Category: Real Estate

Addressing Real Estate Tax Issues Involved in Recently Constructed Property

With increasing real estate development activity, many owners and lenders of recently developed properties are experiencing problems ensuring the correct payment of real estate tax bills during the first year or two after the completion of construction.  In many cases, owners are discovering a couple of years after they have purchased newly constructed property that adequate arrangements were not made to address the complexities of allocating responsibility for pre-construction and initial post-construction tax bills.  This can become quite problematic when undivided tax bills cover parcels owned by multiple owners.

The problem is the result of an incongruity in the time line for the creation of tax parcels for a new project and Illinois practice of paying tax bills in arrears (i.e., tax bills paid in 2015 are for the 2014 tax year).  In the case of newly developed property, this could mean that the tax bills payable in the calendar year after construction is completed could still relate to the property as it existed before construction.

To further complicate matters, if the redeveloped property results in a new ownership structure which does not match the pre-development ownership structure, the old tax bills will not correspond with the new ownership structure.  For example, if a parcel of land which constitutes a single tax parcel (that generates a single tax bill) is redeveloped with two buildings that are sold to separate owners, then the new owners will face a single, undivided tax bill covering both buildings.  Until the County Assessor creates separate tax parcels covering each of the newly constructed buildings, the owners would need to cooperate to cause the combined tax bill to be paid each year.  This situation would lead to all manner of problems because it would not be immediately clear what portion of the tax bill would be attributable to each of the properties.  Furthermore, if one of the owners refused to pay his proportionate share, the other owner might be faced with paying the entire bill to avoiding having the undivided tax bill become delinquent.

Unfortunately, the time line for creating new tax parcels does not correspond with the with the payment dates for real estate tax bills.  For example, an application for a tax division (i.e., the procedure for creating new tax parcels) in Cook County, Illinois is filed a year in advance, meaning a division filed in 2015 will result in new tax parcels in 2016 which will not be payable until 2017.  If the division (other than condominium properties) isn’t filed before the October 31st filing deadline, a division filed in November or December 2015 will result in new tax parcels in 2017 and initial tax bills payable in 2018.

In light of the foregoing, a prudent purchaser of newly developed real estate will need to make certain that adequate provisions have been made to assure the owner that (i) a new division will take place, (ii) that sufficient funds have been collected or will be available from the seller post-closing to pay the seller’s share of the undivided tax bill for the year of closing and any prior years, and (iii) sufficient steps have been taken or are available to protect the purchaser with respect to the payment of undivided tax bills in the periods occurring prior to the issuance of separate, divided tax bills.  Without taking adequate steps to protect themselves, many property owners may be faced with significant real estate tax problems years after the initial construction of their properties.  Thankfully, with some planning, these issues can be avoided.

For further information regarding the real estate tax issues involved in recently constructed property, the procedures which may be employed to address these issues and real estate development and related issues in general, please contact:

Jeffrey M. Galkin at:

jgalkin@lgattorneys.com or 312-368-0100.

New Illinois Law Provides Greater Protections for Pregnant Employees

In August 2014, Governor Pat Quinn signed into law Public Act 98-1050, which is commonly referred to as the “Pregnancy Workers Fairness Act” (the “Act”). The Act, which becomes effective January 1, 2015, provides greater protections for pregnant workers, requiring all Illinois employers to provide reasonable accommodations to any employee or job applicant for pregnancy and child-birth related conditions, unless doing so would impose an undue hardship on the employer.

The Act amends the Illinois Human Rights Act to include pregnancy as a protected class. “Pregnancy” is defined as “pregnancy, childbirth, or medical or common conditions related to pregnancy or childbirth.” Employers are now required to provide pregnant employees with “reasonable accommodations”—the same type of accommodations employers are already required to provide to workers with temporary disabilities. Reasonable accommodations may include light duty, assistance with manual labor, and additional or extended bathroom breaks.  An employer may only refuse a requested accommodation if the employer can demonstrate that the accommodation presents an undue hardship on its ordinary business operations. The Act also prohibits discrimination in the hiring and employment of pregnant workers and those affected by a medical or common condition related to pregnancy or childbirth.

Employers must also post a notice regarding employees’ rights under the Act in a conspicuous location or include this information in the employer’s employee handbook.

To discuss any questions you may have about the effect of this new law on your business, please contact:

Kristen E. O’Neill at:

(312) 368-0100 / koneill@lgattorneys.com

Attention Condominium Associations, Condominium Unit Owners, and Condominium Board Members!

The Illinois Condominium Property Act (the “Act”) provides that all meetings of condominium board members are to be held in person and open to all unit owners, with very limited exceptions.

In fact, the Act requires that a condominium association’s bylaws must provide:

“[M]eetings of the board of managers shall be open to any unit owner, except for the portion of any meeting held (i) to discuss litigation when an action against or on behalf of the particular association has been filed and is pending in a court or administrative tribunal, or when the board of managers finds that such an action is probable or imminent, (ii) to consider information regarding appointment, employment or dismissal of an employee, or (iii) to discuss violations of rules and regulations of the association or a unit owner’s unpaid share of common expenses, that any vote on these matters shall be taken at a meeting or portion thereof open to any unit owner.” 765 ILCS 605/18(a)(9) (West 2004).

The Illinois Appellate Court, in the recent decision of Palm v. 2800 Lake Shore Drive Condominium Ass’n, 2014 IL App (1st) 111290 (2014), held that the board of directors of the condominium association violated the Act by conducting business at closed meetings, including discussion regarding association matters and soliciting input by email, canvassing board members by phone and deciding on matters in closed “working” sessions prior to presentation of the matters for a vote in an open meeting, and that such closed working or executive sessions, which are not open to unit holders, are impermissible. The facts of Palm may serve as a good guide to condominium board members and unit owners alike – to determine what may constitute a closed working or executive session.

Condominium associations should review both their bylaws and their actions to ensure compliance with the Illinois Condominium Property Act and to avoid the practice of conducting closed working or executive sessions, which are not made open to unit holders. If you have any questions regarding condominium board procedures, please contact:

Jeffrey M. Galkin at:

(312) 368-0100 / jgalkin@lgattorneys.com

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