§ 7-7-2. Condominium and townhouse sales.
A.
Property Report. It shall be unlawful for any developer to offer for sale any condominium units in a condominium project with more than four units or any townhouse units in a project requiring an Association to maintain common elements prior to making available to prospective purchasers a preliminary property report and, 30 days prior to the first closing, a property report which shall contain the information specified herein.
1.
A preliminary property report shall contain the following:
a.
Name of building, address and number of units.
b.
Name of developer, address and telephone number.
c.
Prices of units and preliminary declaration.
d.
Estimated monthly assessment upon each unit and taxes on each unit based upon previous year's tax bill. If the units have not been assessed separately, estimated taxes on each unit may be stated.
e.
Proposed financing on each unit (subject to approval by lending institution at time of closing), including percent of price required for down payment, number of years required to repay the loan, interest rate, service charge payable at closing, if any, and total monthly payment, if financed by the developer.
f.
Description of personal property which may be included in the sale, stating whether new or existing, including without limitation: refrigerator, range, garbage disposal, dishwasher, clothes washer, clothes dryer, decorating and floor covering.
g.
Maintenance and amenity costs covered by monthly assessment.
h.
Maintenance and amenity costs which are not covered by the monthly assessment for which optional charges are or may be levied.
i.
The time and circumstances upon which the initial board of managers shall be established.
j.
A brief description of rights and obligations retained by the sellers and the duration of such rights and obligations.
k.
Rights and obligations of unit purchasers after closing and prior to election of board of managers including rights under 765 ILCS 605/18.2.
l.
Description of the physical properties, including:
(1)
For buildings over three years old, an engineering survey of the building's operating and other systems.
(2)
Description of the age and operating condition of the hearing, air conditioning, water and water heating systems, sewer service, and elevators.
m.
Description of existing contracts for management and other services, including:
(1)
Length and terms of contract.
(2)
Location and availability for review.
(3)
List of all interests of developer, directly or indirectly, in all such service contracts.
n.
Explanation of the buyer's cancellation rights and the seller's procedures.
o.
Statement of all warranties included with unit.
p.
The following statement in a type size and style equal to at least ten point bold type:
THIS INFORMATION IS PROVIDED TO PROSPECTIVE UNIT OWNERS IN ADDITION TO THE LEGAL DOCUMENTS REQUIRED UNDER VILLAGE OF HOFFMAN ESTATES AND ILLINOIS LAW. THIS IS NOT INTENDED TO BE A FULL STATEMENT AS TO (Name of Development) , FULL DETAILS ARE SET FORTH IN THE PROPERTY REPORT AND DECLARATIONS.
IT IS STRONGLY RECOMMENDED THAT THESE GUIDELINES AND ALL LEGAL DOCUMENTS BE REVIEWED BY PROSPECTIVE BUYERS AND THEIR ATTORNEYS AND OTHER ADVISORS PRIOR TO ENTERING INTO A REAL ESTATE SALES AGREEMENT.
2.
The property report shall contain the following:
a.
A statement indicating name and address of the developer and owner, if different, including all partners of a partnership or all officers and directors of a corporation as well as the following:
(1)
The name and address of the developer and legal and beneficial owner of the parcel, if different, including all general partners of a partnership and officers and directors of a corporation.
(2)
All persons with a direct material financial interest in the property, including interim and permanent mortgage lenders secured by a blanket encumbrance.
(3)
The principal attorneys, accountants, architects, engineers and contractors for the property.
b.
A description of the property and improvements, including the following:
(1)
Map or plat showing size and dimensions of the condominium project, together with all improvements, including recreational facilities, proposed construction and present and planned location of streets and roads. The share of ownership of each unit in the common elements shall be indicated.
(2)
Description of the units offered and the nature and extent of individual ownership in such units, including the percentage of former renters who have purchased or contracted to purchase a unit when the property is a conversion, if known. If such units are owned in trust or by nominees, the beneficiaries or principals shall be named.
(3)
Description, nature and ownership of all property and facilities on the site which are not part of the unit.
(4)
Description of all existing and proposed recreational facilities and other such facilities within the project.
(5)
Location, nature and ownership of streets and roads on and contiguous to the site.
(6)
Drawings, architectural plans or other suitable documents setting forth the necessary information for location, maintenance and repair of all facilities and equipment to the extent these documents exist. Such items shall be incorporated in the property report be reference, shall be located at the sales office site or construction office site and shall be turned over to the board of managers upon transfer of control by the developer.
(7)
Projected initiation and completion dates for proposed construction, renovation or conversion.
(8)
Use permitted for individual units by the declaration, by-laws of the association or organization and applicable zoning provisions.
