THE REAL ESTATE DEPARTMENT - FREQUENTLY ASKED QUESTIONS
HOW DO I BUY AND SELL PROPERTY? The Real Estate Department can assist you in the planning, management and execution of property sales and purchases. The process can be quite detailed. The first step is to consult with your local Vicar, who must approve the sale or purchase. Upon this approval, the Real Estate Department originates the purchase/sale form to manage the process. We will also order an appraisal or market analysis to confirm property value. The Real Estate Department can assist in the negotiation process, as well as prepare and/or review the contract. Please keep in mind that all contracts and closing documents must be signed by the Director of Finance, the Chancellor or the Cardinal in order to be valid. The Archbishop’s College of Consultors must approve property purchases in excess of $750,000. The Holy See must approve property sales over $7,500,000.
A PARISHONER WANTS TO DONATE A PIECE OF PROPERTY TO THE PARISH. It is imperative that when a Parish/Agency is approached by a potential donor, the Real Estate Department be contacted so that the proper due diligence may be conducted on the property. The due diligence process includes researching property title, potential liens against the property, real estate taxes, and environmental issues. An appraisal or survey may also be deemed necessary. The Parish/Agency must determine the intended use for the donated property, either to sell it or to make use of it. If it is to sell, the marketability of the property will be investigated. Please keep in mind that there is no guarantee that a property will sell within a certain timeframe and that in the interim all maintenance and taxes will be a parish expense. If the Parish/Agency decides to keep the donation, then costs of maintenance, utilities and taxes need to be taken into consideration. The Real Estate Department will consult with the Parish/Agency regarding the donation and, if accepted, will facilitate the property transfer to The Catholic Bishop of Chicago.
WHAT DO I DO IF I RECEIVE A TAX BILL? Contact the Real Estate Department immediately. The Real Estate Department tracks property tax bills for all Archdiocesan properties. We can then assist with real estate tax exemptions or assessment appeals as appropriate. Please send any tax bill to the Real Estate Department as soon as it’s received.
IS ALL PARISH PROPERTY TAX EXEMPT? No. All property that is currently tax exempt had to be removed from the tax rolls. A property is not automatically exempt because it is owned by a religious organization. In order for a property to be tax exempt, it must be used for a purpose which supports the religious mission. The exemption process can be quite long, in some cases taking a year to accomplish. If you believe you are paying taxes on a property that could be exempt, or have any questions, please call the Real Estate Department.
WHAT IF WE RECEIVE A NOTICE OF ASSESSED VALUATION? Every three years, the Cook County Assessor reassesses all property values by township. Every year, the Lake County Assessor sends blue postcards with the assessed value for the coming tax year. These notices list the previous and current assessed valuations. These valuations can be appealed if we believe they are too high, however, there is a very short time period to appeal. It is important that we act quickly. If the parish receives any notices, call the Real Estate Department immediately.
I NEED ITEMS FOR MY PARISH, OR I HAVE ITEMS THAT SHOULD BE REMOVED FROM MY PARISH. We have a closed parish (the former St. Dominic) where we store items received from local or closed parishes. By order of the Cardinal, the Archdiocese can only redistribute these items to parishes/agencies within the Archdiocese of Chicago. If there is an overabundance of an item or there is no need for the item, the Archdiocese may redistribute these items to parishes in other dioceses. Under no circumstance will an item be sold. For donations or an appointment to visit our current inventory contact the Real Estate Department. We will track your requests, and schedule any pickups or deliveries with our field personnel. Please allow twenty-four hours to schedule an appointment.
I HAVE A BUILDING THAT I WOULD LIKE TO LEASE. The Real Estate Department will assist you in every stage of the rental process. Please contact us when parish property becomes available to lease. We will ask you for information about the space, such as utility costs, whether utilities are separately metered, repairs needed, and parish use of the space, etc. This information will help us create the lease terms. We also keep a database of available property that is sent out to potential tenants who contact the Archdiocese. The Real Estate Department receives many calls from groups seeking space for a variety of uses. All organizations that lease Archdiocese property must be non-profit or we will lose our tax-exempt status for that property. The parish can also take steps to market property, such as placing an advertisement or even a notice in the church bulletin.
Once a potential tenant is found, please contact the Real Estate Department immediately and provide a phone number of a contact person for the tenant. We will work with the parish to establish the rent amount and other terms of the lease. We will then negotiate lease terms with the tenant, check their references, draft a lease, get the appropriate signatures, and notify the tenant of insurance requirements.
Although the pastor approves all leases, they still require the signature of the Director of Finance. A lease that is not signed by the Director of Finance or the Cardinal is not valid. A final executed copy will be sent to the parish for their records. The Real Estate Department also keeps track of lease expiration dates and contacts the parish and the tenant regarding renewals.
