You may be interested in researching "Certificate of Occupancy."
Here's the City of Chicago's definitions:
1. A Certificate of Occupancy indicates that a building conforms to the general, special and structural requirements of the Chicago Building Code. No person shall use or rely upon the certificate or the information contained therein as a basis for any legal action against the city.
2. There are three basic types of Occupancy Certificates
"Full" Occupancy, which covers an entire building.
Advance or "Partial" Occupancy, which covers a specific, completed portion of a multiple dwelling building under construction.
"Temporary" Occupancy, which is generally reserved for special events or circumstances in buildings other than residential buildings.
FYI: If the renovations were done with a permit, the buildings department should be able to help you research whther the owner applied for a change in the certificate of occupancy to reflect the proper amount of housing units (e.g. a one or two family legally converted to a three or four family home).
As a buyer, you would not want to be the person holding the bag if an inspector making the rounds decides the attic apartment is an illegal apartment conversion, etc. For example, my girlfriend's buddy brought a one family, wanted a two family, had a lot of expensive contruction done, but failed to have an engineer approve and file the conversion plans and change the certificate of occupancy as required in NYC. The owner was eventually fined by the NYC Dept of Buildings, was forced to relocate the tenant (who was entitled to all rent monies being returned for living in an illegal basement apartment, which was absolutely beautiful by the way) and then was forced to rip out the entire project (which was never inspected or certified as being up to code). The fines went into the thousands, at a $2,500 increment, based upon how many days it took to "restore" the one family home.
Chicago is not NYC, however, may I suggest you ask your agent and attorney to look into the C of O and building permit history for you? You can start reading up on the subject at CityofChicago.org and use the site search for "certificate of occupancy." The resulting links may prove to be quite useful. Wishing you well on your purchase and research.
( http://www.TannStarr.com )
that inspector who comes out to look at your basement rehab and sees that there are illegal apartments will very likely cite you as the owner for code violations. you will have to fix them or restore the building back to a 2 flat.
i'd consult your lawyer about this before doing anything else...