HB4936 94TH GENERAL ASSEMBLY

LRB094 17045 BDD 52327 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4936

Introduced 1/19/2006, by Rep. William Davis

SYNOPSIS AS INTRODUCED:

New Act

Creates the Residential Real Property Tax Estimate Disclosure Act. Requires the sellers of newly constructed residential real estate to provide to buyers an estimate of the property taxes based upon the contract price. Sets forth requirements for the disclosure. Effective immediately.

FISCAL NOTE ACT MAY APPLY

HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Residential Real Property Tax Estimate Disclosure Act.

Section 5. Purpose. The purpose of this Act is to require, at the time of initial contracting, the sellers of newly constructed residential real estate to provide to the buyers an estimate of the property taxes based on the contract price. This information is important to the buyer because the annual amount of property taxes to be paid is a factor in determining if that real property is affordable.

Section 10. Definitions. As used in this Act:

"Newly constructed residential real property" means real property that has been newly constructed with not less than one nor more than 6 residential dwelling units, units in residential cooperatives, or condominium units.

"Seller" means every person who is an owner, beneficiary of a trust, contract purchaser, or lessee of a ground lease who has an interest (legal or equitable) in residential real property.

"Prospective buyer" means any person or entity negotiating or offering to become an owner or lessee of residential real property by means of a transfer for value to which this Act applies.

Section 15. Applicability. Except as provided in Section 20, this Act applies to any transfer by sale, exchange, installment land sale contract, assignment of beneficial interest, lease with an option to purchase, ground lease, or assignment of ground lease of residential real property.

Section 20. Inapplicability. The provisions of this Act do not apply to the following:

(1) Transfers pursuant to court order, including, but not limited to, transfers ordered by a probate court in administration of an estate, transfers between spouses resulting from a judgment of dissolution of marriage or legal separation, transfers pursuant to an order of possession, transfers by a trustee in bankruptcy, transfers by eminent domain, and transfers resulting from a decree for specific performance.

(2) Transfers from a mortgagor to a mortgagee by deed in lieu of foreclosure or consent judgment, transfer by judicial deed issued pursuant to a foreclosure sale to the successful bidder or the assignee of a certificate of sale, transfer by a collateral assignment of a beneficial interest of a land trust, or a transfer by a mortgagee or a successor in interest to the mortgagee's secured position or a beneficiary under a deed in trust who has acquired the real property by deed in lieu of foreclosure, consent judgment, or judicial deed issued pursuant to a foreclosure sale.

(3) Transfers by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust.

(4) Transfers from one co-owner to one or more other co-owners.

(5) Transfers pursuant to testate or intestate succession.

(6) Transfers made to a spouse or to a person or persons in the lineal line of consanguinity of one or more of the sellers.

(7) Transfers to or from any governmental entity.

Section 25. Duties of seller. A seller of newly constructed residential real property must complete all applicable items in the disclosure document described in Section 40 of this Act. The seller must deliver to the prospective buyer the written disclosure statement required by this Act before the signing of a written agreement by the seller and prospective buyer that would, subject to the satisfaction of any negotiated contingencies, require the prospective buyer to accept a transfer of the residential real property.

Section 30. Liability of seller. The seller is not liable for any error, inaccuracy, or omission of any information delivered pursuant to this Act if (i) the seller had no knowledge of the error, inaccuracy, or omission or (ii) the error, inaccuracy, or omission was based on information provided by a public agency.

Section 35. Disclosure supplement. If, prior to closing, any seller has actual knowledge of an error, inaccuracy, or omission in any prior disclosure document after delivery of that disclosure document to a prospective buyer, that seller must supplement the prior disclosure document with a written supplemental disclosure.

Section 40. Disclosure report form. The disclosures required of a seller by this Act shall be made in the following form:

RESIDENTIAL REAL PROPERTY TAX ESTIMATE DISCLOSURE REPORT

NOTICE: THE PURPOSE OF THIS REPORT IS TO PROVIDE PROSPECTIVE BUYERS WITH AN ESTIMATE OF PROPERTY TAXES TO BE PAID BASED ON THE INITIAL CONTRACT PRICE OF THE NEWLY CONSTRUCTED RESIDENTIAL REAL PROPERTY.

