(July, 2003)


By Steven B. Bashaw

Steven B.  Bashaw, P.C.

Suite 1012

1301West 22nd Street

Oak Brook, Illinois  60523

Tel.: (630) 472-9990

Fax.: (630) 472-9993


(Copyright 2003 - All Rights Reserved)

In addition to encouragement from the Illinois Institute of Continuing Legal Education and the Illinois State Bar Association's Real Estate Section Council, 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 from the perspective of a title company serving the public and the attorneys who represent their clients in real estate transactions.

(Ed.'s Note: July and summer is upon us. We should be out with the kids or reading novels on the beach instead of professional stuff, but some of us just can't get enough! This month, for those who are not at the resorts, we have a little light reading: a collection of noteworthy comments from the ISBA List serve, and Real Estate/Estate Planning updates, and, of course, Dick Bales.)



As noted in a recent ISBA Real Estate and Estate Planning Update: "MORTGAGE DEFENSES: The most favored defense of lenders is preemption. This is the process of nullifying state laws and ordinances that could offer a defense to a foreclosure. As a result, the Illinois borrower is frequently reduced to such defenses as breach of contract or common law fraud. Recently deceased ISBA member Harold Levine's article on the subject (the 2nd of 2) is in the June 2003 issue of Isobar's Real Estate Law Section newsletter, on line at  (Excerpted from the ISBA REAL ESTATE AND ESTATE PLANNING UPDATE--July 1, 2003)



At the end of the foregoing article in the ISBA Real Estate Section Newsletter, Sr. Editor Gary Gel Bach remarks:

"Harold I. Levine, Esquire, certainly one of our profession's most prolific real estate practitioners, passed away in May. Mr. Levine was devoted to the practice of law and had a penchant for successfully representing the underserved and needy. He was also a dedicated teacher, authoring dozens of articles designed to better inform fellow attorneys. He is sorely missed." My own thoughts about Harold, (if I may be indulged).... Harold and I had been friends and worthy adversaries over the years. We had lunch frequently after we both took our solo practices and went to medium size law firms; (he to Aronstein & Lehr and I to McBride Baker). We often presented continuing education programs together; Me, taking the part of the plaintiff's counsel in mortgage foreclosure cases, declaring "There are no defenses to foreclosures, either the money is owed or it is not!", only to be followed by Harold moments later stating "The following are the 25 most commonly known and used defenses to mortgage foreclosures, which apparently have eluded my learned colleague." Harold was my opposing counsel during a five-year period when I was foreclosing Al Capone's hotel; until he withdrew when his client refused to perform on a settlement agreement - Harold was very 'principled' about his relationships with other lawyers! Over the years, he cajoled me into doing pro bono work for the Center for Disability Law, and laughed out loud when they sent me a mortgage foreclosure defense case for a 103 year old woman and I told him that my Affirmative Defense attached a copy of her birth certificate as Exhibit "A". Yes...I too will miss Harold terribly; especially the lunches we would have and clef speaking we did together The year before last, the annual compilation of cases presented at the ISBA Law Ed program was dedicated to the memory of Joe Kelleher. This year the collected case law update will undoubtedly be dedicated to Harold, (he would call occasionally and tell me how I got a case "all wrong...), but I don't think 20 or even 30 years of collected cases could even begin to do tribute to the contributions that Harold made to the law and lawyers and legal education in his career. Harold was a bit larger than life in more ways than one. There is a void with his passing in the bar, and there will be one less source of inspiration and one less 'teacher', but those of us left behind, perhaps can 'share' enough to balm the emptiness he leaves. Attorney's Title Guaranty Fund, Inc. has established the Harold I. Levine Center for Housing at Chicago Volunteer Legal Services, where he spent countless hours representing indigent people in housing related matters. This program will provide direct representation to parties in foreclosure, eviction and related housing matters, recruit, train and support volunteers in these cases, and increase public awareness of housing problems. Donations can be sent to Chicago Volunteer Legal Services Foundation at Suite 900, 100 North La Salle Street, Chicago, Illinois 60602-2405. M. Lee Witte is the executive director and was one of Harold's favorites. You might also want to contact Peter Burnham, Aurora Avella Austria co, William Anaya, Fred Feinstein, Stanley Solar, Samuel Levine or Barbara Levine -- they are members of the Committee for Harold's Center.