Please contact the Real Estate Department if you ever have any problem with a tenant or with a leased property. Our goal is to assist the parishes in obtaining rental income and maintaining good relationships with our current and potential tenants.
There are two forms that need to be filled out prior to the Real Estate Department releasing information: the Lease Inquiry and the Purchase Inquiry forms depending on which the prospective tenant is looking to do. After completion of the required forms the prospective tenant receives the listing that the Real Estate Department has available. They should contact the name listed on the form for viewing of the property. After it is determined that the prospective tenant is a proper fit, the Real Estate Department is contacted and the prospective tenant needs to submit $300 for a credit check to cover the cost of the credit report ordered by Real Estate for the tenant organization, along with a Tenant Application form. The Parish needs to complete a Parish Questionnaire and return to the Real Estate Department with proper documentation. If a prospective tenant cannot afford the $300 credit report fee, that gives rise to a concern whether the tenant can afford to meet its rental obligations to the Parish under a lease agreement.
A TENANT WANTS TO MOVE INTO THE PREMISES BEFORE A LEASE IS EXECUTED. It is imperative that a Lease Agreement be executed by The Catholic Bishop of Chicago, the Parish, and the tenant before the tenant occupies the premises. Unlike a Lease Term Sheet, the Lease Agreement is a binding and legally enforceable document that clearly sets forth the rights and obligations of the parties. The Lease Agreement includes more provisions than in the Lease Term Sheet. The Lease includes covenants regarding tenant’s use of the Premises and establishes Landlord’s review and approval process for proposed alterations and additions by tenant. Most importantly, the Lease provides the Parish’s rights and remedies in the event of a tenant default.
A TENANT CANNOT AFFORD LIABILITY INSURANCE. All tenants which lease Archdiocesan property must carry and maintain commercial general liability insurance (CGL) and personal property (contents) insurance at all times during the Lease term, in amounts designated in the Lease Agreement. A certificate of liability insurance must be delivered by tenant to Real Estate prior to occupying the premises. The Certificate of Insurance must name The Catholic Bishop of Chicago as an additional insured on a primary and non-contributory basis. This means that the tenant’s policy must pay first (primary) on a claim, and without seeking contribution from Landlord. Tenants do not carry building (property) insurance, which is the Archdiocese’s responsibility to maintain.
A TENANT CANNOT AFFORD THE CREDIT REPORT FEE. As part of the Tenant Application process, Real Estate requires a prospective tenant to deliver a check in the amount of $300 to cover the cost of the credit report ordered by Real Estate for tenant’s organization. The credit report is an essential tool in Real Estate's due diligence to determine an organization’s financial condition, payment history, and litigation history. This fee cannot be waived. If a prospective tenant cannot afford the $300 credit report fee, that gives rise to a concern whether the tenant can afford to meet its rental obligations to the Parish under a lease agreement.
WHO NEEDS TO PAY FOR THE CAPITAL REPAIR WORK IN A LEASE? Most people are not clear how to read the lease and what the parish’s responsibility is for capital repair work. It is very common that parishes initiate unnecessary work to improve the building. We should stress that if there is an issue where to look in the lease and how to identify a capital repair vs. minor maintenance.
WHEN IS IT BEST TO NOT LEASE A BUILDING? Many parishes think that rental income can be a quick fix to their financial issues. The archdiocese portfolio has over 3,000 buildings. Many of these building are not up to code and have so much deferred maintenance that it many not be economically feasible for anyone to rent the space.
HOW DO I HANDLE A CODE VIOLATION FOR LEASED PROPERTY? When the parish receives a code violation, the Real Estate Department consults the lease to determine which party should pay for the necessary corrections. The standard lease agreement form makes certain code violations the tenant’s responsibility. Generally tenants must correct code violations concerning the interior of the building, such as fire exit signs for example. Violations concerning the exterior of the building, such as fire escapes, would be the parish’s responsibility. Please call the Real Estate Department if a “gray area” is involved or the parish is unsure how to proceed.
WHEN TO ORDER A SURVEY. The Real Estate Department can assist you in determining the scope of work and price for a survey. Depending on the type of survey needed, the process can take weeks or even months to complete. The most common reasons for ordering a survey are:
Construction: The most common reason is that there will be a new or expanded building at the parish. Most municipalities require a survey before issuing building permits for new construction or renovations.
Selling Property: Whenever property is sold, a survey is required as part of the contract with the purchaser. The same applies whenever property is purchased by a parish. When we receive the survey from the seller, it is reviewed to ensure that the parish is getting everything it should, as well as to check for any easements or encroachments that could affect the property use.