CHICAGO NCS BLOG Archives - Page 2 of 5

February 10, 2018

Endorsement Handbook

The latest version of Chicago Title's Endorsement Handbook is now available to download! The basic coverages provided by the standard American Land Title Association (“ALTA”) title insurance policies address many of the most common title insurance needs. Often, however, certain insureds or certain aspects of a specific real estate transaction raise special concerns. By requesting an endorsement to the title insurance policy, an Insured owner or lender may be able to receive insurance against the risk of suffering loss or damage by reason of a particular matter that is beyond the coverage of the standard policy jacket.

This handbook is intended to serve as an introduction for our customers to the most commonly requested title insurance endorsements. It contains a brief commentary introduction to each endorsement followed by the text of each such endorsement

Click HERE to download a copy!

January 30, 2018January 30, 2018

Karlen’s Korner Special Edition: Looking for State Tax Liens

By Douglas M. Karlen
Regional Counsel (Retired)
Chicago Title Insurance Company

Click HERE to download the article.

Q: How do you find a state tax lien?

A: You could look it up—on the State Tax Lien Registry.

Q: What the heck is the State Tax Lien Registry?

A: Well, . . . see Public Act 100-22.

Public Act 100-22 (SB 9, the budget and revenue bill), among many other things, creates the State Tax Lien Registration Act, codified at 35 ILCS 750/1-1 et seq. The Act is intended to establish a statewide filing system for notices of lien in favor of and enforced by the Illinois Department of Revenue (IDOR). See 35 ILCS 750/1-5. This statewide filing system is an internet-based state tax lien registry to be operated and maintained by IDOR. IDOR will file all notices of state tax liens in the registry, and it will no longer file notices of state tax liens with county recorders. This portion of P.A. 100-22 is effective January 1, 2018.

IDOR must file notice of a state tax lien in the state tax lien registry within 3 years of the date on which final tax liability is determined. 35 ILCS 750/1-10. By filing the notice in the registry, IDOR perfects a lien that immediately attaches to all property (including real property) owned by the debtor (that is, the delinquent taxpayer) as of the date of filing or acquired thereafter. 35 ILCS 750/1-20. The lien takes priority from the filing date and remains enforceable for 20 years from the filing date. 35 ILCS 750/1-25. Thus, a state tax lien filed in the state tax lien registry will affect real property in exactly the same manner as state tax liens currently filed in the offices of county recorders. There is, however, one difference; liens appearing in the registry will encumber all of the debtor’s property located anywhere within the State of Illinois—not, as under current law, just in the county in which the lien is recorded.

When IDOR files a notice of state tax lien in the state tax lien registry, IDOR must include in the notice:

January 9, 2018January 31, 2018

NCS News Brief: State Lien Registration Act

Click HERE to download the memo below.

Effective January 1, 2018 Public Act 100-22 (SB9) (“Act”) authorized the Illinois Department of Revenue (“IDOR”) to provide a uniform statewide system for the filing of notices for state tax liens. IDOR will now maintain an online database for the filing of state tax liens for real and personal property, tangible and intangible, against parties with unpaid final state tax liabilities.

The Act also does not invalidate any prior lien recorded with a county recorder in Illinois prior to the effective date of the Act, however, the IDOR will no longer be recording its liens or releases with local county recorders. Instead, the IDOR will now maintain its own searchable lien registry to file state tax liens in their online database.

Whenever Chicago Title is searching property for the purpose of issuing commitments or policies, a search will be conducted on the Illinois State Tax Lien Registry (STLR) which will be found at http://tax.illinois.gov. The link to the STLR will appear in the left column on this page under “Lien Registry”. Questions regarding the internal workings of the STLR can be sent to rev.lien@illinois.gov.

Chicago Title Attorney Agents should be aware that all search packages provided to them for examination will contain an additional search page(s) to cover items filed in the IDOR online database.

The State Tax Lien Registry (“STLR”) was effective and online as of January 1, 2018.

A notice of tax lien registered in the STLR on or after December 1, 2017 will be a lien upon all property owned by the taxpayer in the State of Illinois, without any further requirement of recording in any specific county.

October 16, 2017January 30, 2018

NCS News Brief: New 2016 ALTA Commitment for Title Insurance

Download MEMO below and New 2016 ALTA Commitment HERE.

