Proration of chicago water bill

proration of chicago water bill.  You can prorate a chicago water bill.  To prorate simply request the prior years full bill which is two six month bills. Then divide the total year bill by 360 to get the per day cost.  Then count the days from when the last bill was issued.  Use following equation to caluculate the credit that should be given to buyer at closing

X = number of days since last bill issued

Y= the cost per day for water 

Z= the amount of credit given to buyer at closing




Sellers received a water bill for $318 dated February 8, 2014 and another water bill for $324 dated August 18,2014.  Sellers have signed a contract to sell the home to buyers closing on January 31 2015.

To determine coat of water per day, add the two water bills issued in 2014 for 2014 water cost and the. Divide by 360

(318 + 324)/360 =1.783

To find out credit that should be issued to buyer calculate where 134 is the number of days since last bill in August through date of closing


The credit at closing will be $238.92

free sailboat

free sailboat


A Free Rhodes 19 Sailboat Keel Version is available to someone who will sail it.  To obtain this boat please contact;


Ron Johnson


Call:  309-265-4653

Call Now/Email Now – Boat May be Gone by July 31, 2012.


To Sail your new Rhodes 19 Sailboat in Chicago, you need to Join Fleet 12 and Moor Your Boat at Montrose Harbor.  You also need to join the National Rhodes 19 Organization.

Lastly, you need to join the Chicago Corinthian Yacht Club to race your Rhodes 19 and to more fully enjoy Montrose Harbor.

Average Yearly Cost to  Run, Race and Moor Your Rhodes 19 is $3000 or less including Yacht Club Membership, Fleet Membership and Average Maintenance Costs, Mooring for Summer and Winter.

I am the past fleet captain (2003-2005) of the Fleet 12 and strongly endorse owning a Rhodes 19 as a great form of recreation that is affordable in the City of Chicago.

FHA Mortgage Fees Could Increase Soon –

FHA mortgage fees could increase soon –

I read this article today and think it provides a very good summary of some changes coming to FHA Loan pricing.  What it does not discuss well are the “real world” limits on credits at closing.  In Illinois, the seller “by law” provides all of the title insurance cost on the seller’s side.  Plus, in Illinois, our tax system forces nearly a year of taxes to be credited at closing so that they can be paid the next year.  When you consider all of the forced credits in Illinois, the bottom line is that you may not even get a 3% credit for closing costs approved, especially if your purchase is less than $100,000.

HERE IS A GOOD RULE OF THUMB:  Never purchase a house for more money that you really want to offer even if you are getting a 3% credit for closing costs.  Instead, haggle for a very aggressive price that is good for you as a buyer then demand the 3% credit for buyer’s closing costs as simply an incentive to get you to sign on the offer.  Never count on the credit for closing costs as the seller may not be allowed to give the credit to you.  Also be aware that seller payments made to you outside of the closing escrow process are forbidden, illegal and will get you into serious trouble with the federal government.


Social Media & Employee Misconduct

Today, I attended a Continuing Legal Education Program at the Chicago Bar Association presented by the Young Lawyer’s Section.  The topic of this course was the issue of employee misconduct as it relates to Social Media.  Here is the one takeaway from the course:  Employees who would have once had a discussion about employer treatment of its employees amongst themselves can now do in public via Facebook.  Even if the comments are disparaging about the employer, such as “my supervisor is an asshole”, the speech is protected and so are the employees jobs.

Bottom line, union employees getting ready to strike for wages, file a complaint against supervisor or just to “bitch about work” can do so now in public with no repercussions.

Now obviously there are alot of exceptions to this, but bottom line, as your company size grows, so does the need to have a good employee manual covering social media disclosures by employees.

For more information about setting up a top flight employee handbook or updating yourself, consider calling these two fine attorneys who put on this excellent CBA CLE Presentation today.

Adam Wit, Attorney, Littler Law Firm of Chicago

Kathryn Siegel, Attorney, Littler Law Firm of Chicago


royal crown cola bankrupt

royal crown cola bankrupt

Read the fine print –  you can still buy Royal Crown Cola whose recipe is owned by Dr. Pepper Snapple Group and Distributed Locally by itself and not through a bottler.  This bottler is a former bottler and distributor of Royal Crown Cola and hasn’t bottled and sold Royal Crown for several years.  The good news is:  You can still get Royal Crown Cola – a personal favorite.


As Reported by the Chicago Tribune, January 23, 2012;

Royal Crown Bottling Co. of Chicago Inc. filed for Chapter 7 bankruptcy last Friday and said it plans to dissolve the business.

