Rapidly accumulating late fees cause hardship
Q. I have been renting a condominium for about six months. I have been having some issues with work and have not been able to pay my rent on time the last four months. Right now I am paid up through last month but I have not been able to pay this month yet.
I keep getting bills from my landlord showing that I owe $25 per day for every day the rent is late past the 5th of the month. Right now, he is showing I owe him an additional $800 just for late rent. I have tried talking to him and I keep telling him he will be paid, and he has been paid every month, but I keep getting the bills. He says it is in the lease. I checked the lease and it does say that I owe $25 per day for every day the rent is late after the 5th of the month. This seems very harsh. Do I have to pay this?
A. I don't believe any judge would enforce such a provision in a lease. That said, at some point, the landlord may attempt to evict you for failure to pay rent. If the total basis of his claim is that you have failed to pay these late charges, again, I doubt a judge would order an eviction on that basis alone. Your problem will likely come at the end of your lease. He may attempt to withhold the late charges from your security deposit, presuming there is a security deposit. In that case, you will probably be forced to go to court to resolve the issue.
I would suggest you speak to a real estate attorney familiar with these matters for further advice.
Q. I have a question about 1031 exchanges. My wife and I sold an apartment building we owned for a number of years and had the money from the sale deposited with the title company. I was told I needed to identify the replacement property within 45 days and close on the replacement property within 180 days. OK, so far so good.
We identified a replacement property and let the title company know at about the 40-day mark. We were to close about 45 days later.
About a week before the closing, our attorney found out from the seller's attorney that there was a problem with the sale. It seems the property we were going to buy was owned by a woman who died about four months earlier. And now, a dispute has come up within her family as to who is entitled to what. We have also found out that someone went to court and the seller is now, at least temporarily, prevented from selling to us.
What happens to us if we cannot close within the 180 days? Are we allowed to identify another property? We really don't want to pay the capital gains tax on the sale of our original property.
A. I am not aware of any provision contained in Internal Revenue Code Section 1031 that provides for an extension of time to identify your replacement property. Your situation is an example of why attorneys and other professionals advise to identify more than one property. If one deal falls through, you retain a potential fallback position.
In your situation, given that this is your only possible replacement property, I would ask the court that is probating the deceased seller's estate (or whatever court it was that entered the order holding up the sale) to allow the sale to be completed and simply retain the sales proceeds in escrow until the family issues are resolved. Unless one of the parties feels strongly about retaining the property, this solution prejudices no one and allows the parties time to work out the issues regarding the disposition of the sales proceeds.
• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tom@thomasresnicklaw.com or call (847) 359-8983.