Before you close on a Chicago condo purchase, read that 22.1 Disclosure twice!
You’re under contract and you’re 30 days away from moving into that beautiful, Instagram- worthy Lincoln Park condo with the brand new hardwood floors and the shiny counter-tops. You’re excited and you’ve got furniture shopping to do. So why should you give a crap about this document called the 22.1 which you will receive by email from your attorney at some point before the closing? Well, there’s a very good reason. Because once you close on your condo, not only do you have to worry about maintaining your unit, but you’re also responsible to pay your share of the upkeep on the building (the common areas). You need to know how likely it is that you’re going to have to shell out for unexpected costs. Because you aren’t prepared to pay them, are you? The last thing you need is a money pit. If you don’t like what the 22.1 says, you can get out of the deal and get your earnest money back. So the 22.1 is a document, required by Illinois law, which is going to tell you some very important things. Here are a few of them:
#1 – Has the Association passed a special assessment? Better yet, is the Association even thinking about a special assessment? Courts have said that they have to tell you either way. If the answer is yes, you’re going to want to demand that the seller pay for it.
#2 – How much are the reserves? Make sure you’re comfortable with the amount in the piggy bank. If it seems too low, it probably is.
#3- Are there any lawsuits against the association? Any litigation is cause for concern. Make sure any liability is covered by insurance. If not, you could end up paying.
So put that furniture shopping on hold for a second. When you get that 22.1, read it carefully. Get your lawyer to go over it with you. After all, this is why you have representation! At O’Keefe, Rivera & Berk, we read these documents just about every day. We’ll happily give you our opinion.