, 1995, David Blagg, a neighbor of McCall and owner of land adjacent to his, called Lucero to notify him of an agreement he had reached with McCall to loan him the $84,000 to payoff the loan and clear title to the property.  In an affidavit filed at the trial, Blagg stated that he understood from Lucero at the time of this telephone conversation that the arrangement would be acceptable and a closing would be arranged in the near future.  Asst. U.S. Attorney Lucero stated at trial, however, that he had handwritten notes that indicated otherwise, and that he advised Mr. Blagg that a new appraisal had to be done; which implied that if the appraisal stated a higher value than anticipated, the offer of settlement would be rejected or renegotiated.  (Neither Blagg nor Lucero actually testified at trial and these facts were adduced by affidavits and stipulations much to the consternation of the Tenth Circuit’s opinion which sharply criticized Lucero for not avoiding the ethical dilemma of playing a dual role as both a material witness and advocate for the plaintiff in the case;  “Lucero should have never have been in this position, and once he found himself there, should not have allowed himself to remain.”)


The District Court rejected Lucero’s interpretation of the events. It found that the June 26th letter set forth no conditions or prerequisites, and constituted an unconditional offer to settle the debt for $84,000.  Noting that the offer had remained pending for several weeks before both the original and extended expiration dates passed, during which time the agency neither undertook an appraisal nor communicated an appraisal requirement to defendants, the trial court found that McCall reasonably expected his case had been resolved, and the government could not impose a condition on an offer to settle that had never been communicated.  Awarding fees under the bad faith exception to the “American Rule”, Dist. Judge Kane adopted the statement of law that: “Because inherent powers are shielded from direct democratic controls, they must always be exercised with restraint and discretion.”, and noted that the actions of the government here appeared to be “neither fair nor forthright.” with “no basis in fact or in law for its abrupt change of position, which revoked the essential terms of settlement it had itself unilaterally established.”, so that “The agency’s actions depart so far from reasonableness as to warrant the imposition of sanctions.”


This case has a lot of good language for foreclosure defendants who may be the victim of perceived lender abuse during settlement negotiations. Many times it appears that the unreasonable actions are related to the inconsistent positions or lack of communication with the lender.  Other times the source of the problem is, as appeared here, the result of counsel’s position.  The point made by the Court in criticizing the Asst. U.S. Attorney for his “dual role” is one to be remembered.





Like most attorney who continue representing buyers in residential real estate transactions, I find it a constant struggle between “time” and “money”.  On one hand, I’d like to continue to offer, if not actually improve, the level of counseling I give to buyers as part of my commitment that attorneys are an important and necessary component to the transaction.  On the other hand, of course, due to the continuing pressure to keep attorney’s fees at a competitive level, the amount of time I can actually spend answering questions and explaining the process outside of the closing room is limited.  (Especially if you are representing the buyer, traveling to the closing place designated by the seller, and not acting as the “title agent” in the transaction.)  One effective way of meeting this dilemma is to consider the fact that more and more clients are aware of and have access to the Internet, and give them directions to reliable resources on it for them to educated themselves.  One such resource is the Secretary of Housing and Urban Development’s “Homebuyer’s Kit”, which can be found on the Internet at This is a great place for homebuyers to begin understanding the process of buying a home and fine-tune their issues and questions for you as their attorney.  The site opens with “Common Questions From First-Time Homebuyers” and lists “100 Questions About Buying a Home”.  There is a section on “How Much Mortgage Can You Afford?” with a “Calculator”,  “Tips” about how to shop, compare, and negotiate with mortgage brokers, and a discussion of the differences between conventional and federal mortgage programs.  While there is no corresponding section on choosing an attorney, there is a discussion of choosing a real estate agent, followed by introductions to home inspections, appraisals and homeowners insurance.  My staff and I are going to include a mention of this site with the url address in our “engagement letter” for homebuyers in the coming year. I am hopeful it will provide them with information to use in our relationship; which will be a part of the value that I offer to them as an attorney.  It may serve as a better source of introductory information than I can…. while driving down the road on a cell phone trying to return calls.





Even those who practice primarily in the area of real estate, and wouldn’t know how to file standard interrogatories in a person injury action if we had to, nonetheless manage to come across issues relating to the liability of a landowner or person in possession to someone on their property and the duty to avoid dangerous conditions.  A recent Fourth District Case, True v. Greenwood Manor West, Inc., (4th Dist., October 4, 2000), provides a good review, and reaffirms the application of the Restatement (Second) of Torts adopted by the Illinois Supreme Court relating to the “open and obvious hazard” and “distraction” exceptions.


In this case the Plaintiff, Vivian Opal True was visiting her sister in a nursing home when she tripped over a fan that had been left in the center of the room. Following a jury verdict in her favor, the nursing home, Greenwood, filed a motion for judgment notwithstanding the verdict, alleging that it did not owe a duty to True as a matter of law.  The trial court denied the motion, and on Greenwood’s appeal, the Fourth District reversed citing Section 343A of the Restatement for the law in Illinois that:


“A possessor of land is not liable to his invitees for physical harm caused to them by any activity or condition on the land whose danger is known or obvious to them, unless the possessor should anticipate the harm despite such knowledge or obviousness.”


