Mark your calendars! The excitement is building! The REALTOR® Nationwide Open House Weekend is scheduled for April 10-11. So REALTORS® in Illinois, begin planning how you can take part in this national event. We will be working to build awareness about why now is a good time to buy.

NAR, IAR and state and local associations from across the country are going to do their part to promote this nationwide open house designed to showcase the vitality of the real estate market. But we need you to host the open houses to show off your listings. You won’t want to miss your opportunity to participate!

The REALTOR® Nationwide Open House Weekend will enable sellers to showcase their homes for sale and potential homeowners to shop for a home while interest rates are low, home prices are affordable and before the April 30 deadline for the federal homebuyer tax credit.

According to the IRS, buyers who wish to qualify for the tax credit must sign a contract to purchase a home on or before April 30, 2010, but have until June 30, 2010 to close on the home.

IAR encourages its members to share their plans for the REALTOR® Nationwide Open House Weekend. Write to: iarnews@iar.org with the details and link here for event logos and graphics. We’ve got a celebration going on this April!

A group of residents in Cherry Valley last week learned of the outcome they had hoped for when the village agreed they had more than the minimum number of signatures required to protest a proposed Special Service Area (SSA).

The Village of Cherry Valley proposed a SSA for its Stormwater Detention Facility which consisted of approximately 43 acres of land including many subdivisions, Cherry Vale mall, and Magic Waters water park.  Many residents within the proposed SSA felt they were unfairly targeted to pay for the $1.6 million project because other stormwater projects within the village where funded by the village’s general fund.  The village argued that this funding was the fairest approach because these properties were in the run-off basin.

A public hearing was set on the matter on a snowy evening in early December to begin the 60-day period for filing a protest petition for the SSA.  The petition required signatures of both 51% of the property owners within the area and 51% of the registered voters.

While the Rockford Area Association of REALTORS® had no formal position on the proposed Special Service Area, we acted as a resource to property owners who had questions on the matter.  Through the Illinois Association of REALTORS® Legal and local GAD involvement, we provide accurate information in regards to petition format and requirements.

In about two weeks time, three residents circulated petitions collecting 379 property owners and 288 voters –75% of the required signatures within the boundaries of the proposed SSA.  They even researched obituaries to see if “missing” signers were deceased.

Link to a related story in the Rockford Register Star.

In order to help provide members with useful information in preparing for the transition with the new License Law, IAR has created a user-friendly Web site at www.IARlicenselaw.org. So Check it out!

This new site is your source for the latest news, requirements and instructional videos related to the rewrite of the Illinois Real Estate License Act of 2000, which took effect Dec. 31, 2009.

• PREPARING FOR THE TRANSITION – Learn the steps you need to take to change your license category from salesperson to broker, broker to managing broker, and broker choosing to stay a broker. Bottom Line: You have time! A ticker shows how many days are left to transition to the new License Law categories of broker and managing broker.
• WEBINARS & PODCASTS – Download informative videos by IAR legal counsel on your frequently asked questions, transition and CE requirements.
• EDUCATION REQUIREMENTS – IAR has prepared an at-a-glance chart to help you understand your continuing education requirements and options.
• IMPORTANT DETAILS – Find quicklinks to the full text of the new License Law, FAQs about licensure, dual agency, advertising, company policy, new enforcement and disciplines.
• NEW FORMS – Many contracts and forms have been revised for the new License Law including consent to dual agency, buyer representation, disclosure of contemporaneous offers. Be sure to be use the new forms!

We will continue to make updates to the site throughout the next year to help with questions regarding the new License Law.  And if you don’t find your answer at www.IARlicenselaw.org, e-mail your questions to Questions@IARlicenselaw.org.

The “Crime Free” Housing initiative originated in Tempe, Arizona, and traveled to other states including Illinois. Crime Free Housing ordinances continue to grow in popularity among local officials in Illinois. The idea behind these proposals is to regulate landlords and rental housing in regard to crime prevention on the property.  Requirements such as landlord licensure and building registration are being imposed by several home rule municipalities in Illinois, but non home-rule units cannot impose such requirements. IAR local Government Affairs Directors have objected to many features of these proposals, including the attempts to regulate those who already have a real estate license. The most common provisions of these proposals include:

• Licensure of Landlord or Property Owner
• Registration Fee for Rental Property
• Crime Free Housing Seminar hosted by Local Police Department
• Inspections and Occupancy Certificates
• Eviction Requirements

Licensure Requirements

Many communities require property owners or managers to obtain a license from the municipality before they are allowed to rent property within the community. Oftentimes, the property owner or manager is required to live “locally,” or else they may be required to name a “local agent” to serve as the responsible party of the property in case of an emergency or a reported crime on the property.

