Lake County Case Discusses Expunging Redemptions

A recent unpublished order, Kelver v. Baczek, 2014 IL App (2d) 130569-U, exemplifies the confusion between different judicial circuits when it comes to expunging redemption of delinquent taxes. In Kelver, the record owners of property refused to recognize a contract with the contract purchaser, forcing the purchaser to file suit for specific performance.

When the delinquent real estate taxes were sold, the contract purchaser redeemed. The contract purchaser and the tax buyer then worked out an agreement wherein the redemption would be expunged, the tax buyer would seek a tax deed and the tax buyer would sell the property to the contract purchaser. The tax buyer and the contract purchaser agreed that the record owner would not receive notice of the agreed order. Unlike the Circuit Court of Cook County (Rule 10.3.1), the 19th Judicial Circuit (Lake County) does not have a local rule requiring notice to interested parties when expunging a redemption. Moreover, Section 21-397 of the Property Tax Code does not require notice to interested parties in counties with less than 3,000,000 inhabitants (non-Cook County).

When the contract seller learned of the agreement, she filed a petition to vacate pursuant to Section 2-1401 of the Code of Civil Procedure claiming the tax buyer procured the tax deed by “fraud or deception.” The court conducted a “multi-day” evidentiary hearing and granted the contract seller’s petition to vacate. The appellate court order does not explain the basis for granting the petition to vacate but it does not make any mention of 21-397 of the Property Tax Code regarding expungement of redemptions.

Tax buyers and parties with an interest in real estate should be aware of the different applications of the Property Tax Code by county. Regarding redemptions in counties outside of Cook County, redeeming parties must be aware that they only have one chance to redeem the taxes if the tax buyer expunges the redemption after the redemption period has expired.

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