Tax Sale Redemptions Can Occur at the Last Minute!

A recent case, A.P. Properties v. Rattner , 2011 IL App (2d) 110061 (October 27, 2011) Lake Co. demonstrates how cutthroat the tax deed business can be.  On the one hand, you have companies that buy taxes at real estate tax sales, with the hope that they will end up owning the property for a fraction of its actual value.  On the other hand, you have homeowners and lenders, trying to redeem the taxes to save the property before the redemption period expires.  And then occasionally, you have companies that reap their profits from buying properties just before the redemption period expires, when homeowners are desparate to salvage some of the value of their home.   The defendants in this case fall in the latter category.

The plaintiff, A. P. Properties, was in the business of buying taxes at tax sales, and they sued the defendants because in two instances, the defendants bought real estate A.P. Properties was hoping to acquire shortly before the expiration of the redemption period.  The plantiff had already petitioned for a tax deed in both cases.  In the first case, in fact, the defendant purchased the property less than 48 hours before the redemption period expired, and then immediately redeemed the taxes.

The court, however, found in favor of the defendant.  The plaintiffs appealed on various technicalities, but at the end of the day, they still lost.  The court stated that the owner or an interested party may absolutely redeem the property during the redemption period.  Since the defendant bought the property, albeit at a bargain price, they had the right to redeem the taxes.  Sure, the defendants profited from their actions, but their actions were allowed, and not legislatively banned.  Moreover, in this way, the people who owned the property were able to sell the property to the defendants for something, even if it was a small sum.  The tax sale buyer, on the other hand, would not have paid the homeowners anything.  The court concluded that public policy supports the sale of properties prior to the expiration of the tax sale redemption period.

So if you are about to lose your home to a tax deed, consider selling it.  And if you are close to obtaining a tax deed, remember, someone can swoop in and buy the property from under your nose!