How someone can pay your taxes, then take your property
The owners of a strip club near Elk Grove Village, a shuttered Schaumburg seafood restaurant and a Rolling Meadows brunch spot are among nearly 39,000 in Cook County at risk of losing the deeds to their businesses, homes or vacant land because of unpaid property taxes.
"We didn't make enough money last year to pay our taxes," said Anna Stachura, who owns and operates the Egg'lectic Cafe at 2905 Algonquin Road in Rolling Meadows. "The last two years have been really slow."
The eatery's $39,076 property tax debt is part of the more than $106 million in delinquent property taxes due in 2017 that are slated to be sold at a special four-day auction early next month at Cook County Treasurer Maria Pappas' office. If property owners don't repay whoever buys the tax debt -- which often comes with hefty interest charges -- the tax buyer can ultimately claim the property through a fairly simple court filing, real estate legal experts said.
Almost two-thirds of those unpaid taxes are for suburban properties. And nearly half the delinquent property owners owe $1,000 or less, according to data from Pappas' office.
Fifty-eight homes with senior citizen exemptions and unpaid tax bills totaling $173,216 are listed in Northwest suburban Barrington, Elk Grove, Hanover, Leyden, Maine, Palatine, Schaumburg and Wheeling townships, according to Pappas' records.
"In many cases, we're talking about seniors who wrote their checks the wrong way, forgot to pay or whatever and they become our most vulnerable," Pappas said, urging people to make sure their property isn't at risk.
"It is paramount that I get as many people off this tax sale list as possible."
Her efforts seem to be working. Since 2013, the number of properties available at the tax sale have dropped by nearly 27 percent. Pappas expects the number to shrink even further before the April 30 deadline to pay the back taxes and any accrued penalties.
Pappas initiated a platform on her cookcountytreasurer.com website for property owners to check the status of their tax bills and has an outreach program with other elected officials to remind property owners about the tax sale.
The treasurer's office sends out several notices to property owners about unpaid taxes. In the past year, 15,918 of those notices -- nearly 41 percent -- were returned to her office. Her staff will continue trying to locate the owners of the properties.
"I've got a whole group of people dedicated to outreach on this," she said. "Every year, if I can get it down by another thousand, that's a victory."
Pappas said some property owners miss paying taxes because of cultural or language barriers. Her office offers assistance brochures on avoiding the tax sale in 23 languages other than English. The foreign language brochures have been downloaded 1,275 times so far this year, records show.
The Cook County tax sale begins May 4. Property tax sales in other counties usually occur in November or December. Bidders have to register with the treasurer's office in advance of the auction, but registration has closed for this year, officials in Pappas' office said.
Pappas said while tax buyers can claim a property's deed if they aren't repaid, most buyers want the tax bills as an investment because they can charge interest. Once someone buys a property's tax debt, he or she gets first rights to that property's future delinquent bills and can charge a 12 percent interest fee on the new debt. The interest doubles every six months the debt goes unpaid, officials explained.
Tax buyers can claim deeds on a residential property after 2½ years have passed without repayment, but deeds on commercial properties can be claimed after just six months, officials said.
"What's bad with the property tax system is the amount of penalties and fees to get your property redeemed is ridiculous," Pappas said. "But nationwide, in every county, nobody's come up with something better."
The money collected from the tax sales goes to the government taxing bodies that have been shorted by the delinquent bill payments. Late payment penalties and a $200 buyers fee go to the county.
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