PROPERTY TAX SALES AND DEEDS
Due Dates and Delinquency
- Property taxes for a particular year are generally due in two installments in the
subsequent year.
o Unless the county is using accelerated billing under Section1 21-30, the first
installment is typically due June 1 of the following year and the second
installment is due September 1 (Sections 21-15 & 21-30).
o For example, property taxes for 2009 would be due in two installments on June 1,
2010, and September 1, 2010.
- If a homeowner is late on either installment, interest on the past due taxes grows at 1.5%
per month (Sections 21-15)
o Section 21-27 provides exceptions to the additional interest penalty in limited
circumstances
o Under Section 21-40, counties other than Cook can extend the delinquency date to
60 days after each installment is due
- Once taxes are delinquent, a superior-priority lien arises by statute:
o Section 21-75: “The taxes upon property, together with all penalties, interests and
costs that may accrue thereon, shall be a prior and first lien on the property,
superior to all other liens and encumbrances, from and including the first day of
January in the year in which the taxes are levied until the taxes are paid or until
the property is sold under this Code.”
Application for Judgment and Sale
- Within 90 days after the second installment is due, the county collector will apply for
judgment and order of sale for taxes on delinquent properties. (Section 21-150)
- A hearing is scheduled for 30 days after the application for judgment and if rendered, the
property will proceed to sale within five days after the date specific in the Publication
Notice. (Section 21-150).
- Publication Notice (Sections 21-110 & 21-115): At least 10 days before the collector
applies for judgment, the collector will publish the following in a print advertisement:
o A list of the delinquent properties, including the names of owners and the total
amount due;
o The date on which the collector will apply for judgment against the properties for
the taxes, costs, and for an order to sell the taxes on the delinquent properties; and
o The date on which the annual tax sale will take place (described in more detail
below).
- Mailed Notice (Section 21-135): At least 15 days before the collector applies for
judgment, the collector will mail a copy of the application for judgment by registered or
certified mail to the person whom taxes were last assessed against.
- Objections (Section 21-175) - during the hearing for judgment and sale the court will
only entertain objections to sale if:
1
Unless otherwise noted, all Section references are to the Illinois Property Tax Code, 35 ILCS 200/1-1, et seq.
o The objection includes a writing specifying the particular grounds for the
objection; and
o Taxes are paid under protest under Section 23-5 and a tax objection complaint is
filed under Section 23-10.
Annual Tax Sale
- After judgment is entered, the collector holds a public auction for people to bid to buy the
delinquent tax debt. (21-205).
- Participating in the Auction
o Cook County: 10 days prior to bidding, interested participants must provide the
collector with a letter of credit or bond equal 1.5 times the amount of any tax due
on property the participant intends to bid on to the county collector (Section 21220)
o Other counties: Must register 10 days prior to bidding and pay entrance fee
(Section 21-220)
o Bids by taxing districts (Section 21-210):
 “Any city, incorporated town or village, corporate authorities,
commissioners, or persons interested in any special assessment or
installment thereof, may become purchaser at any sale, and may designate
and appoint some officer or person to attend and bid at the sale on its
behalf.”2
- Auctions
o Penalty bidding (Section 21-215):
 Participants at the annual tax sale bid penalty or interest rates on the
delinquent tax debt. Bids start at 18%. The lowest bid wins.
 The penalty % is additional interest that is added to the total amount due.
The penalty % doubles every six months and is not compounded. (Section
21-355)
 For example, if the taxes, plus interest, due on a particular property was
$3,000 and the penalty bid was 10%, the penalty amount would be $300 if
the property was redeemed within six months of the tax sale.
o Bids are now automated and run through networked computers or online3
 In Cook County bids are held online through realauction.com
 In many other counties, automated bids are run through network
computers running Real Time Auction Management software
(http://www.ramsauctions.com/) distributed by Joseph E. Meyer &
Associates.
o The winning bidder gets a “Certificate of Purchase” (Section 21-250)
2
Many Illinois counties have outsourced this function to Joseph E. Meyer & Associates in Edwardsville.
http://www.jem-a.com/collections.html
3
One benefit of automated bidding is it eliminates collusion among bidders to drive up the bids for particular
properties. On the other hand, automated bids increase the pool of participants, which has led to potentially
troubling results, such as the securitization of tax sale certificates. A more detailed discussion of this issue is
available at http://www.npr.org/2010/12/14/132030011/wall-street-finds-lucrative-market-in-tax-liens
-
o The county clerk is required to maintain public record of the name of the
purchaser and final bid (Section 21-230) and maintain a registry of the names,
addresses, and telephone numbers of owners of Certificates. (Section 21-251(a))..
Assignment
o Tax certificate holders can assign their interest, however, the assignee must
register the assignment with the county clerk (Section 21-251)4
Notice of purchase
o Within 4 months and 15 days after the tax sale, the tax certificate holder must
provide the county clerk with a notice of the purchase to be sent by certified mail
to person whom taxes were last assessed (Section 22-5). The notice contains
information about the redemption amount and expiration of the redemption
period.
