If a building has decayed, and the owner is unable to maintain it for whatever reason, sometimes building code problems begin to arise. When money is tight, some have asked whether it is possible to sell a building with building code violations.
Yes, under certain circumstances. Here are some points to keep in mind:
- Identify the work that needs to be done, and the cost. That will provide important information for the sale process.
- The nature of the violations and any litigation must be disclosed to the buyer.
- The market will price in the cost of the repairs, so the sales price will be less than a building in good condition.
- The target market is smaller – it is limited to investors rather than owner-occupants that have the financial and operational resources to renovate the building.
- Conditions deemed dangerous and hazardous still need attention, because they are a liability risk.
If you are contemplating such a sale, talk to us. We can help you to prepare the necessary disclosures. Also, some form contracts, including those commonly used for residential real estate in and around Chicago, contain language that no violations exist. That language can be adjusted so that it suits the situation.
Simultaneously, we can follow any court hearings on the building code complaint. A pending sale does not automatically result in the dismissal of a pending building code case. It is important to follow up in court after the sale, to stop any more liability from accruing.
In these kinds of situations, it is important both to accomplish the sale, and to establish a definite break from further involvement or liability with the property.