If you’re planning to buy or sell a home in Chicago’s Northwest Side, recent changes to the city’s housing regulations could directly affect your transaction. The Northwest Side Preservation Ordinance, introduced to protect affordability and prevent displacement, requires property sellers and buyers to follow specific procedures when dealing with rental properties. But what does this mean for homeowners looking to sell and buyers looking to purchase in neighborhoods like Logan Square, Avondale, Hermosa, Humboldt Park, and West Town?
In this guide, the Camille Canales Group, a top Chicago real estate team, breaks down what you need to know about the ordinance, how it impacts the Chicago real estate market, and the steps you must take to ensure compliance.
Key Takeaways of the Northwest Side Preservation Ordinance
For Home Sellers:
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Mandatory Notice of Intent to Sell: Sellers of rental properties must provide tenants and the Department of Housing (DOH) with a formal notice before listing their property.
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Tenant Right of First Refusal: Renters may have the opportunity to purchase the property before it’s sold to an outside buyer.
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Potential Delays in Selling: The ordinance introduces waiting periods that could impact how quickly a property can be sold.
For Home Buyers:
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Possible Purchase Delays: Buyers may need to wait for tenant decision periods to expire before closing on a property.
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Increased Awareness of Affordable Housing Policies: Buyers need to be aware of local regulations that could impact financing and closing timelines.
Let’s explore the ordinance in detail and what both sellers and buyers should do next.
How the Ordinance Impacts Home Sellers
1. Notice of Intent to Sell
If you’re selling a rental property within the designated areas, the law requires that you notify both your tenants and the Department of Housing before you list your home. The notice period depends on the property size:
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5 or more units: 60-day notice required.
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3-4 units: 30-day notice required.
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1-2 units: 15-day notice required.
The notice must be posted publicly at each entrance to the property and include the asking price and basic property details.
2. Tenant Right of First Refusal
Tenants have the right to purchase the property under the same terms offered to an outside buyer:
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5+ unit buildings: Tenants have 90 days to express interest.
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3-4 units: Tenants have 30 days to respond.
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1-2 units: Individual tenants have 15 days to act.
To exercise this right, tenants must provide either a pre-approval letter from a lender (for 4 or fewer units) or a letter of intent from a financial institution (for 5+ units).
3. Delays and Penalties
If sellers fail to comply, fines range from $200 to $1,000 per day per offense. The waiting period required before completing a sale can slow down transactions, so early preparation is crucial.
What Sellers Should Do Next
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Review your property’s eligibility under the ordinance.
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Provide the required Notice of Intent to Sell before listing the home.
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Prepare for a possible extended timeline if tenants express interest in purchasing.
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Work with a Chicago real estate expert like Camille Canales Group to navigate these regulations efficiently.
How the Ordinance Impacts Home Buyers
1. Delays in Closing
If you’re under contract to buy a property in the affected areas, be prepared for potential delays if tenants exercise their right to purchase. Your closing date could be postponed while tenants evaluate their purchasing options.
2. Verifying Compliance Before Closing
Buyers should ensure that the seller has:
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Properly issued the Notice of Intent to Sell
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Allowed tenants the opportunity to purchase the property
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Complied with all waiting period requirements
3. What Buyers Should Do Next
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Request Documentation: Ask the seller for proof of compliance with notice requirements.
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Work With an Experienced Realtor: Partner with a Chicago real estate agent who understands the ordinance’s implications.
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Plan for Possible Delays: If purchasing a multi-unit property, build in extra time before finalizing a closing date.
Why the Northwest Side Preservation Ordinance Matters
This ordinance aims to preserve affordable housing in some of Chicago’s fastest-growing neighborhoods. While this is great for keeping communities stable, it creates additional steps for sellers and buyers alike.
The Camille Canales Group has extensive experience navigating Chicago’s real estate regulations and can help you buy or sell with confidence. If you're selling a property in Logan Square, Avondale, Hermosa, Humboldt Park, or West Town, reach out to us to ensure you remain compliant while securing the best possible deal.
Contact the Camille Canales Group
Ready to sell your home or navigate buying in these areas? Camille Canales and her expert team are here to help! Contact us today at [email protected] or 773-377-9200 for expert guidance in the Chicago real estate market.
