How to share property ownership with an investment partner
Q. Me and a friend of mine are looking for a fixer-up property to purchase. Each of us is putting half the money down and we will split the mortgage payments and other house-related expenses. We haven't signed a contract yet or hired an attorney, but we were wondering what would happen if after we buy the property, something happens to one of us. Where does that person's share of the property go?
A. There are essentially two ways for two or more people to individually hold property in the state of Illinois: tenants in common and joint tenants. There is actually a third way reserved for a married couple's primary residence (tenants by the entireties), but most of the characteristics of tenants by the entireties are similar to joint tenants.
Most married couples hold property as joint tenants or tenants by the entireties. This means if one of the joint tenants dies, the surviving joint tenant (or joint tenants) obtain the deceased joint tenant's share. This is regardless of inconsistent provisions in other documents, such as a will. If Dennis and Sharon own property as joint tenants and Dennis dies with a will leaving all his property to his brother, Sharon still takes Dennis' interest in the property.
Now, if Dennis and Sharon own the property as tenants in common, each has an individual 50% (or whatever split they agree upon) interest in the property. Now, if Dennis dies and he leaves all his property to his brother, his brother now owns whatever interest Dennis had and co-owns the property with Sharon. This applies in the event Dennis and Sharon are not married. There are certain statutory provisions concerning limitations married couples are subject to in regards to passing their estate.
I am presuming you and your friend are not married, so in your case, tenants in common may be the better alternative.
Also, there are other options available to hold real estate, such as a land trust. Before making any decisions, I would suggest speaking to a real estate attorney to determine what works best for your situation.
Q. I had a tenant who was not paying rent. I handled everything myself and had a court date a few weeks ago. The tenant did not show up. I received an order of possession and a judgment for $3,100 plus court costs.
The tenant now appears to be moving out. How do I go about collecting my $3,100 plus costs?
A. There are numerous provisions in the state statutes that provide ways to collect judgments. One of the most common is a wage garnishment. Presuming your ex-tenant is paid through a corporate or other formal entity, you can serve a wage garnishment on the employer. Presuming there are no other garnishments ahead of you, up to 15% of the ex-tenant's gross wages can be deducted from his/her paycheck and forwarded to you until the judgment and costs are paid.
Wage garnishments often don't work well for informal employment arrangements, such as the construction guy who sometimes works here and sometimes works there. It also doesn't work as well for workers paid in cash.
If you are aware of your ex-tenant having funds in a bank or brokerage, a Citation to Discover Assets or a Non-wage Garnishment may be served on that entity. Once the garnishment or citation is served, any money in the judgment debtor's name is frozen and you are informed of the funds in the account. Presuming you locate funds, one more trip to the courthouse for a "Turnover Order" and the bank or brokerage turns the funds over to you up to the amount you are owed.
There are other methods available to collect judgments. Contact a collection attorney for more information.
• Send your questions to attorney Tom Resnick, 910 E. Oak St., Lake in the Hills, IL 60156, by email to tom@thomasresnicklaw.com or call (847) 359-8983.