Redemption Period and Amount
- Redemption Period: after the tax sale, the homeowner has two and a half years to redeem
the property (Section 21-350(b)). Different rules apply if the property is vacant non-farm
property. (Section 21-350(a)).
o Tax Certificate Holders may extend this period to 3 years. (Section 21-385).
- Redemption amount (Section 21-355): Sum of
o Certificate amount, which includes the tax, interest, and penalties paid by the
certificate holder along with the costs the county collector incurred as a result of
the sale
o Accrued penalty
 The winning penalty bid increases every 6 months.
 Example: If the homeowner redeems 11 months after the tax sale, and the
winning penalty bid was 6% interest, the accrued penalty equals 12% of
the certificate amount
o Taxes and accrued interest for subsequent years the tax certificate holder has
purchased
 Tax certificate holders can purchase taxes in subsequent years for the
same property once the taxes become delinquent without bidding at
auction. (Section 21-355(c)).
 Outside of Cook County, tax certificate holders must wait until the second
or final installment is delinquent. (Section 21-355(c)).
 Homeowners are charged a 12% penalty for each subsequent year
purchased. (Section 21-355(d)).
o Fees associated with the cost of filing and providing notice for a tax deed
proceeding (described below)
o Fees the tax certificate holder pays to purchase any subsequent year taxes at a tax
sale.
- Who can redeem, Section 21-345:
o “Any owner or person interested in that property, other than an undisclosed
beneficiary of an Illinois land trust, whether or not the interest in the property sold
is recorded or filed. Any redemption shall be presumed to have been made by or
4
As was the case with mortgage backed securities, where tax sale certificates are securitized, assignments may not
be properly reported under Section 21-251.
-
on behalf of the owners and persons interested in the property and shall inure to
the benefit of the persons having the legal or equitable title to the property
redeemed, subject to the right of the person making the redemption to be
reimbursed by the persons benefited.”
Redemption under protest (Section 21-380)
o Section 21-380 provides procedures for a homeowner to redeem but reserve their
right to protest the redemption at a tax deed proceeding
Tax Deed Proceedings
- Between 6 and 3 months before the expiration of the redemption period, the tax
certificate holder may file a petition in circuit court to obtain a tax deed against the
property in the event the homeowner fails to redeem (Section 22-30).
o A tax deed gives the tax certificate holder title to the homeowner’s property free
and clear of any liens.
- Required notices in order to obtain a tax deed
o Section 22-10: Between 6 and 3 months before expiration, the tax certificate
holder must send notice of the sale and the date of expiration of the period of
redemption to the owners, occupants, and parties interested in the property,
including any mortgagee of record.
o Owners who reside on the property must receive personal service (Section 22-15)
of the Section 22-10 notice
o Notice must be sent by certified mail to all parties entitled to notice (Section 2215).
o Notice must also be published 3 times between 6 and 3 months before expiration
of the redemption period. (Section 22-20).
o Under Section 22-25, notice must be given to the county clerk to be mailed out by
the clerk to the owners of the property at their last known addresses and to any
occupants.
o Finally, under Section 22-30, notice of the filing of the petition must given to
“occupants, owners and persons interested in the property as part of the notice
provided in Sections 22-10 through 22-25, except that only one publication is
required.”
- Hearing
o If the tax certificate holder demonstrates that he has met all the statutory notice
and other requirements for obtaining a tax deed, the judge will order the clerk to
issue a tax deed to the tax certificate holder for the property.
Avoiding Tax Sale or Tax Deed
- Before Delinquency
o Senior Tax Deferral (320 ILCS 30/1-1, et seq.)
 Can defer real estate taxes up to 80% of equity in home for household with
less than $50,000 in income.
 Acts as loan that is recouped by state when house is sold or transferred.
 Cannot owe any property taxes or special assessment (so only available
before delinquency)
 6% interest per year
-
-
Pre-redemption
o Chapter 13 Bankruptcy
 A homeowner may be able to include the tax certificate holder’s claim as
part of a confirmed plan in a Chapter 13 bankruptcy proceeding, thereby
avoiding issuance of a tax deed. In re Kasco, 378 B.R. 207 (Bankr.
N.D.Ill. 2007)
o Reverse Mortgage
 Alternatively, the homeowner may be eligible for a reverse mortgage to
pay the redemption amount
 Homeowner could use a reverse mortgage to redeem under protest in the
event the fees have been miscalculated and then use the refund to pay off
the reverse mortgage.