Its 20 biggest unsecured creditors include the Pension Benefit Guaranty Corp., which has a disputed claim of nearly $4.5 million for retirement plans for the company’s employees. The PBGC is a federal agency that protects pension benefits in private-sector defined benefit plans, which typically pay a set monthly amount at retirement.

Another unsecured creditor is the Soft Drink Industry Local Union No. 710 Pension Fund, which has a disputed claim of nearly $3.7 million, bankruptcy records show.

Royal Crown has total liabilities of $8.2 million and total assets of $28,635.

As of 2001, it had been the nation’s largest independent Royal Crown bottler.

Seyfarth Shaw LLP lawyer Jason DeJonker, who is representing Bolingbrook-based Royal Crown Bottling Co. of Chicago, declined to comment on the bankruptcy. According to bankruptcy documents, 43 percent of the company is owned by Fred Adamany of Rockford, and 46 percent by the estate of Dan Weil and Weil trusts.

Royal Crown is a brand of Dr Pepper Snapple Group. A spokesman for the beverage chain said that it has been several years since Royal Crown Bottling of Chicago carried its brands. Dr Pepper Snapple handles its own sale and distribution of Royal Crown Cola in the Chicago area from a Northlake bottling facility, the Dr Pepper Snapple spokesman said.

chicago residential landlord and tenant ordinance summary attachment

chicago residential landlord and tenant ordinance summary attachment

Do you need to attach a summary of the Chicago Residential Landlord Tenant Ordinance (RLTO) to your residential tenant lease?

Answer:  Yes & No

You DO NOT need to attach a summary if you as a landlord are not subject to the Chicago RLTO.  You are NOT subject to the RLTO if your rental building is six units or less AND is owner-occupied.

You DO need to attach a summary if you are subject to the Chicago RLTO.  All landlords who rent buildings that are NOT owner-occupied ARE subject to the RLTO regardless of whether it is six units or just one unit.  For example if you own a 1 bedroom condominium in Chicago and rent it out but reside in your own home, the rental unit is not owner-occupied and subject to the RLTO.  However, if you own a six flat and live in one of the units, this rental building is an owner-occupied building and NOT subject to the RLTO.

In a nutshell; if you building is six units or less, occupied by you as an owner, your building is not subject to the RLTO and the summary of the RLTO is not required.  The RLTO in general is geared towards regulating non owner-occupied rental buildings with any number of units.  Any time you are an absentee landlord, you are covered under all the provision of the RLTO with some small exceptions – see the RLTO code below.

If you are subject to the Chicago RLTO, please click on the attached link for a copy of the summary required to be attached to your residential lease.  Chicago RLTO Summary

To view a copy of the Chicago Residential Landlord Tenant Ordinance, please click on the attached link:  Chicago RLTO Ordinance

Has it been a while since you tuned up your rental operation?  As a landlord, please consider calling NLO Nelson Law Office to set up a consultation for a leasing and landlord tune-up.  Call 877-464-6656 or click to email our office for more information.

How to Compute Real Estate Tax Proration Illinois & Tax Credits in Cook County Illinois

John Deere Planetarium Augustana College Rock Island Illinois

John Deere Planetarium Augustana College Rock Island Illinois

How to Compute Real Estate Tax Proration Illinois & Tax Credits in Cook County Illinois

  • Do you need an attorney for your real estate closing? Selling your house? Please contact NLO today

If you are a young attorney just starting out or just someone interested in the obscure world of tax prorations, this article is for you.  Tax Prorations are essentially receiving credit for unpaid property taxes either now or later after tax bills come out.

History:  In the Great Depression of the 1930’s; the State of Illinois granted a one year property tax holiday.  This set all tax collections back one year.

Example:  Your Tax Bill for the First Half of 2010 (January 1, 2010 to June 30, 2010)  is $2000.  The tax bill is dated March 15, 2011 and due by June 30, 2011.    Since the bill is provided nearly a year after when the tax was incurred, the taxpayer has no idea what his tax bill will be when the tax is actually being incurred….He can only estimate based upon his prior tax bills.

Application:  When you purchase a piece of residential real estate in Cook County, clear title is provided and all of the taxes that can be paid are paid up on the day of closing.  However, because tax bills come out one year after they are due, there is often an entire year of property tax liability that is unpaid and the actual bill is unknown..

Example:  Buyer of Real Estate makes offer to purchase a home in Chicago.  The offer is accepted June 1, 2011.  The closing is to be September 30, 2011.  Full Year Tax Bill for 2009 is $4000.

