Zoning Regulations affect on sales.

[Ron Rose]

Selling a house from my father's estate. According to city hall, the house is zoned for singly family, but it has been a duplex since my Dad bought in 1972. I have a very interested buyer and sale is hinging on this point, at the moment. Can I sell the house despite the fact that it is nonconforming to zoning laws in Peoria IL?

[Michael Herr]

Originally posted by @Ron Rose:

Selling a house from my father's estate. According to city hall, the house is zoned for singly family, but it has been a duplex since my Dad bought in 1972. I have a very interested buyer and sale is hinging on this point, at the moment. Can I sell the house despite the fact that it is nonconforming to zoning laws in Peoria IL?

Yes, you can sell it.

Sometimes Peoria will grandfather a duplex and refer to it as a "legal nonconforming" single family zoned property with duplex as permitted use.

If this is the case the new owner will be able to legally and officially use it as a duplex.

I have also heard of people finding an architect to declare that the house was originally built as a duplex, which would help you get it rezoned as multi-family and duplex as permitted use.

PM me for more info.

[Bill Gulley]

Likely built before the area was zoned and this is a non-issue, it's a non-conforming property grandfathered, if the zoning is single unit single family. By definition a single family dwelling is any attached residential unit containing one to four units. So you have a single family dwelling.

If your duplex is the only one in the area it is more desirable in that setting than if it were in a neighborhood of duplexes. More valuable.

Good luck :)

[Ron Rose]

Thanks to both of you guys.

I'm planning this sale as a cash deal, so no real estate agents and the buyer has several other duplexes in the Peoria area (3 of them within two blocks of this house). Much of this neighborhood, over the last 40 years has converted to multi-family.. at least 25 percent.

The buyer just wants a clear, unencumbered title to the place.

[Bill Gulley]

Zoning of any kind is an encumbrance, the issue is that title will be insured by the title company. There is no issue with title in a matter like this as good title would be insurable. That should be your buyer's concern and insurable title is "good and merchantable title". :)

[David Krulac]

@Ron Rose

A few things that you can check out:

1. When was the zoning changed/adopted to make this property SFH zoned?

2. Check with city building dept. to see if any past building permits were issued, maybe for the conversion to 2 family.

3. When was the house built?

If the house was built as a 2 unit or was converted to a 2 unit before the zoning was enacted or changed you're in good legal standing. If not, its iffy, have seen it go both ways, but the long time that it has been verifiable (1972) speakes strongly in your favor.

[Colin L.]

Originally posted by @Bill Gulley:

By definition a single family dwelling is any attached residential unit containing one to four units.

A single family dwelling is 1 dwelling unit. 2 or more is multi-family.

[Bill Gulley]

Originally posted by @Colin L.:

Originally posted by @Bill Gulley:

By definition a single family dwelling is any attached residential unit containing one to four units.

A single family dwelling is 1 dwelling unit. 2 or more is multi-family.

LOL, need to study again. Multi by definition in law and regulation begins at 5 units. No municipal definition trumps federal. See HUD.

1 unit is, as I said, referred to as single detached single family, single family attached is 2-4, 5 is multi. :)

[Adam Johnson]

A more general observation on this topic, intended for you and any future readers - find out from the agency that has control over this area exactly what it takes to LOSE grandfathered status. In certain municipalities in my area (and this varies, which is why I am saying to ASK!), you lose grandfather status if a property has been vacant for a year. In others, if the property loses the certificate of occupancy, it also loses grandfather status. This can be a very expensive lesson/mistake.

My lesson was luckily at another local investor's expense. He rehabbed a vacant 4-unit property without ever asking. Gut rehab, all new kitchens, bathrooms, all new EVERYTHING. Couldn't get the water turned back on without an inspection. Couldn't pass the inspection until he ripped it all apart, removed 2 new kitchens and 2 new bathrooms, moved walls, etc. and made it a 2-family building. The zoning had changed and the property had been unoccupied longer than a year. He was screwed. He didn't ask, 100% his fault. Foreclosure on the investor was the end of the story.

Never, ever assume when it comes to zoning. Ask the question with as many specific details as possible.

Another quick story, I had a former motel property (small) under contract for $ 10,000 that needed a lot of work. During due diligence, found a zoning concern, in spite of it being marketed as commercial. Zoning changed to single-family, no exceptions. Property vacant over 2 years. It is still sitting unsold and I have my deposit money back. I asked before I closed.