As of October 15, 2017, all Chicago Title offices in the State of Illinois are now issuing the 2016 ALTA commitment form adopted by ALTA. This is a nationwide ALTA standard. In states where you have not already been seeing this form, you will in the near future. The use of the commitment has not changed in any fundamental way, but does contain certain revisions and important clarification regarding the obligations of all parties.

On the first page of the new commitment, you will see at the top of the form that a new NOTICE provision has been incorporated as part of the commitment. This NOTICE provision sets forth in the first paragraph that this ALTA commitment is only an offer to issue a title insurance policy and nothing more. In addition, all claims under the commitment must be based solely in contract law. In other words, the commitment is really just the initial step in the formation of a binding contract, that being the title insurance policy.

The second paragraph of the NOTICE provision states that the “commitment is not an abstract of title, report of the condition of title, legal opinion, opinion of title, or other representation of the status of title.” Essentially the title commitment is not to be seen as an informational product and not a reflection as to the state of title, but rather a limitation on the obligation of the Title Company to that of issuing a policy.

August 14, 2017November 9, 2017

How Residential Surveys Affect Title Insurance and the Closing Process

To download the article, click HERE.

Surveys are an important part of both residential and commercial real estate transactions, both to the parties involved in the transaction and the title company insuring the land. Surveys provide many important pieces of information needed for the closing including, but not limited to, confirming the correct property is being sold or mortgaged and insured; confirming the dimensions of the property; showing any easements of record such as for utilities and access; and showing any encroachments that affect the property. Parties to the transaction rely on surveys, and the title company reviews them to confirm any exceptions of record are properly platted against the property along with any easements.

There are several types of surveys typically used, depending on the nature of the transaction. The most common surveys are as follows:

A Boundary Survey is acceptable for residential transactions as it accurately locates the boundaries of the land in question.
A Land Title/ ALTA Survey is acceptable for commercial transactions as it conforms to standards adopted by the American Land Title Association (referred to as an “ALTA” survey) and done to exacting requirements.
A Condominium Survey is surveying cubes of air, dimensions bound by floors, ceilings and walls of the living space. A condominium plat is part of the condominium declaration. A survey is not needed for subsequent transfers for a condominium unit as the original plat of survey for the condominium is attached to the recorded Declaration.

August 14, 2017November 9, 2017

Powers of Attorney

To download the article, click HERE.

Introduction

A power of attorney (“POA”) can be granted when an individual, referred to as a principal, appoints another individual, known as an agent, to act on his behalf. Usually this occurs when the principal cannot attend or carry out a specific purpose for himself. (“POA’s”) are granted in Illinois under 755 ILCS 45-1-1 et seq.

Types of Powers of Attorney

There are two types of POA:

Statutory (“POA’s”), a model form of which is set forth in the Illinois (“POA”) Act; and
Non-statutory (“POA’s”), which are all other types.

Statutory Form v. Non-Statutory Form

The difference between the two is that statutory (“POA’s”) can be used after the incapacitation or incompetency of the principal; a non-statutory cannot. However, neither statutory nor non-statutory (“POA’s”) survive the death of the principal.

Statutory (“POA’s”) can be limited in time. A principal can include a termination date or state that they do not want the (“POA”) to survive the incompetency of the principal. A statutory (“POA”) may thus state a beginning and/or end date.

Powers of Attorney and the Elderly

If a (“POA”) is being used for an elderly principal in the mortgage or sale of property, it is important to find out whether the principal is incapacitated or incompetent. There is also a concern about possible elder abuse or fraud. If the principal is incompetent, a title company can only rely on the (“POA”) if it was executed before the principal became incompetent.

Specified Powers

If a (“POA”) is being used for a person’s property, the title company must confirm that the powers granted or described are those for which the (“POA”) is being used. For example, if the principal is taking out a mortgage, the following powers should be permitted to the agent: “borrowing transactions” and “real estate transactions”. The powers granted to the agent must be specific. Any powers not granted can be struck out from the statutory form.

Requirements for a Power of Attorney

Every (“POA”) (statutory and non-statutory) must meet the following requirements:

April 12, 2017November 9, 2017

Covenants, Conditions, and Restrictions

To download article, click HERE.

“Covenants, conditions, and restrictions” (hereafter CC&Rs) is a generic term for privately-created rules and regulations that frequently govern the use and improvement of real property. They are a long-time staple of the real estate market, appearing regularly as exceptions to title.

The Basics – CC&Rs Defined

A covenant is an agreement or promise to do or not to do a particular act. It is created by those words in a deed or other instrument that denote an agreement between the parties to that deed or instrument.

