Fate of disputed earnest money among topics covered in May DR Legal News

DR Legal News 2016 masthead

Six legal case studies, recent disciplinary actions by the Illinois Department of Financial and Professional Regulation (IDFPR) and an explanation of how the Unclaimed Property Act affects earnest money when transactions don’t close are just a few of the topics covered in the May D.R. Legal News for managing brokers.

In the top story, “The Unclaimed Property Act: It Applies to You,” Lisa Harms Hartzler, Sorling Northrup Attorneys, offers guidance to brokerage companies that hold escrow money and the application of the Unclaimed Property Act to the funds that might be held in those accounts.

Managing brokers can read Hartzler’s synopsis for a more detailed explanation.

D.R. Legal News is published online six times a year in a downloadable PDF format that is emailed to all Illinois REALTOR® members who are the Designated REALTOR® (or D.R.) for their real estate office. Be sure to watch and open all email from “Illinois REALTOR® Communications” or the “Illinois REALTORS®.”

There’s more to RESPA than TRID: IAR Legal Webinar

Affiliated Businesses & Marketing Service Agreements - Feb 18, 2016In Thursday’s IAR Legal Webinar, IAR Legal Hotline Attorney Betsy Urbance and IAR Transaction Helpline Attorney Jeff Baker discussed some of the permitted and prohibited practices for real estate agents and brokers relating to affiliated business arrangements and marketing service agreements.

These issues continue to be governed by the federal Real Estate Settlement Procedures Act (RESPA) statute and regulations, they said. Real estate professionals make up just one of several categories of people defined as Settlement Service Providers under RESPA. Others include attorneys, mortgage brokers, appraisers, representatives of home warranty companies.

While much has been in the news lately concerning TRID, a combination of some Truth-In-Lending and RESPA regulations, and which over the loan origination and settlement process, RESPA still governs other aspects of federally related real estate transactions as well.

In one example, Baker and Urbance noted that RESPA does not allow Settlement Service Providers to exchange referral fees, and payments collected from consumers must be for “distinct and identifiable services.”

For more information on this member-only benefit, REALTORS® can log in and download the webinar or listen to the audio-only version.

REALTORS®: Mark your calendar for Feb. 18 Legal Webinar

Affiliated Businesses & Marketing Service Agreements - Feb 18, 2016

Illinois REALTORS® can participate in the Feb. 18 IAR Legal Webinar, “Affiliated Businesses & Marketing Service Agreements,” starting at 9:30 a.m., with Jeffrey T. Baker, IAR Transaction Helpline Attorney and Betsy Urbance, IAR Legal Hotline Attorney.

If members have a question they’d like addressed during the webinar, they can send them in advance to: webinar@iar.org. Although questions can be submitted during the webinar, preference will be given to those received in advance.

Since space is limited for webinars, IAR members who aren’t able to log in will be able to access a recording within 48 hours of its completion.To register for this members-only webinar, go to: www.illinoisrealtor.org/legal/webinars.

Do you understand drone registrations and laws regarding security deposits?

Jeff Baker and Betsy Urbance

Among the issues discussed during the Dec. 17 IAR Legal Webinar, “Out With (Review) the Old and In With the New,” were federal requirements for drone registrations as well as an amendment to the Illinois Security Deposit Interest Act that affects some renters’ security deposits.

Drone registration today

Bigstock Photo

Bigstock Photo

The commercial use of drones is prohibited by federal law unless a certificate (also known as a Section 333 Waiver) has been granted by the Federal Aviation Administration, said IAR Transaction Helpline Attorney Jeff Baker, noting the process can be expensive and time intensive. REALTORS® who want to use a commercial drone, he said, should get a certificate or hire someone who has one.

Today, most drone pilots will have to register their drones online at www.faa.gov. Registration must be by credit card and will cost $5 but rebates will be issued to those who sign up during the first 30 days.

Registration includes providing the owner’s name, home address and email address. Each owner will receive a unique identification number for his or her aircraft and the number must be marked on the drone.

Security deposit interest law changes – for some

IAR Legal Hotline Attorney Betsy Urbance said that the Security Deposit Interest Act was amended, and starting Jan. 1, Illinois landlords aren’t required to pay interest on security deposits for qualifying rental property unless the annual interest is $5 or more. If the amount is less than $5, the landlord can credit the interest to the tenant and disburse at the end of the tenancy. However, it is important for landlords and property managers to know if they live in Chicago or in another home rule community, stricter requirements may apply.

For instance, Chicago’s Residential Landlord Tenant Ordinance requires annual interest payments on security deposits to be issued to tenants even if the amount is less than $5. Urbance says landlords and property managers need to be aware of local ordinances that may be stricter.

Other news

Urbance and Baker also recapped several court decisions and answered questions from Illinois REALTORS® who participated in the webinar, while providing some advice about the TILA RESPA Integrated Disclosure changes that took effect Oct. 3. While noting that some lending institutions are taking more time since the rules became effective, and some REALTORS® may be experiencing heartburn over delays in the closing process, they’ve not heard of anything “overly catastrophic.”

They also discussed other matters that are regulated by the Consumer Financial Protection Bureau (CFPB) under RESPA, concerning affiliated business arrangements. They warned members to be sure that they are making the required written disclosures when recommending their affiliated businesses to consumers. There are very specific requirements for those written disclosures, and CFPB seems to be actively enforcing these federal rules and the potential penalties are high.

For more information on the webinar, Illinois REALTORS® can login and download recordings of the one-hour presentation. Legal webinars are a members-only benefit.

Wrigley scoreboard legal decision featured in November legal case studies

DR Legal News masthead 459 by 81A new scoreboard looming over the Wrigley Field outfield resulted in a court battle as the owners of several neighboring buildings claimed its installation violated antitrust laws and was a breach of contract. (Member login required.)

This is one of six legal case studies analyzed by Christine Self of Sorling Northrup Attorneys in the November issue of DR Legal News.

In the Wrigley Field case, the building owners (Right Field Rooftops, LLC) filed complaints against the Cubs (Chicago Baseball Holdings, LLC) in federal district court stating that the video board and billboard blocked the view of the field and violated a license agreement between the two parties. The building owners wanted to halt stadium expansion that began in September 2014.

The court dismissed both claims. Find out why.

If you’d like to know about the other case studies, read these quick descriptions:

  • Difficulty setting a price does not extinguish an option to purchase.
  • A settlor who declares a trust naming herself as trustee is not required to separately transfer property into the trust.
  • Implied warranty of habitability is not applicable to architects and may be disclaimed by other parties.
  • Road relocation did not result in material impairment.
  • Tenants may recover reasonable attorney fees in successful counterclaims.

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