I was scheduled to close yesterday until my attorney discovered last minute that there were 3 building code violations on the property. It's a brick 2 flat with a finished garden unit in which I plan on occupying, until this discovery. The violations are:
1) 2004, $3,000
- Code 157017 - Repair or replace defective soil pipe.
- Six other small things like working smoke detectors, and replace windows here and there
2) 2009, $0.00
- Code 169017 - Repair or replace house drain to receive and convey discharges from plumbing fixtures to sewer.
3) 2013, $0.00
- Code 169017 - Repair or replace house drain to receive and convey discharges from plumbing fixtures to sewer. (appears not remedied)
So when we discovered these violations and fines, the seller insisted several times that they were paid off. We requested the dismissal paperwork which their attorney literally said, "Your client is asking for a unicorn," claiming no such paperwork exists and we were foolish to think a receipt was necessary for these violation fines. My attorney did some digging and we found the paperwork showing they in fact did not pay these fines at all.
We don't know why the amount on the second two violations are set at $0.00, and while I can begrudgingly pay off the 3k fine because the seller won't budge, I worry the second two have just not yet been set. Considering the first $3,000 fine is comprised of seven different $500 fines, I would guess these two would be $500 a piece as well? This property is in Humboldt Park, Chicago.
I was feeling super confident in this purchase until these mysteries popped up. If the seller lies about paying the fines, what else are they hiding? There is a lot of repair work I knew about going into this around $15k but this might put it over the top if those $0.00 fines turn into an actual number. My attorney is trying to find ways to make it work with lender credits to offset the fines if I pay them, but I feel like the deal has turned sour.
What are your thoughts? Very much appreciated.
I don’t know how Chicago code violations work, so I can’t help there.
But have you included the cost of actually remedying the issues? I’d imagine they haven’t been fixed yet, and digging up and replacing sewer pipes can get costly quick.
So while you may be looking at a few thousand in fines, you’re probably also looking at at least a few thousand more in repairs.
You need to decide if you’re willing to walk away from this deal if he continues to not budge - and is obviously lying too.
@Mike McCarthy Thanks Mike. To be honest, I haven't considered the cost of repair. And now that I think more, the fact that the garden unit has been vacant for a while now according to the property management company I called, I'm inclined to think that it may not be in working order at all.
I think this seller is trying to pass off their hidden problems onto someone else.
It would cashflow so nicely without this! And it may explain why the property has been on the market for 5 months prior to my offer. I'll have to check this sort of problem out way up front with future property analyses.
Thanks for the thoughts.
As long as the violations are closed out - have the seller pay, make sure title is clear, and buy the property
Next time, and as you build your empire use the link below to look up any City of Chicago code violations.
And if you cant remember this link just google "Chicago Building Violations". Enter the address or the PIN and everything in the file for the building will pop up. Certainly don't need to wait until day before closing to get surprises like this. Before I even go look at a building I am on this website to check out the building and its history of permits or violations etc. If you find something that concerns you have then have ample time to investigate and get it resolved.
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