By Gary S. Mueller, Three Rivers Association of REALTORS® Attorney
Good Day to All.
There are times in this space when I try to bring to light various matters or situations that affect the real estate industry. The following is the most recent submital in that line of articles.
A bi-partisan bill has been introduced to attempt to “fix” TRID (TILA-RESPA Integrated Disclosure). The most recent “fix” is intended to make title related expenses more transparent. Further, an “add-on” to the proposed legislation would allow utility and cell phone payment histories to be used in calculating credit scores.
According to the April 2018 Edition of Title News, it appears that, in some areas of the country, Bit-coins are being accepted in real estate transactions. Thus far, the influx of Bit-coin usage has concentrated in foreign investment hotbed locations (Miami, Lake Tahoe, Manhattan, Phoenix, etc.), but it appears other areas where foreign investment is gaining traction are using the currency with more frequency. Note that, in a Bit-coin transaction, all aspects and partners in the deal may be affected---from how earnest money is provided (so the brokerage that accepts earnest money may need the ability to accept Bit-coin) to the payment of a down payment (thus affecting the lender) to the payment of the remaining balance owed to close the deal (title company involvement becomes relevant). Thus, though perhaps a futuristic issue, the use of Bit-coin currency may be only around the corner----make sure you are ready if and when it comes to our area.
On the case law front, in Michigan Wacker Associates LLC v Casdan, Inc (2018 IL App (1st) 171222, the Appellate Court, reversing the trial court, held that actual notice of an intent to exercise a lease option was untimely in that case where the written notice did NOT specifically comply the dictates of the lease agreement. There, the original lease agreement ran for ten years and provided two, five-year options to extend. According to the terms of the agreement, in order to perfect an extension of the initial lease, the tenant had to provide written notice to the landlord, sent by registered or certified mail, with a copy sent to the landlord’s attorney. For the first extension, tenant sent landlord a written notice to successfully extend the lease (though the written notice was not fully compliant with the terms of the lease as it was not also sent to the landlord’s attorney). For the second extension, tenant sent only an email to the landlord indicating that tenant wanted to exercise the second option, questioned the rent terms, and sought conversion of both options into a ten-year term. The Appellate Court found that this second attempt was not compliant with the terms of the initial lease holding that no landlord would have reasonably understood the email to be an exercise of the second option when the email indicated that there were other matters to be discussed, matters to be proposed, and matters to be resolved prior to moving forward.
CFPB (Consumer Financial Protection Bureau) issues New Rules to clarify TRID (these are different than the bipartisan proposal identified above). CFPB has proposed or put in place the following changes:
a) The changes take effect no later than October 1, 2018. All aspects of the legislation will need to be followed thereafter;
b) TRID will now also apply to Trust and Cooperatives. The disclosure only has to be provided to one of the applicants/borrowers;
c) The disbursement date is now the date funds are to be expected to the third party or the seller as opposed to the date the funds are delivered to the title company/settlement agent;
d) A corrected CD must be provided what an amount changes within 30 days post-closing, but a revised CD is NOT required if the only change is to the per diem interest amount.
Concerning the 7.0 Contract Committee----the Committee has calendared meeting dates to the end of this calendar year. Even once the proposal is agreed within the Committee, all participants will still need to have the proposal reviewed and approved by their respective Association boards and Bar Associations. With that in mind, I am NOT confident that a 7.0 contract will be available for our current summer market season. As a result, please continue to send to me any and all comments or suggestions. We can still utilize your input prior to final approval of the contract.
Final reminder-----the Will County Bar Association and the Three Rivers Association of REALTORS® have rescinded their support for the Three Rivers Association Residential Real Estate Contract effective immediately (actually, the actions of the Associations were finalized some time ago. I am simply stressing this now). As a result, please DESTROY and SHRED any Three Rivers Residential Contracts you have in any files or on your computer so that the form is NOT used. If you receive an offer on a Three Rivers Contract, it is absolutely acceptable to ask the agent or buyer to resubmit the contract on the 6.1 Multi-Board Contract.
If you have any questions about any of the above, please feel free to call me at 815) 725-7300. Take care and keep working hard!