Page 1 - John Hundley 2014

Real Estate Roundup

Sharp Thinking

No. 108 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. January 2014

Party Charged With Reading Actual Recorded Document

A party must read the actual notice of lis pendens and may not rely upon an erroneous summary
thereof provided by a recorder of deeds, a panel in the Appellate Court’s First District has held. In
Bayview Loan Servicing, LLC v. 2010 Real Estate Foreclosure, LLC, 2013 IL App (1st) 120711, the
appellant had thought it purchased property free and clear at a second-mortgage sale unaware that the
first mortgage on that property was in fact in force and being foreclosed upon (a fraudulent release of the
first mortgage had been recorded). It sought vacation of the foreclosure sale in the first-mortgage case,
arguing that justice would not be done if the property were awarded to the first-mortgage foreclosure
purchaser. Holding that the appellant should have read the actual lis pendens which had been recorded,
the panel said it “will not vacate the confirmation of a judicial sale at the insistence of an interested party
whose complained-of error was the result of its own negligence.”

Passage of 48 Years Insufficient To Invoke Laches

Mere passage of time – even 48 years – is by itself insufficient to invoke the doctrine of laches to
prevent reformation and construction of a deed, a panel in the Appellate Court's Fifth District has held.

Ruling in a case brought by a government body, for which it also said mere
nonaction was insufficient to invoke the doctrine, the court in Department of
Natural Resources v. Waide, 2013 IL App (5th) 120340, found erroneous an
exclusion of one-fourth of the oil and gas interests in an executor's deed issued in
1960. The Department contended that the exclusion was properly construed to
refer to a previously-created exclusion (which the Department had acquired) and
not to the creation of a new reservation. Decades later, when oil was discovered,
the descendants of the granting estate started paying taxes on the purported
reservation and receiving royalties.

That defendants would lose income from the royalty payments “does not constitute an extreme
detriment or hardship to justify the application of laches,” the court said, because defendants “were not
the owners of the property interest and should not have received the royalty payments in the first place.
The loss of a benefit to which they were not entitled is not a compelling circumstance warranting the
imposition of laches.”

Special Warranty Deeds Create Limited Liability

A special warranty deed – even if it excepts only taxes not yet due and payable – does not make the
grantor liable for a tax lien arising before it owned the property, even if a petition for a tax deed is filed
during the grantor’s ownership of the property, a panel in the Appellate Court’s First District has held.

In Chicago Title Ins. Co. v. Aurora Loan Services, LLC, 2013 IL App (1st) 123510, defendant acquired
property at a foreclosure sale after delinquent taxes had been sold. Defendant did not redeem them, and

●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●
Sharp Thinking is an occasional newsletter of The Sharp Law Firm, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp
Thinking shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein
constitute educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal
advice on your particular situation, contact a Sharp lawyer at the phone number or one of the addresses provided on page 2 of this newsletter.