The Restatement offers the illustration of an injury caused by walking into a plate glass door that would be obvious to anyone exercising ordinary attention. A customer mistakes the door for an open doorway while coming into a business office and preoccupied with his own thoughts. The resulting injury is one for which the landowner is not liable under the “open and obvious hazard” exception to the duty of care set forth in Section 343 of the Restatement.  The “distraction” exception set forth in the Restatement requires that the landowner/possessor anticipate the injured person might be distracted from the open and obvious condition because circumstances require them to focus their attention elsewhere. Here, Ms. True simply did not look down as she turned to leave the room, and missed the open and obvious hazard of falling over the fan, but Greenwood could not have reasonably foreseen that True would be distracted.  The likelihood of injury was slight, and the Court found it burdensome and impractical to require the Greenwood staff remove the fan each time a resident left the room or did not need the fan; hence, no liability as a matter of law.





Last month I came across a situation that may become more common with the increased pace and continuing residential development in the south and western suburbs expanding into the outlying counties. Be forewarned and forearmed.  A builder had put up a subdivision of townhomes, but a number of circumstances resulted in delaying the completion of the tax subdivision of the properties into new, separate tax parcels. My clients were a group of homebuyers who had purchased residences the preceding year from the builder and received a tax proration at closing based upon the previous year’s unimproved tax assessment.  Some lots within the subdivision remained unsold, some owners were mystified by the concept that they were supposed to pay the difference between the proration they received and the portion of the actual bill attributable to their lot.  The county assessor and collector had moved quickly to re-assess the property, but the delay in the division of the properties into new tax parcels meant that some homeowners were facing the sale of the underlying tax parcel on which their homes stood for non-payment of the taxes because of the fact that some of the lots comprising the underlying whole parcel had not paid their portion of the whole bill. The builder was not as cooperative as he might have been, and had contracted and closed on an agreement not to pay (or reprorate!) when the actual tax bills came due.  The County Treasurer, of course, wanted to collect the taxes, and by this time there were interest and penalties on the underlying bill that had to be paid. He was doing his job as best he could with what information he had at the time. The mortgage companies escrowing the taxes were prepared to pay, but were totally confused when they received tax bills on the underlying parcels that were ten times the amount held in the escrow and didn’t know how to deal with a county treasurer in a different state and taxes on un-subdivided parcels.   Accordingly, as the annual real estate tax sale approached, the underlying parcels were advertised and scheduled to be offered for sale; including the underlying portions of the properties owned by the homebuyers.


The solution to the problem lies the in the provision of the Property Tax Code, 35 ILCS 200/20-210, that allows a property owner to protect his property interest from the failure of a neighbor or co-tenant to pay taxes.  This section applies where several adjacent landowners are included in one tax parcel or in which one tax parcel is owned by co-tenants.  The statute states that the county collector, when requested by a taxpayer, shall receive and accept payment on any part or portion of property charged with taxes as a “payment under specification” when “a particular specification of the part is furnished”.  (Whatever that is!  The words “partial payment” “redemption” or “payment under protest” does not appear in the section. A diligent computer search, even with the aid of my Westlaw Service Representative, Mark J. Levin, initially drew a blank, and I had to read this section three or four times when I finally found it to be certain it was the section I had heard about somewhere a long time ago!)  Once I identified the Tax Code Section with the County Treasurer, we were able to make some progress, although there is a great potential for a logistical nightmare here, too.  The Section provides that once “specified”, the appropriate portion of the tax must be paid, and if the tax on the remainder of the property remains unpaid, the Collector “enters” the specification on his or her return designating the portion of the property on which the taxes remains unpaid, and this is the portion of the property that is sold; something certainly confusing to most tax buyers and guaranteed to frighten most homeowners.   We were lucky with the logistical problems.  The parcels had been physically divided and surveys were available.  The local township assessor was very helpful in providing figures from which we were able to determine the proportionate share of the taxes our clients were to pay on their individual lots, and the Treasurer accepted these figures.  The Treasurer and State’s Attorney were also helpful and accommodating in agreeing to present a court order specifically withdrawing our affected parcels from the sale based on the specification.


There are some old, old cases under this Section of the Tax Code that will give insight to the law and process; see Stuckart v. Lamb, (1917), 277 Ill. 584, 115 N.E. 720, People ex rel. Stuckart v. Chicago, L.S.& E Ry. Co., (1915), 270 Ill. 477, 100 N.E. 720, and Lemoyne v. Harding, (1890), 132 Ill. 23, 23 N.E. 414.  This area is fraught with pitfalls, (just read the annotations relating to the effect of voluntary payment), but when the taxpayer provides a legal description or specification of a partial interest in the tax parcel and obtains a receipt acknowledging payment under Section 20-210, the failure of the other persons interested in the underlying tax parcel to pay their portion of the tax on the whole will not affect his property interest and a tax sale for the unpaid balance will only affect the un-specified portion.  Caution would suggest that this be done prior to the entry of a judgment and order of sale by the County Treasurer, however, otherwise an emergency motion for stay of sale or injunction may be necessary and could be quite difficult without the agreement of the government. Trying to put together legal descriptions and appropriate valuations on the eve of sale is not something to undertake lightly, of course.