First:  Calculate the estimated tax liability  up to the date of closing:

First Half of 2010 Tax Bill $2200  (must be 55% of the full bill from the prior year)
Second Half of 2010 Tax Bill (unknown)
First Half of 2011 Tax Bill (unknown)
Partial Second Half of 2011 Tax Bill (unknown)

The contract should call for a proration premium which is typically 105% or more.  In this contract, the amount is 105%.

To figure out estimate full year 2010 bill, simply take the 2009 bill times 105%.
$4000 X 1.05 = $4200.

To figure out Second Half of 2010:

Take $4200 (total estimated 2010 bill) less the $2200 already paid for a credit of $2000 to be given at closing for this half.

To figure out estimated full year 2011 bill, simply take the 2009 bill times 105%
$4000 X 1.05 = $4200.

For 2011 you will be paying 1/2 of the $4200 for the period 1/1/2011 to 6/30/2011 or $2100

For the period or 7/1/2011 to 9/30/2011 you would pay the fraction of ((31+31+30)/365) x $4200

So our closing statement will show the following credits:

2010 Taxes 1st Paid
2010 Second Half Credit    $2000.00
2011 First Half Credit:  $2100.00
2011 Second Half Credit to 9/30/2011:  $1058.64.


Answer:  Take 2% of the purchase price.  This is an approximate annual maximum tax rate for homes in Cook County and specifically applicable to the City of Chicago.  This is used often with new homes that do not have any tax record yet.

For more information about tax prorations or to hire David Nelson as your real estate attorney, please call 877-464-6656 (877-GO-GO-NLO) or email David at

chac voucher program

chac voucher program

In the City of Chicago, the Chicago Housing Authority runs various types of low income subsidized housing. In the past these were often referred to as the “projects” which was a description of several concentrated areas of public housing in Chicago. The three largest “projects” were the Robert Taylor Homes, Cabrini Green and many lesser known housing developments. All of these housing projects were failures. A law enacted in the early 1970’s is largely responsible for these failures. For the most part, all tenants had to pay 40% of whatever their income was. Therefore, there was no way to have super cheap housing and save money over a period of time. Without saving, no working class person could use these units and only the very impoverished used these units as “safety net.” Although these units provided a way to stay off of the street, they were unsafe “prisons” that simply encouraged and literally trapped people in poverty. There was no interaction with working class, middle class or upper class persons and all job opportunities fled as far away as possible from these housing projects.

In the 1980’s, Mayor Daley enacted a long-term plan to close down all of the concentrated low-income housing in Chicago. Part of the program was to create the so-called “scattered” site housing which was essentially 1-12 unit size housing projects. Most the land was acquired by people who didn’t pay taxes and/or were foreclosed upon. Vacant lots in up and coming neighborhoods provided the best opportunities for good housing with these scattered site housing programs. As welfare reform was passed in the middle 1990’s the need for this program began to fade and opposition to these scattered site housing developments intensified causing a shutdown of the program. Bickerdike Housing, Lutheran Social Services and other agencies typically manage these sites today. Today, there is no further building of these types of housing.

With the advent of Welfare Reform and the Creation of “Section 8” Housing came the idea of landlord vouchers. Poor people would be allowed to rent “fancy” market rate units in regular neighborhoods all over the place with not racial or economic boundaries. The reality of this situation was quite different. Section 8 Landlords had to be qualified and typically only desperate landlords in mediocre to bad neighborhoods oftentimes also far away from good jobs.

CHAC Houses are essentially a Section 8 voucher used to purchase a home and then have the mortgage payment paid by Section 8 for up to 15 years. Before you think this is an easy gift for the buyer…..think again. Typically, the buyer has been in public housing for over 20 years and has a lot of getting used to working and not being essentially a ward of the state. It takes a long time to make the transition and usually these buyers have really put forth some good effort to get into the right mindset. Also, the Section 8 Subsidy only covers the principal and interest and does not cover taxes, homeowners/renters insurance or mortgage insurance.
Bottom line: Oftentimes, the buyer is paying up to 1/3 of their housing costs right away. AND they can never return to public housing – ever! They sign this agreement when they accept the CHAC home.

So what are the issues for the seller’s and buyer’s attorney? BEWARE! First of all, as all real estate attorneys known in Illinois, nearly 3/4 of their compensation comes from providing the title insurance policy. This odd and not particularly good situation arises from the introduction of title insurance in the 1930’s. Traditionally attorney’s made 1% of the purchase price as their compensation. Title Insurance Premiums were designed to replace this with only nominal legal fees to the seller. In a CHAC closing, the seller’s attorney is NOT ALLOWED TO PROVIDE THE TITLE INSURANCE. This is done via a forced rider that the seller signs during attorney review. Bottom line, if the seller is desperate to sell the property, then they will essentially need to pay their attorney for the missing premiums which average about $1500. In a good market, the seller will simply refuse to sign the rider and cancel the transaction.