Initial Contract Price:..........................

Estimate of Property Taxes:......................

County in which the residential real property is located:.................................................

Real Estate Permanent Index Number:..............

Property Address:................................

City, State & Zip Code:..........................

Seller's Name:.......................................

This Report is a disclosure of an estimate of property taxes to be paid for the newly constructed residential real property listed above in compliance with the Residential Real Property Tax Estimate Disclosure Act. This information is provided as of ... (month) ... (day) ... (year), and does not reflect any changes made or occurring after that date or information that becomes known to the seller after that date.

Seller certifies that seller has prepared this statement and certifies that the information provided is based on actual knowledge of the seller. The seller hereby authorizes any person representing any principal in this transaction to provide a copy of this report, and to disclose any information in the report, to any person in connection with any actual or anticipated sale of the property.

Section 45. Material defect. If an estimate of property taxes to be paid is disclosed in the Residential Real Property Tax Estimate Disclosure Report after the execution of an offer made by a prospective buyer that is accepted by the seller for the conveyance of the newly constructed residential real property, then the prospective buyer may, within 3 business days after receipt of that report by the prospective buyer, terminate the contract or other agreement without any liability or recourse except for the return to prospective buyer of all earnest money deposits or down payments paid by prospective buyer in the transaction. If an estimate of property taxes to be paid is disclosed in a supplement to this disclosure document, the prospective buyer does not have a right to terminate unless the estimate of property taxes to be paid results from an error, inaccuracy, or omission of which the seller had actual knowledge at the time the prior disclosure document was completed and signed by the seller. The right to terminate the contract, however, does not exist after the conveyance of the newly constructed residential real property. For purposes of this Act, the termination is deemed to be made when written notice of termination is personally delivered to at least one of the sellers identified in the contract or other agreement or when deposited, certified or registered mail, with the United States Postal Service, addressed to one of the sellers at the address indicated in the contract or agreement or, if there is not an address contained therein, then at the address indicated for the residential real property on the report.

Section 50. Act not a limitation. This Act is not intended to limit or modify any obligation to disclose created by any other statute or that may exist in common law in order to avoid fraud, misrepresentation, or deceit in the transaction.

Section 55. Delivery of Report. Delivery of the Residential Real Property Tax Estimate Disclosure Report provided by this Act must be by:

(1) personal or facsimile delivery to the prospective buyer;

(2) depositing the report with the United States Postal Service, postage prepaid, first class mail, addressed to the prospective buyer at the address provided by the prospective buyer or indicated on the contract or other agreement; or

(3) depositing the report with an alternative delivery service such as Federal Express, UPS, or Airborne, delivery charges prepaid, addressed to the prospective buyer at the address provided by the prospective buyer or indicated on the contract or other agreement.

For purposes of this Act, delivery to one prospective buyer is deemed delivery to all prospective buyers. Delivery to an authorized individual acting on behalf of a prospective buyer constitutes delivery to all prospective buyers. Delivery of the report is effective upon receipt by the prospective buyer. Receipt may be acknowledged on the report, acknowledged in an agreement for the conveyance of the residential real property, or shown in any other verifiable manner.

Section 60. Violations and damages. If the seller fails or refuses to provide the disclosure document prior to the conveyance of the residential real property, the buyer has the right to terminate the contract. A person who knowingly violates or fails to perform any duty prescribed by any provision of this Act or who discloses any information on the Residential Real Property Tax Estimate Disclosure Report that he or she knows to be false is liable in the amount of actual damages and court costs, and the court may award reasonable attorney fees incurred by the prevailing party.

Section 65. Limitation of actions. No action for violation of this Act may be commenced later than one year from the earlier of the date of possession, date of occupancy, or date of recording of an instrument of conveyance of the residential real property.

Section 70. Copy of Act; Report form. A copy of this Act, excluding Section 40, must be printed on or as a part of the Residential Real Property Tax Estimate Disclosure Report form.

Section 99. Effective date. This Act takes effect upon becoming law.