Did a lender or title company just ask you for a zoning certificate on your Chicago 2‑flat, and you are not sure what that means? You are not alone. Many closings slow down because the legal unit count is unclear or the wrong document is requested. In this guide, you will learn when a zoning certificate is needed, how the City of Chicago process works, what pitfalls derail deals, and how to verify your unit count early so your sale stays on track. Let’s dive in.
What a zoning certificate is
A Certificate of Zoning Compliance, often called a zoning verification letter, is written confirmation that your property’s use and number of dwelling units align with Chicago zoning. Different lenders and title companies use different names, so always confirm exactly which document your closing requires.
A Certificate of Occupancy (CO) is a separate Department of Buildings document that establishes legal use and often lists the number of units. If an up-to-date CO exists and matches the current layout, lenders and title companies often accept it as proof. If there is no clear CO on file, the buyer, lender, or title company will usually ask for a City-issued zoning verification or similar letter.
When Chicago buyers and lenders ask for it
You will most commonly be asked to produce a zoning compliance document in these situations:
- Real estate transfers with financing. Lenders, title companies, and buyers want proof that the property’s use and unit count are legal under current records.
- New construction or changes in use or unit count. Any change requires permits and City review. A CO or zoning verification becomes part of the record.
- Insurance underwriting. Insurers sometimes request documentation of legal unit count to confirm risk and habitability.
- Contract requirements. Some contracts or lenders require zoning verification before closing, and missing paperwork can trigger delays or renegotiation.
- Permitting or City enforcement. If you plan renovations, zoning compliance review is part of the permit process.
Bottom line: lenders and title companies want a clear, documented statement of legal use and unit count before closing. If a current CO exists and matches the property, that often satisfies them. Otherwise, expect a zoning verification request.
How Chicago’s process works
The exact steps and document names vary case by case. Always confirm requirements with the City of Chicago Department of Buildings and your lender or title company.
Get prepared
Start by gathering what you already have. Pull together:
- Deed, recent tax bill, and survey or plat
- Current Certificate of Occupancy, if any
- Prior permits and approved plans
- Floor plans that show unit separations, kitchens, and bathrooms
- Lease agreements if the building is rented
- Utility bills and photos of unit entrances, kitchens, and bathrooms
- Public records: assessor/property card and your zoning district from the official zoning map
Submit the application
Apply for a City zoning verification or for a CO if one is needed. Attach required documents such as proof of ownership, a site plan or survey, floor plans showing kitchens and bathrooms, and any prior permits or an existing CO. Pay the City’s application fee as listed on the current fee schedule.
Administrative review
A zoning reviewer checks your zoning district, permitted use, and whether the recorded legal use and unit count match City records and any CO or permits on file. If everything aligns, the City may issue a written zoning verification or confirm that the existing CO stands.
Field inspection when needed
If records are unclear or a site check is required, the City may inspect to confirm unit separations, means of egress, and the presence of kitchens and bathrooms. Inspections can reveal unpermitted units or life safety issues.
Outcome
- Issued or accepted. The City issues a zoning verification or confirms the CO and unit count.
- Issued with conditions. The City may note corrections or require permits to legalize changes.
- Denied or nonconforming. If units were added without permits or do not comply, the City can require permits, corrections, or removal. Some cases require variances or a path to legalization that can take time.
Timelines, fees, and who does what
- Turnaround times vary. Records-only verifications can be resolved in days to a few weeks. Inspections, additional documentation, permit history research, or legalization can take weeks to several months.
- Fees apply. Municipal application and inspection fees change periodically. If you need to legalize a unit, permit fees will apply. Private expeditors or zoning attorneys charge their own fees if you choose to engage them.
- Who typically handles it. Sellers often secure the zoning verification or CO before listing or in response to buyer or lender requests. Buyers may require the seller to provide it as a condition of closing. Title companies and lenders usually request the verification and may accept a CO or City zoning letter as proof.
The unit count pitfalls to avoid
For 1 to 5 unit properties in Chicago, the same issues come up again and again. Get ahead of these to protect your timeline and negotiating power.
- Illegal conversions and accessory units. Unpermitted basement apartments, attic conversions, garage apartments, or single-room rentals without proper permits, separate exits, or egress. A kitchen added without permits can create an unpermitted unit. Lenders may refuse to underwrite based on the legal unit count.
- Mismatch among CO, tax records, and actual layout. Older buildings often had renovations without a new CO. The tax assessor, CO, and MLS can each show different counts. Expect inspection or an updated CO in these cases.
- Nonconforming or grandfathered uses. A use allowed under prior rules can remain legal if documented. Lack of paperwork can slow verification while the City researches records.
- Missing or outdated Certificate of Occupancy. Many older 1 to 3 unit buildings never received a current CO. Without one, lenders typically ask for a City zoning verification.
- Definition of a “unit.” Inspectors and lenders look at the presence of a full kitchen, bathroom, sleeping area, and separate exterior access. In-law suites and studio spaces can be interpreted differently, which can trigger inspection.
