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Lenders Must Now Secure and Maintain Vacant Buildings Under New Chicago Ordinance

On July 28, 2011, the Chicago City Council amended an existing ordinance to compel lenders, loan servicers and their agents to secure and maintain vacant buildings in Chicago. Formerly, this requirement applied only to property owners. The recent amendment, which is expected to go into effect September 18, redefines “owner” to include the following:

  • Lenders holding a mortgage against the vacant building
  • Loan servicers servicing loans for those lenders
  • Other agents working for those lenders or servicers

(Note: For simplicity, the term “lenders” collectively refers to lenders, loan servicers and their agents.)

This amendment imposes extensive-and expensive-new legal duties on lenders, including strict financial penalties for those that fail to comply. Among other things, lenders must:

  • Register each vacant building with the City of Chicago;
  • Pay a registration fee for each property;
  • Secure and maintain each property;
  • Insure each property; and
  • Post a surety bond with the City of Chicago

Read more at the National Law Review.