real estate

Encumbrance
An encumbrance is a legal interest in property held by someone other than the owner of the property. An encumbrance is not an ownership interest in real property, but it creates some kind of obligation for the owner. An encumbrance attaches to the property, not the property owner, so the property may be bought and sold even though there is an encumbrance attached.

Easement
An easement is the right to use another person's land for a particular purpose. There are many forms of easements. Public utility companies frequently have utility easements that permit them to run gas, water, or electrical lines through the property of others. The owner of property near a lake might buy from the owner of lake shore property an easement to cross his or her property to access the lake. A person who owns property that is land-locked may receive an easement from an adjacent land owner to have access in and out of the property. This is called a right of way.

Deed Restriction
Deed restrictions may also be known as covenants, conditions, or restrictions. Deed restrictions, which usually are included in the seller's deed to the buyer, generally are imposed to maintain certain standards. Restrictions may limit the color one may paint a house, the kind of trees one may plant, or the size of home one may build on the property.

Lien
A lien is a charge against property that provides security for a debt or obligation of the property owner. The lien holder does not own the property. Some liens are voluntary, such as when the owner of property takes out a mortgage. Other liens may be imposed. For example, a lien may be imposed on property for nonpayment of taxes. One of the most common liens is the mechanics lien. A mechanics lien arises when someone furnishes labor or materials to improve a piece of property. A worker or supplier who is not paid may file a notice of lien with the county recorder and the property owner and collect the amount owed from a subsequent sale of the property.

Assessment
An assessment is a value placed on real property by a local taxing authority for the purpose of levying taxes. Real estate taxes are calculated by multiplying the assessed value of a piece of property by the tax rate. Most properties are reassessed periodically, and a property's assessed value may not be the same as its actual market value. A special assessment is a tax levied on a piece of property to pay for improvements that benefit the particular property, such as streets, sidewalks, and street lighting. Special assessments are liens on the property until they are paid.

Landlord -- Tenant
Under Illinois law, whenever the owner (landlord) of a house, apartment, room, or any other living space agrees to let someone else (tenant) use the space for a fee, the two parties enter into a legally binding rental contract. General contract principles are discussed in the Contract Law Chapter. Rental contracts are a special class of contracts that are governed by many unique rules. This section discusses the laws applicable to rental contracts.

Leases
The terms of any rental agreement are stated in the lease. A lease can be an oral agreement or a written document. There are two general types of leases: the periodic lease and the lease for a definite term. A periodic lease continues for a specific time period and is automatically renewed at the end of the period for an indefinite time without a specific end date. For example, parties may agree on a month-to-month lease without specifying how many months the renter will stay. The lease continues until one party terminates it. Most periodic leases will state the rules for notice: how much time each party has to give notice of termination, and the form the notice must take. If the periodic lease does not specify when or how notice is to be given, the parties must follow state law. Illinois law requires that a party to a year-to-year lease give 60 days' notice, a party to a week-to-week lease give one week notice, and a party to any other periodic lease give 30 days' notice. All notices must be written.

A term lease is a rental agreement specifying a definite time period. For example, a lease for one year is a term lease. Term leases are almost always written. If the parties to the lease do not state when and what kind of notice is required, the lease automatically ends on the last day of the time period.

Security Deposits
A landlord has the right to insist that a renter pays a security deposit before moving in. The security deposit -- also called a penalty deposit -- is used to pay for any damage beyond ordinary wear and tear that the tenant might do to the rental property, or to satisfy any debts between the tenant and landlord. The deposit cannot be used by the renter to pay rent. There is no limit to how much the landlord may require for a security deposit. The landlord may increase the security deposit at any time during a periodic lease if the tenant is given proper notice, which generally is one rental period plus one day. If the lease is a term lease, no changes may be made to the deposit until the lease comes up for renewal or the parties agree otherwise.

At the end of the tenancy, the landlord must return the deposit to the renter. If the landlord rents to 25 or more tenants, the landlord must pay five percent interest on the security deposit. The landlord is allowed to keep some or all of the deposit if there have been damages or if the tenant does not give timely written notice of termination. If the tenant has paid a penalty deposit, the landlord may keep only the amount necessary to repair damages. The landlord may keep the entire amount of a security deposit, even if the actual damages are not that high. Within 30 days of the termination of the lease, if the landlord plans to keep the deposit, he or she must provide the former tenant with an itemized statement of the damages the tenant caused. In any case, the landlord has 45 days to return the deposit to the tenant.

Repairs
Owners of rental property are required to keep the property in reasonable repair. This requirement cannot be waived by the parties, but the tenant may agree to make repairs or perform maintenance if the arrangement is in writing and the tenant receives compensation in return. For example, a renter might agree to make routine plumbing repairs in return for a reduction in rent or payment from the owner. If the parties have not agreed the tenant will do repairs, repairs remain the responsibility of the landlord. If something needs repair, the tenant by law must notify the landlord and give the landlord a reasonable opportunity to make the repairs or have them made. If the owner refuses to make repairs, the renter has several options.