Expert: liznarr - 2/10/2010

Question
I live in Illinois, and my husband & I bought our home nearly 7 years ago. We have recently decided to have an addition put on our home. When questioning the zoning office, we were told that our home is on commercial land. The Zoning department is unable to locate any records to indicate that the land was zoned anything except commercial.

Unfortunately, because this information was not disclosed to us prior to closing, we are now unable to put an addition on our home due to required easements, building laws, etc (more space required between the property line & any wall/structure).  I have checked through all of my copies of closing paperwork and have been unable to find anything noting the zoning of the land.  To re-zone our land residential, we would have to pay upwards of $300, and have no guarantee of the rezone.

My question is: Was this information supposed to be disclosed to us?  If so, by whom (title company, bank, etc)?

I appreciate any insight you can provide!  Thank you!

Answer
Christina,

Yes, absolutely, if you purchased a home for residential purposes located on commercial property, this should have been disclosed to you by, I would think, everyone involved in the transaction:  Appraiser, closing agent, real estate agent(s), and the owner.

If you have a copy of your title policy, call your title company and/or closing agent and ask if this situation is covered by your title policy.  If it is, they might pay for the rezoning process and/or any damages you incur.  

A title company relies on the title search ordered by the closing agent’s office, but someone connected with your closing definitely dropped the ball.  Banks/lenders also rely on closing attorneys and/or closing agents to protect their interest by giving all disclosures of public record, and if your property has always been zoned commercial, this is definitely “of public record.”  

If you purchased directly from an owner, and Illinois requires a Seller property disclosure form be completed (even without an agent involved), check to see if you received such a form.

I do not have time to research this now for you, but here is the web address of the Illinois Real Estate Commission:  http://www.idfpr.com/dpr/RE/realmain.asp   If you cannot find information on the site for a mandatory Seller disclosure form, give them a call and you will be able to get this information.

It sounds like you probably need some good legal advice, but you can do some homework first, in addition to calling your title company.

Locate all information and paperwork on your home purchase that you can.  Look for any Seller-required property disclosures with information that would relate to zoning.  If you cannot find your paperwork, contact any real estate agent involved – they may still have copies.  A Broker-in-Charge is required to keep copies of pertinent paperwork on all transactions in my area for FIVE years; I don’t know what the time period in Illinois might be.

If you purchased through a real estate agent, MLS offices probably still have copies of the listing paperwork on your home and possibly any disclosures that might have been uploaded to their database.  Get copies of whatever you can and look for anything related to zoning.  Contact the Broker-in-Charge of any agent(s) involved, and ask for his/her involvement.  They could also have some liability in your situation.

If you had an appraisal done, I believe the appraiser would have been required to note any commercial zoning on a residential property.

Before doing anything at all, however, do check with a good attorney in your area.  You may have an action for fraud (intentional misrepresentation).  The fact that this was NOT disclosed was an omission of a disclosure, and I feel still could be fraud.  You need legal advice on this, though.  Since I am not separately licensed as an attorney, I cannot advise you.  Since your purchase was seven years ago, if you are denied a rezoning permit and you file for fraud, most states do not have any Statue of Limitations for fraud (the time period in which you can sue).

I don’t know your financial situation, but if your title company cannot step in and help you and you can afford to go forward now and up-front the $300.00 amount, plus or minus, to file a request for rezoning, I would get this process started.  Until you have been refused, you don’t know exactly what all your “damages” would be.

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth