Cook County ‘Bed & Breakfasts’ reclassified for 2015 assessments

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The IAR Government Affairs team is working with the Cook County Assessor’s Office to find out what a policy change means for the property tax assessment classification for current and future “Bed & Breakfast” owners.

Although previously considered commercial properties by the assessor’s office, Deputy Assessor of Valuation and Appeals Thomas A. Jaconetty says all of the 40-plus B&Bs in Cook County are now classified as “5-97s” or “special commercial improvements,” though owners can appeal.

Mike Scobey

In a conference call with IAR Assistant Director Mike Scobey, Jaconetty said the decision to change policy was made so future assessments would be more uniform and equitable.

Each appeal will be decided individually, Jaconetty says, based on business and financial information submitted by owners through the appeals process.  A list of information needed on all appeals includes:

  • documentation to show if any portion of the property is owner occupied;
  • a full narrative appraisal or appraisals indicating fair cash value on Jan. 1, 2015;
  • square footage;
  • audited income and expense statements for 2012, 2013 and 2014;
  • income for 2012, 2013, 2014 and 2015 (to date); and
  • a detailed narrative brief discussing all relevant factual and legal issues.

The policy change was posted on a “Bed & Breakfast” page on the site of the Cook County Assessor’s Office. But Jaconetty says all of the affected Bed & Breakfast owners have been identified and individually contacted by the assessor’s office.

The fact that Cook County bed & breakfasts had been previously classified as commercial properties came to Jaconetty’s attention several years ago, but he put the idea to change classifications on hold until recently. He says members of the assessor’s office are working in a cooperative spirit with Bed & Breakfast owners.

He noted that because the assessor’s office is recommending the policy change, Illinois law limits what can be collected in property taxes from B&Bs. The reclassification is only for assessments in 2015 and beyond (property taxes payable in 2016), and it will not be applied retroactively.

If a B&B is the owner’s primary residence, it is likely that it will be classified as residential property, says Jaconetty. However, an appeal to the assessor is necessary. Commercial properties are assessed at 25 percent, while residential properties with fewer than six units are assessed at 10 percent.

Morning Minute: Federal Reserve finds improving economic growth in early 2015

There was continuing moderate economic growth in January and February as consumer spending, manufacturing production and business spending improved, according to the latest Federal Reserve Beige Book. The Seventh District in Chicago, reported modest gains in construction and real estate activity as home prices and rents increased and sales held steady. The commercial real estate sector saw even greater gains as rents rose, vacancies declined and leasing activity increased. Read the report for the Seventh District.

In other headlines:

Mortgage Rates Move Lower – Freddie Mac reports today that fixed mortgage rates declined this week for the first time in four weeks.

Housing Market Gets Stronger in 2015 - Kiplinger reports that 2015 is expected to be a solid year for the housing market as a stronger economy combines with pent-up buyer demand.

Could Chicago’s Willis Tower get a new name (again)? – The Willis Tower (formerly the Sears Tower) could soon have a new owner, and potentially a new name. The Belleville News-Democrat has the Chicago Tribune story. Read more.

Get answers to questions about commercial broker liens

A great new RVOICE brochure, “What You Should Know About Commercial Real Estate Broker Liens,” (form #649) is highlighted for Managing Brokers in the January issue of IAR’s D.R. Legal News.

Mike Scobey, IAR Assistant Director of Advocacy and Local Issues, says the brochure is based on a 1992 state law that gives real estate brokers the right to a lien on commercial real estate to secure fees and commissions due to them. The law is designed to help brokers collect what’s owed to them without expensive legal battles.

While the brochure provides answers to 10 questions, Scobey’s article gives five examples:

  • What is a commercial real estate broker lien?
  • How is commercial property defined?
  • Who is a broker under the lien statute?
  • How does a broker create the right to a lien on real estate?
  • When does a lien become effective?

Get a free download of the brochure or order a printed brochure by viewing the January D.R. Legal News.

Capital Area REALTORS® wins honorable mention ACE award

The Capital Area REALTORS® received a 2014 Accredited Commercial Excellence Award (ACE) honorable mention during the National Association of REALTORS® annual conference last weekend in New Orleans.

Capital Area won in the area of Technology and Data. The award was presented during the Commercial Leadership Forum at the conference.

Nominations were accepted by the NAR Commercial team in seven categories of newly revised benchmarks. Entrants prepared a short essay and nomination form and submitted them by Oct. 24 deadline.

Commercial: Will the business of ‘going green’ follow Chicago’s lead?

Understanding phrases like “energy-use benchmarking” and the ramifications of a recent ordinance passed in Chicago will make “going green” increasingly important to you and your clients, says one Chicago REALTOR® in the October issue of Illinois REALTOR® magazine.

Angela Aeschliman, the chief operating officer for Watermark Property Management in Chicago and a past president of the Northern Illinois Commercial Association of REALTORS®, says the Chicago ordinance creates new standards for property owners and managers of commercial, municipal and residential buildings, as well as anyone who buys or sells.

In June, owners/managers of buildings with more than 250,000 square feet submitted their first reports on energy consumption, water usage and greenhouse-gas emissions to the city.  In June 2015, owners of buildings with between 50,000 and 250,000 square feet will provide similar reports.  The data will be measured by U.S. Environmental Protection Agency software and must be verified by a licensed architect, engineer or other professional recognized by the city.

The city will be able to share individual building performances next June and Aeschliman says the information could increase competition for more energy-efficient properties.  How quickly these concepts spread to suburban Chicago and the rest of the state will be watched closely by the IAR, local associations and their members.

Read the whole story, “The Growing Business of Going Green,” which includes client concerns about the costs of “going green.”