Illinois the lone holdout
Friday, Feb 27, 2026 - Posted by Rich Miller
* Capitol News Illinois…
In the 2023 Tyler v. Hennepin County decision, the Supreme Court unanimously ruled that local and state governments cannot seize and sell the homes of people with unpaid property tax debt without returning the value left after the debt is settled.
Every state but Illinois has corrected their state law in accordance with the ruling.
To comply with the ruling, the state must require that homeowners receive the leftover funds from a sale after their debt has been settled.
Before the Tyler decision, county treasurers could hold annual sales of unpaid property tax debt to private investors. If the homeowners fell behind on paying back their debt, the investors could then seize and sell the property, pocketing the difference with no refund to the homeowner.
As a result of the seizure, homeowners would lose the entire value of their home, which is often much more than the size of their debt. The tax sales help local governments continue to fund their everyday operations, but critics say it also leaves homeowners vulnerable to predatory tax buyers.
Some groups would take advantage of a loophole in the law called sale-in-error that allowed them to receive a refund on a sale if there was an error in the sale documents, like miscalculated square footage.
That loophole has since been closed after a report from Cook County Treasurer Maria Pappas, but the state still needs to enact further reforms to the sale process to comply with the Tyler ruling.
“This isn’t a new issue, we’ve been working on it for years,” Villanueva said in a statement. “We cannot continue to let this issue fall by the wayside while families — especially seniors and working-class homeowners — remain at risk of losing not just their homes, but the equity they worked their entire lives to build.”
Legislators have introduced some reform bills, like House Bill 3146 and Villanueva’s Senate Bill 3940, but face resistance from the groups who buy tax debts.
Ugh.
- joand315 - Friday, Feb 27, 26 @ 12:07 pm:
That’s a disgusting practice.
- Friendly Bob Adams - Friday, Feb 27, 26 @ 12:09 pm:
This seems like an easy one. They should get it fixed as soon as possible.
My guess is that many of the homeowners late on taxes are older people having difficulty keeping up with expenses.
- Jack in Chatham - Friday, Feb 27, 26 @ 12:16 pm:
Friendly Bob, It also has to do with people moving out of State at the end of their life who are losing their faculties. People who have fallen and broken a bone and are put in institutions. It is about taking advantage of the sick and infirmed. Sad.
- Remember the Alamo II - Friday, Feb 27, 26 @ 12:17 pm:
=== My guess is that many of the homeowners late on taxes are older people having difficulty keeping up with expenses. ===
Actually because of the senior freeze exemption, seniors aren’t as affected by property tax hikes as other taxpayers. The South Suburbs of Chicago are particularly harmed by this practice.
One of the issues with crafting a solution is that one of the solutions used by other states (having a property auction) is also under judicial scrutiny. Apparently the argument is that values generated by the property auctions is not reflective of the true value of the properties.
I know auctions were being considered here as an alternative to the current process, but if those are not going to be sufficient, then it is back to the drawing board.
- DuPage Saint - Friday, Feb 27, 26 @ 12:17 pm:
The tax buyers are like a little club but I did not realize how influential they are. What Illinois is doing is illegal it has already been to the Supreme Court. I guess being last to comply with the law at least gives us opportunity to see how it is handled in other states. This seizure of property used to also be done if you had a city lien in Chicago
- Zee - Friday, Feb 27, 26 @ 12:21 pm:
There’s been substantive negotiations on a Hennepin fix for several months. The respective revenue chairs and their staffs have put in yoeman’s work to hear from everyone. The state of Cook County’s Indemnity Fund is an indescribable complicating factor here, I’d argue to a degree that makes a solution in Illinois far more difficult than other states, as is the fact local governments inside and outside of Cook, regrettably, rely on these tax sales as a bridge loan when taxes aren’t paid.
- Excitable Boy - Friday, Feb 27, 26 @ 12:40 pm:
Maybe a class action lawsuit could get the legislature off the dime. It’s embarrassing that places like Mississippi are ahead of us on this very simple issue.
- Leslie K - Friday, Feb 27, 26 @ 12:41 pm:
==My guess is that many of the homeowners late on taxes are older people having difficulty keeping up with expenses.==
In an extra tragic twist, it is also often older people who have paid off their mortgage. For 30 years (commonly) the bank was paying the property tax out of an escrow account and the owners didn’t have to think about it. Once the mortgage is paid off, some owners don’t necessarily realize that they now need to pay the tax directly and end up unknowingly falling behind and end up in a tax sale.
This whole mess has been on the radar long before Tyler and I am ashamed Illinois has not only not taken the lead, but is far far behind.
- 40,000 ft - Friday, Feb 27, 26 @ 12:43 pm:
In the material world this is disgusting, predatory, deserving of publicity and lawsuits with treble damages if that’s applicable here.
In the spiritual world, this is evil.
- Sklar - Friday, Feb 27, 26 @ 12:52 pm:
This could’ve been fixed a long time ago. As could most of the inequities and arbitrariness of the property tax system l. Madigan never wanted to and now Harmon and Welch don’t want to.
- H-W - Friday, Feb 27, 26 @ 12:54 pm:
Thanks for pulling this story out from “Its Just A Bill,” and elaborating more.
- Responsa - Friday, Feb 27, 26 @ 12:54 pm:
The election is soon, but perhaps candidates running for the Illinois legislature in both parties should be asked pointedly about their position and potential vote on this matter. Perhaps the governor could mention it as well?
- Wolfy - Friday, Feb 27, 26 @ 1:06 pm:
The Happy Gilmore Bill
- here we go again - Friday, Feb 27, 26 @ 1:10 pm:
Another shameful stain on a state that has the nerve to call itself the Land of Lincoln.
One would think that with all the politicians —of both parties— who run around crowing they are fighters and are “fighting for you”, that someone would have ended this vulture practice a long time ago that openly steals equity from people at their lowest time in life. Shame on every single one of our useless politicians who have never lifted a finger to correct such an obvious wrong.