Legal Question in Real Estate Law in Illinois

selling a house on contract

How is ''sweat equity'' calculated? I verbally offered to sell a small house to an acquaintance. I did not have a clear idea of how to accomplish this. I did not state a purchase price but said monthly payments of $225 and assuming the payment of utilities and water would be a starting point. There was no written contract. Three and a half years later, we're in mediation to find a solution. The tenant/purchaser feels thousands of dollars should be taken off any purchase price for work he has done on the property. He submitted receipts for materials which have been noted. He did not submit any record of hours worked. Since September 2003 he made variable payments to a total of $4,200 over 17 months. He has made no payments since October 2005 but did assume utilities and water payments in April 2006. In February 2006, the property was appraised at $22,000. The tenant feels I engaged in ''a classic bait and switch'' by not presenting a price sooner. I claim he did not fullfill his part of the agreement by not making reliable payments and not putting the utilities in his name. What a mess! A real estate attorney advised against writing a contract with this individual. Any suggestions?


Asked on 3/31/07, 12:08 am

2 Answers from Attorneys
Joseph Michelotti Michelotti & Associates, Ltd.

Re: selling a house on contract

legal answer:

Since you still are in title, you can file a forcible entry action against the tenant and just have him (or her) removed by the sheriff.

contracts regarding the sale of land have to be in writing or are not enforcable.

so your "tenant" does not have an argument

Moral answer:

You had something in mind when you started. Just do what YOU think is fair. Its too bad the tenant does not like the deal he is getting, he's lucky to be getting anything

BTW where do you buy real estate for $22,000.00?

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Answered on 3/31/07, 12:26 am
Thomas Moens Moens Law Offices, Chartered

Re: selling a house on contract

I cannot understand why you would have been advised against a written agreement. Your situation is exactly why a written agreement likely should have been executed. I suppose one way to calculate it would be the appraised value today minus the appraised value when the "arrangement" started minus reasonable rent payments. Without more information, it is difficult to say with any certainty. Please feel free to call my office for an appointment if you would like to discuss this further.

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Answered on 3/31/07, 11:22 am


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