[Michael Herr]

Originally posted by @Bill Gulley:

Originally posted by @Colin L.:

Originally posted by @Bill Gulley:

By definition a single family dwelling is any attached residential unit containing one to four units.

A single family dwelling is 1 dwelling unit. 2 or more is multi-family.

LOL, need to study again. Multi by definition in law and regulation begins at 5 units. No municipal definition trumps federal. See HUD.

1 unit is, as I said, referred to as single detached single family, single family attached is 2-4, 5 is multi. :)

This statement is not true.

To clarify.

When you talk to a banker up to four units can qualify for residential financing. 5 or more units must be considered commercial. Note: you can get commercial financing for 1-4 unit properties.

When you talk to your local planning and zoning department, 2 or more units are considered multi-family.

Since this discussion was about zoning, not financing it is more correct to refer to a duplex as multi-family.

In my area (the area of the original poster) a conforming duplex would be zoned as multi-family with duplex as permitted use, and could be financed as residential real estate.

Hopefully that clears it up.

It's sort of like a tomato. It's a veggie according to a produce guy and a fruit according to a botanist.

[Bill Gulley]

Originally posted by @Michael Herr:

Originally posted by @Bill Gulley:

Originally posted by @Colin L.:

Originally posted by @Bill Gulley:

By definition a single family dwelling is any attached residential unit containing one to four units.

A single family dwelling is 1 dwelling unit. 2 or more is multi-family.

LOL, need to study again. Multi by definition in law and regulation begins at 5 units. No municipal definition trumps federal. See HUD.

1 unit is, as I said, referred to as single detached single family, single family attached is 2-4, 5 is multi. :)

This statement is not true.

To clarify.

When you talk to a banker up to four units can qualify for residential financing. 5 or more units must be considered commercial. Note: you can get commercial financing for 1-4 unit properties.

When you talk to your local planning and zoning department, 2 or more units are considered multi-family.

Since this discussion was about zoning, not financing it is more correct to refer to a duplex as multi-family.

In my area (the area of the original poster) a conforming duplex would be zoned as multi-family with duplex as permitted use, and could be financed as residential real estate.

Hopefully that clears it up.

It's sort of like a tomato. It's a veggie according to a produce guy and a fruit according to a botanist.

You are just dead wrong.

You are you? Are you an engineer, an attorney, or another investor with less than twenty years around RE with a bad college education?

There is absolutely no aspect of multi housing that hasn't been past me, financing, planning and zoning, or at law. You need to drill down deeper, R-2 is single family as well as R-3 and R-4, they are multi family in the sense of being more than one unit, R-1, but the federal designation does not change until there are 5 units or more. How your city designates multi is irrelevant, we all don't live in your city.

The definition is set in LAW, not by someone working in some city P&Z office, it is DEFINED by HOUSING AND URBAN DEVELOPMENT, better known as HUD. What I gave was the HUD definition.

I do make mistakes, being somewhat human, suggest you check people out here before contradicting people with what you may think. I've been all over this country dealing in multi family and I'm pretty sure I know what the heck I've been looking at and how it's defined, thank you, newbie.

good luck. :)

[Bill Gulley]

Originally posted by @Bill Gulley:

Originally posted by @Michael Herr:

Originally posted by @Bill Gulley:

Originally posted by @Colin L.:

Originally posted by @Bill Gulley:

By definition a single family dwelling is any attached residential unit containing one to four units.

A single family dwelling is 1 dwelling unit. 2 or more is multi-family.

LOL, need to study again. Multi by definition in law and regulation begins at 5 units. No municipal definition trumps federal. See HUD.

1 unit is, as I said, referred to as single detached single family, single family attached is 2-4, 5 is multi. :)

This statement is not true.

To clarify.

When you talk to a banker up to four units can qualify for residential financing. 5 or more units must be considered commercial. Note: you can get commercial financing for 1-4 unit properties.

When you talk to your local planning and zoning department, 2 or more units are considered multi-family.

Since this discussion was about zoning, not financing it is more correct to refer to a duplex as multi-family.

In my area (the area of the original poster) a conforming duplex would be zoned as multi-family with duplex as permitted use, and could be financed as residential real estate.

Hopefully that clears it up.

It's sort of like a tomato. It's a veggie according to a produce guy and a fruit according to a botanist.

Excuse me, my statement is true, it's no veggie.

