Businessman buys 17 condos in Lakeview building, driving down values, some neighbors say
CHICAGO (WLS) -- A businessman is buying up condos in an East Lakeview condo building, angering long-time owners who say they're trapped in a situation where they may have to sell their homes at a lower value because too many of the units are owned by one person, which can affect sales.
"We were shocked, like 'Wow, how could we let this get so far?'" said Amy Golubski, who has owned her condo for 16 years.
"It's awful. It's horrifying," added Patty O'Shea, who bought her condo 35 years ago.
"I saw this condo building as leading to stability," said Richard Everett, one of the building's longest-tenured residents, owning his home for 40 years. "If we stay stuck, people aren't going to be able to use their investment for the purposes they desire."
All of these concerns are over a building rule change in 2017. The association's board of directors got rid of a rule limiting the ownership of units by a single person or business to two units.
Businessman Michael Lazarus starting buying up units after the rule was axed. He now owns 17 units, or 28 percent of the building.
Lauren Peddinghaus, a condo association consultant who owns Haus Financial Services, explains how the situation affects other units' values.
"They see it as more risk, more risky because a single entity and that entity goes under, the whole building is compromised," she said.
Many condos restrict ownership to less than 10 percent of a condo property because it creates that financial risk and banks will often deny mortgages.
"Currently, if any single entity owns more than 10 percent, then it's not going to be a warrantable loan," Peddinghaus said.
Late last year, the new association board at the property reinstated the rule limiting ownership of more than two units in the building. Lazarus filed a lawsuit saying the rule was illegally restored because it needed 75 percent of unit owner votes, which is impossible without his support. The lawsuit calls the rule "unenforceable," "unreasonable" and "beyond the board's authority." It also says he has "right to buy additional units" and that right is "unlawfully being interfered with."
In addition, Lazarus claims the rule causes him "irreparable harm" because the closing on the sale of four other units was blocked.
Other condo owners in the building saw it differently.
"It's not good for any of the people who live here now," O'Shea said.
"I'm extremely aggravated about this situation," Golubski added.
Michael Lazarus did not respond to the I-Team's requests for an interview.
This condo controversy serves as a reminder for all condo owners to attend all board meetings and be part of the process in their buildings. Here are some tips to prevent similar situations in your building:
-If condo owners want to limit the percent of ownership, the rule should be put into the building's amendments. It's harder for a building or board to eliminate the rule if it's in the amendments because it takes 75 percent of the condo owners to vote for a change.
-Get involved by participating in the decision-making of your building.
-Attend board meetings and read the minutes if you cannot make a meeting.
-Read the building declaration and bylaws. Read all the amendments that have been filed and understand what restrictions are and are not in place.
