Illinois Real Estate Practices
- Attorney Involvement
- Cancellation/Commitment Fee
- Certificate of Release (of Mortgage)
- Joinder of Spouses
- Mortgage Tax
- Payment Customs
- Policy Countersignatures
- Real Estate Taxes
- Search and Examination Fees
- Search Requirements
- Security Instruments (Deed of Trust vs. Mortgage)
- Standard Exceptions and Requirements
- State-specific Policy Variations
- Title Insurance Form and Filing Regulations
- Transfer Taxes
- Withholding Taxes
- Witness Requirements
Please describe any requirements under applicable state law for attorney, abstractor or other special professional involvement, for example, in the search, examination, opinion of title, signing, closing, disbursement, recording, preparation of documents, and/or policy-issuance.
There is no required attorney involvement in the title insurance or closing process. However, Illinois strictly enforces its unauthorized practice of law statutes with respect to preparation of documents.
Does your state permit or require a cancellation fee or commitment fee upon cancellation?
The State of Illinois permits a cancellation fee or a commitment fee upon cancellation but does not mandate that there be a charge.
Certificate of Release (of Mortgage)
If anyone other than the lender (such as a title agent, settlement agent, underwriter or attorney) has the authority to release the security instrument, please describe.
Illinois allows for a mortgage certificate of release. See 765 ILCS 935/1 et seq. The Certificate must be in a statutorily mandated form. See 765 ILCS 935/50. A title insurance agent must be specifically appointed by the title insurance company before it has authority to issue a Certificate of Release. See 765 ILCS 935/30. Wrongful or erroneous certificates do not relieve the mortgagor from personal liability. In addition, wrongful recording imposes liability on the title insurance company executing or recording the certificate for actual damages sustained along with reasonable attorneys fees and costs. See 765 ILCS 935/40.
Please describe the kinds of deeds that are customary for commercial and residential transactions. Please describe the kinds of deeds that are generally not insurable.
Types of Deeds:
- Quit Claim Deed (General)
- Quit Claim Deed (Joint Tenancy)
- Quit Claim Deed (Tenancy by the Entirety)
- Quit Claim Deed in Trust
- Warranty Deed (General)
- Warranty Deed (Joint Tenancy)
- Warranty Deed (Tenancy by the Entirety)
- Warranty Deed in Trust
- Special Warranty Deed (General)
- Trustee’s Deed
All other deed forms are subject to review and approval by an Illinois underwriter.
Warranty Deeds are the customary deeds used in the state. All deed forms are insurable subject to the facts and circumstances surrounding the issuance of a particular deed.
Joinder of Spouses
If a non-title holding spouse is required to join in the execution of a deed or a security instrument, please describe. Any analogous rights, such as those in a civil union or equivalent, should also be addressed.
The signature of both spouses is required to a document which is acknowledged in order to release, waive or convey homestead estate rights. See 735 ILCS 5/12-904.
Is there a mortgage tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Who customarily pays for:
(a) Owner’s Policy?
(b) Transfer Tax & Recording Fee?
(c) Survey Charges?
(d) Closing/Settlement Fees?
All charges are subject to change in the contract, however, customarily charges are as follows:
- Owners Policy – Seller
- Mortgage Policy – Buyer
- Transfer Tax – State - Seller
- Transfer Tax – County - Seller
- Transfer Tax – Municipal – by Ordinance
- Recording Fee – Deed – Seller
- Recording Fee – Release of liens – Seller
- Recording Fee – Mortgage – Buyer
- Survey Charge – Seller
- Closing Fee –Agency – Buyer
- Closing Fee – Cash Deal – ½ Buyer/ ½ Seller
- Closing Fee – Formal Escrow – ½ Buyer / ½ Seller
Please describe any statutory or regulatory requirements for countersignatures in order to issue the policy (for example, residency requirements).
There are no requirements for policy signatures or countersignatures on title insurance policies.
Real Estate Taxes
Please describe the general tax year, due dates, and delinquency dates, including lien dates and payment cycle.
- Illinois real estate taxes become a lien on the land on January 1 of the year before they are collected. NOTE: TAXES ARE COLLECTED 1 YEAR IN ARREARS.
- Cook County, Illinois sets its own date of collection. The first installment always has a delinquency date of March 1 and is equal to ½ of the previous tax payment. The payment of the second installment depends upon the completion of assessments and publication of the notices, and the mailing of the actual bills.
- In the remaining 101 counties, tax bills are due June 1 and September 1. Current unpaid taxes accrue interest at 1.5% a month or any portion thereof.
Search and Examination Fees
Is it permissible and/or customary to charge a separate search and/or examination fee, and under what circumstances? If your jurisdiction is all-inclusive, please state that.
Illinois title insurance charges are usually all inclusive charges. However, a charge for search and examination fee may vary by locality.
Is there a minimum period of time for a title search required: (a) by state law, (b) pursuant to marketable record title acts, or (c) by any other applicable title examination standards (e.g., state bar association)? Please respond to each category. If a minimum search period exists for any category, please state it.
Illinois does not require any particular time period for a search by law or regulation. There is a 40 year statute of limitation on claims to real estate, with some exceptions, pursuant to 735 IL CS 5/13-118.
Security Instruments (Deed of Trust vs. Mortgage)
Please describe the customary and permissible form(s) of security instruments used in your state.
Who can be listed as the trustee on the Deed of Trust (e.g., residency and/or natural person requirements, etc.)? Can an underwriter or title agent be designated as the trustee, and, if so, is it customary?
Illinois allows the use of both a deed of trust and a mortgage. Illinois is a lien-theory state. Mortgages are considered to be liens against the property and the vast majority of the liens in Illinois are mortgages. Both instruments are subject to the same judicial foreclosures rules under 735 ILCS 5/Art XV.
Standard Exceptions and Requirements
Please identify the standard exceptions and requirements that are customarily used in your state.
- Rights or claims of parties in possession not shown by the Public Records.
- Easements, or claims of easements, not shown by the Public Records.
- Encroachments, overlaps, boundary line disputes, or other matters which would be disclosed by an accurate survey or inspection of the Land.
- Any lien, or right to a lien, for services, labor, or material heretofore or hereafter furnished, imposed by law and not shown on the Public Records.
- Taxes or special assessments which are not shown as existing liens by the Public Records.
State-specific Policy Variations
If there are state-specific changes to the provisions in the ALTA policies (e.g., Arbitration, Minerals), please describe.
Title Insurance Form and Filing Regulations
Please describe the form and/or rate filing requirements, if any, related to policies and endorsements. Please describe any applicable rating bureau.
Is there a transfer tax in your state? If yes, is it uniform across the state or does it vary? If it is uniform, please describe.
Illinois has a transfer tax. The tax is imposed at the state, county, and at some municipal levels. The state property tax code can be found at 35 ILCS 200/31-10 et seq.
Is usury coverage available?
A usury endorsement can be issued. The current usury laws apply only to personal loans, however, violation of that statute is a Class 4 Felony.
What are your state’s requirements, if any, with regard to withholding proceeds from a sale, similar to but not including FIRPTA?
Are witnesses required on a deed or security instrument? If so, please describe.