Protect Your Property Rights and Avoid Tax Penalties
Title insurance is a necessary part of a real estate transaction — it protects against loss if a defect is found in the title to property.
Most member attorneys of the Illinois Real Estate Lawyers Association are affiliated with a title insurance company to provide title insurance. Many IRELA members belong to a bar-related title insurance company such as Attorneys Title Guaranty Fund (“ATG”), or are affiliated with an independent title insurance company.
Affiliation with a title insurance company gives an IRELA member the ability to give all parties the extra security of having an experienced real estate lawyer oversee the title clearing process and take a proactive role in clearing liens or other title exceptions to help insure a smooth closing.
Whether you are buying an existing home or are buying new construction, there are some important things to know about taxes on real property and about real estate tax bills in order to protect your property rights:
You need to know how to obtain current real estate tax billing information and when your tax bills will come due so they can be paid in a timely manner so as to avoid tax penalties. If you have established an escrow for taxes with your lender, mail a copy of your tax bill to the lender, and keep a copy for yourself. You should call the county twice each year to verify that your lender is paying your tax bill out of the escrow. Late tax payments generally accrue interest at the rate of 1 ½% per month. If tax bills are not paid in a timely manner, they can also be “sold” by the county, causing you more time and expense to “redeem” the sold tax bills to avoid liens on your property.
A. Buyers of Existing Homes
Buyers of Existing Homes will be responsible for paying all real estate tax bills that come due after the closing date. Taxes in Illinois are paid in arrears, i.e., one year after they are assessed. Credits received from a Seller at a closing for taxes will be shown on your settlement statement. Taxes are billed as follows:
NOTE: The first bill to come out after the closing often is sent to the Seller. IT IS YOUR RESPONSIBILITY TO PAY THE TAXES ON YOUR PROPERTY WHETHER OR NOT YOU RECEIVE THE BILL, SO YOU MAY WISH TO CONTACT THE COUNTY TO OBTAIN A DUPLICATE COPY OF THE TAX BILL. WHEN YOU CALL OR VISIT, BE SURE TO HAVE YOUR P.I.N. (Permanent Index Number) AVAILABLE.
B. Buyers of New Construction
Buyers of New Construction have somewhat different concerns. Sometimes the Builder pays the tax bill from the closing year because the lots in the new subdivision may not yet have the individual tax parcel numbers assigned which are necessary to allow individual bills to be generated. CALL your builder when the tax bills come out in your area to see if they are getting the tax bill and paying it or if it is being mailed to you.
You will be responsible to pay the tax bill for the closing year when it comes out the following year. If you have a separate reproration agreement with your builder, your builder may be obligated under it to reimburse you for a portion of the closing year tax bill, but the county will treat you as responsible for the entire tax bill. Therefore, to avoid endangering your property rights, you may wish to pay the entire bill first and then seek reimbursement from the builder for the builder’s portion. (NOTE: this issue may be addressed in your contract with your builder, or in a separate reproration agreement, if your builder has agreed to one.)
Permanent Index Number
Your Permanent Index Number (or “PIN”) is the number assigned to your specific real property for tax purposes by the county in which you reside. You will need your Permanent Index Number in order to access any information from the county assessor’s office or to obtain a duplicate tax bill. You may wish to make note of your Permanent Index Number for future reference.
Important Phone Numbers
Here, for your reference, are some telephone numbers of County Treasurer’s and Assessor’s offices in the Chicago area. You can call the office for your county of residence and, with your Permanent Index Number, obtain current information concerning payment of taxes on your property.
Local Township Assessor Numbers
For telephone numbers of assessor’s offices for individual townships, read on.
Cook County and Surrounding Counties
P.O. Box 4956
Telephone: (312) 600-7720
© 2018 by the Illinois Real Estate Lawyers Association