Page 21 - John Hundley 2014

Real Estate Roundup

Sharp Thinking

No. 117 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. June 2014

Buyers Cannot Waive Incomplete Condition Disclosures

Illinois home buyers do not waive their rights under the Residential Real Property Disclosure Act (765
ILCS 77) by closing the transaction despite omissions on sellers’ disclosure form, a panel in the Appellate
Court’s Fourth District has held.

Relying upon a prior case holding that a buyer’s right to receive a report prior to closing cannot be
waived, the panel held that buyers cannot waive the seller’s failure to answer certain questions on the
form either. Messerly v. Boehmke, 2014 IL App (4th) 130397.

Ruling that the statute’s “mandatory language requires the seller to complete the entire form,” the
court said the buyers’ “claim is not defeated because they continued with the closing, as such an outcome
would allow defendant to fail to perform his duty to complete the entire disclosure form with impunity.”

The panel also ruled that the seller could be liable for his failure to provide complete information on
the questions answered on the form. “A seller who discloses some information can be subject to liability
under the Act if the seller knows the information disclosed contains a material error, inaccuracy, or
omission,” it said.

Strict Compliance With Property Tax Code Again Required

Two more appellate panels have emphasized that strict compliance with the redemption rights notice
provisions of Property Tax Code § 22-5 (35 ILCS 200/22-5) is required to receive a valid tax deed (see
generally Sharp Thinking No. 108 (January 2014)).

In In re Application of County Treasurer, 2013 IL App (1st) 130463, the tax sale purchaser included in
its notice the township (Hyde Park) but not the municipality (Chicago). Rejecting an argument that the
omission was immaterial, the court said that “under the strict compliance standard it is irrelevant whether
any owner, occupant, or other interested party is misled by a defect in a notice.” It affirmed a trial decision
refusing to grant the tax deed.

In In re Application of Douglas County Treasurer, 2014 IL App (4th) 130261, the panel affirmed in
relevant part a trial court order vacating the granting of the tax deed, because a claimant had not been
properly notified. It said the claimant’s interest under a will in probate constituted a recorded interest for
purposes of the statute, and that the tax purchaser had not fulfilled its duty to conduct an inquiry “as full as
the circumstances of the situation will permit.”

Closing Escrow Agent Owes Limited Duty to Investors

A closing escrow agent owes only limited duties to financing investors who conclude their
arrangements with the to-be property owner outside of the HUD-1 Settlement Statement, the Court of
Appeals for the Seventh Circuit has held.

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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.