essential real estate law
Both Opportunity Zone funds and 1031 exchanges are ways of reinvesting gains from the sale of a property into another property in order to avoid current taxation and obtain valuable tax benefits. These regimes were created by Congress and codified in the Internal Revenue Code. Both are important tools for managing tax liabilities and for acquiring tax-advantaged investments. One is driven by a national agenda to promote investments in certain locations; the other is driven solely by the taxpayer’s agenda. One regime is very old; the other is very new. Which is the right one for you?
There are other transaction details you may easily overlook, such as the myriad of additional fees and costs charged to buyers as part of their home purchase transaction, also known as closing costs. These costs can add up quickly, so keep reading to find out more about closing costs, what to expect, and how much you may need to pay.
Landlords almost always ask for a security deposit when leasing property to a tenant. This is a sum of money that is held to cover any damage that may occur throughout the course of a tenancy. Although the landlord holds it, a security deposit remains the property of the tenant. The security deposit may be used only for damages that make the apartment un-rentable.
Home and commercial space transactions can be complex, and the timeline is subject to individual circumstances. Below are the general steps and how you can best set yourself up for a smooth transaction:
Home and commercial space transactions can be complex, and the timeline is subject to individual circumstances. Below are the general steps and how you can best set yourself up for a smooth transaction:
In the City of Chicago, property taxes are paid in arrears. This means that property tax amounts are due the year after the tax year has passed. When a Buyer and Seller are working on their property sale, the property tax proration is a negotiated term. Because taxes are paid in arrears, the parties will not yet have received the property tax bill for the current year by the time of the closing. With each subsequent year, taxes go up. For this reason, the seller will usually pay 105+% of the previous year’s tax bill.
When purchasing property, there are a few ways that a new owner can “take” title. There are three ways that the State of Illinois allows multiple property owners such as family members or business partners to hold title. 1) tenants in common, 2) joint tenants with right of survivorship, or 3) tenants by the entirety. Typically, new owners can choose which way to hold title and this can be changed in the future. It is important for Buyers to understand the different ways title can be held as it may affect the rights of creditors or the transfer of the property after an owner’s death.
In addition, there are different types of deeds that can be used to transfer title. There are four main types: General Warranty Deed, Special Warranty Deed, Bargain and Sale Deed, and a Quitclaim Deed. We will cover these types of deeds below after the types of title.