Hopefully, you are starting to see the bad precedent. Bottom line, the title insurance costs ultimately are paid for by the low income buyer and in an amount that is more than they would have been if the seller’s attorney was allowed to provide the title insurance. Also, better properties will typically cancel faster because they can choose standard buyer’s who don’t have “weird” financing and restrictive riders to sign.

Obviously the intent of the creators of CHAC was to provide a low cost title insurance policy to the buyer. However, this ultimately results in a higher price and unavailability of many homes where the seller’s reject the CHAC riders in attorney review. This may be viewed as discrimination and it is, but it’s not prohibited discrimination, just unfortunate.

The buyer’s attorney also needs to be aware that at the first sign your buyer is a CHAC buyer, you need to withdraw. CHAC requires volunteer attorneys. This is also misguided. Good, reasonably priced attorneys who are qualified provide good experience to buyers in how to hire attorneys which they will need in their new non-welfare lifestyle. Requiring free attorneys sets a terrible precedent for these new homeowners where they think that just because they are low income they will have attorneys wanting to offer pro bono (free) services, which is not realistic.

In my opinion, the CHAC program is great except that title should be pulled by the seller’s attorney using existing rate cards and buyer’s attorneys should be hired using reasonable rates. Moving people into the opportunity to own a home is great. The process of getting to home ownership should help train the new homeowner in the way the transaction would ordinarily be conducted outside of CHAC home ownership.

Lastly, I have recently seen where CHAC buyers became “stuck” with the idea that they needed a certain kind of home for a certain kind of price regardless of where it is located and regardless of the effect on their commute. The bottom line: It is my opinion that CHAC counselors should always encourage potential buyers to buy within 10 miles of their employment with a viable public transportation option and near an area that has job growth. A beautiful home that is not near your work is called a “vacation home.” A beautiful home in a depressed economic area is called a museum. A small but practical home near tremendous job opportunities, vibrant communities and good schools is called a HOME.

For more information about the CHAC program, please contact the CHA at

For more information about quality real estate attorneys who represent residential real estate sellers and buyers, please contact David Nelson at

Transfer Tax Real Estate Summary In Illinois

In Illinois, Municipalities can levy a transfer tax on a buyer and/or a seller.  A transfer occurs when a piece of real estate is sold and/or transferred.  Don’t be mislead; a transfer tax is in its very essence a sales tax on the purchase of real estate.

In Chicago, the transfer tax is 0.75% of the purchase price for the buyer.   That means the buyer pays a 0.75% sales tax when they buy a home in Chicago.  For example, if a buyer purchases a new home for $100,000, his or her closing costs will include a $750 sales tax.  Be advised that the seller will also pay a transfer tax as well.

Every City, Town, Village or other municipality has a transfer tax, to determine when your transfer tax will be, please visit the Transfer Tax Summary.  This is a PDF document that is a great resource for realtors, buyers, sellers and anyone interested in the local transfer tax.  Email my office at to request a copy.

If you are considering the sale of your home and need an attorney, please email my office for a free quote on legal services.

Illinois Foreclosure Laws Right of Redemption and Title Theory 9 Months Or Longer to be out of your house

Illinois foreclosure laws right of redemption and title theory 9 Months Or Longer to be out of your house

Real Estate Law is State law, not Federal law.  Therefore, every state has different foreclosure laws.  Here in Illinois, the land of Lincoln, we have one of the most liberal foreclosure laws in the country.  It takes at least 9 months to get an order of possession against a homeowner from the first missed home mortgage payments.  Oftentimes in practice, this time is 14 months or more.

Why is this – there are title states and lien states.  In title states, the lender has title to property until the loan is paid off and the mortgage is released.  States like this are California and Florida where it takes about 3 months to throw you out of your home.  Here in in Illinois, the lender has a lien against the property and based upon our foreclosure law has to go through an extensive series of steps to foreclose.

Why do we have such a liberal foreclosure law?  Because we are a farm state!  Yes it’s true, everybody thinks of Chicago and its big city glitz but the reality is that we are an agricultural powerhouse and our state does not like to see farmer’s lose their farms.  But the real impetus for our law is the Great Depression when things were so bad that they gave a tax holiday for one year which is why we pay our taxes one year in arrears.

So hears to Illinois – the state that is conservative in its politics and liberal in its homeowner rights.

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