Depending on how the ordinance is drafted, there may be a conflict with the Illinois Real Estate License Law.  A municipality cannot prevent a real estate licensee from performing “licensed activities” as spelled out in the state license law.  But some towns have attempted to do just that with their own license ordinance.  If you have any questions about this type of provision in a local ordinance, contact your local Government Affairs Director.

Property Registration Fees

Registration fees are most often set at around $50.00 per unit, per year in order to fund the local Crime Fee Housing program and other operations related to regulation of rental units. This can become quite costly for large companies who manage large numbers or units.

Crime Fee Housing Seminar

Property Managers or owners are also required to complete a Crime Fee Housing seminar, hosted by the local police department prior to renting property. These seminars provide property managers with tips on tenant screening and other ways in which crime can be decreased on their properties. The Crime Free Housing Seminar is typically a 6 to 8 hour class.

Inspections and Occupancy Permits

Exterior and interior inspections of property may also be required. Local building officials often suggest exterior changes that could help to decrease crime on property including trimming bushes or adding exterior lighting.  Interior inspections may be required to determine habitability of the unit. Once a unit has passed inspection, Occupancy permits may also be required.  Most of these property maintenance requirements have existed in several municipalities in Illinois long before the more recent emphasis on crime prevention.

Evictions

Several municipalities require the use of a “crime-free” addendum to leases.  If one of the tenants commits a crime on the property, the lease is voided and the tenant may be evicted.

Banners announcing that fact are displayed during the month of March on light poles in and around the State Capitol in downtown Springfield. This is a busy month for the Illinois General Assembly with legislative bill reading deadlines and meetings late into the night. With lobbyists and business groups traveling to Springfield to influence state lawmakers, IAR also has that added boost in the subtle messaging from the display of the banners adorning the streets of downtown Springfield.

With the legislative session in full swing and IAR lobbyists hard at work protecting your business interests in Springfield, make plans now to attend the IAR Capitol Conference on March 23 to help advance our legislative agenda. This offers you the opportunity to see the legislative process in action, learn more about key issues affecting real estate being considered by the legislature and meet with your respective legislator. Learn more at  www.illinoisrealtor.org/capitolconference2010.

Well the spring 2010 legislative session is in full swing, and the strength of the REALTOR® lobby is being put to the test once again. The plain fact is that there are groups and constituencies who have an agenda to accomplish, and don’t know or care how their proposals affect property owners or real estate practitioners, while others simply view us as the enemy or part of the cause of their problems.

Fortunately, from your dues dollars supporting a seasoned and effective lobbying staff, to your grass roots participation in calls to action and the IAR Capitol Conference, our organization has the strength to meet these challenges.

The challenges are numerous. There’s legislation that seeks to remove provisions of the Real Estate License Act that we just fought so hard to put into place, like the bill that seeks to remove the definition of “regular employee” that was just added to the Act.  There are bills that inadvertently bring the activities of real estate licensees under the purview of other regulatory Acts, like those regulating debt settlement counselors.  Another bill attempts to allow counties to place yet another new recording fee on real estate transfers to fund “affordable housing.”  Others seek to usurp voter input on property tax increases by enacting new loopholes in the property tax cap law.

The tenants are in charge under other proposals, like one that would allow a tenant to test for radon and break their lease if an elevated level if discovered.  Then there are the bills that pummel real estate investors from both sides: one that allows problem tenants that invite violence onto their premises and violate their lease to stay on the premises if they claim “victim” status, while other bills allow local governments to hold landlords responsible for the criminal activity of their tenants.

Rather overwhelming, isn’t it?  Even more so when you consider that IAR, in most cases, is the only thing standing in the way of these proposals just flying through the process towards passage.