Also as noted in the ISBA Real Estate and Estate Planning Update, (May 20, 2003), the regulations relating to Illinois Home Inspectors are now in place and available on-line at the Office of Banks and Real Estate website, The on-line materials include the OBRE Regulations in PDF format, a telephone number in Springfield to contact relating to home inspector issues, a link to the Home Inspector License Act, (225 ILCS 441/et seq.), the license application in a PDF form, information relating to the mandatory educational and continuing education requirements, an on-line copy of the "Candidate's Handbook", and the meeting dates and places of the Home Inspection Advisory Board; (the next meeting is July 16, 2003, if you have an inclination to go to Springfield, or wait until August for Chicago). The ISBA Update also notes that trade associations for home inspectors are on-line at, (the American Society of Home Inspectors) and, (the National Association of Home Inspectors). Both sites have a 'find an inspector" feature that searches by zip code/location and some limited consumer information. The substantive content is contained in "members only" areas.



In last month's ISBA Real Estate Listserv exchanges there was a little noted but very interesting discuss about homestead exemptions. Real Estate lawyers and title companies have adopted a fairly routine requirement of having a non-owner spouse execute mortgage documents when the title to the property is held only by the other spouse, "solely for the purpose of waiving homestead". A common and almost universal requirement, right? "No need" says Dick Bales for the vast majority of transactions. When I questioned him, he said, "Go and read the statute and you'll see!" (Most of you who know Dick can imagine the little smile and twinkle he gets in his eye at this point, right?) So, I went to 735 ILCS 5/12-903 and read the statute:

(735 ILCS 5/12-903) Sec. 12-903. Extent of exemption. No property shall, by virtue of Part 9 of Article XII of this Act, be exempt from sale for nonpayment of taxes or assessments, or for a debt or liability incurred for the purchase or improvement thereof, or for enforcement of a lien thereon pursuant to paragraph (g)(1) of Section 9 of the "Condominium Property Act", approved June 20, 1963, as amended, or be exempt from enforcement of a judgment for possession pursuant to paragraph (a)(7) or (a)(8) of Section 9-102 of this Code. This amendatory Act of the 92nd General Assembly is intended as a clarification of existing law and not as a new enactment. (Source: P.A. 92-540, off. 6-12-02.)

I called Dick back up; "Dick, I don't get it!" Dick laughed and sent me the following version of the statute to help me 'see'"

(735 ILCS 5/12-903) Sec. 12-903. Extent of exemption. No property shall, by virtue of Part 9 of Article XII of this Act, be exempt from sale for nonpayment of taxes or assessments, or for a debt or liability incurred for the purchase or improvement thereof, or for enforcement of a lien thereon pursuant to paragraph (g)(1) of Section 9 of the "Condominium Property Act", approved June 20, 1963, as amended, or be exempt from enforcement of a judgment for possession pursuant to paragraph (a)(7) or (a)(8) of Section 9-102 of this Code. This amendatory Act of the 92nd General Assembly is intended as a clarification of existing law and not as a new enactment. (Source: P.A. 92-540, off. 6-12-02.)

On second reading, (with the help of the bold face print), I 'got it'. Dick's final comment": "The wording is kind of convoluted, but title companies have traditionally maintained that the homestead laws do not apply to a purchase money mortgage." Hmmm…. So, why do they always require the spouse not in title to sign, "solely to waive homestead" at all of those purchase closings???



I attend the ISBA Annual Law Office Economics Breakfast every year, hoping to get just one 'tidbit' to make it worth while for getting up early in a resort, leaving the wife and kids (now grandkids!) in the room, and paddling over for buffet eggs and juice. This year I think I got my 'money's worth' the in the single following thought about keeping track of time and billing clients. It is especially poignant in the current economy and the crisis in the airline industry…and keeps coming back to me every time I hear about United Air Lines: "Our law firms and the airlines have a significant element in common: we both provide services that are perishable. Once a plane leaves the gate with an empty seat, that seat's revenue can never be recovered. Similarly, once a clock ticks off 60 minutes, a non-billable hour can never be recovered and is lost forever." (Excerpted from "Office Management Survival Skills Idea Exchange Breakfast, June 19, 2003", Paul J. Sullivan, Quinn Johnston Henderson & Pretoria's, Peoria, IL.)



As reported in the ISBA Real Estate list serve, ISBA Director of Legislative Affairs James Covington notes that House Bill 2550 will continue to allow title insurance companies to file certificates of release after notice to the lender and an opportunity to object or cure. It applies to mortgages and mortgage liens on 1-4 family residential real estate if the loan principal is less than $500,000. HB 2550 has passed both Houses of the General Assembly; you can read its text and track when it's signed into law, (the act has passed both the House and Senate and been sent to the Governor), at The Amendment extends the sunset provision from 2004 to 2006. (Now all we need to do is to find a way for the title companies to actually USE the act to create some order out of the "payoff/release" chaos that impacts every residential real estate transaction in the state!)



