The information in this answer provided by Attorney Ranj Mohip is general information and is not intended as legal advice, nor does the attorney intend to create an attorney-client relationship with any reader by answering this question or otherwise contributing as a member of Trulia.com.
If the violations aren't substantial, the lender may just want an escrow for estimated compliance costs. If major the violations could easily kill the deal for anyone but a cash buyer.
I'm a little leery of this question and the violations. A '5' flat is not 'normal' in Chicago. Yes, legal ones do exist but it is definitely not the norm. My immediate thoughts are whether the 5th unit is an illegal conversion and if the outstanding violations have anything to do with that.
We provide jargon translation services, compliance consulting for City violations and Housing Court / AH assistance. Feel free to give me a call. Good luck
I'm not a lender but I know lenders and have studied the issues. If this doesn't work out and you seek another property, I would advise you to work with a realtor if you do not have one. If you need one, contact my team any day of the week. I would love to work with you so you can be a successful investor of Real Estate!!
Harold Arnold/Marcella Cohen
American Invsco Realty
A/I Realty Team
Sure. It all depends on the strength of the buyer, and the nature of the violations. You would have to disclose the violations to the buyer, and the lender for the buyer may require that the violations be addressed as a condition of funding. They may want to fund the loan with a construction escrow for the repairs. Because it's five units, the buyer will likely pursue commercial financing.
Obviously, the violations will pose a problem for you in that the value of the property will be reduced.
Best of luck
Keller Williams Chicago Consulting Group