Meanwhile, the legislature continues to look to the Illinois Association of REALTORS® for guidance and counsel on fundamental questions of public policy relating to real estate. For example, we are pursuing legislation to ban the validity of private “transfer fee covenants,” a new concept taking shape on the West Coast whereby a property developer records a covenant requiring all future buyers of the property to pay a fee on the transfer of the property.

The Judiciary committees in each chamber are looking to us for input on everything from how non-condominium homeowner associations are regulated, to changes in the way the title insurance industry is regulated.  The legislature is also seeking our guidance on how short sales and foreclosures should impact property valuations for property tax purposes, and we have also been saved a seat at the table to tackle the emerging issue of bedbug infestation in rental property.

I wish that all of our members were aware of how extensive the challenges facing our industry in the public policy arena are, and how effective we are at meeting these challenges.  But we can only do so with the ongoing commitment of our members – and your support of all of our programs that enable us the have such a strong voice at the state capitol. It doesn’t take a huge commitment by our members to be effective.

Please do your part, and help spread the word…and we’ll continue to fight the fight on your behalf at city hall, in Springfield, and in Washington, D.C.

Last week the Illinois Senate Local Government Committee approved legislation OPPOSED by the IAR. Senate Bill 3001, sponsored by Senator Susan Garrett would permit all counties the authority to establish an affordable housing trust fund by imposing ANOTHER surcharge on the recordation of any real estate related documents. Fees would be imposed by ordinance of the county board WITHOUT VOTER APPROVAL for the purpose of providing financial support for affordable housing activities for low and moderate income households “as determined by the county board.”

The bill grants a county board the authority to impose a charge that begins at $5 in 2010 and 2011 which can be increased up to $10 after 2019. The IAR argued against this proposal in committee debate and was very disappointed in the 6-2 roll call vote. The bill is currently on final passage stage in the Senate and IAR is urging its members to contact your state legislator to ask for a NO vote on SB 3001.

Today the Senate Judiciary Committee will consider IAR initiative Senate Bill 3747, which creates the Transfer Fee Covenant Act. The concept of these private transfer fees is that a covenant is recorded on property that requires future buyers or sellers to pay a transfer fee to whoever is designated in the covenant on all future transfers. These covenants set a dangerous precedent in attempting to establish a new estate in real property separate and apart from any possessory interest in the real property. SB 3747 declares these transfer fee covenants to be invalid and against public policy.

Finally, thanks to the hundreds of Illinois REALTORS® who responded to our Call to Action regarding House Bill 5071 that was scheduled for a hearing last week in the House Business and Occupational Licenses Committee. The Committee hearing was cancelled last week but the bill could be called this week.

HB 5071 is an initiative of the Homebuilders Association and is STRONGLY OPPOSED by the IAR. HB 5071 deletes the “regular employee” definition within the Real Estate License Act. As you are aware, the Real Estate License Act has always had a provision exempting an individual or entity that is selling or leasing its own property from needing a license to do so. This exemption had included the “regular employees” of such owner or lessor. However, this limitation had never been clearly defined and the regulating agency, the Illinois Department of Financial and Professional Regulation sought clarity in the meaning of the term, and so a definition was added to the rewrite. This is a significant consumer protection issue.

One up-tick does not a trend make, but the increase in the statewide median price in January (up 0.2 percent from January 2009) is positive movement and marks the first year-over-year price increase since September 2007.

The statewide median price in January was $145,300, up 0.2 percent from $145,000 in January of 2009, according to the Illinois Association of REALTORS® latest housing market report. Sales were up 14.0 percent statewide, the fifth consecutive month of year-over-year sales increases.

In the Chicagoland Primary Metropolitan Statistical Area (PMSA), year-over-year home sales were positive for the seventh straight month, up 29.2 percent in January. The median home sale price for the Chicagoland PMSA was $175,000, down 5.4 percent.

“We are seeing an accelerated spring market despite the snow and cold in Illinois with the homebuyer tax credit the driving factor for rising home sales,” said REALTOR® Mike Onorato, GRI, president of the Illinois Association of REALTORS® and broker-owner of Onorato Real Estate in Coal City. “Current conditions remain favorable for buyers with interest rates still hovering near 5 percent and just over two months remaining to take advantage of the homebuyer tax credits before the April 30 deadline to have a purchase contract in place for first-time buyers and current homeowners who want to buy their next home.”