- Shared or combined units after remodeling. If units were merged or subdivided without permits, City records may show older configurations that no longer match the interior.
- Parking or district limits. Some zoning districts limit the number of units or require parking. Changing unit count without meeting zoning can cause compliance issues.
Seller checklist to prevent surprises
Do this early, ideally before you hit the market:
- Pull your existing CO and permits. If you cannot find them, start the City verification process now.
- Confirm your unit count matches City records and floor plans. Photograph unit entrances, kitchens, and baths.
- Build a zoning file. Include deed, survey, CO, permits, floor plans, before and after photos, and leases.
- If you have an illegal unit and want to keep it, discuss with the City and your title or lender contacts whether legalization is required before closing or whether disclosure and an escrow or repair holdback might work.
- Consider a zoning expeditor or attorney if your permit history is unclear or if legalization will be needed.
- Leave room in your sale timeline for City review, possible inspection, and any permits.
Buyer due diligence checklist
During your inspection and financing period, confirm what you are buying and what your lender will accept:
- Ask for the CO and a City zoning verification in your contract. A simple clause can help. Example concept: “Seller shall provide an acceptable City of Chicago Certificate of Occupancy or City-issued Zoning Verification confirming lawful use and the stated number of dwelling units by [date].”
- Review seller documents early. Compare CO, permits, tax records, and floor plans to actual conditions you see during showings.
- Verify kitchens and exterior entrances. Count kitchens, check for separate egress, and note any basement or attic units.
- Ask your lender what is acceptable. Will they allow an unpermitted unit, require legalization, or decline the loan?
- Plan for insurance and occupancy. Clarify whether your insurer requires documentation of legal unit count.
Red flags that need immediate action
- No CO on file and visible evidence of multiple units
- Multiple kitchens or exterior doors that do not match City records
- Basement finishing, attic buildouts, or added kitchens without permits
- Discrepancies between deed, CO, tax records, and the MLS listing
- Lender or title requests that surface late in the deal
Typical outcomes and options
- Clean file. Current CO on file, City verifies unit count, and closing proceeds.
- Minor paperwork gaps. Seller produces missing permits or affidavits, City issues the verification, and the deal stays on schedule.
- Illegal units found. Options include seller legalization with permits, buyer price reduction or escrow with acceptance of risk, lender refusal and a delayed or canceled closing, or removal of noncompliant units to match legal approval.
- Variance path. Some zoning conflicts can be addressed with a variance, but timelines can stretch to months and approval is not guaranteed.
Plan your sale timeline
If you are listing a 1 to 5 unit property in Chicago, build a simple plan:
- Verify records in week 1. Pull CO, permits, and your zoning district. If missing or unclear, start a City verification request.
- Address gaps in week 2. Organize floor plans, photos, and any prior permits. If you see red flags, consult an experienced professional.
- Keep your lender and title aligned. Confirm what they will accept and set a document deadline in your contract to reduce last-minute surprises.
- Prepare alternatives. If an issue surfaces, be ready to negotiate escrows, credits, or timelines while you work through City steps.
Work with a local pro
A smooth Chicago sale comes down to preparation. Verify your legal unit count early, get the right document on file, and set clear contract terms. If you want a pragmatic plan for selling fast and for the best net, let’s talk about staging, pricing, and the right pre-list paperwork. Reach out to Unknown Company to get started and Get Your Free Home Valuation.
FAQs
What is the difference between a Chicago zoning certificate and a CO?
- A zoning certificate or zoning verification letter confirms lawful use and unit count under zoning, while a Certificate of Occupancy establishes legal use and often lists unit count. A current CO often satisfies lenders; without one, they typically ask for a zoning verification.
When is a zoning verification required in a Chicago home sale?
- It is commonly required when there is financing. Lenders, title companies, and buyers ask for documented legal use and unit count, especially for 1 to 5 unit properties.
How long does a Chicago zoning verification take?
- Records-only cases can be resolved in days to a few weeks. If inspection, permit research, or legalization is needed, expect several weeks to a few months.
Who usually pays for the zoning letter in Chicago?
- It depends on the contract. Sellers often obtain it pre-listing or as a buyer condition. Specify who pays, what documents are acceptable, and the deadline in your contract.
What happens if an illegal basement or attic unit is discovered?
- Options include legalizing the unit with permits, negotiating price or escrow while accepting risk, lender refusal and delay, or removal of the unit to match legal approval. Timelines and costs vary.
Can nonconforming or grandfathered uses be accepted?
- Yes, if the use was legal under prior rules and is documented. The City may require research or documentation to confirm status.
Do I need a zoning letter to get insurance in Chicago?
- Some insurers ask for legal unit count documentation for underwriting. Check with your insurer early so it does not delay closing.
Can I close without a Certificate of Occupancy in Chicago?
- Many older 1 to 3 unit buildings lack a current CO. In those cases, lenders and title companies typically request a City zoning verification confirming lawful use and unit count.
