Chicago just implemented the largest assault on property owner rights you have ever seen, if it’s not stopped, it could be implemented throughout Cook County and beyond.
The ordinance does two things: creates an opportunity for tenants to purchase their building when it is up for sale (a right of first refusal) in some Northwest side neighborhoods, and increases demolition surcharges by 400%
Here’s how the ordinance creates up to nine (9) months of delay in selling a building. Owners have to give their tenants:
- * Up to 60 days advance notice of their intention to sell;
- * Up to 90 days to decide whether or not they are interested in buying the building;
- * Complete financial information including rent rolls; and
- * Up to 120 additional days to find financing if they want to match the offer.
The ordinance applies to SFH, 2-4 units, mixed use and large apartment buildings—and even rented condos. It will depress sales prices, even if there is a buyer willing to go through the hassle of dealing with this ordinance. Clearly 1031 deals will be impossible. Owner occupied sales will be eliminated since a provision in the ordinance requires you to keep tenants for 6 months even if they are MTM or their lease expires.
Act now. Seriously, ACT NOW.
- * The fines are up to $1,000 a day for non-compliance and proof of compliance will need to be submitted and reviewed by the DOH and a certificate will be issued to the title company.
- * We may see mass evacuations of buildings because this ordinance is too difficult to deal with and it does not apply to vacant properties.
- * No buyer is going to spend thousands of dollars in due diligence on a deal that might not move forward.
- * The tenants have the right to sell the contract to a third party for a profit.
This ordinance will drive out small, local owners, replacing them with cash-rich, out-of-town corporate owners. This is a problem for all of us and we need your help right now. You need to tell your alderman, and the alderman of every building you own, what a terrible idea this is—even outside the ordinance zone.
Get informed! The NBOA has put together a page with more detailed info, updates and additional calls to action at nboachicago Make sure you sign up for their newsletter and stay up to date on how you can get involved.
Brie Schmidt, Designated Managing Broker of Second City Real Estate and Bob Floss, Owner of Floss Law have an extensive video on YouTube/ChicagoBrie. It includes a highlight video and reels you can share on social media.
Spread the word by sharing this on social media, with your friends and colleagues, and anyone you know who could be potentially impacted by this. This ordinance is awful and you need to help make sure it is stopped.
@Tom Shallcross @Mark Ainley @Crystal Smith @Lumi Ispas @Henry Lazerow @Sarita Scherpereel @Bob Floss II @John Warren @Jonathan Klemm