In the IAR report, University of Illinois economist Geoff Hewings noted foreclosed properties continue to exert downward pressure on median prices in the Chicagoland region but less so statwide.

His forecast through April calls for continued home sales increases in the range of 1-14% statewide and 18-50% in the Chicagoland PMSA. Median prices will fluctuate and fall just under 2 percent statewide and in the range of 6 percent below comparable prices from the same months in 2009 in the Chicagoland PMSA.

(The Chicagoland PMSA includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.)

Municipal inspection programs continue to be proposed in communities throughout Illinois. Cities are granted inspection powers under Illinois state statute, however, there are limitations to these powers. Local Government Affairs Directors (GADs) work to ensure that the provisions in these ordinances are attentive to property rights and to the time-sensitive nature of real estate transactions. The most commonly-seen provisions in these programs are:

• Fees
• Property Registration or Landlord Licensure Mechanisms
• Inspection Checklists
• Timely Delivery of Inspection Report
• Temporary Occupancy Permits

Fees

Municipalities cannot use inspection ordinances as a way to generate income for the community. The fees charged for a municipal inspection should cover the administrative costs with running the program, but should not create a profit for the city.

Property Registration or Landlord Licensure Mechanisms

Property registration or landlord licensure mechanisms are typically used when rental property is required to be inspected. Registrations may require the name of the tenant or landlord in addition to a contact number for each. Cities should be encouraged not to seek too much personal information from a tenant or landlord such as birthdates, license plate or social security numbers.

Inspection Checklists

Inspections can only include those items in a home that would prove to be hazardous to the health and safety of the occupant. Checklists assist the property owner in understanding what is expected of them and clearly states improvements the property may need.

Timely Delivery of Inspection Reports

Inspection reports should be submitted to the property owner within three to five working days of the inspection. A delay in receiving the inspection report could result in the loss of a tenant, or could possibly hold up the sale of a property.

Temporary Occupancy Permits

Temporary occupancy permits can be granted to an owner in the event the property does not pass inspection, but isn’t necessarily an immediate threat to the health or safety of the occupant. Temporary occupancy permits allow an occupant to inhabit the property while providing an extension of time to remedy problems.

“Zero Dollar Transfer Tax” as an Enforcement Mechanism

Some municipalities will use their home rule power to enact what has become known as a “zero dollar transfer tax.” This type of tax is not meant to generate revenue but is used as a way to ensure that the point-of-sale inspection requirements are completed–by prohibiting the transfer of the property. (If the transfer tax stamp is not issued, then the property’s transfer cannot be recorded.) IAR strongly believes that this enforcement mechanism (whether with a zero dollar transfer tax or any kind of transfer tax) is an unconstitutional violation of the property owners’ rights.

These are just a few examples of negotiations that can be made during the creation of an inspection program. There are other issues that may arise, but these items are simple to attain and help foster a streamlined inspection program that is simple for REALTORS®, homeowners and municipal governments.

The 2010 Illinois broker license renewal deadline is fast approaching and according to the Illinios Department of Financial and Professional Regulation (IDFPR) the renewal forms have been mailed.

Brokers must complete 12 hours regular CE and 6 hours broker management CE by the April 30 deadline.  IAR will be your guide to compliance with the IDFPR.

This is what the renewal postcard mailed by IDFPR looks like:

If you haven’t received your renewal postcard from IDFPR you can still renew online at the IDFPR website via credit card, print off a renewal form to mail in, or get the toll-free number to renew via credit card using a telephone.

Here are your options:

1. ONLINE: If you choose the online renewal you will be required to enter your PIN number sent by IDFPR via postcard AND your professional license number.  (If you don’t have a PIN number you can also use your social security number)
2. BY PHONE: Call 1-800-823-6100.
3. BY MAIL: Choose “Print Renewal” from the IDFPR website.

STILL NEED CE?  We’ve got it!  Don’t wait until the last minute!  Check out IAR’s CE options for brokers.

Still have questions?  No problem.  Feel free to contact me or Stacy Mahinda for direction, Celliott@iar.org or SMahinda@iar.org.