Federal Judge Dismisses Lawsuit Accusing Zillow of Conducting Appraisal Without License

This is a follow up to my post last week about some of the controversies surrounding the real estate website Zillow.  To bring yourself up to speed, click here

Welcome back to the post!  At the time of publication a lawsuit was pending against Zillow accusing the website of violating Illinois law by conducting appraisals without a license.  The Plaintiff in the lawsuit sought an injunction stopping Zillow from publishing its Zestimates in Illinois, as well as unspecified compensatory and punitive damages.

In what could be called a big win for Zillow, Judge Amy St. Eve held today that Zillow is not violating Illinois law, because Zestimates fall into an exception in the Illinois Real Estate Appraiser Licensing Act (the Act).  The exception provides that non-licensees may “procure an automated valuation model” from publicly available data without obtaining an appraisal license.  Judge St. Eve found that development of Zestimates by Zillow are clearly the procurement of an automated valuation model.  As such, Zillow does not need to be licensed.

The Court’s holding is significant, there was a substantive determination that Zillow is not breaking the law.  Had the Court simply based its holding on a technicality, it would leave the door open for further attack.  As such, the ruling provides a significant precedent for Zillow to rely upon should it be sued again, or if the State of Illinois were to bring an action against Zillow to enforce the Act.

So, it looks like Zillow is, in fact, here to stay.  Moreover, Zillow continues to expand its offerings with its “Instant Offers” pilot program.  (Hat tip to Cleo Aquino of Superior Realty for the heads up on this.)  The program launched in May 2017 in the Las Vegas and Orlando markets and allows sellers to make their property available for cash offers from 15 select large private investors with closing in as little as one week.  The program will expand to Phoenix next month.  Whether Zillow will see success with the program is anyone’s guess (it looks a bit predatory to me, to be honest…), but it certainly looks like Zillow is looking to take a more active role in the market.

As always, please do not hesitate to contact me at 773-632-8330 or patrick@loftus-law.com.  And finally, as always, I am honored by your referrals.  To learn more about my practice, please contact me!  And if you are looking to buy or sell property, I would love to set you up with one of my fantastic real estate brokers.

Condo Rental Caps – How The Board Can Prevent You From Renting Your Place

Most condo owners prefer that their neighbors are owner-occupants.  As a result, many condo boards enact rental restrictions or even outright ban rentals.  If validly done, the condo board can levy fines and file lawsuit to stop you from renting your unit.  Here is how to determine whether your board’s restrictions are enforceable.

Most buildings don’t start off with rental restrictions.  Developers want to cast the widest net possible for buyers, which means they want to be able to sell the new units to both owner-occupants and investors.  Rental restrictions tend to scare off investors.  As a result, rental restrictions tend to be enacted only after the condo board has been turned over to the unit owners.

On its face, rental restrictions seem counterintuitive.  Why would anyone voluntarily give up that right?  One reason is that it is a way to maintain unit values.  Most buyers cannot qualify for a purchase loan if a condo is less than 50% owner-occupied, which severely restricts the pool of potential buyers.  Property that is difficult to sell tends not to be particularly valuable.  In addition, renters tend to be less invested in the quality of a building long term and can be rather transient.  This can have the effect of lowering the quality of life for owner-occupants.

Restricting or banning rentals in a building is not a simple matter.  In order to be valid and enforceable, such a restriction requires an amendment to the condominium declaration.  Amending the declaration requires the vote of at least 2/3 of the ownership interests to pass.  Obtaining a super-majority in favor of a rental restriction can be quite a difficult task, and many initiatives to institute rental restrictions fail.  Interestingly, until recently, it was an open question whether a rental restriction could be enacted  by the board as a condominium rule rather than an amendment to the declaration.  About a year ago, the appellate court in Illinois made it clear that a rule without an amendment is not an enforceable rental restriction. Stobe v. 842-848 West Bradley Place Condo. Ass’n, 2016 IL App (1st) 141427.

The consequences of an enforceable rental restriction can be significant.  Renting a unit in violation of a restriction will probably at least get you fined.  Worse, the board will probably also sue you for possession of the unit or an injunction against renting it.  If your tenant is evicted, they will probably sue you for breach of contract.  The whole thing quickly becomes expensive and messy.  Before that happens, it is crucial to understand whether your association has a valid rental restriction, and what your rights are to rent your unit.  Before you buy a condominium that you intend to rent out, make sure you review the board’s rental policies before making a costly mistake.

As always, please do not hesitate to contact me at 773-632-8330 or patrick@loftus-law.com.  And finally, as always, I am honored by your referrals.  To learn more about my practice, please contact me!

 

Mindfulness & The Law

The topic of mindfulness is near and dear to me.  Last year, I was in a bit of a funk when I was fortunate enough to stumble on Dan Harris’s podcast.  Some of you may know Dan as the 10% Happier guy.  Dan had a man named George Mumford on his podcast.  I really liked the way George talked about this thing called mindfulness, so I decided to download is audio book, “The Mindful Athlete,” and my journey began.

Mindfulness has a lot of definitions, but perhaps the best is from one of the first people to bring the practice of mindfulness from India to the western world, Jon Kabat-Zinn.  He says that “mindfulness is awareness that arises through paying attention, on purpose, in the present moment, non-judgmentally.”  You might also say that it’s the practice of removing yourself, at least momentarily, from the narrative going on inside your head.  By noticing your surroundings and the thoughts in your head, you become more present.  In time, the practice provides a way to get to know and understand yourself better.

What does that have to do with the law?  As lawyers, we tend to get wrapped up in results.  I want nothing but good things to happen for my clients, and dammit I’m going to move heaven and earth to create good results.  This creates a lot of anxiety, because you think a lot about things that might happen, especially the bad things.  Constant anxiety about things that might not even happen is no way to live life.

The practice of mindfulness allows me to notice when I am dwelling on outcomes instead of being present.  The world happens in the present, and that’s where I want to be.  The mindful lawyer understands that things will happen (or nor happen) in the future no matter what.  By being present, the mindful lawyer can take confident action knowing that he or she has the necessary skills to expertly guide clients through challenging episode of life.  There is no need to be anxious or fearful of outcomes that are out of our control.

Don’t get me wrong, I am always worried about you guys.  I just have a better sense of when I’m letting it get out of hand.  Mindfulness makes me a better, more complete person; and therefore, a better and more complete lawyer.

I will wrap this post up with some resources that I use or have heard positive things about with respect to the practice of mindfulness.  My personal practice is to meditate in the morning with an app called “Lucid.”  It is geared toward athletes, and I fancy myself a very amateur athlete.  It speaks to the neanderthal part of me.  In the evening I sit for 20 minutes of awareness of breath meditation.  There’s nothing magic about meditation, and you can’t do it wrong.  If you aren’t ready for 20 minutes, start with 1 and go from there.

I have also heard good things about an app called “headspace.”  Once in awhile, I like a guided meditation.  YouTube is great for that, because it is free.  Check out The Honest GuysJason Stephenson or Michael Seeley’s channels.  Or you can just go on YouTube and search “guided meditation.”  Pick something that looks interesting and give it a go!

No call to action on this entry.  If you are interested in a discussion on mindfulness, feel free to leave a comment below!