Tax deed foreclosure is a legal process by which a local government can sell a property to recover unpaid taxes.
While the design of the process prioritizes fairness and transparency, it may not always work out that way. Read through to understand why the process may get bogged down.
1. Incorrect tax assessments
If the local government assesses the property owner for the wrong tax value, the property owner may end up owing more than they should. In this case, the property owner can challenge the assessment and seek reconciliation, which takes time.
2. Lack of notice
Under Illinois Property Tax Code, the local government must provide the property owner with notice of the tax deed foreclosure action. If the property owner does not receive notice, they may not be aware that the property is being sold and may miss the opportunity to pay the taxes or challenge the assessment.
3. Bidding wars
This is very common if the property is publicly auctioned. What results is a selling price higher than its fair market value, which can be a financial burden for the new owner.
4. Lack of a clear title
Complex ownership history, liens or other legal issues can slow down the process, making it difficult to obtain a clear title to the property. Refinancing also becomes difficult in this scenario.
5. Unforeseen expenses
As with any real estate transaction, there are potential expenses that may arise during a tax deed foreclosure. For example, the new owner may need to pay closing costs and legal fees. If they do not pay their bills in a timely manner, it can prolong the process.