Also from the ISBA list serve, one lawyer queries:

"I have an unusual situation. I represent a client who was a tenant in a property owned by a relative of hers. The property was foreclosed upon and my client was evicted by the bank. The bank, although it was the successful bidder at the judicial sale, apparently never recorded its judicial deed. The owner of the property (after the entry of the judgment of foreclosure but before the entry of the order approving the report of sale), prepared and executed a deed purporting to convey the property to my client and another relative. My client, an elderly woman, had no knowledge of this purported conveyance. The City of Chicago has cited the property for building code violations and had named my client as a defendant because a title abstract shows the property to last be conveyed to her. There seems to be some confusion between the bank, another entity it believes it has assigned its interest to and HUD regarding which entity, if any, is going to claim responsibility for the property. In the meantime, the City refuses to let my client out of the case. I currently have a motion to dismiss pending. Another attorney suggested that I prepare a "disclaimer of interest in real property" and record it with the Cook County Recorder of Deeds. Does anyone have such a form that he or she would be willing to share? Does anyone have any other suggestion about how to extricate my client from this mess?

Dick Bales says:

I find this interesting because a similar situation has happened to an elderly relative of someone who works in this office. She asked me to help her out, and I also thought of the disclaimer statute. This is found at 755 ILCS 5/2-7. The statute states that "A person to whom any property or interest therein passes, by whatever means, may disclaim the property..." This seems to contemplate the fact that one can disclaim deeded property, that it is not just applicable to property passing by heirship or by will. In order to disclaim property, a written disclaimer must be delivered to the transferor, if possible, otherwise, to the person who would benefit by the disclaimer. If the estate is being probated, it should be filed in the court case. Then, the disclaimer has the effect as if the disclaiming person had predeceased the decedent. It seems to me that the disclaimer should be recorded, although the statute does not require this, but only states that it "may" be recorded. As every fact situation is unique, I cannot imagine a form disclaimer being very helpful. I think that we are stuck with drafting them ourselves!

Lin Hanson, (another active member of the list serve) concurs:

I think you're on the right track here. A few years ago we had an intestate estate with 50+ heirs. Our decedent had inherited environmentally damaged property a few months before his death. This property was worse than worthless, none of the heirs wanted it, we couldn't find a buyer, and we offered to donate it to the county, and they wouldn't take it. Then we hit on the idea of a disclaimer, filed it. The person from who our decedent would have inherited had no other known heir. I assume that the property will ultimately escheat, but meanwhile we got out from under our environmental problem.



The Plat Act is found at 765 ILCS 205/1. The fact that there is no paperwork or that the client no longer remembers the facts of the case should not have any bearing here. The title company can easily search the recorded documents and determine what and to whom land was sold.

Title companies request that a Plat Act affidavit be delivered at closing when they are closing unsubdivided land. Generally speaking, one cannot subdivide land without first platting it. (One can certainly sell unsubdivided land without triggering the Plat Act, as long as one is selling everything that one originally bought.)

But note that there are exceptions to the Plat Act.

I. Exceptions to the Plat Act -- No subdivision plat is required under the following instances:

A. The division or subdivision of land into parcels or tracts of five acres or more in size which does not involve any new streets or easements of access.

1. A owns a large tract of land. He can subdivide it, as long as all subdivided parcels are five acres or more in size, and as long as the subdivision process does not require any new streets or access easements.

2. In other words, you cannot take an eight acre tract of land and deed out a five acre tract, arguing that this is a five acre tract under this section, since the remainder tract is not five acres or more in size.

B. The division of lots or blocks of less than one acre in any recorded subdivision which does not involve any new streets or easements of access.

1. Many subdivisions recorded years and years ago consisted of relatively large lots. Under this provision of the Plat Act, these lots can be further subdivided without preparing a new plat of subdivision. However, again, this is the case, provided no new streets or access easements are required.

2. This exception can be confusing. The first exception deals with the division of land into tracts of five acres or more in size. This second exception deals with the division of existing lots or blocks of less than one acre in size. This second exception is not referring to the division of land into lots or blocks of less than one acre in size.

C. The sale or exchange of parcels of land between owners of adjoining and contiguous land.

1. A and B live next to each other in Sunny Acres subdivision. By virtue of this exception to the Plat Act, A can deed the Easterly 10 feet of his lot to B without having to prepare a plat of subdivision.

D. The conveyance of parcels of land or interests therein for use as a right of way for railroads or other public utility facilities and other pipe lines which does not involve any new streets or easements of access.

