In recent years, there has been an overall improvement in the real estate climate. However, many condominium owners continue to lose their units due to their failure to pay property taxes, leaving condominium associations exposed.
In the event a unit owner neglects to pay its property taxes, the unpaid balance may be sold to a third party. Pursuant to the Illinois Property Tax Code (35 ILCS 200/21-350), delinquent taxes must be redeemed within two years from the date of sale. If taxes are not redeemed, a tax purchaser may apply for a tax deed and may ultimately take ownership of a unit free and clear of any and all liens (including past due assessments). It is important to note, that tax purchasers are required to notify all “interested parties” of a property tax sale, giving time for a party to redeem the property taxes if desired.
Associations are considered to be an interested party. While an association may elect to redeem the property taxes on a unit, the association will not become the owner of the unit but will merely be “loaning” money to the unit owner in order to bring the property taxes current. However, if an Association does redeem the delinquent taxes, the cost of redemption may be added to the unit owner’s account balance. In order to determine the amount of delinquent taxes that are owed, our office may obtain an estimate of redemption on the Association’s behalf.
In the event, that taxes are not redeemed, a tax purchaser will become responsible for assessments from the date the Court grants an Order issuing the Tax Deed. As previously mentioned, the tax purchaser will not be responsible for prior delinquent assessments, which is different than in a mortgage foreclosure case.
If your association wishes to discuss tax redemption and/or options following the sale of a unit for delinquent property taxes, please contact our office at 855-537-0500 or visit our Contact page.