After Tax Deed has Issued
o Bankruptcy
 Tax deed may be set aside as a fraudulent transfer if the bankruptcy is
filed within two years after the tax deed is recorded. Smith v. SIPI, LLC,
614 F.3d 654 (7th Cir. 2010)
o Section 22-45
 Section 22-45 provides four grounds on which a homeowner can attack a
tax deed under Section 2-1203 (within one year) and 2-1401 of the Illinois
Code of Civil Procedure (735 ILCS 5):
(1) proof that the taxes were paid prior to sale;
(2) proof that the property was exempt from taxation;
(3) proof by clear and convincing evidence that the tax deed had been
procured by fraud or deception by the tax purchaser or his or her
assignee; or
(4) proof by a person or party holding a recorded ownership or other
recorded interest in the property that he or she was not named as a
party in the publication notice as set forth in Section 22-20, and
that the tax purchaser or his or her assignee did not make a diligent
inquiry and effort to serve that person or party with the notices
required by Sections 22-10 through 22-30.
 Fraud exception: failure to inform the court during a tax deed petition
proceeding of facts that might change the court’s ruling (such as the
failure to serve notice on a party entitled to notice that the tax certificate
holder knew or had reason to know about) may constitute fraud for
purposes of vacating a tax deed. Application of County Treasurer
(HomeSide Lending Inc. v. Midwest Real Estate Investment Company),
347 Ill.App.3d 769 (1st Dist. 2004); Application of Cook County Collector
(Standard Bank v. Barnard), 228 Ill.App.3d 719 (1st Dist. 1992).
 22-45(4) Exception: homeowner does not need to show due diligence and
meritorious defense to prevail on a Section 2-1401 brought under 2245(4). In re County Collector (Devon Bank v. Miller), 921 N.E.2d 462
(1st Dist. 2009)
o Indemnity fund (Section 21-295 – 21-306)





Counties maintain fund to compensate individuals who have lost property
in a tax deed proceeding
Can get up to $99,000 if can demonstrate equitably entitled to a payment
(equitable factors include age, disability, financial literacy, etc).
Payout is based on fair market value of home minus liens and property
taxes owed
Obtain funds by filing a petition with court that issued the tax deed
Can get more than $99,000 if can demonstrate no fault
TIMELINE
Timeline For 2008 Delinquent Property Taxes in Cook County 5
December 1, 2009: Second installment for 2008 due
August 2, 2010: Certified notices sent to homeowners of sale pursuant to Section 21-135
September 13-22, 2010: Tax Year 2008 Annual Tax Sale
January 28, 2011: Deadline to send Section 22-5 Notice for taxes purchased on September 13,
2010.
September 13, 2011 – December 13, 2011: Period to file petition for tax deed and issue notices
under Sections 22-10 through 22-25 for taxes purchased September 13, 2010.
March 13, 2012: Expiration of the redemption period for taxes purchased September 13, 2010.
Annual Tax Sale for 2009 Delinquent Property Taxes in Counties using R.A.M.S.:6
County
Tazewell
Mason
Ford
Menard
Fulton
Christian
Coles
Cumberland
Logan
Piatt
Woodford
Douglas
Marshall
Champaign
Date
10/17/2011
10/18/2011
10/19/2011
10/20/2011
10/21/2011
10/24/2011
10/24/2011
10/25/2011
10/26/2011
10/26/2011
10/27/2011
10/27/2011
10/27/2011
10/28/2011
Time
10:00 AM *
10:00 AM
1:00 PM
2:00 PM
9:00 AM
9:00 AM *
1:00 PM *
9:00 AM
10:00 AM *
2:00 PM *
9:00 AM *
10:00 AM
2:00 PM
9:00 AM
Using the dates available on the Cook County Treasurer’s Website available at
http://www.cookcountytreasurer.com/taxdates.aspx?ntopicid=75
5
6
Information obtained from http://www.ramsauctions.com/index-4.html
Adams
Bureau
McLean
Henry
Whiteside
Carroll
Kankakee
Stephenson
Dekalb
Schuyler
Peoria
Cass
Morgan
LaSalle
Grundy
Macoupin
Saline
Williamson
Franklin
Livingston
DuPage
Knox
Lawrence
Crawford
Will
Macon
Lake
Jackson
Calhoun
Rock Island
*Designates Tentative Date/Time
10/31/2011
10/31/2011
11/01/2011
11/01/2011
11/02/2011
11/02/2011
11/03/2011
11/03/2011
11/04/2011
11/04/2011
11/07/2011
11/08/2011
11/08/2011
11/09/2011
11/10/2011
11/14/2011
11/14/2011
11/15/2011
11/16/2011
11/16/2011
11/17/2011
11/17/2011
11/18/2011
11/18/2011
11/21-11/23/2011
11/21/2011
11/28-11/29/2011
12/01/2011
12/05/2011
12/29/2011
10:00 AM
1:00 PM
9:00 AM
10:00 AM
9:00 AM *
2:00 PM *
9:00 AM
10:00 AM
9:00 AM *
11:00 AM
9:00 AM
10:30 AM
2:00 PM
9:00 AM
9:30 AM *
10:00 AM
9:00 AM
9:00 AM
10:00 AM
10:00 AM *
9:00 AM
1:00 PM *
10:00 AM
2:30 PM
9:00 AM
9:00 AM
9:00 AM
1:00 PM
1:00 PM
9:00 AM