Beware with legal non conforming units - NEW CHICAGO "POLICY"

Beware with legal non conforming units - NEW CHICAGO "POLICY"

Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes

I have noticed the City of Chicago has changed their policy on legal non-conforming. Previously you could easily get these units legalized and keep them legalized. I have now noticed several cases where we have X number zoning doc from few years ago and when go to pull a new doc the city refuses to re-issue with X number and goes 1 less. I want to keep addresses private for client confidentiality but had this happen in bronzeville on a 4 unit city claimed 3 even with our 8 year old 4 unit doc, Avondale old doc from 2 years ago said 3 but city argued it was a mistake and it's 2 now, Logan Square 3 unit from 7 years ago but city refused to give us a 3 unit doc saying it's a 2 (this one I think I could of legalized though if put the time in). When this happens clients have option of closing or killing deal as your attorney puts a X zoning doc contingency, typically you will renegotiate down the price if still comfortable in the deal. 

I believe this change in policy is due to ADU soon being allowed throughout entire city, so they want to get permit fees, etc. vs giving out a quick X unit doc that produces no city revenue. You can view some of these legal 2 units but that clearly were 3 units as a long term play. If look in permits and past permits show 3 units or FOIA water bills show 3 you have a strong shot at either ADU these or as city policies revert back/with an attorney legalizing to create equity.

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Rental Property Investor · Chicago · Member since 2018 · 613 posts · 1k+ votes
5y

@Henry Lazerow - +1 as I just saw this as well. As you mentioned, even if seller has an older zoning cert, make sure you have the zoning cert contingency aligned to the number you expect to see. 

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  • Rental Property Investor · Chicago · Member since 2018 · 613 posts · 1k+ votes
    5y

    @Henry Lazerow - +1 as I just saw this as well. As you mentioned, even if seller has an older zoning cert, make sure you have the zoning cert contingency aligned to the number you expect to see. 

  • Jonathan KlemmBusiness Member
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    Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
    5y

    @Henry Lazerow - I haven't personally seen this with any clients, but am not nearly as active as a broker.  

    But in principle what the City of Chicago is doing makes sense (for the City of Chicago). Downgrade number of units which ultimately will increase ADU permits (and most importantly $$$) down the road.

    I guess my question would be are the buildings you are under contract for by right (i.e, number exits, ceiling height, etc.) the number of units you applied for?  To me, it doesn't seem like the actual zoning cert means much and I've heard the watermarked records hold more ground.

    Interested to hear what @Samuel Pavlovcik or @Prashanth Mahakali have to say regarding this topic.

  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    5y

    @Henry Lazerow - I am also seeing certs go the other way and add units.  It seems with each cert application someone is actually going through all old permit records and checking for what was done 20+ years ago.  Previously they just issued it based on the last cert

  • Architect · Chicago, IL · Member since 2020 · 214 posts · 236 votes
    5y

    I am interested in how they can claim a pre-existing legal document is "incorrect", are they providing any evidence/claim to why? I did have this issue arise with one client recently where the previous Zoning Cert said 3 units, and the new Cert came in as only 2 residential units, but 1 ground floor commercial unit. They claim that the old wan was incorrect since it didnt specify Residential Vs. Commercial, even though this was in a Residential zone, and they just hand wrote in "1-Commercial Ground floor"...

  • Chicago, IL · Member since 2016 · 172 posts · 38 votes
    5y

    @Henry Lazerow and @Brie Schmidt Just curious if either of you know the answer for any of these instances -> For 2-4 unit buildings, there is now the charge per unit on water/sewer bills for trash or waste hauling or whatever it is called.  Maybe 4-5 years now? Does this match the number of stated units on the older certs or the newer ones issued?  If any owner has been paying for the greater number of units, I would think there would be a real opportunity to challenge this, if you are in the right wards of course because it won't go anywhere without your alderman.

  • Brie SchmidtBusiness Member
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    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    5y
    Originally posted by @Jerry N.:

    @Henry Lazerow and @Brie Schmidt Just curious if either of you know the answer for any of these instances -> For 2-4 unit buildings, there is now the charge per unit on water/sewer bills for trash or waste hauling or whatever it is called.  Maybe 4-5 years now? Does this match the number of stated units on the older certs or the newer ones issued?  If any owner has been paying for the greater number of units, I would think there would be a real opportunity to challenge this, if you are in the right wards of course because it won't go anywhere without your alderman.

    Interesting concept.  I just checked my bills and my 2+G is being billed as 2 units, my legal 3 is billed as 3, my 2 unit is being billed as 3

  • Chicago, IL · Member since 2016 · 172 posts · 38 votes
    5y

    @Brie Schmidt I have wondered about this as the cert issue has been popping up and never had the reason to really ask.

    Not sure if the 2 as 3 is one of your buildings or this was one of your sales, but I would be disputing that one.  I doubt you would be able to get anything credited to you, but going forward save some change.

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