October 16, 2021

Volume XI, Number 289

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October 15, 2021

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October 14, 2021

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New Higher Majority Requirement for Condominium Deconversions in Chicago: Here's What You Need to Know

Chicago Passes New Legislation Effective Immediately

On September 18, 2019, the Chicago City Council unanimously passed a new ordinance that increases the percentage of owners required to approve the sale of a condominium building in the City. The ordinance, introduced by Alderman Brendan Reilly (42nd Ward), increases the required unit owner vote on a deconversion condominium sale to 85% of unit owners, up from the 75% currently required in the rest of the state under the Illinois Condominium Property Act.

A condominium “deconversion” generally occurs in connection with a bulk sale of condominium units to a single purchaser who then converts them into rental apartments. Deconversions have been on the rise in Chicago over the past five years with dozens of condominium properties having been deconverted by developers and investors.

The topic of condominium deconversions in Chicago is  increasingly debated  with proponents of the ordinance  arguing it will help protect long-term residents from being forced to sell. Having represented condominium developers and deconverters, HMB expects the new ordinance will significantly slow the number of deconversions in Chicago.

What You Need to Know

  • The ordinance is effective as of September 18, 2019
  • Not less than 85% or more of unit owners in a Chicago condominium building must vote in favor of deconversion for the sale of the entire building to be approved
  • The Illinois Condominium Property Act still sets the threshold at 75% for the rest of the state, however Chicago has home-rule authority which preempts this state law
  • Owners who vote against the sale may be entitled to certain proceeds from the sale, including the value of the owner’s interest and reimbursement for relocation costs
© Horwood Marcus & Berk Chartered 2021. All Rights Reserved.National Law Review, Volume IX, Number 289
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About this Author

Kristin Dunlap Real Estate Attorney HMB
Partner

Kristin is a partner in HMB’s Real Estate Group. She focuses her practice on commercial real estate transactions, development, leasing and finance matters.

Kristin helps real estate owners, developers, investors and users fulfill their business vision by diving deep into the details and efficiently driving projects over the finish line. Kristin works on acquisitions, dispositions and financing of several property types, including shopping centers, condominium properties, offices, apartment buildings, hotels and raw or distressed land for...

312.606.3204
David Sachs Real Estate Lawyer HMB Law Firm
Real Estate Chair

David is a partner at HMB and the Chair of the firm’s Real Estate Group. He focuses his practice on helping clients purchase, sell, develop, lease, manage, finance and construct all types of property, including industrial, mixed-use, multifamily, commercial, office and vacant land sites. His practice extends to environmentally-challenged and financially distressed properties.

With over 30 years of experience in real estate, David’s clients include real estate developers, investors, property managers and entrepreneurs as well as wealthy...

312.606.3249
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