{"id":7626,"date":"2026-07-22T10:40:25","date_gmt":"2026-07-22T14:40:25","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=7626"},"modified":"2026-07-22T10:40:27","modified_gmt":"2026-07-22T14:40:27","slug":"illinois-tax-sale-reform-news-what-deed-holders-now-must-know","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/illinois-tax-sale-reform-news-what-deed-holders-now-must-know\/","title":{"rendered":"Illinois Tax Sale Reform News: What Deed Holders Now Must Know"},"content":{"rendered":"\n
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A new court ruling, plus a new state law, is strengthening Illinois deed holders at risk of losing their hard-earned home equity because of unpaid property taxes.<\/p>\n\n\n\n

It\u2019s about time. Thousands of Illinois deed holders have lost their homes and all<\/em> of their home equity over relatively minor tax debts.<\/p>\n\n\n\n

Consider the Kidd household. After medical bills overwhelmed the family, the Kidds neglected to pay their property taxes for two years. When they approached the Cook County Treasurer’s office to work out a payment plan for a past-due amount of just over $2,000, they were shocked to learn that their deed had already been transferred in a property tax sale.<\/p>\n\n\n\n

Something smells rotten about this, because it is. What happened to the Kidds offends the Constitution.<\/p>\n\n\n\n\n\n\n\n

What\u2019s Going on With Cook County, Illinois, and Its Approach to Unpaid Property Taxes?<\/h2>\n\n\n\n

Cook County includes Chicago and 133 Chicago suburbs. Here, any amount of neglected property tax debt can steer a deed into a tax sale.<\/p>\n\n\n\n

Since 2019, tax buyers (typically corporations and LLCs) have taken more than a thousand Cook County homes away from their owners. Just like the Kidds, most of these deed holders owed less than $2,000 before fees and interest accrued, according to Injustice Watch. The nonprofit\u2019s Investigative Project on Race and Equity found that Illinois has enabled tax buyers to enrich themselves at the expense of Cook County deed holders\u2014especially in predominantly Black neighborhoods. <\/p>\n\n\n\n

Investors buy up tax liens by paying the overdue taxes to the county. Then, a struggling deed holder gets two and a half years to pay the property tax buyer (and pay continuing taxes in the meantime) before the buyer keeps the deed and the struggling former owner is either evicted or expectedto pay rent to the investor.<\/p>\n\n\n\n

A tax lien investor has been able to walk off with the deed and keep all the owner\u2019s equity.In other words, investors could foreclose on the tax liens and keep any leftover equity if the debtors failed to pay off the debt, fees, and interest within 30 months. This sort of wealth-stripping has been struck down as a form of unconstitutional taking in every other state. Illinois is the last holdout.<\/p>\n\n\n\n

In the Kidd family case, the overdue tax bill amounted to $2,344. With penalties and fees, the bill swelled to a five-figure total. The Kidds were evicted. They asked Legal Action Chicago to take on their case. The group sued Cook County. The suit is based on the Fifth Amendment to the U.S. Constitution.<\/p>\n\n\n\n

Now, change has come. The Kidds fought hard for it. More than 2,000 households, including the Kidds, are pursuing class actions. They\u2019re all hoping they\u2019ll be reimbursed for at least some of their lost home equity. (Nine other counties, in addition to Cook, face similar legal actions.) Under the court\u2019s latest ruling, they can claim compensation if they lost their deeds in property tax sales after December 15, 2020.<\/p>\n\n\n\n

A lien clouds title until it is paid off and legally released. A <\/em><\/strong>property tax lien<\/em><\/strong><\/a> can lead to foreclosure and eviction when the deed holder does not resolve it. <\/em><\/strong><\/em><\/strong><\/p>\n\n\n\n

Illinois Just Enacted Major Property Tax Reforms to Stop \u201cHome Equity Stripping\u201d Over Unpaid Tax Bills<\/h2>\n\n\n\n

Legal challenges like the Kidd family\u2019s are about to be a thing of the past, in any case. Governor J.B. Pritzker has just signed House Bill 4537, a law that will now protect Illinois deed holders from being stripped of their surplus home equity after property tax foreclosures. Under the new tax sale system, if a property is sold, any proceeds that remain after repayment of taxes, fees, and interest will go to the owner who built that equity.<\/p>\n\n\n\n

The new law:<\/p>\n\n\n\n