Chicago Ordinance to Protect Renters and Buyers in Condo Conversions Takes Effect
Effective January 1, 2012, a new Chicago ordinance that was passed last May finally went into effect. The goal of the ordinance is to protect buyer of new condominium conversions, as well as tenants of buildings that are in the condominium conversion process.
Developers must obtain a license for residential real estate development from the city. If a developer is recording the condominium declaration after January 1, 2012, the developer must provide a Condominium Disclosure Summary in a format approved by the city. This summary shall include various details about the condominium development, such as 1) a description of the property’s amenities; 2) financial information regarding assessments, budget, reserves, and operating expenses; 3) a description of applicable warranties; 4) parking information; 5) information about the building’s or unit’s infrastructure, such as appliances, HVAC, hot water heaters, elevators, masonry, and security systems; 6) restrictions such as limits on rentals, sales, or use limitations; 7) association-provided or other monthly service information, such as waste removal or cable; and 8) a list of all contractors who worked at the property, complete with license and registration numbers. The city may request other pertinent information in the summary as well. This summary must be filed with the city at least 90 days before the first unit is offered for sale, and must also be delivered to all prospective purchasers.
Before signing any lease after January 1, 2012, the landlord must notify the prospective tenant of the proposed condominium conversion in writing. This notice should be attached to the lease. If the developer/landlord intends on recording the condominium declaration on or after for July 30, 2012, the developer must notify all tenants in writing at least 180 days prior to the recording of the declaration. Depending on the circumstances, the tenant may also qualify for relocation assistance from the landlord.
If a developer fails to comply with the new ordinance, the city will withhold transfer stamps, in essence stopping the developer from selling any of the condominium units, until after the developer complies and pays the fines, or posts a bond equivalent to the maximum fine.