Real Estate Litigation
Loftus & Eisenberg, Ltd. handles litigation surrounding real estate transactions including: disputes over brokerage commissions, commercial leases, development of contracts and contracts including options to purchase.Types of Commercial Real Estate Disputes
Disputes in commercial real estate often relate to contractual disputes, property development or management, and fraud. The real estate litigation attorneys at our Chicago firm regularly litigate the following real estate disputes:
- Disputes between property owners and tenants over commercial real estate;
- Breach of lease, through non-payment of rent, failure to maintain commercial premises, or failure to operate a business in the manner described in a lease contract;
- Disputes involving land use regulations including zoning;
- Construction or development contracts, including lack of payment, negligent work, breach of warranty, or unsatisfactory services;
- Undisclosed contamination or pollution of real estate; and
- Easements or other encumbrances preventing use of property.
Disputes arising from residential real property transactions may include:
- Breach of contract for sale of real property;
- Seller’s disclosures regarding the condition of the premises;
- Disclosures regarding financing;
- Disputes over boundary lines or other encroachments;
- Nuisance claims;
- Alleged violations of restrictive covenants;
- Condo Association disputes, Homeowner’s Association disputes;
- Encumbrances and easements;
Among the types of real estate disputes we handle are partition cases. These are lawsuits in which one co-owner of property asks the court to divide the property between two or more owners. Under 735 ILCS 5/17101, if lands, tenements, or other real property are held in any form of co-ownership, any interested owner can compel a partition by filing a verified complaint in a circuit court where the premises are located.
The complaint must describe the property that is to be divided and describe the parties’ interests. Anybody with an ownership interest needs to be made a defendant. Either by request or of its own volition, the court can appoint a disinterested commissioner to report as to whether the premises are subject to division without prejudicing the property rights and how the division should be made. A surveyor may also be employed to determine how to divide the property.
Often, a partition action is filed during divorce or after somebody dies, but as a property co-owner you can bring this action as a matter of right without a triggering event. Since a home or building may not be able to be equally divided, the remedy is usually the purchase or sale of one person’s interest or the sale of the property, with an equal division of the sales proceeds.Broker Commissions
Real estate brokers can place a lien for earned commissions on commercial real estate to force payment when a seller or buyer attempts to circumvent payment to the broker. The act is known as the Commercial Real Estate Broker Lien Act, 770 ILCS 15 et.seq
There are many instances where a property is being used for commercial purposes; however, the Commercial Real Estate Broker Lien Act specifically defines what properties are covered. Under Section 5 of the Act, “Commercial Real Estate” is defined as any real estate located in Illinois other than (i) real estate containing one to 6 residential units, (ii) real estate on which no buildings or structures are located, or (iii) real estate classified as farmland for assessment purposes under the Property Tax Code. Commercial real estate shall not include single family residential units such as condominiums, townhouses, or homes in a subdivision when sold, leased, or otherwise conveyed on a unit by unit basis even though these units may be part of a larger building or parcel of real estate containing more than 6 residential units.
The broker can only assert a lien if he or she has earned his or her commission under a written contract or agreement signed by either the owner, buyer, or tenant. That written instrument is typically a listing agreement, lease or sales contract. The contract will provide for exactly when a commission is due but generally for the broker to have earned his or her commission, he or she has to produce a ready, willing and able buyer or lessor at the contract price.
Illinois has extensive caselaw on when a broker earns his or her commissions that the attorneys at Loftus & Eisenberg have participated in creating. A broker who shows he produced a prospective purchaser who agreed to the sellers’ terms, who was continuously willing to purchase during the time of the relevant negotiations and became able to execute a contract upon the agreed terms at a reasonable time subsequent to the initial negotiations, has made a prima facie case for recovery of his commission.
Frequently broker commission claims arise in the context of an exclusive listing agreement. Brokers and realtors frequently dispute exactly when a sale occurred to trigger the commission and whether it occurred within the time limitation of the exclusive listing agreement.