About Howard Handler

Howard Handler is the Illinois Association of REALTORS® local Government Affairs Director (GAD) representing North Shore-Barrington Association of REALTORS® and Lake County for the Mainstreet Organization of REALTORS®.

Transfer taxes are the exception in Illinois

Only 5 percent of Illinois municipalities levy real estate transfer taxes. Click on the photo to see the list. (Bigstock Photo)

A little-known fact that often surprises elected officials (and even some REALTORS®) is that Illinois municipal real estate transfer taxes are the exception rather than the rule.

This is largely due to late 1990s Illinois REALTOR®-led legislation that allowed only home rule municipalities that won approval by referendum to adopt a real estate transfer tax. Since the late 90s, only municipalities with a grandfathered transfer tax, and a small number of municipalities that won voter approval lay claim to a real estate transfer tax.

In fact, only 5 percent of Illinois municipalities levy a real estate transfer tax. That’s worth repeating because it shocks people: only 5 percent of Illinois municipalities tax the sale of real estate. (Click here to see the list of municipalities.)

Transfer taxes are regressive, unfairly penalize those who move more frequently, and increase housing costs, limiting housing choices for some on the margins. The National Association of REALTORS® estimates that for every $1,000 increase in the cost of a house, 250,000 people are priced out.

It is for those reasons we urge municipalities to eliminate or reduce the burden of their existing transfer tax. The city of Lake Forest (Lake County) offers a refund of up to $2,000 to property owners who sell and buy within the city limits. Recently the North Shore – Barrington Association of REALTORS® successfully advocated to allow property owners to claim that rebate over a two-year period rather than a one-year period. The change would allow those who purchased a home but, for any number of reasons, could not sell their existing home within one year, to claim the rebate within two years (three for extenuating circumstances).

The change is small and will only benefit a limited number of property owners, but it’s an incremental step toward being on par with 95 percent of Illinois municipalities with no transfer tax.

Almost a decade later, REALTOR® effort has lasting effect

Howard Handler

In 2013, local Government Affairs Director Howard Handler described the domino effect of REALTOR® advocacy. Handler recounted how a successful REALTOR® effort from 2008, to beat back an illegal real estate transfer stamp program adopted by the city of Highwood, led to squashing a similar ordinance and proposal, respectively, in the villages of Golf and Riverwoods. Nearly a decade later, our advocacy still has legs.

When village of Deerfield staff, trying to tackle illegal sanitary sewer infiltration, toyed with the idea of requiring a village-issued transfer certificate prior to recording a deed, the North Shore-Barrington Association of REALTORS® (NSBAR) jumped in. NSBAR shared with Deerfield staff the written decision by the Lake County Recorder of Deeds to record deeds with or without Highwood’s faux-transfer stamp.

Deerfield staff in a memorandum to the Village Board wrote: “Upon reviewing the 2008 opinion issued by the Lake County Recorder’s Office… Village staff and the Village Attorney concluded that only non-compliance with a referendum approved transfer tax would be sufficient to prohibit real estate transfers in the Village.”

Deerfield village staff and Board of Trustees have instead decided to conduct an educational and incentive-based campaign to bring illegal sanitary sewer hookups into compliance.

“Deerfield staff were very receptive to our concerns that a transfer certificate requirement without voter approval was not only unlawful, but that it would unduly interfere with home sales,” said Handler.  “We recognize the problems caused by illegal sewer connections and look forward to working with the village on educating REALTORS® and property owners.”  Handler is also a Deerfield resident.

REALTORS® put themselves in clients’ shoes when they visit Lake County government offices

Circuit Judge Daniel Jasica helped REALTORS® understand evictions so they can be better resources for landlords and tenants. See photo gallery at bottom of this story.

Lake County REALTORS® braved unprecedented flooding and closed roads to attend a special, REALTOR®-only real estate related walking tour of Lake County government offices Monday.

REALTORS® met with Recorder of Deeds Mary Ellen Vanderventer to learn more about the recording process and how to access real estate records, then met Treasurer David Stolman to learn more about property tax bills and collections. Circuit Court Judge Luis A. Berrones taught them about the foreclosure mediation program, Circuit Court Judge Daniel L. Jasica spoke about evictions, and Chief County Assessment Officer Martin P. Paulson explained about the property assessment process and appeals.