(9)
Statement as to whether or not the units may be rented by the owner.
(10)
Statement of title, listing all restrictions of record and the condition of title.
c.
Method and timing of transfer of control over the condominium project to the board of managers and the nature and extent of any interest retained by the developer.
d.
A statement of all financial aspects of the condominium project, including but not limited to:
(1)
Name of construction mortgagor or the interim mortgagor.
(2)
Institution offering long term mortgage financing, if available, and terms and conditions of such mortgage.
e.
Statement disclosing the existence of penalty if the construction, renovation or conversion or completion date is not met and the additional costs to be imposed if such date is not met.
f.
Nature and extent of any protection of a purchaser if the developer defaults on blanket encumbrance, unless the developer shall have furnished to the purchaser a non-cancelable bond executed by a surety company authorized to do business in the State of Illinois which has consented to be sued in this State, indemnifying a prospective purchaser against loss of the deposit or deposits against payment for the unit (earnest money) except by reason of the purchaser's default. If the developer has made no such arrangement, the following statement must be inserted, in a type size and style equal to at least ten point bold type:
THE DEVELOPER HAS MADE NO ARRANGEMENTS TO PROTECT THE PURCHASE OF A UNIT FROM ITS POSSIBLE DEFAULT ON A BLANKET ENCUMBRANCE. ACCORDINGLY, THERE IS A RISK OF LOSING YOUR FINANCIAL INTEREST IN THE EVENT OF THE DEVELOPER'S FAILURE OR BANKRUPTCY.
g.
Statement of any pending litigation which would affect the owner or the developer's ability to convey clear title.
h.
Statement of the current taxes and estimated possible changes in the tax situation of the project which buyers may encounter during the first two years.
i.
Copies of the sales documents and literature, including but not limited to:
(1)
Basic purchase contract from being used by developer.
(2)
Forms of conveyance.
(3)
Deed of trust, mortgage and promissory note.
(4)
Statement of sales prices, terms and options.
(5)
Statement of terms and conditions of sale, including estimated closing and settlement costs, taxes and expect special assessments levied either by the association or a governmental entity.
(6)
Statement of monthly payments to be itemized as to principal, interest, taxes, utilities and all other payments for a period of one year from the expected date of closing of the sale.
j.
Summary of past operating history of the project, if any.
k.
Copies of all required documents numbers and indexed in such a manner as the developer may select, so as to permit ready reference thereto:
(1)
The declaration and plat.
(2)
The articles of incorporation or charter of the association.
(3)
The by-laws and regulations of the association.
(4)
Any leases of real or personal property applicable to the association of more than one year duration.
(5)
Any management contract, employment contract, insurance policy, or other contract affecting the use, maintenance or access to all or part of the common elements or units of more than one year duration.
(6)
Coverage and amounts of insurance policies.
l.
A statement of management and expected operation costs, including:
(1)
Name of management agent, if any, and the services the agent will perform.
(2)
Length of term of any management contract and charges and circumstances, if any, under which the charges may be increased.
(3)
The conditions, if any, under which the contract may be canceled or terminated.
(4)
Statement disclosing any relationship between the developer and the management firm and their respective corporate officers and controlling interests.
m.
Copy of estimated operating budget for the project, projected for a period of one year from the expected date that control of the project would pass to the board of managers, to include monthly payments to be prorated to each unit for maintenance and/or management of the property and charges for use of recreational and other facilities. In particular, the operating budget shall include, but not be limited to, the following:
(1)
Operation Costs:
Utilities
Heating fuels
Janitorial servicesRefuse and recycling collection services
Ground and building maintenance
Security
Maintenance and operation of recreational and other facilities
Building insurance
Elevator maintenance
Sidewalks and street maintenance
Other operating costs(2)
Management Costs:
Legal and accounting services
Bookkeeping services
Management fees(3)
Reserve Costs:
Segregated reserve fund for improvements
Segregated reserve fund for unexpected repair work
Segregated reserve fund for replacement and upkeep of common elements and facilities, including basis upon which reserves are calculatedIf no reserve is provided for any one or more of the costs listed in this item, the following statement must be inserted in the property report in a type size and style equal to at least ten point bold type:
THE DEVELOPER HAS NOT PROVIDED A RESERVE FOR CERTAIN POSSIBLE FUTURE COSTS IN HIS BUDGET. ACCORDINGLY, IT MAY BE NECESSARY TO PROVIDE FOR A SPECIAL ASSESSMENT TO ALL UNIT OWNERS TO PAY FOR SUCH COSTS SHOULD THEY OCCUR.
n.
