I am in the process of closing a deal on SW Side of Chicago. The building has outstanding code violations from prior to rehab. After talking to a city representative, he stated that the building had an initial permit but the permit does not have the final inspection documented. Without this from the city, this building permit (from 2009) will not be finalized. We can though request a re-inspection which will clear the existing code violations.
How crucial is it to have the house be inspected by the city during and after completion?
There is also no certificate of occupancy but building is fully occupied. Is this a major or minor issue?
The seller has been broad in terms of his responses to our questions. Stating that "The property has been inspected by the City, State Farm Insurance and by the Section 8 program. No one had issues with the condition of the property"
Your opinion is greatly appreciated.
You need to be careful. If the code violations are not cleared by the city, the property can end up in the DEMOLITION LIST. The City of Chicago is very serious about this and they will fine the owner $30,000 when the property gets demolished. I work with one of the top attorneys defending owners of properties in the demolition list so I know this to be a fact.
So answer: the city has to inspect it so get a re-inspection.
@Wendell De Guzman - Thank you! That is what I was thinking needs to be done.
It came to me as a shock because I thought my attorney would be looking into this deeper than just seeing the violations on the website and asking if they are cleared.
The City of Chicago is nuts when it comes to this stuff. I had a property that got bulldozed, my advice is to stay away from this deal. If your looking for properties in Chicago, I have 1 in Calumet City and 1 in Markham that I'm closing on next week.
The violations were PRE gut rehab. If I am assured that they will be cleared after a city inspection, is this still a bad idea?
violations aren't as big of a deal as everyone is making them out to be. First, there are more steps that need to happen before the property just ends up on the demo list. Second, as long as the work was done correctly the violations are easy to clear. If the owner will have it inspected and the city clears them then there's no reason not to proceed.
Good luck, and be prepaid to pay the city of Chicago the most corrupt City in the USA.
keith, I understand you had a bad experience but the fact is that you can have a building code violation for not posting a management sign on the property. That certainly wouldn't be a reason to pass on a deal. I've been involved with 10+ purchases of properties in the past few months on the south side. Each of them had violations and all of them have been cleared. There are violations that I would walk away from but I don't see why she should "be prepared to pay the city of Chicago" if the owner clears the violations before she purchases. Doesn't really make any sense.
You mentioned the earlier inspection(s) had been signed off and all that remained was a final inspection approval. If that's the case, a final inspection is a surface inspection completed by a licensed inspector in that jurisdiction. You may have to get the permit reopened but it sounds like you may have a relatively simple solution available. Outstanding code violations and open/expired building permits can come up as an issue with a mortgage, obtaining insurance or become an on going fine in the form of a lien against the property. It's worth a little effort and/or expense now to put that issue to rest.
The seller provided a court order "Order of Dismissal with a mandatory injunction"
This document is dated after the rehab and states :
"The permanent injunction entered on 12-2009- has been vacated and lifted. The property is safe for occupancy."
It is signed by the Judge.
I cannot reach anyone at the city to help me understand whether this court order will clear the violations - any thoughts?
@Tom Reynolds the "during" and "after" inspections were not documented with the city. See above on what the seller provided to show that the violations should be cleared.
I am a first timer and worried this may come back at me at some point. That's why I want to ensure that I am fully cleared here.
Thanks for your help!
If it were me I would get resolution with the local building department. I don't believe a judgement will overrule building code requirements. If a building permit was issued, there was a reason and if that permit was never finalized, there are outstanding issues. Someone in the building department should be able to provide clarification. Ask to speak with the Building Official or Chief Building Inspector, have the address and permit number for referrence. The permitting staff may be able to provide information on the documented inspection(s) and what remains to be signed off.
What you're describing is a loose end that may come back to haunt a new owner because these things go with the property. Learning about it up front (before taking ownership) gives you an opportunity to use it as leverage and possibly get it resolved before it becomes your problem.
@Tom Reynolds Thank you for this clarification. This is quire helpful..
I've spoken on the phone with the building department and they keep telling me that the seller needs to do the leg work to clear these violations and not me. My biggest fear is that the permits will not be closed and the city requests a rough inspection at some point. Then I would have to tare the walls out? That's certainly a risk that I cannot take as a first time investor.
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