- Introduction
- Acknowledgements
- 1: Getting Ready
- 2: The Costs of Space
- 3: Understanding Credit
- 4: Professional Services
- 5: Finding Space
- 6: Residential Leases
- 7: Commercial and Industrial Leases
- 8: Buying Real Estate
- 9: Types of Mortgages
- 10: The Mortgage Application
- 11: Ownership Models
- 12: Purchasing Alternatives
- 13: Chicago Zoning Ordinance
- 14: Chicago Building Code
- 15: Chicago's Neighborhoods
- 16: Property Taxes
- 17: When You Find a Property
- 18: Inspections
- 19: After Moving In
- 20: Insurance
- 21: Utilities
- 22: Rehabbing Your Space
- 23: Safe and Healthy Spaces
- 24: Green Practice
- 25: When Disputes Arise
- 26: Space Emergencies
- 27: Facility Development Planning
- Bibliography
Surprises
Even if you ordered a property inspection prior to occupying your new space, undetected issues such as a defective kitchen appliance, sticky door or window, peeling paint or leaky faucet could arise. More serious defects can be difficult to detect, including problems with structural integrity, plumbing, heating, cooling, electrical systems, or the roof and sewer.
Additional considerations for older properties and new construction:
For Older Properties
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Without an extended property warranty, you are unprotected if defects to the property occur. Extended warranties usually provide coverage for major structural and design problems. These warranties can last up to 10 years, and are typically available for residential spaces.
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If you buy a newly renovated property, check for a warranty -- especially if you purchase the property through a federally-backed mortgage such as an FHA or VA loan. The warranty should cover major defects for at least one year after purchase. These are typically available for residential spaces.
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Many warranties don’t cover pre-existing conditions, so read the fine print. Your warranty company might disallow your claims, based on information contained in inspection report.
For New Construction (you are the first property owner)
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Obtain a warranty from the builder that the property is free of major defects, and that all systems will work properly. Note time limitations and other restraints.
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The builder might grant you a written warranty as part of your Purchase Agreement or under a Homeowner’s Warranty Program sponsored by the National Association of Property Builders.
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Residential properties subsidized by HUD/FHA (U.S. Department of Housing) under Section 235 are warranted for a period of one year from the date of purchase.
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New homes and commercial properties are not defect-free. In fact, many inspectors find more problems with newer buildings than with older ones. With new buildings, the completion and workability standards are higher than with older properties; today’s contractors are required to know more about installing construction and building materials than contractors did 80 years ago.
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Look for solid construction work that meets the Chicago Building Code and and all manufacturers’ and construction standards. This is critical.
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Insist with any new construction that you have a warranty. In addition, ensure that your builder completes any construction problems discovered during your first year of occupancy. If you make these repairs yourself, or even pay other professionals to fix them, most builders will claim that you voided their warranty and will then refuse to reimburse you or make any additional repairs. Address these possible scenarios in the initial negotiations.
TIP: Keep original documents in a safety deposit box, and copies on your premises. This allows you a back-up in the event of fire, flood or loss.
TIP: Should repairs be necessary, have an inspector review “before and after” situations in order to document the nature and security of the repair. S/he should be able to document who is responsible for the breakdown. This is not so critical for a faulty refrigerator, but may be crucial after a flood event.