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Annually, auctions are held for unpaid property taxes in an
effort to recoup lost revenue. Real estate investors can swoop
in and buy a tax lien certificate on a property and collect
interest on the unpaid property taxes. Once the debt is
purchased, a lien is placed on a property and a county’s hands
are tied.
State Rep. Nicholas Smith, D-Chicago, the sponsor of House Bill
3040, said allowing a property to sit vacant is detrimental to
all Illinois neighborhoods.
“These properties are locked into years-long cycles of tax sales
and foreclosures, which leaves them abandoned and deteriorating
and just really an eyesore on neighborhoods and communities,”
Smith said during a House committee hearing.
Joe Dulin, community development director for the city of
Peoria, said other cities around the state are on board.
“We have been partnering with many communities throughout the
state of Illinois, Rockford, Decatur, the city of Chicago,
Kankakee, to specifically look at these issues,” said Dulin.
According to a study by the Cook County’s Treasurer’s office, a
little-known loophole has allowed investors to siphon millions
of dollars from schools, fire departments and other government
agencies.
Many of these investors have no interest in the property itself
as many of them are located in economically distressed areas of
the state. The study showed that simple clerical errors were
enough to allow many tax lien holders to walk away from the
property with their profits intact.
That makes Illinois “like no other state in the country,” where
the law “allows tax buyers to easily and quickly undo a tax deal
for trivial reasons, often getting all of their money back,
including interest, fees and court costs,” according to the
study.
Smith’s bill provides that, “if a sale is declared to be a sale
in error, the tax certificate shall be forfeited to the county
as trustee.”
Kevin Bessler reports on statewide issues in
Illinois for the Center Square. He has over 30 years of
experience in radio news reporting throughout the Midwest.
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