Since you're both in the same city, I can agree with where you are coming from, however, even your city defines housing under HUD regulations, they break it down further, R1,2,3 and 4 as all states and P&Z offices do, special use is not a zoning category but an exception permitted. I gave the HUD definition. As to financing, special use permits depend on the term allowed as to secondary financing, a special use permit for a property not properly zoned does not always qualify. If the property is in compliance with zoning and is 1-4 family it may be financed as an owner occupied or non-owner single family attached dwelling. Detached dwellings, like two homes or units on one lot don't fall under residential guidelines but can be done as commercial. A lender may classify detached multi units as residential in portfolio loans in some states, not all.

Thanks for your clarification. :)

[Michael Herr]

I just looked up definitions for Multifamily housing.

It appears @Bill Gulley is correct. The HUD definition of the word multi-family is 5 or more units.

I was confused because most people, including investors (and most sources I could find) define multi-family as two or more units.

It is sort of like the tomato analogy: when discussing zoning and laws, 2-4 units are not multi family, in pretty much any other context they are.

(Even though that definition is technically wrong as Bill pointed out)

Hopefully my wife never goes to BP, because here it goes: "I was wrong"

[Adam Johnson]

Important note to all - this conversation took a wrong turn somewhere, but brings up a very important issue. It doesn't matter who is "right" and who is "wrong" because, as is evident from the conversation, the answer to "what is considered multi-family?" depends on who you ask.

Going back to the point and restating a previous comment - YOU NEED TO CALL THE LOCAL CODE ENFORCEMENT/BUILDING OFFICE!!!

You can argue with them about who defines what and how they define it, but at the end of the day, they are the ones who have the ultimate control. This can be a very expensive mistake if you don't make the phone call to check.

I am not going to choose sides or define multi-family because the original post didn't ask that and also because the answer will vary from one town to the next.

I encourage any current or future readers of this stream to look at the original post then follow the advice I have given and will repeat one more time - if you don't know 100% for sure if your intended use is allowed whether by change in use or grandfather status, then call the LOCAL code enforcement office, explain to them your specific situation as well as your intended use, and let THEM advise you.

Disclaimer - this is not to be considered legal advice, but I am beating my head against the wall explaining it because it is an elementary lesson in real estate.

Best of luck to all.

[Matt Devincenzo]

Originally posted by @Michael Herr:

I just looked up definitions for Multifamily housing.

It appears @Bill Gulley is correct. The HUD definition of the word multi-family is 5 or more units.

.......

(Even though that definition is technically wrong as Bill pointed out)

Hopefully my wife never goes to BP, because here it goes: "I was wrong"

I'd give you two votes if I could! For two things one taking time to look up what Bill said, and for being able to openly post that you were...misinformed :)

[Ron Rose]

I appreciate all the response on this.

For those of you who not in the Peoria area, I thank you, but I'm sure zoning regulation changes from municipality to another.

As for banks being of concern, possibly... they are not. If this sale happens, it will probably be a cash deal, at least that's what it's sounding like to me.

The potential buyers concern is his ability to rent both upper and lower flats. He wants to meter both flats, since at the moment there is only one for the whole house. This house was built in in the 1920's and probably converted sometime in the '40's (though I have no record of the conversion.) What I do have is a title that shows only single family unit, and a county assessment that shows single-family.

I don't have any rent receipts at all (which I find pretty surprising, considering my Dad was almost obsessive in his record keeping - us kids have recently just "ransacked" his office and found no records of rent). Over the years, though, except for a couple of short stays, both flats were rented to family members, at least lived in by them. I'm currently staying in the upper.

I hope I haven't fogged the main issue here... I have pretty good communication with the potential buyer, besides being a landlord in the immediate area, he has been a family acquaintance for years. I've run out of options from my side on how to "get around" this zoning issue, the buyer may have some options using some "personal" connections. We're going to work on that this coming week.

[Denise Crudup]

I live in Chicago, Illinois and a single family property is listed on the title. But it is a duplex first and second unit would I be still able to sell the property?

[John Warren]

@Denise Crudup you would want to get a zoning certificate. That would show you what the real zoning is. 

[Jonathan Klemm]

Hey @Denise Crudup - JW is right you just need to put in for a zoning certificate here in Chicago.

Here is a link to the PDF: https://www.chicago.gov/content/dam/city/depts/zlup/general/...

Maybe also worth taking a look at the Chicago zoning map just to double check your current zoning:  https://gisapps.chicago.gov/ZoningMapWeb/?liab=1&config=...

Is the property in Perioa, but you live in Chicago?  If so you can ignore my links...