Alternative provisions, if any, if an insufficient number of units are sold to cover the proposed operations and maintenance budget.
o.
In the case of a conversion from rental or other legal status, a report from a qualified licensed engineer or registered architect, stating his opinion concerning the condition and the rated life and expected useful life of the roof, foundation, external and supporting walls, mechanical, HVAC, electrical, plumbing and structural elements and all other common facilities, together with an estimate of repair and replacement costs, at current market prices, which shall indicate what the cost per category of unit would be if the unit owners were assessed for the estimated cost. This report shall include the approximate dates of installation of the facilities listed above and the dates of major repairs to such facilities.
p.
If there are any restrictions upon the free sale, transfer, conveyance, encumbrance or leasing of a unit, then a statement in bold face type of capital letters in substantially the following form shall be included: THE SALE, LEASE OR TRANSFER OF YOUR UNIT IS RESTRICTED OR CONTROLLED. Immediately following this statement, there shall appear a reference to the documents, articles, paragraphs, or pages in the disclosure materials where the restriction, limitation or control on the sale, lease or transfer of units is set forth or described in detail.
q.
A senior executive officer of the developer shall sign the property report and affirm that it and any supplements, modifications and amendments are true, full, complete and correct.
3.
The developer shall amend the preliminary property report and property report from time to time when any material changes occur in any matter contained in such reports. Amendments shall be made as soon as practicable after such change occurs or the developer has reason to know of such change. Amendments shall be attached to reports subsequently distributed to prospective purchasers and shall be immediately distributed to all purchasers of units.
B.
Certificate of Inspection; Fees.
1.
Application for Certificate of Inspection. Any developer selling townhome units or a condominium conversion which is regulated by this Section shall first apply to the Department of Development Services for a certificate of inspection with respect to each dwelling unit and relative to the common elements of the property containing the unit. The developer shall submit the declaration and plat pertaining to the property with the application.
2.
Inspection Fees. For inspections conducts pursuant to this Section, the developer shall pay to the Village a fee of Three Hundred Dollars ($300.00) for every ten (10) units, or portions thereof, within a building for inspection of the common elements, plus a fee of Fifty Dollars ($50.00) for inspection of each dwelling unit contained in said building or group of units.
3.
Issuance of Certificate; Contents. After inspection as provided herein has been completed and compliance with current codes has been ascertained or waived, the Department shall issue a certificate of inspection with respect to each dwelling unit inspected and with respect to the common elements. The Department shall also issue to such applicant clear and legible copies of such certificates suitable for posting.
4.
Posting of Certificate. It shall be the obligation of the developer to post and keep posted one copy of the certificate of inspection on the front doorway of each dwelling unit to which it pertains until the sale of that unit is closed. The developer shall further post and keep posted a copy of the certificate pertaining to the common elements on the doorway of the main entrance and any other such places as may be directed by the Department until the sale of the last unit has been closed.
5.
Inspection. Inspection shall consist of a building inspector from the Code Enforcement Division viewing each dwelling unit and all common areas of buildings to ensure that electrical, plumbing and mechanical systems are functioning properly and that each unit is in compliance with current life safety and building codes. Use of restricted materials or equipment for these systems shall be required to be discontinued.
Ground Fault Interrupter protection shall be provided in bathrooms, kitchens (within six feet of the sink), garages and grade level exterior receptacles.
6.
Compliance with Provisions.
a.
Except as otherwise contained herein, no certificate of inspection shall be issued and no sale shall be closed for any dwelling unit if such unit, or the common elements, are not in compliance with current codes.
b.
No townhome units or condominium conversion unit located within the Village shall be sold under the provisions of this Section unless, prior to the closing of the sale, all provisions of this Section, including the issuance of a certificate of inspection, have been complied with.
C.
Warranties. Any agreement for sale of a unit under the provisions of this section shall contain a one year warranty that the unit and the common elements, including the roof, foundation, external and supporting walls, mechanical, HVAC, electrical, plumbing and structural elements, are in good condition, free from any latent or patent defects and that the developer shall repair or replace any defect in said unit or the common elements at the developer's sole cost promptly upon being notified, in writing, of such defect by the purchaser of such unit or the association, as the case may be; provided, however, that such notice of defect must be delivered to the developer within one year from the date of conveyance of title thereto to the purchaser.
D.
