We are under contract for a SFH in Chicago. But during attorney review it was found that the sellers bought it 5 years ago when it was 3 units, and converted it to one big SFH. They got permits for electrical, plumbing, and moving walls, but never got a deconversion permit. We're told they probably never did this because it would raise property taxes. Our appraisal came back as a SFH and we are cleared to close. We are fine leaving the zoning alone, but our only concern is that if in the future we have to get a deconversion permit, or the city finds out we have a SFH where a MU is zoned, will we have to pay back taxes? The lot is zoned as RS-3. Thank you!
Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
6y
I would suggest you check with experts in your area. Around here, we use expeditors to do the research, and they'll do the necessary filings. In my area though, a unit zoned as a 3 family is charged more in property taxes. I have a property paying property taxes as a triplex, though legally it's a duplex, and paperwork was filed as such for a C/O when the illegal unit was taken out. So I would pay even less if it's a SFH. That's in the buildings department. In the finance dept. they still has it as a triplex and charging more, but not a lot more. I'm retired now, and everything going through the bureaucracy is a hassle so I'm leaving it alone. I got a senior citizen's exemption plus the rents here are high.
RS-3 Zoning is actually "Single Family" zoning for the City of Chicago; however, if the lot is large enough, you can legally get a multi-unit building on the property "by right".
That being said, I am not really sure what you would need in terms of a "Deconversion permit". The City of Chicago only has (2) typical building permit processes; the Easy Permit Process, or the Standard Plan Review (Full Permit Process). In order to (legally) move walls, the contractor would have needed to go through the full permit process, during which they would have formalized the deconversion from a 3-unit to a SFR. The Easy Permit process is really only supposed to be for minor work, where you are replacing fixtures in a like-for-like manner, without major relocation. It is possible that the previous contractor may have only pulled an Easy permit and then went well above and beyond the scope that they claimed on the permit; however, you may be able to find more info by requesting info from FOIA. I might be able to see some more info online as well if you sent me the address. Feel free to PM me.