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A federal appellate court has considered the constitutionality of a city’s ordinance requiring inspections prior to closing.
Calumet City, Illinois (“City”) enacted an ordinance which: first, required a “point of sale” inspection without the owner’s consent and prevented the transfer of the property until a certificate of compliance was issued; and second, prevented sales of multi-family housing unless the owners performed a “deconversion” to reduce the number of dwelling units to the amount that was permitted under current law. In a previously summarized decision, the Mainstreet Association of REALTORS® (“Association”) had challenged the ordinance, but the court had ruled the association lacked standing to file such a challenge- click here to read a summary.
After the Association’s challenge for lack of standing was dismissed, two property owners filed lawsuits challenging the ordinance. Both owners argued that the ordinance failed to provide hearings for those who wanted to contest the results of an inspection and contained vague standards (requiring property to be in “good repair”) for compliance. The trial courts had rejected both challenges, finding the inspection ordinance provided some procedural safeguards and that the ordinance referenced a publication containing various descriptions of what constituted a suitable property condition.
The United States Court of Appeals for the Seventh Circuit rejected the owners’ constitutional challenges to the ordinance. The owners argued that the ordinance was unconstitutional on its face because the ordinance did not provide adequate due process before interfering with the owners’ property ownership.
First, the court rejected the owners’ facial challenge to the ordinance. The court found that the constitutionality of similar ordinances had been upheld by other courts, and the owners had failed to identify specifically what procedural protections the City needed to adopt in order to protect the rights of the owners. The court determined that the ordinance provided adequate safeguards, as there was a hearing process allowing owners to challenge orders. Thus, the court dismissed the facial challenge.
Second, the court considered the owners’ argument that the ordinance failed to provide a “pre-deprivation” hearing before it orders repairs or other actions before a sale can occur. The owners argued that such a hearing was necessary because the ordinance did not contain enough detail as to what sort of repairs inspectors could mandate. The court summarily dismissed this argument, ruling that the constitution did not require such detailed laws. Therefore, the court affirmed the dismissals of the owners’ challenges to the ordinance.
Mann v. Calumet City, 588 F.3d 949 (7th Cir. 2009)
Editor’s Note: NAR contributed financial support to the challenges to the City’s ordinance, per the recommendation of NAR's Legal Action Committee.