Future Law

ISBA Summary Judgment Further Defines “Practice of Law”

summary judgement practice of lawThis June, the Illinois State Bar Association (ISBA) won summary judgment in a lawsuit against the Illinois Department of Financial and Professional Regulation (IDFPR) regarding whether an attorney representing a client in a property tax proceeding violates the Appraisal Act, thus functioning as an unlicensed appraiser when that attorney provides an analysis of comparable property valuations to the client. If the attorney was acting in such a capacity, the IDFPR could prosecute the attorney for offering appraisal services without a proper state license when they argue valuations before tax assessment appeal tribunals. Otherwise, the acts of the lawyer constituted the practice of law, which is regulated exclusively by the Illinois Supreme Court.

The IDFPR asserted that two attorneys, G. Terence Nader and David Bass, members of the ISBA, violated state law for allegedly including an “opinion of value” of properties in briefs filed with property tax appeal boards on behalf of their clients.

However, the ISBA argued that the IDFPR didn’t have the authority to impose these charges as these attorneys, and any attorney acting in a similar manner, are not acting as an “Appraiser” under Illinois law. As a result, they filed suit against the regulatory department for declaratory judgment, injunctive relief, and a writ of prohibition against IDFPR.

The Circuit Court of Cook County (where the suit was filed) found that :

the comparison of properties or an income approach valuation presented by a licensed Illinois attorney on behalf of a client in real estate tax assessment proceedings does not entail the development or submission of an appraisal or constitute unlicensed practice of real estate appraisal.

The trial court relied on a prior Supreme Court decision that concluded the activity of representing a client in a property tax proceeding constitutes the practice of law and thus is regulated exclusively by the Illinois Supreme Court.

In the court’s finding for the Plaintiff ISBA, the also enjoined the IDFPR for future enforcement actions against licensed Illinois attorneys for such practices and issued a writ of prohibition against the IDFPR “preventing [it] from initiating, maintaining, or threatening a prosecution of [a licensed Illinois attorney] for engaging in the submission of a comparison of properties or income approach valuation by a property tax attorney in a real estate tax assessment proceeding.”

Like the legal profession, real estate appraisers are regulated by an administrative agency, like the Illinois Attorney Registration and Disciplinary Commission. The major difference is that the IDFPR is composed of four different divisions that regulate a wide array of industries, including physicians, detectives, cosmetologists, CPAs, architects, and more. The IDFPR’s Division of Real Estate who regulates real estate appraisers also regulates brokers, auctioneers, community association managers and home inspectors.

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