The Civil Union Act and the execution and preparation of real estate documents

Introduction

Public Act 96-1513 (S.B. 1716), effective June 1, 2011, creates the Illinois Religious Freedom Protection and Civil Union Act (hereafter Civil Union Act). The Act is codified at 750 ILCS 75/1 et seq. The Civil Union Act establishes procedures for the creation and dissolution of civil unions and is intended to provide persons entering into a civil union with the obligations, responsibilities, protections, and benefits afforded or recognized by the law to spouses. See 750 ILCS 75/5.

The passage of the Civil Union Act brings many new challenges to real estate practitioners. For example: How should parties to a civil union be described in deeds and other documents? How should the issue of homestead be addressed in these documents? Can parties to a civil union own their home as tenants by the entirety, and if so, how should they be described in the deed?

Identifying parties on deeds, mortgages, and other recorded documents

Example: Ann Anderson and Betty Barnes are partners in a civil union. They want to buy a home and take title as partners in a civil union. How should they be described in the deed?

Ann Anderson and Betty Barnes, partners in a civil union, grantees. . . ..

Note: The grantees’ tenancy in this deed must still be considered and addressed. That is, the Civil Union Act does not confer any automatic tenancy to grantees who take title as partners in a civil union.

Example: Fred Smith and Jack Jones are parties to a civil union who own their own home and want to convey it. How should they execute the deed?

A “party to a civil union” is a defined term in the statute (750 ILCS 75/10). Therefore, the following is certainly appropriate:

Fred Smith and Jack Jones, parties to a civil union, convey and warrant to. . . .

But on the other hand, one might argue that Fred and Jack might be parties to a civil union, but not with each other. For this reason, the more specific term, “partners in a civil union,” might be preferable:

Fred Smith and Jack Jones, partners in a civil union, convey and warrant to. . . .

Example: Joe Doe is not married and he is not a party to a civil union. He owns his home by himself and wishes to execute a deed. Remember that a civil union is not the same as a marriage. Thus, a grantor might be unmarried but still be a party to a civil union. Therefore, a deed wherein the grantor is described only as “an unmarried person” might be construed as being vague. That is, the grantor might be unmarried, but he or she might be a party to a civil union, and thus, the waiving of homestead might be an unresolved title issue.

For this reason, the following language is not appropriate:

Joe Doe, an unmarried person, conveys and warrants to. . . .

On the other hand, any of the following are appropriate, with the last one being the simplest and therefore probably preferable:

Joe Doe, an unmarried person and not subject to a civil union, conveys and warrants to. . .

Joe Doe, an unmarried person and not a party to a civil union, conveys and warrants to. . .

Joe Doe, a single person, conveys and warrants to. . . .

Example: John Jones and Paul Smith are partners in a civil union. Only John owns the home in which they live. The house is going to be sold. Realistically, for purposes of waiving homestead, how should the deed be prepared? That is, how should John be described in the deed in order to convey the property? How should Paul sign the deed in order to waive homestead?

John Jones, a party to a civil union with Paul Smith, conveys and warrants to. . . .

Paul Smith, a party to a civil union with John Jones, signs this deed solely for the purpose of waiving any applicable homestead interest.

The following is also appropriate:

John Jones, a partner in a civil union with Paul Smith, conveys and warrants to. . . .

Paul Smith, a partner in a civil union with John Jones, signs this deed solely for the purpose of waiving any applicable homestead interest.

Example: Sandra Smith and Isabel Douglas are partners in a civil union. Sandra owns the home in which the two of them live. Sandra now wishes to refinance her original purchase money mortgage. Sandra will execute the new mortgage. The lender is requiring that Isabel waive homestead in this mortgage. How should Sandra be described in the mortgage? How should Isabel sign the mortgage in order to waive homestead?

Sandra Smith, a partner in a civil union with Isabel Douglas, (hereafter “Mortgagor”), does hereby. . . .

Isabel Douglas, a party to a civil union with Sandra Smith, signs this mortgage solely for the purpose of waiving any applicable homestead interest.

Example: Carl Cooper owns a rental property, which he is selling to Greg and Pamela Jones. Carl has entered into a civil union with David Dawson. Neither Carl nor David live in this property.

How should Carl be described in the granting clause of the deed?

Carl Cooper, a partner in a civil union with David Dawson, conveys and quit claims to Greg Jones and Pamela Jones, husband and wife. . . .

How should the issue of homestead be addressed in Carl’s deed? Consider simply adding a statement to the face of the deed:

Appropriate but unnecessarily broad: This land is not the homestead of grantor, grantor’s spouse, or grantor’s partner in a civil union.

Preferable: This is not homestead property.

Example: Phillip Edwards and Jane Jacobs are two single people who own their own home and want to convey it. How should they execute the deed? As noted above, a description of either party as “unmarried” does not address the issue as to whether or not they are parties to a civil union.

With that thought in mind, any of the following is appropriate:

Phillip Edwards, a single person, and Jane Jacobs, a single person, convey and warrant to. . . .

Phillip Edwards and Jane Jacobs, unmarried people and not parties to a civil union, convey and warrant to. . . .

Phillip Edwards and Jane Jacobs, unmarried people and not partners in a civil union, convey and warrant to. . . .

The Civil Union Act is not reserved solely for same sex relationships. A man and woman can enter into a civil union.

With this in mind, consider the following:

Example: Frank Adams and Janet Baker own their home in joint tenancy. They have lived together for many years. Neither one has any intention of getting married.

After becoming partners in a civil union ceremony, they decide to deed their home to themselves. How should they describe themselves in the deed?

Frank Adams and Janet Baker, partners in a civil union, grantors, convey and quit claim to Frank Adams and Janet Baker, partners in a civil union, grantees, in joint tenancy. . . .

Tenancy by the Entirety

Section 20 of the Civil Union Act provides that “a party to a civil union is entitled to the same legal obligations, responsibilities, protections, and benefits as are afforded or recognized by the law of Illinois to spouses. . . .” Because of the broad application of this legislation, parties to a civil union should be able to own their homestead as tenants by the entirety.

But remember that Public Act 92-136, a 2002 amendment to 765 ILCS 1005/1c, deleted the statutory requirement that a married couple must be expressly identified as “husband and wife” on deeds creating a tenancy by the entirety. This means that “John Carlson and James Davis, partners in a civil union,” can take title to their homestead merely as tenants by the entirety (i.e., with no indicia of civil union status) and the tenancy should be valid. In addition, this amendment made it clear that the formal language “not as tenants in common, not as joint tenants, but as tenants by the entirety” was not needed in order to create a valid tenancy by the entirety.

That being the case, either one of these grantees is valid:

John Carlson and James Davis, partners in a civil union, not as tenants in common, not as joint tenants, but as tenants by the entirety

John Carlson and James Davis, as tenants by the entirety

Conclusion

Public Act 96-1513 is only a few pages long. Nonetheless, it seems clear that the changes created by this legislation will have a tremendous effect on not only the general public but on real estate attorneys as well. ■