Municipal inspection programs continue to be proposed in communities throughout Illinois. Cities are granted inspection powers under Illinois state statute, however, there are limitations to these powers. Local Government Affairs Directors (GADs) work to ensure that the provisions in these ordinances are attentive to property rights and to the time-sensitive nature of real estate transactions. The most commonly-seen provisions in these programs are:
- Property Registration or Landlord Licensure Mechanisms
- Inspection Checklists
- Timely Delivery of Inspection Report
- Temporary Occupancy Permits
Municipalities cannot use inspection ordinances as a way to generate income for the community. The fees charged for a municipal inspection should cover the administrative costs with running the program, but should not create a profit for the city.
Property Registration or Landlord Licensure Mechanisms
Property registration or landlord licensure mechanisms are typically used when rental property is required to be inspected. Registrations may require the name of the tenant or landlord in addition to a contact number for each. Cities should be encouraged not to seek too much personal information from a tenant or landlord such as birthdates, license plate or social security numbers.
Inspections can only include those items in a home that would prove to be hazardous to the health and safety of the occupant. Checklists assist the property owner in understanding what is expected of them and clearly states improvements the property may need.
Timely Delivery of Inspection Reports
Inspection reports should be submitted to the property owner within three to five working days of the inspection. A delay in receiving the inspection report could result in the loss of a tenant, or could possibly hold up the sale of a property.
Temporary Occupancy Permits
Temporary occupancy permits can be granted to an owner in the event the property does not pass inspection, but isn’t necessarily an immediate threat to the health or safety of the occupant. Temporary occupancy permits allow an occupant to inhabit the property while providing an extension of time to remedy problems.
“Zero Dollar Transfer Tax” as an Enforcement Mechanism
Some municipalities will use their home rule power to enact what has become known as a “zero dollar transfer tax.” This type of tax is not meant to generate revenue but is used as a way to ensure that the point-of-sale inspection requirements are completed–by prohibiting the transfer of the property. (If the transfer tax stamp is not issued, then the property’s transfer cannot be recorded.) IAR strongly believes that this enforcement mechanism (whether with a zero dollar transfer tax or any kind of transfer tax) is an unconstitutional violation of the property owners’ rights.
These are just a few examples of negotiations that can be made during the creation of an inspection program. There are other issues that may arise, but these items are simple to attain and help foster a streamlined inspection program that is simple for REALTORS®, homeowners and municipal governments.