A restriction is a limitation on the use of the land.

Land developers often utilize covenants and restrictions when subdividing land in order to establish uniform provisions concerning the use of the lots and the character, size, and location of the improvements to be constructed on the lots. These restrictions are usually called general plan restrictions, and are normally set forth on a plat of subdivision, in the developer’s deeds to the initial lot purchasers, or in a declaration. (While probably not entirely synonymous, the terms “covenant” and “restriction” will be used interchangeably in this article.)

A condition in a deed, on the other hand, is a qualification of the estate granted. It is a requirement of the conveyance.

Building lines (also known as building setback lines) create areas of unobstructed light, air, and vision for the benefit of the public and for the benefit of all the owners upon whose property the restricted area is laid out. They also secure uniformity in the appearance of the buildings, which helps keep property values high.

Building lines are a form of covenant. A declaration of covenants, conditions, and restrictions containing building lines is a limitation on the use of the land. The building line limits where the improvements may be placed on the land. Most building lines are created by a plat of subdivision or in a declaration of CC&Rs. These are privately created building lines.

Through the zoning power, municipalities and counties may create building lines as well. These publicly-created building lines on occasion are different from the privately-created setbacks.

The difference between these two types of setbacks lies in their enforcement. Private building lines may be enforced by other owners in the subdivision. Zoning setbacks may be enforced by the municipality or county.

Because building lines are a form of covenant, they will not be discussed separately in the remainder of this article.

March 1, 2017November 9, 2017

Title Insurance 101: Back to the Fundamental Principles

By Richard F. Bales
Chicago Title Insurance Company

The Old Days

In the late-eighteenth and early nineteenth centuries, attorneys began hiring abstractors to perform title work. Abstractors would compile a history of the land, sometimes from the original land patent forward. (A land patent is a land grant or deed from a sovereign entity. In Illinois the examiner will sometimes see a land patent from the United States of America for a section of land or more.) These abstractors would then issue this compiled history, together with an abstractor’s certificate. The certificate would inform the proposed purchaser and the attorney as to the matters purported to be covered by the abstract.

Abstracts have not been used in the Chicago area for many years. Until a few years ago, though, they were occasionally prepared in the central and southern parts of the state.

But relying on an abstract had its disadvantages. Consider the case of Watson v. Muirhead, 57 Pa. 161 (1868). Watson wanted to buy some property in Philadelphia. He hired Muirhead to abstract the public records. Muirhead discovered an unsatisfied judgment. Relying on a previous opinion from a local lawyer who felt that the judgment was not final and that therefore did not affect the land, Muirhead omitted the judgment from his report.

After Watson purchased the land, the judgment creditor successfully enforced his judgment, and Watson lost the property at a judicial sale. Watson sued Muirhead for his damages. The court ruled, however, that Muirhead had exercised due care and therefore decided that Muirhead should not be held liable for an error that was not due to his negligence.

It was clear that something better was needed.

December 28, 2016November 9, 2017

Easements 101

To download the article, click HERE.

Easements may burden or benefit a parcel of real estate. In either event, easements may affect the value and use of the land. For this reason, it is important to consider whether the property is either burdened or benefitted by an easement. This article will discuss the different types of easements and the ways in which easements can be created and terminated; it will also discuss title company requirements for insuring easements.

An easement is a right acquired by a landowner to use the land of another for a special purpose. This right may be for such purposes as access, driveway, party wall, drainage, public utilities and other purposes. Easements are divided into 2 general categories: an appurtenant easement or an easement in gross.

An appurtenant easement operates for the benefit of one tract of land and burdens another, usually adjoining tract. Thus, there must be two tracts of land owned by different parties, that is, a separation of title. The benefitted parcel is referred to as the dominant estate (or dominant tenement), and the burdened parcel is referred to as the servient estate (or servient tenement). Because an appurtenant easement is regarded as being so closely connected to the dominant tenement, it is regarded as “running with the land”. This means that once the easement has been properly created, the easement will pass upon a conveyance of the dominant tenement to the grantee of the deed, even if the deed does not mention it.

An easement in gross does not specifically benefit another parcel of land. It runs in favor of a party who does not own the property adjoining the easement. A utility easement given to a utility company such as the phone, gas, cable or electrical company is the most common type of easement in gross. Easements in gross may not be considered interests in real property; they are generally not insured by title companies.