If You Don't Pay

Property taxes are a serious matter. Not paying them can result in hefty penalties, or even loss of ownership of the property. If you do not pay the entire amount of your property taxes by the second installment due date, the taxes are automatically considered delinquent. Even if you are only one day late, or make a partial payment, it is treated as though you have not paid any taxes. At this point, your delinquency triggers the penalty process.

Initially, you will be penalized a late charge based on 1.5% of the bill for each month taxes go unpaid. The penalty process is cumulative, so each month a new penalty will be assessed against the original tax plus any interest that has accrued. The penalty is calculated on the second day of each month you are late, and can be applied on a prorated basis.

For example, if you owe $2,000 for your March 1 installment, you will owe the following taxes each month you are late:

• April 2: $2,000 + 1.5% interest = $2,030
• May 2: $2,030 + 1.5% interest = $2,060.45 (approx. $2,000 x 3% interest)
• June 2: $2,060.45 + 1.5% interest = $2,091.36 (approx. $2000 x 4.5% interest)

Failure to pay all fees and the entire back tax will result in your property being included in the Annual Cook County Tax Sale, an annual auction held by the Cook County Treasurer’s Office to sell delinquent property taxes. Once the sale begins, it will last a specified amount of days based on the volume of taxes up for auction. To remove your property from the sale roster, you must pay all back taxes and accrued fees before the scheduled auction date, which is held sometime between December and March.

At the Sale, buyers can bid on and then pay the unpaid taxes, fees and penalties for listed properties. The buyer essentially purchases certain rights to the property, which can eventually lead ownership.

Do not be alarmed if you are late in paying your taxes. The process of claiming a property can take from six months to 2.5 years, many safe guards are built into the system to give you a chance to pay the taxes.

Initially, when you fail to pay, the Cook County Treasurer’s Office will notify you twice of your delinquency. The first notice simply informs you that you are late. The second notice is sent via certified mail, and warns you that unless you pay your taxes, the property will be sold at the County Tax Sale.

For extra-added protection, you can also enroll in the Third-Party Notification Delinquency Program, in which you designate another person or organization of your choice to receive a duplicate copy of the two delinquency notices. While this person or organization is not responsible for paying the taxes, they can remind you that your taxes are due.

If you are unable to pay your taxes before the County Tax Sale, contact the Cook County Clerk’s Office immediately to find out the amount you owe, and the time period for repayment. If you can afford legal counsel, hire a competent property tax attorney. If you cannot afford an attorney, review the resource section in Chapter 4: Professional Services to locate reduced fee or pro bono legal services.

The repayment period is known as the Redemption Period. For residential properties, the redemption period is automatically 2.5 years, but is shorter and varies for mixed-use, commercial and industrial properties.

Property taxes not sold at the County Tax Sale can be placed up for bid again at the Scavenger Sale, which occurs every 2-3 years. The Scavenger Sale consists of unsold taxes from previous years’ Tax Sales. The redemption period is considerably shorter for taxes sold during the Scavenger Sale for residential and non-residential properties alike.

Unfortunately, if your taxes are bought, not only are you now required to pay the original tax amount, penalties and accrued monthly interest charges, but also any additional interest and fees added by the buyer. Buyers can legally charge interest rates as high as 36% annually. If, at the end of the redemption period, you still haven't paid all taxes, interest, penalties and fees, the buyer can legally claim ownership and take possession of your property.

One way to make sure you have the finances to cover your property taxes (if applicable) is to have them included in your monthly mortgage payment. At the mortgage closing, the lender puts the tax portion of the mortgage payment into an escrow account each month. The lender then pays the property taxes on the required due dates. While this does not negate your need to ensure that the mortgage company pays your taxes on time, you can at least be assured you have the funds available to pay your taxes.

If your taxes have been sold, review the Cook County Treasurer’s Office Website for information on how to redeem your property.