Real Estate Karma

Nothing irritates me more than a lack of basic ethics among certain Chicago real estate professionals. It’s an endemic problem in the industry, and one that motivated me to enter the industry. However, maybe there’s such a thing as real estate Karma, as my recent experience with a certain real estate developer has led me to believe.

The names in this story are being withheld to protect the guilty and to protect me from a slander lawsuit. Of course, if it’s true then it’s not slander but then I would have to pay my lawyer to prove it and I like my lawyer but I would rather not pay him for defending me against a slander claim.

The story begins with my client who was looking for a condo. We finally found what appeared to be a nice garden unit. However, on a subsequent visit to the property we encountered one of the other residents of the building who not so subtly let it be known that he and his wife were having issues with the developer. They had been the first people to buy in the building and they had a laundry list of problems that they felt the developer needed to address. However, according to them, the developer was either not responsive or didn’t fix things properly. Since they mentioned that many of these issues had been uncovered during an inspection of the property I asked them if I could see a copy of their inspection report. Karma #1: the developer had unresolved issues with a buyer and now it was coming back to haunt them. Oh…did I mention that the property had been on the market since August of 2007, starting at $219,000 and was now listed at $169,000?

I then went through this issue list with the developer who either claimed that the issues had subsequently been fixed or that they really weren’t problems or that they would be fixed. My client and I discussed our strategy and decided to make an offer contingent upon some important subset of these issues being fixed. Once we did that it became much clearer exactly where the developer was on each of these issues and what they were willing to do: not much. In addition, some problems that were supposed to have been fixed “next week” had still not been fixed. So our mistrust of this developer was growing rapidly. I’ll skip past a few rounds of negotiations but let’s just say that we dropped our upper limit in order to compensate for the problems and our mistrust of the developer.

Finally we agreed on terms and scheduled the inspection but between the last time we had seen the unit and the inspection it had rained – rather heavily. I think you can see where this is going – especially since this was a garden unit. When the inspector arrived he didn’t even set down his bag before pointing out that not only did the unit have water damage but that there had been an attempt to hide it. The lower two feet of many of the walls had been repainted. The inspector also found evidence of mold and, as a side note, there were serious deficiencies in the electrical wiring. That’s 3 material defects that are required disclosures by law.

We ran into that other resident of the building again and he confirmed that he had seen workmen in the unit during the past couple of weeks replacing carpeting and drywall – repairs that are purely cosmetic and won’t stop the water from coming in. I think that pretty much killed the deal right there. Within a week the listing price dropped to $159,000 and a week later it dropped to $155,000. Did I mention that when I went by the developer’s office to present the offer there were several large Mercedes in the parking lot?

Fast forward to Monday of this week. It rains in biblical proportions. Tuesday morning the listing on this unit is canceled. Coincidence? I think not. Let’s just say that in response to an inquiry my sources have now confirmed that there was extensive damage to the unit and once again the developer is making cosmetic repairs. Karma #2: they didn’t fix it correctly and now they are having to fix it again.

This is a rather interesting situation. The developer is required to disclose these problems to potential buyers. Think they will? If they don’t they can be sued by the buyer. If they do who is going to buy the place? Or will the developer just throw in a lifetime supply of drywall and carpeting? If the developer doesn’t fix the water leakage do they expect the condo association to fix it? There is a paper trail a mile long documenting this problem and there are numerous witnesses to the aftermath. Think the association will allow themselves to get stuck with this problem?

What goes around comes around.

0 thoughts on “Real Estate Karma

  1. BUYER BEWARE!!!!!!!!!!!! My husband and I own unit #3 At 6832 S. Clyde Ave. Chicago IL. 60649. We were also the first ones to move into our unit and have experienced very similar problems. The audacity of this developer!!!!! He should be called out for what he truly is a “SLUMLOARD”!

    We had our first inspection before we bought our condo and we had many issues to be taken care and we were told by the developer that they were. After a few months in our new place we started to experience many problems such as leaking roof, electrical wiring issues,ventless fireplace could create pyrophoric conditions- a fire hazard not only in our unit but the other three units also., Whirlpool tub throwing the breaker, leaking windows, and so on……………..
    At this point we knew it was time to have another inspection.

    We had the same inspector come to 6832 S Clyde Ave. Unit #3 Chicago Il. 60649. He found that many of the issues in our first report had not been taken care of. We still had many code violations and still do. We have tried numerous times to resolve the issues with the developer but to no avail. So, my husband and I started to document all the problems pertaining to our unit (We are still under our first year contract.) as well as the empty garden unit still for sale. We have watched the developers crew come in and remove wet drywall from the garden unit and try to cover up all the damage from rain so he can unload the last unit. He pulled the wool over our eyes but we will not let it happen again especially to a potential buyer.

    After the storm on 8-04-08 the garden unit flooded once again. The building superintendent informed us that there was as much as 6″-8″ inches of water in the garden unit. The next day the crew was here once again trying to cover up the damage. This time we took over 70 photos of the crew hauling out the ripped off baseboard, soaked carpeting, and drenched drywall. The garden unit door was left open so we even got a great photo of the inside. Two days later
    the crew came back to finish the cover up. Once again I took photos of the crew hauling in fresh drywall and starting this process over. Like you said “How many times are they going to do this”. If my husband and I can help it not many moore.

    We have made two packets containing all the pictures, the two identical but seperate inspection reports of our unit, and the corespondence with our attorney, and lack of correspondece from the so called developer. One packet is about to be turned over to our attorney so we can start legal procedures. The other packet will be presented to any buyer that is interested in the garden unit.

    What goes around comes around!!!!! We as owners here at 6832 S. Clyde Ave. Unit #3 will not let someone else be taken advantage of. The motto for this developer (Mansion View Development) must be “Take the money and run” because that is all we have seen!!!!!!!!!!!

    If there is a way this response can be posted for the public please do. It is not slander when we own the property and have the proof to back up what we are saying. We would love to hear from the developers attorney. Thank you so much for this blog. We hope this saves someone from going through all the hassles we have. It should not be this way.
    Thank You, Shelly and Michael

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