REALTORS® back a zoning fix in Lake County affecting lending, property sales

August 14, 2012

By Howard Handler

The free transfer of property is a top concern for Illinois REALTORS®, and a current example of how the Illinois Association of REALTORS® local Government Affairs Director (GAD) program serves as a watchdog on this issue is taking shape in Lake County’s Winthrop Harbor community. 

Selling property has become a challenge for some Winthrop Harbor homeowners whose homes have been rezoned from residential to commercial. Their legal but nonconforming status has become a major hindrance, as lenders have recently been denying prospective buyers financing for these particular homes because of aspects of the Village Code which prohibit nonconforming structures from being rebuilt in their original form if 50 percent or more of the structure is destroyed, for example by fire or tornado. 

It is not uncommon for municipalities or counties to rezone existing property even when existing structures do not conform to the new zoning. In those cases, the non-conforming structures are allowed to continue in their present use, and often local governments adopt triggers for when the property must convert to the new use. The fairness, sense, and legality of these triggers vary among Illinois’ local governments, but legal counsel for the Illinois Association of REALTORS® provide us the following guidance: a local government “cannot deprive a property owner of a nonconforming use or condition unless it has enacted a reasonable amortization ordinance that furthers the public welfare and that, when applied to a particular property, does not result in losses to the property owner that are disproportionate to the public benefit.” In other words, a compelled change in use can only be done over a reasonable timeline with the interests of the property owner and the community in mind.

Winthrop Harbor officials have been quick to take corrective action to ensure these select groups of property owners are able to freely transfer their property. The Village Board has directed the Village Attorney to craft an ordinance to alleviate the concerns of lenders. While the ordinance has not yet been written, the general direction seems that the Village will allow these structures to be rebuilt as residential even if more than 50 percent of the structure is destroyed.

REALTORS® and the IAR GAD program will continue to monitor and support this change to the Village Code to help ensure REALTORS® and their clients are able to freely transfer property.

Howard Handler is the Illinois Association of REALTORS® local Government Affairs Director (GAD) representing the North Shore-Barrington Association of REALTORS® and the Mainstreet Organization of REALTORS® (Lake County).