Large property tax bill catches new owners off guard

Q. I saw an article in the Daily Herald and was hoping you may be able to give me some insight. I purchased a property back in April of this year in Bolingbrook. We thought all was good and then we received the property tax bill and realized we were shorted almost $5,000 at closing. The property was part of a bankruptcy and they used the previous taxes paid, which had included a senior exemption and freeze. We have been trying to work with our closing attorney but he has not responded to emails for the last two months. Are we at a loss or is there something we can do? We have already paid the tax bill but it was quite a bit to pay for a year we did not even own the house! Any advice or insight is greatly appreciated!

A. To determine where you stand, the first step is always … read the contract. In the event the agreement is written on the commonly used Multi-Board contract, paragraph 9a applies, which states "All general real estate tax prorations shall be final as of closing …" Not good news for you.

You indicate this was part of a bankruptcy so that leads me to believe it's possible another contract was used. If so, review the paragraph(s) that are associated with tax prorations. Unfortunately, the language providing that tax prorations are final at closing is a common provision found in many if not most contracts.

Most real estate attorneys representing a buyer will review the most recent tax bill looking for exemptions or deductions on the tax bill that may not apply once their client takes title to the property. Attorneys know the tax prorations will be calculated based on the last known tax bill. The senior freeze is probably the most important issue to review for two reasons.

One, the senior freeze generally does not carry over to the following tax year. This is because the senior freeze is not only age dependent, but also income dependent. If the senior exceeds a certain income level, the senior freeze is not available. This is unlike the senior exemption, which is available so long as one owner of the property is 65 or older on Jan. 1 of that tax year and the property is the senior's primary residence. To obtain and maintain the senior freeze, the senior must not only be 65 years old on Jan. 1 of that tax year, but also must complete an income affidavit each year confirming they are under the required income level.

So, if you buy the house in April and the senior fails or failed to complete required the freeze application(s), the freeze will fall. This may be very significant depending on how long the freeze has been in effect. Remember, the senior freeze freezes the assessed valuation of the property once the freeze is effectuated. If the freeze has been in effect for 10 years, the property is likely being assessed, and therefore taxed, at a far lower rate than if the freeze were not in effect. This is the second reason why paying attention to the senior freeze is important. The amount of money involved can be significant.

So, to what you can do now, first determine if the prior owners filed for the senior freeze for tax year 2019, which they would have needed to complete in 2020. It would appear they did not, given the significant rise in the tax bill. Presuming they did not, contact your county treasurer to determine if the senior freeze application can still be filed for tax year 2019. The rules regarding the freeze differ somewhat from county to county, so make sure you are contacting the appropriate treasurer, as Bolingbrook sits in two counties.

Presuming you can still file for the freeze, you need to locate the prior owner(s) and persuade them to complete the application. They would not benefit from doing this so you will need all your persuasion skills. If you have young children, bring them along. Once completed, file with the county and follow whatever other instructions it provides.

Two final thoughts. If the property was sold by the bankruptcy court, you could contact the bankruptcy trustee, though it's likely he or she won't be much help. Also, again, the freeze would only apply for tax year 2019 if the sellers were using this property as their principal residence during that year.

• Send your questions to attorney Tom Resnick, 910 E. Oak St., Lake in the Hills, IL 60156, by email to tom@thomasresnicklaw.com or call (847) 359-8983.