Sales agents misinformed about property reports
Posted 4/19/2007 by Joe ZekasThe City of Chicago's Municipal Code requires that condo developers make available a detailed property report to any prospective purchaser who requests one, if the building has more than six units.
I've heard that sales agents routinely stiff buyers, telling them that the report is only available when a contract is signed. The law requires that the report be made available to "prospective purchasers" not just to actual purchasers.
Here's the relevant section of the Municipal Code:
13-72-050 Requirements for developer of more than six units.
(A) Not later than the offering for sale of the first unit, a developer of a condominium of more than six units must:
(1) Have a property report available for distribution to each prospective purchaser and for examination by the department. A developer may make a charge, not to exceed $2.00, for each report so distributed;
Developers should be careful about compliance since it's easy to commit a misdemeanor violation under Section 13-72-110, punishable by up to 6 months in the county jail.
Comments
4/19/07
Seth Anderson said:
Interesting, but your link is broken.
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4/20/07
Joe Zekas said:
Seth,
It worked when I posted it, and it just worked for me now.
May be a transient site error of some sort. Try again.
Jeffery said:
Joe,
Great stuff and great topic. More of this discussion is needed.
The difficult thing in my opinion is relating the Property Report, back to what specifically the developer or contractors did to correct it. Most don't, but the buyers and associations need to include each of these items in the punch list.
I find this especially true on say Loft conversions where you have either a great deal of restoration, or restoration with new additions, covering some of the flaws. You also have more items come out during the actual restoration that are not disclosed. (i.e. damge during construction)
As well, the property report only tells you what they know or discovered and what they must disclose. It does not dicated what level of inspection the developer must do to prepare the Property Report, or what the qualifications their inspectors must have. If possible, from a larger Association perspective, obtain the actual Inspector's Reports, notes, Report scope, and qualifications. Hire qualified speciality inspectors for areas of facade, roof, electrical, etc. You get what you inspect, not expect.
Joe Zekas said:
Good advice, Jeffery.
The problem with any rehab project is that no one can be certain until the project is very far along as to what the actual scope of the work will be.
As you note, problems arise during construction, and hidden problems are dfiscovered, and things happen.
If there isn't enough money in the construction budget contingency to cover those problems, priorities need to be shifted and some other things may not get done.
For anyone who's deeply concerned about these things and wants certainty, the preferred way to get it is to buy a resale in a seasoned development. Otherwise you're always buying into some level of risk. It would be nice if that risk could be completely eliminated, but I don't believe it can.
Joe Zekas said:
Seth,
I just tested the link again and got the same error message you did.
All I can suggest is that people try repeatedly over a period of time.
4/23/07
New Construction Series: Property Report at ChitownLiving said:
[…] Developers, please scan your property reports to PDF. It would make distribution, and receipt so much easier. Great discussion at YoChicago. […]
Jeff Kerr said:
Joe, the link does not work.
Joe Zekas said:
Jeff,
It just worked for me. And other times it hasn't worked. See my comment above - keep trying; nothing I can do about this.