Are You Considering an REO Property?

REO, Wheaton real estate attorneysIf you have shared with friends and family members that you are in the market for a new home, there is a good chance that someone has at least suggested that you look into buying a foreclosure property. In this context, a foreclosure property is a home that is being sold at auction by a bank because the owner of the property could not keep up with his or her mortgage payments. At a foreclosure auction, there is the possibility of getting a fantastic deal, but not all foreclosure auctions are successful. When foreclosure auction does not result in the sale of the foreclosure property, the property remains under the ownership of the lender and becomes a real-estate owned property or REO.

Understanding a Foreclosure Auction

When a home is seized by the lender during foreclosure, the home is typically put up for sale in public auction. As such, the property will be sold to the highest bidder. However, in many foreclosure auctions, the bidders are not given the chance to walk through or inspect the home before making their bids. In most cases, the highest bidder will also be expected to pay cash for the property immediately following the auction. The combination of these factors makes buying a foreclosure property at auction a rather risky proposition. It is also why some foreclosure auctions do not result in the sale of the property.

An unsuccessful foreclosure auction leaves the lender with a home that has already caused the lender to lose money due to the defaulted mortgage loan. Now that the property is considered REO, however, there may be benefits for you as the potential buyer.

REO Sale Basics

While a foreclosure sale is typically a singular event that takes the form of an auction, an REO sale is very much like any other residential real estate deal. The lender will usually list the property and get real estate brokers involved to facilitate the sale. Prospective buyers will also get the chance to inspect the home and arrange private financing without the pressure of bidding in an auction.

You should remember, however, that most REO properties will be sold “as-is.” This means that while inspections can and certainly should be done, the lender is not likely to cover the cost of any repairs. Your broker and your lawyer could try to negotiate with the lender regarding the price of the property if substantial repairs are required, but there is no guarantee that that lender will move on the listed price. With this in mind, you will almost certainly want to include a contingency provision in your offer that allows you to back out if the property needs more work or repairs that you are willing to pay for or do yourself.

It is also important to ensure that a title search is conducted on any REO property that you are considering buying. The home could have liens or other encumbrances on it that might become your problem once the transaction is finalized.

Contact a DuPage County Real Estate Lawyer

If you are thinking about buying a real-estate owned property or a foreclosure property, you could get a good deal, but there are many potential pitfalls. Contact an experienced Wheaton residential real estate attorney to ensure that your best interests are protected at every stage of the home-buying process. Call 630-665-2500 for a confidential consultation at Stock, Carlson, Oldfield & McGrath LLC today.

Sources:

https://www.thebalance.com/buying-post-foreclosures-reos-1798183

https://www.realtor.com/advice/buy/guide-reo-properties/

Can a No-Contest Clause a Prevent a Will Dispute?

no-contest, Wheaton estate planning attorneysWhen a loved one dies, the loss can be very difficult on the surviving friends and family members. The intense emotions of dealing with the loss can often make a grieving family member act in ways that would be otherwise uncharacteristic, leading to serious disputes over a variety of matters. A common point of contention is the deceased person’s will, and serious battles can affect the stability of a family for years to come, if not permanently. In an effort to prevent such issues from tearing apart your family after your death, you may wish to consider including a no-contest clause in your will.

In Terrorem Provisions

A no-contest clause is also known as an in terrorem clause, which is a Latin phrase meaning “by way of threat.” Such a clause may be included in your last will and testament to deter beneficiaries from formally contesting the will. Most no-contest provisions specify that if an heir files a contest to the will, that heir automatically forfeits the portion of the estate intended for him or her. The idea is that, if there is a threat of receiving nothing, or a nominal amount like $10 or $20, a would-be heir is not likely to push for more. It is important to understand that a no-contest clause cannot stop an heir from contesting a will; its only potential impact is to what may happen as a result.

A Challenge Is Possible Anyway

Before deciding to include a no-contest clause in your will, you should meet with an attorney to discuss your particular circumstances. In some cases, the amount intended for specific heirs might not be enough leverage for such a clause to serve as an effective deterrent. For example, if you have a large number of beneficiaries each set to inherit $1,000, an heir might be willing to gamble with that amount to try an obtain a larger inheritance. If the original amount is $100,000, an in terrorem provision may be more effective.

