I am looking for a purchase in Chicago and came across a 2 Flat with an illegal (ahem .... non-conforming) basement unit since the ceiling is too low. Worst case scenario, it will need to be de-converted and the numbers work without it anyway. I placed the property under contract, but the seller and I have not reached full agreement on a few things yet so I can still back out if necessary.
The problem is when I looked up the records in City Hall, the property has a violation showing. The inspectors had come to the property back in 2011 and filed a violation for the building out of the basement and the enclosure of the back porch to create extra living room without architects/structure approval/permits, etc.
The seller had pulled permits back in 2011 to de-convert the basement and do some other items but never paid for the permits or actually done any of the stuff. As such the permits show as lapsed over / open in the city records. Since the work was never done, the inspectors were never called out to close the permits/violations.
My questions are as follows and I would like answers from people who have experience with this:
1. Does this mean that the inspectors are going to return (if so, when) ?
2. Any idea on how much the fines would be or how that works?
3. Would the inspectors require that the enclosed porch area be restored / would I have to get it approved somehow?
4. Am I just stressing out? This is Chicago and this is how real-estate works in low income areas, a series of fines and violations with no consequesnces?
Originally posted by @Nate J. :
The problem isn't just the city inspectors, it is that they put it on title if it is unresolved. If so, the only way you can buy it is with cash, and take over the responsibility of the violations. Or a 203k and take over the responsibility of the violations.
If it is not on title, it will be eventually. Then you can't sell it until you fix it, or have a cash/203k buyer willing to take on the responsibility.
If it isn't an active court case inspectors will not return until they are called by you or for another violation that may be reported. The previous permits will have expired and you will have to seek new permits. For basement a deconversion issue which is pretty easy to comply on and for the porch you will have a porch specialist go and draw up plans and permits to try to save the existing structure. The porch guys push this thru more times than not for us. Depending on the condition of the porch you may just want to invest in a new porch removing that space and that will wipe the issue out.
Fines for the issue will follow the owner at the time so you will not be on the hook for those even if on title, again assuming no open active court case.
The City can come out at any time and pursue the violations against the owner, even if the owner just took title, and are likely to do so if they discover or are informed by a nosy neighbor that the property changed hands of has activity going on there. Best bet is to get in touch with the attorney who handled it for the city and/or the inspector assigned to the case and confirm what you need to do to get the building up to code. You may even be able to use this as leverage to get concessions from the seller. Hoping the City issues disappear on their own will likely result in unpleasant surprises later.
Free eBook from BiggerPockets!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing