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Bank Real Estate Tax Liability For Tax Exempt Properties After Foreclosure

Article:
Many banks are reluctant to foreclose on a church or other not-for-profit entity because of the potential for negative publicity. Fortunately, at least for churches, these are rare occurrences. Only about 1.1% of churches close each year and most of these have orderly dispositions of their properties. Is some cases, however, banks are required to foreclose on a church or other not-for-profit that may have a tax exempt status on their real estate.

We were recently involved in a situation where a Chicago area bank questioned their potential real estate tax liability should they foreclose on a church and take title. We consulted with several Chicago area real estate tax attorneys and township assessors and they all indicated that the bank could have a real estate tax liability. Since the bank is not a tax exempt organization they could be liable for real estate taxes.

In Cook County, Illinois (Chicago) not-for-profits are required to submit an affidavit annually confirming the tax exempt use. The property could go for a time without being assessed if the Assessor has no notice of the change. The bank could be liable for back taxes and penalties, however, if they do not notify the Assessor's office.

The amount of property taxes due would depend upon the assessment. A bank could also file for a vacancy allowance and seek further tax reductions although this would need to be handled on a case by case basis and every County may handle it differently. Real estate assessments and tax liabilities can be complex issues and we would recommend consulting an attorney well versed in the subject should the bank find itself in this position. Consulting with a Chicago area tax appraiser could also be considered.

J. Chie, Esquire

Our law firm provides legal work for real estate closings for over 30 years… What distinguishes Chicago Commercial Appraisal Group from other appraisers is the level of thoroughness and details.

A. Raila, Senior Tax Analyst

Gary is a hands-on professional always willing to pick up the phone and work with you... His appraisal firm produces one of the best real estate forecasting reports in the state. I highly recommend his work and his opinion is highly recognized by governmental agencies.

J. Norris, Property Tax Attorney

As an attorney, we deal with many appraisal reports used in tax appraisals. Gary's work has proven successful for our clients and I do not hesitate recommending him for tax assessment appeal appraisals.

C. Noone, property owner

I needed an appraisal for settling an estate. Mr. Peterson was very professional, punctual and helpful with the process. I received my report ina timely manner. I would certainly recommend this company, as well as use their services in the future.

J. Tsiaousis

Gary is one of the top commercial appraisers in Chicago. Every time I have a client in need of a commercial appraiser I refer all work to him without hesitation.