Lake County Board Chairman Aaron Lawlor was scheduled to appear but he and numerous REALTORS® were unable to attend due to area flooding.

REALTORS® target point of sale inspection policy in Beach Park

Source/Bigstock

REALTORS®, more than anyone, know how complicated and fragile the home selling process can be.

Every step of the home selling process, from contract to closing, and everything in between, can complicate and derail a home sale.  Introducing another prerequisite – the government home inspection – only serves to increase costs and create more opportunities to disrupt the transaction.

Only a small minority of Illinois municipalities require a government home inspection prior to sale.  And unlike state licensed private home inspectors, municipal inspectors have no minimal training or standards requirements, and sellers must correct any violations found by the government inspector.  Worse, government inspectors often nitpick over cosmetic rather than life-safety concerns.

For these reasons, the Mainstreet Organization of REALTORS® (MORe) has teamed up with the Illinois REALTORS®, by way of the Real Property Alliance, to take aim at the Lake County village of Beach Park’s policy requiring an exterior inspection of one’s home prior to sale.  The two associations have launched a sophisticated advocacy campaign to take the message directly to Beach Park residents.

Through newspaper advertisements, electronic mail, and social media advertising, Beach Park residents have been directed to www.BeachParkInspections.com where they can learn even more about the issue and send a message to the Beach Park village board encouraging them to end point-of-sale inspections.  The campaign has been well received by the public and we are seeing a steady stream of property owners telling their village board to stop interfering with home sales.

“REALTORS® are not saying the village shouldn’t address code violations, but what makes it frustrating is code violations can be addressed at any time of the year by the village as opposed to right when a resident is trying to sell their home,” says Kris Seegren a REALTOR® and Beach Park resident. “I have never seen a municipal inspection make the transaction go smoother; in fact it just adds further points of contention between the parties at a late date in the transaction, sometimes causing sticking points of negotiation right at the closing table.”

REALTORS® rein in Zion’s nuisance property ordinance

Bigstock

The Illinois REALTORS® does not just advocate against transfer taxes and government pre-sale home inspections — we took the lead in reining in the city of Zion’s chronic nuisance property abatement ordinance that was, among other things, targeting sexual assault and crime victims.

Zion’s chronic nuisance property abatement ordinance authorizes city staff to contact property owners when two of 13 defined nuisance activities are found to have occurred within a 180 day period. If a property owner does not respond or a proposed plan of action is not mutually agreed upon, the property must be shut-down for a period of 30 to 180 days and all occupants, regardless of culpability, must immediately vacate the building and be subject to homelessness. Other penalties include civil fines and judicial remedy.

The Illinois REALTORS® has long maintained concerns with these types of ordinances that often penalize property owners for seeking police assistance – the police services they pay for. Echoing our concerns, the Sargent Shriver Center on National Poverty Law, writes, in their report, the Cost of Being “Crime Free”: Legal and Practical Consequences of Crime Free Rental Housing and Nuisance Property Ordinances, “these ordinances present numerous potential pitfalls that can cause serious harm to tenant households, landlords, and the community at large and expose municipalities to legal liability.”

Upon hearing of escalated and abusive enforcement, the Mainstreet Organization of REALTORS® (MORe) Lake County Government Affairs Committee took the lead in investigating, and uncovered, among other concerns, that the city was violating its own policy by enforcing the ordinance even in cases of just one alleged nuisance instance and breaking Illinois law by enforcing the ordinance against the disabled and victims of domestic and sexual violence at risk.

According to a front page Lake County News-Sun story profiling our findings, Zion Mayor Al Hill says the city is now sending far fewer violation notices, no longer enforcing against crime victims, and violation notices now must have supervisory approval.

Illinois REALTORS® and MORe will continue to monitor this ordinance for continued abuse. To read the Lake County News-Sun’s story on Zion’s ordinance, click here; to read the Lake County News-Sun’s editorial calling the ordinance “misguided,” go here.