Not Getting a Permit!? Think Again!
Adding a bathroom, making renovations to a current room or running new pipes or electrical wiring could all be parts of making home improvements for the typical Chicago resident. When that home improvement bug bites, the urge to grab up materials and get started right away can be difficult to resist – we all know how quickly it can disappear too, so it’s got a kind of built in urgency. It doesn’t just hit families either; those who own rental properties or other real estate are also subject to the sudden urge to make improvements, especially when property is cheap to buy.
Purchasing cheaper homes while the market is depressed is part of making money in real estate and essential for building your long term wealth. Buying low and selling high is the underlying principle behind all forms of investing and it’s no surprise that people in Chicago are grabbing up land and attached buildings as fast as they can. Making improvements without getting things cleared with the right permits can lead to serious problems further down the line. Buying other properties which have been illegally improved can also land investors in a pot of hot water, but the most common infraction is investors working on their own properties without permits.
Being blocked from financing is just one of the possible consequences of being discovered owning homes with unpermitted improvements. Banks don’t want to give people money to make buildings which end up on government blacklists for bad workmanship. A lack of financing can lead to foreclosure for homes owned on mortgage or other forms of repossession. Besides losing money this way, homeowners and investors can also lose funds through the various fines and penalties which are charged for various code violations. Whether you did the work or not, if you own the home, you’re getting fined.
Another consequence to rehabbing property without permits is the fact that the city can red tape your property! When a property is red taped, it means that work cannot continue and a stop work order has been placed. If work continues you can be sued for large amounts of money by the city. If one of your properties gets red taped, the city will be on the look out for every property you purchase in the future. Passing future inspections will be much more difficult because the city will know who you are in a bad way and that’s not a good thing! They will be more likely to nit pick every single detail for the rest of your career until you regain your reputation which will take a long time.
On top of those charges and fines, if you own a home with illegal improvements and they are identified, you’re going to have a difficult time selling that home without making the right changes to the property. New buyers will have the same problems as you do now with their new home if purchased from you. Once people know about these issues, it’s pretty much impossible to sell such a house. Perhaps more than anything, the hit to your reputation for dealing in bad property, especially in Chicago, is the most damaging.
In Conclusion
When in doubt, get a permit. It is a little more work on the front end but it can save you a lot more work on the back end, save you from headaches and fines, and establish you as a reputable and professional business. When a city inspector comes to do an inspection on one of our properties and they say “Oh it’s you guys, PASS”, it is music to our ears.
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