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from Local Attorney, Michael H. Wasserman

Thursday, December 27, 2012

CHANGES COMING AT THE CITY OF CHICAGO WATER DEPARTMENT?

Changes afoot at the City of Chicago, Department of Water Management may be having (adverse) impacts on real estate closings.  Over the course of the last several weeks, I have seen an uptick in closings being delayed as some Sellers are finding it harder to some required paperwork from the City. One source described a six week backlog for some certification requests. At least two contracts have been outright cancelled because of the delays. Buyers simply could not, or would not wait any longer.

In order to close on home purchase or sale involving Chicago real estate, the Sellers must present a "Full Payment Certification" to show that the water bill is current. These certificates are typically obtained directly from the water department's basement lair at the DePaul Center, 333 South State Street. If you have never been there, the offices are uninviting, inhospitable, and doing business there has long been (for my, anyway) unpleasant. Slow and unfriendly to say the least. Things as 333 South State seem to be going even slower than usual. I think we finally know why.

Last month, the City sent pink slips to 34 workers in the water department billing center. They lay-offs all go into effect on January 4. At the same time, the City has out-sourced the billing center work to NTT Data, a Japanese corporation. The City expects to save $100,000 annually with this privatization move.

Ben Joravsky at the Chicago Reader has written about this story here and here. Otherwise, I have not seen any other media coverage of the move. Joravsky focuses his inquiry on the loss of full time jobs for City residents, being replaced by employees who will (apparently) receive lower part time wages, taking jobs with no benefits. You can & probably should read his stories to learn more.

What does this mean for buyers and sellers going forward? It will be hard to say until we see how NTT and the City handle the transition to privatized water department billing. Hopefully, things will go smoothly and NTT will hire enough workers to clear up the backlog of pending certification requests.


Certain select title companies and clerking services have direct on-line access to the water department and can generate the paperwork directly, without requiring a trip to DePaul Center. Smart sellers should insist that their attorneys work with such title companies & clerking services. Best that they also make application earlier, rather than later in the process. Buyers should be a bit more pro-active too, to try to encourage their sellers' attorneys to do so to, and to try to sport potential delays early in the closing process.