Who Pays My Real Estate Taxes?

I had a client call me earlier today asking if they should pay the most recent tax bill for there new condo. This may sound like a no brainer, but since they just closed on their condo a month ago, there was some confusion on their part. Taxes in Chicago are paid in arrears. In other words, you pay 2005 taxes in 2006. My clients obviously didn't live there in 2005, so the previous owner is responsible for paying the taxes, right? Well, yes and no.

At the closing the attorneys figure out what amount to credit the buyer for the taxes owed up until the date of closing. This amount is credited to the new owner so when the tax bill comes the new owner takes care of it, regardless of whose name appears on the tax bill. In this case the sellers owed the taxes and indirectly paid them by giving the buyer a credit at closing. It was now up to the new owners to actually follow through and pay them when the actual tax bill arrives.

Many times the taxes are put into an escrow and the lender pays them when they are due. It is extremely important to keep tabs on them!!! If you receive the tax bill, as in this case, and the taxes were put in escrow, make sure to contact the lender (it's probably a good idea to call your attorney as well) and make them aware that you have the current tax bill. You can't imagine how many times the lender screws up paying peoples taxes. A great place to check and see if they have been paid is by going to the Cook County Assessor's website. Once there, type in the address or home owners name to pull up the latest tax information. It's all public information so you might as well check and see what your neighbors are paying and compare them to your own. If you feel you are paying way more than they are, then you might have a good case to appeal and get them lowered.