1. A conveyance of a portion of one's property to a railroad, utility company, or pipeline company, for, respectively, railroad, utility, or pipeline purposes, does not necessitate the preparation of a plat of subdivision, as long as new streets or easements of access are not required.

E. The conveyance of land owned by a railroad or other public utility which does not involve any new streets or easements of access.

1. A railroad or public utility can divide and convey property without first subdividing it, as long as the division does not require any new streets or easements of access.

2. Note that paragraph "D," above, concerns conveyances to railroads, public utilities, and other pipelines. But here, the statute concerns conveyances from only railroads and public utility companies. Pipeline companies are omitted. Does this mean that a pipeline company can receive subdivided property without the property first being platted, but it cannot deed the property without first subdividing it? a. Apparently so, unless the pipeline company is a public utility company.

F. The conveyance of land for highway or other public purposes or grants or conveyances relating to the dedication of land for public use or instruments relating to the vacation of land impressed with a public use.

1. The owner of a tract of land can convey a portion of it to a municipality for public use without first subdividing it.

2. Any document relating to the vacation of, e.g., a public street would not require a plat of subdivision.

G. Conveyances made to correct descriptions in prior conveyances.

1. The re-recording of a deed to correct the legal description does not require a plat of subdivision.

H. The sale or exchange of parcels or tracts of land following the division into no more than two parts of a particular parcel or tract of land existing on July 17, 1959 and not involving any new streets or easements of access.

1. A owns a large tract of unsubdivided land. He wants to divide it into two lots and sell off each lot. The conveyances will not involve any new streets or access easements.

a. Whether or not he can do this under this paragraph depends on when this same tract of land was carved out of a larger tract of land.

b. If this same tract of land existed on July 17, 1959, then it can be divided.

2. On the other hand, if on July 17, 1959 this tract had not yet been created, that it was still a portion of a larger parcel, and that thus, this tract in question was created some time subsequent to July 17, 1959, then A cannot subdivide the property under this paragraph of the Plat Act without first preparing a plat of subdivision.

I . The sale of a single lot of less than five acres from a larger tract when a survey is made by an Illinois Registered Land Surveyor; provided, that this exemption shall not apply to the sale of any subsequent lots from the same larger tract of land, as determined by the dimensions and configuration of the larger tract on October 1, 1973, and provided also that this exemption does not invalidate any local requirements applicable to the subdivision of land.

1. This is called your "one chance" or "first bite of the apple" rule -- you are given one chance to exempt yourself from the Plat Act.

2. In order to use this exemption of the Plat Act:

a. The tract of land to be divided must have existed as of October 1, 1973. If a title search indicates that on October 1, 1973, this tract had not yet been created, that it was still a portion of a larger parcel, and that thus, this tract in question was created some time subsequent to October 1, 1973, then this exemption cannot be used.

b. A survey must be made by an Illinois surveyor. The survey does not have to be a subdivision plat. All you need is a survey which contains a sufficient legal description of the boundaries of the smaller tract to be conveyed. See 1974 Op.Att.Gen. No. S-768.

c. This exemption shall not apply to the subsequent sale of lots. See 1974 Op.Att.Gen. No. S-768.

d. This exemption cannot invalidate any local requirements. J. Note that the Plat Act does not prevent individual counties from establishing ordinances which reduce the acreage minimum to less than five acres, but not less than two acres, or otherwise supplement the Plat Act.

II. Interesting court cases

A. In Heerey v. City of Des Plaines, 225 Ill.App.3d 203 (1992), the court held that a plaintiff who was merely seeking to remodel his building, and not subdivide it or sell it, did not have to first have the property subdivided. In other words, the Plat Act was not applicable.

B. In Orrin Dressler, Inc. v. Village of Burr Ridge, 173 Ill.App.3d 454 (1988), the owner of the land felt that the proposed subdivision of his land was exempt from the Plat Act, as it was a "...division into no more than two parts of a particular parcel or tract of land existing on July 17, 1959..." The plaintiff felt that the transaction was exempt, since the original parcel was divided into two parts, but then the lot line between two of the resulting parts was merely "relocated." (!!) The court disagreed.

III. The Plat Act Affidavit

A. If a proposed conveyance falls within one of the above exemptions, then a "Plat Act Affidavit," also called a "Metes and Bounds Affidavit," must be filled out and signed. This affidavit indicates the applicable exemption.

B. Once the affidavit is presented to the recorder, the recorder cannot refuse to record the deed on the grounds that the conveyance is not in compliance with the Plat Act. See 1978 Op.Atty.Gen. No. S-1350, see also 1976 Op.Atty.Gen. No. S-1143.