Bond Required. The developer shall (a) furnish to the purchaser a noncancellable bond executed by a surety company authorized to do business in the State of Illinois which has consented to be sued in this State, indemnifying a prospective purchaser against loss of the deposit or deposits against payment for the unit (earnest money) except by reason of the purchaser's default, or (b) establish an escrow with a bank or trust company having trust powers, an attorney who is a member of the Illinois Bar or title company authorized to do business in Illinois, with whom shall be deposited all earnest money. The escrowed funds shall be deposited in separate accounts and conditions and release of escrowed funds and conditions of the bond shall conform to the following:
1.
If a purchaser shall properly terminate the contract of purchase, earnest money shall be paid to him free of the cost of escrow.
2.
Prior to the closing of sale, no earnest money shall be paid to the developer from escrowed funds, except up a default by the purchaser.
3.
The developer may require funds to be placed at interest, which interest shall be paid or credited to the person entitled to the deposit, net of any reasonable expense incurred by the escrow agent in the discharge of his duties.
4.
Escrowed funds shall not be subject to attachment by the creditors of any party to the escrow.
5.
At least ½ of the cost of such escrow shall be borne by the developer. The developer shall also furnish a bond to all unit owners for the purpose of guaranteeing the maintenance and repair of common elements under the warranty. The amount of said bond shall be based on an independent architect's or engineer's estimate of possible liability.
E.
Parking Facilities. No developer shall record a declaration or plat unless parking facilities, if any, located on or within the property are (a) included in the common elements, or (b) are divided as individual parking spaces among and designated as being a part of the units.
F.
Lease of Common Elements. Unless otherwise provided by the board of managers, no lease of common elements and no serve or management contract relating to the association shall be valid longer than one year after the board of managers assumes control of the association, and no developer shall enter into such a lease for any longer period.
G.
Inspection Required. It shall be unlawful for any person to fail to allow unit owners to inspect the financial books and records of the project within 72 hours of the time written request for examination of the records is received.
H.
Contract. A developer shall not advertise the sale of, offer the sale of, or enter into an agreement, or preliminary agreement, or contract for sale of any unit unless:
1.
A preliminary property report or property report, as appropriate, are available for distribution to prospective purchasers and examination by the Department.
2.
Copies of all documents that were filed or required to be filed in connection with the project with the Recorder of Deeds of Cook County are available to prospective purchasers.
3.
A copy of the preliminary property report or property report, as appropriate, and any amendments, modifications and supplements thereto have been given to the prospective purchaser, upon his visit to the site or upon his request for information.
4.
The prospective purchaser has been given an opportunity to read the preliminary property report or property report, as appropriate.
5.
A receipt signed by the prospective purchaser has been received by the developer or agent acknowledging that the prospective purchaser has received and has had an opportunity to review the preliminary property report or property report, as appropriate. Such receipts are to be kept on file in the possession of the developer for a period of three years from the date of signature of the prospective purchaser and such receipts are subject to the inspection of the duly constituted authorities at any reasonable time.
6.
The preliminary property report or property report, as appropriate, and any amendments and supplements thereto, are available for inspection by the public.
I.
Notice Requirement.
1.
No less than 120 days prior to offering for sale of any unit or recording the declaration pursuant to the Illinois Condominium Property Act, where applicable, whichever occurs first, the developer shall give written notice to each tenant of the building, if any, of such event, the date that conversion will commence. Such notice shall be hand delivered or sent certified mail.
In addition to the foregoing notice, as soon as practicable after preparing the preliminary property report, the developer shall notify each tenant of the availability thereof and of the rights of a prospective purchaser to receive a copy thereof.
2.
Any tenant who is elderly or handicapped as defined by the ADA (Americans with Disabilities Act) shall be given 180 days notice of conversion, as set forth in this section.
3.
Each tenant will have the option to purchase his premises for a period of 90 days from the notice of conversion required on the same terms or better than the premises will be offered to the general public.
4.
Notwithstanding lease provisions to the contrary, the tenant's premises will not be shown to prospective purchasers without the tenant's permission until the expiration of the tenant's option to purchase or 90 days prior to the end of the term of the tenant's lease, whichever is later.
5.
No lease or other agreement for the rental of property shall contain any provision which authorizes the lessor to terminate the lease less than 120 days from notice of conversion because of conversion of the property covered by the lease or which authorizes the termination of a lease less than 120 days from notice of conversion as part of any operation or transaction incident to such a conversion. No such provision of any lease or other agreement entered into after the effective date of this chapter shall be given any force or effect, and such provisions are declared to be void.
J.
Application of Section. The provisions of this section shall apply to any townhome units or condominium, the declaration for which is recorded or the first unit offered for sale after the effective date of this section.
(Ord. No. 3800-2006, § 1, 2-6-06; Ord. No. 3848-2006, § 1, 8-7-06; Ord. No. 3874-2006, § 1, 10-2-06)