Concerns in Illinois

The law concerning the enforcement of no-contest clauses is rather vague in the state of Illinois. At least one court has set aside a no-contest provision on the grounds that the will contest was filed in good faith on the part of the heir. However, by closely with an attorney and employing the proper language in your will, you will be more likely to ensure that your wishes are carried out regarding your estate.

Contact a Wheaton Estate Administration Lawyer

If you are listed as an heir in a will with a no-contest clause, but you have reason to believe the will was not properly executed, contact an experienced DuPage County probate law attorney. We will review your case and help you identify your best option under the law. Call Stock, Carlson, Oldfield & McGrath LLC at 630-665-2500 today to schedule an appointment and get the representation you need during a difficult time.

 

Sources:

http://ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075500050HArt.+VIII&ActID=2104&ChapterID=60&SeqStart=10100000&SeqEnd=10400000

http://www.actec.org/assets/1/6/State_Laws_No_Contest_Clauses_-_Chart.pdf

Can I Require My Employees to Sign Non-Compete Agreements?

non-compete, DuPage County contract lawyersIn today’s highly competitive world, many employers insist that their employees sign non-compete agreements or NCAs. Also called non-competition agreements, these documents are especially popular for employers who hire workers with unique abilities or specific talents. In general, employers have the right to attempt to limit the impact to their brand caused by an employee leaving, but a non-compete agreement could be declared unenforceable if an employer overreaches. Put simply, NCAs can help protect your company, but they must be used properly.

The Basics of Contract Law

If you intend to have your employees sign an NCA, you probably expect the document to be a valid contract. This means that the NCA must meet the requirements of any other contract. Under Illinois law, these requirements are an offer, acceptance, and consideration for both parties. Basically, both sides must reach an agreement to exchange something for another thing—in most cases, the trade is a form of payment in exchange for goods or services. “Consideration” refers to what each party receives. For example, a purchase at a grocery store is essentially a simple contract. The store offer eggs for sale at a specific price—the “terms” of the contract. By handing over your money, you accept those terms. The store receives your money as the consideration, and you receive the eggs as your consideration.

In the past, the consideration offered in exchange for signing a non-compete agreement was the continuation of employment. Essentially, “sign this and you will be allowed to work here.” Unfortunately, this led to employers hiring certain employees for a very short period of time, requiring them to sign NCAs, then terminating them, leaving them without the ability to find work in their field. In 2013, Illinois courts determined that such practices were unethical, and two years of continued employment was found to be sufficient consideration.

Other Important Factors

Under Illinois law, there are generally four factors that will determine the viability of your NCA. If any of the four is found to be lacking, the entire agreement may be set aside:

  • Scope: The scope of your NCA is important, especially if your business operates in a narrow field. It is reasonable to require NCAs for employees with uncommon or unique training. However, it is unreasonable to ask minimum-wage cashiers or laborers to sign NCAs to stop them from doing similar work at another company.
  • Legitimate business interests: It is not enough to want an NCA; you must have something to protect. In many cases, this “something” might be proprietary interests, processes, or information that could damage your company if it was given to a competitor.
  • Area: The geographic factor of an NCA is becoming more complex in the digital age, but your NCA still cannot be overly restrictive. For example, it is understandable that your NCA might prevent an employee from working for a competitor in DuPage County, but trying to restrict competition in the entire state of Illinois is less understandable.
  • Duration: The average NCA is set up to last for two years or less. Drafting an agreement that lasts longer will increase the chances of it being deemed invalid on the basis of unconscionability.

If an NCA is overbroad on any of these factors, it could be considered “restraint of trade.” This will nearly always result in the agreement being unenforceable. So, the answer to the question is “Yes.” You can require certain employees to sign a non-compete agreement, but it will only be enforceable if the terms are reasonable.

A Wheaton Contract Attorney Can Help

For more information about non-compete agreements or any other business contracts in Illinois, contact a DuPage County business lawyer. Call 630-665-2500 to schedule a confidential consultation at Stock, Carlson, Oldfield & McGrath LLC today. We will work with you in developing legally sound, enforceable business agreements that are designed to protect you and your company.

Sources:

http://www.businessdictionary.com/definition/restraint-of-trade.html

http://www.illinoiscourts.gov/circuitcourt/civiljuryinstructions/700.00.pdf