Dick Bales, Chicago Title Insurance Company



In a decision sure to make many a developer loose sleep, the Second District in Brazas v. PTAB, (2nd Dist., June 11, 2003), has ruled that a county assessor can reassess real estate during construction and before the issuance of an occupancy certificate. Brazas, the owner/builder built a 3,356 square foot single-family residence in Kane County. He began construction in 1992, but didn't complete until four years later, and did not receive an occupancy certificate until after August 26, 1996. During construction, however, the local assessor inspected the home in October, 1995, determined that it was 80% complete, and accordingly assessed the value of the home at 80% of the completed value for the purpose of taxes accruing on January 1, 1996. Brazas argued before the PTAB that the "pro rata valuation" of the home was improper under the tax code provision that:

"The owner of property on January 1 shall also be liable, on a proportionate basis, for the increased taxes occasioned by the construction of new or added buildings…from the date when the improvement was substantially completed or initially occupied or initially used…" (35 ILCS 200/9-180)

The assessor stated that she ordinarily would not make an assessment of property during construction if the improvement is completed within a year, but that this property had been under roof and enclosed since 1994. The PTAB found that the home was substantially complete as of the assessment date of January 1, 1996, that the statute permitted the prorate valuation (i.e., 80% completed value) used here, and that "proportional rather than a total exemption is appropriate for residences that are partially completed at the beginning of the assessment year." The Second District affirmed, holding that "Substantially complete" does not require the owner be able to occupy or utilize the home, and therefore the issuance of an occupancy permit is not the triggering event for assessment. The assessor is allowed to value any substantially completed improvements to the extent they add value to the property, and it need not be both substantially complete and initially occupied.

(There is a great revenue 'opportunity' here for local assessors, and a pending carrying cost nightmare for builder/developers.)



In Northwest Diversified v. Mauer, (1st Dist., June 3, 2003),, the Court was confronted with an appeal of the trial court's grant of the defendant/home owner's motion to set aside a levy sale. Mauer alleged that the home sold for $10,124.00 at the sale had a value at the time of $250,000, and that she had paid $141,000 for the property in 1998. Further, she alleged, she never received notice of the actual levy sale and appraisal. The record did reflect that the Sheriff served the levy on her. Then the commissioners were summoned to appraise the property. (The appraisal does not give an actual value, only whether or not the value exceeds the homestead exemption.) The property was sold on December 2, 1998, and on the following July 13th, Mauer filed her motion to set aside the sale and extend the redemption period. Her argument was that she was never served with notice that the levy would proceed to sale or a copy of the appraisal as required by 735 ILCS 5/12-911, and that the property was sold for a grossly inadequate sales price.

The notice required to be served states that the sale will be held unless the judgment debtor pays the surplus over and above the homestead exemption within 60 days. Northwest's reply relied upon the affidavits of the Sheriff relating to the ordinary practice and procedure of the Sheriff's office in serving notices and appraisals in levy cases. The Sheriff's staff did not have any specific recollection that a notice was served in this particular case, and it was not their practice to make any written note or certification of service, but they did testify as to the procedures they ordinarily followed and that these procedures included not moving specific files from one area to another until the notices were sent. It was this system of moving files that apparently substituted for maintaining a copy of the notice or notations on the file that the notice had been sent.

The Appellate Court affirmed the trial court's determination to set aside the sale. The decision begins with some really excellent quotable language:

"The sale of one's property to satisfy his debt to another is a drastic remedy, and the provisions of the law by which it is brought about must be strictly complied with, and, where this in not done, courts will, where the price is inadequate, allow redemption upon equitable terms though the period of redemption has expired…The policy in this State, where no innocent parties are involved, is to permit a judgment debtor to redeem upon equitable terms even though the period of redemption has expired, where the provisions of the law have not been complied with and the judgment creditor would otherwise gain a benefit to which he is not entitled. [Citations] Likewise, where land has sold for an inadequate price, irregularities will be seized up to set aside an execution or judicial sale and to permit the judgment debtor to redeem…This court has held that a redemption, although a statutory privilege and to be exercised in substantial compliance with the statute, is nevertheless looked upon with favor and unless injury is to result to the purchaser at the sale a liberal construction will be given redemption laws."

Then, holding that Section 12-911 requires personal or substituted service (rather than by mail) of the 60 day notice of levy, along with the appraisal, the decision finds that the Sheriff's "custom and practice is insufficient to satisfy the mandates of section 12-911…Accordingly, the statute was not strictly complied with and an irregularity existed in the sale."