Indemnity Fund; Sales In Error

  1. Law
  2. Illinois Compiled Statutes
  3. REVENUE
  4. Mobile Home Local Services Tax Enforcement Act.
  5. Indemnity Fund; Sales In Error

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(35 ILCS 516/Div. 6 heading)

Division 6. Indemnity fund; sales in error

 

(35 ILCS 516/235)

Sec. 235. Creation of indemnity fund.

(a) Each person purchasing any mobile home at a sale under this Act shall pay to the county collector, prior to the issuance of any certificate of purchase, a fee of $20 for each item purchased. A like sum shall be paid for each year that all or a portion of subsequent taxes are paid by the tax purchaser and posted to the tax judgment, sale, redemption and forfeiture record where the underlying certificate of purchase is recorded.

(b) The amount paid prior to issuance of the certificate of purchase pursuant to subsection (a) shall be included in the purchase price of the mobile home in the certificate of purchase and all amounts paid under this Section shall be included in the amount required to redeem under Section 300. Except as otherwise provided in subsection (b) of Section 240, all money received under subsection (a) shall be paid by the collector to the county treasurer of the county in which the mobile home is situated, for the purpose of an indemnity fund. The county treasurer, as trustee of that fund, shall invest all of that fund, principal and income, in his or her hands from time to time, if not immediately required for payments of indemnities under subsection (a) of Section 245, in investments permitted by the Illinois State Board of Investment under Article 22A of the Illinois Pension Act. The county collector shall report annually to the county clerk on the condition and income of the fund. The indemnity fund shall be held to satisfy judgments obtained against the county treasurer, as trustee of the fund. No payment shall be made from the fund, except upon a judgment of the court which ordered the issuance of a tax certificate of title.

(Source: P.A. 94-412, eff. 8-2-05.)

 

(35 ILCS 516/240)

Sec. 240. Amount to be retained in indemnity fund.

(a) The county board in each county shall determine the amount of the fund to be maintained in that county, which amount shall not be less than $50,000 and shall not be greater than $1,000,000 in counties with less than 3,000,000 inhabitants. Any moneys accumulated by the county treasurer in excess of the amount so established, as trustee of the fund, shall be paid by him or her annually to the general fund of the county.

(b) In counties in which a Tort Liability Fund is established, all sums of money received under subsection (a) of Section 235 may be deposited in the general fund of the county for general county governmental purposes, if the county board provides by ordinance that the indemnity required by this Section shall be provided by the Tort Liability Fund.

(Source: P.A. 92-807, eff. 1-1-03.)

 

(35 ILCS 516/245)

Sec. 245. Payments from Indemnity Fund.

(a) Any owner of a mobile home sold under any provision of this Act who sustains loss or damage by reason of the issuance of a tax certificate of title under Section 360 or 400 and who is barred or is in any way precluded from bringing an action for the recovery of the mobile home shall have the right to indemnity for the loss or damage sustained, limited as follows:

  • (1) An owner who resided in a mobile home on the last day of the period of redemption and who is equitably entitled to compensation for the loss or damage sustained has the right to indemnity. An equitable indemnity award shall be limited to the fair cash value of the mobile home as of the date the tax certificate of title was issued less any liens on the mobile home, and the award will not exceed $99,000. The court shall liberally construe this equitable entitlement standard to provide compensation wherever, in the discretion of the court, the equities warrant the action.
  • An owner of a mobile home who requests an award in excess of $99,000 must prove that the loss of his or her mobile home was not attributable to his or her own fault or negligence before an award in excess of $99,000 will be granted.
  • (2) An owner who sustains the loss or damage of any mobile home occasioned by reason of the issuance of a tax certificate of title, without fault or negligence of his or her own, has the right to indemnity limited to the fair cash value of the mobile home less any liens on the mobile home. In determining the existence of fault or negligence, the court shall consider whether the owner exercised ordinary reasonable diligence under all of the relevant circumstances.
  • (3) In determining the fair cash value of a mobile home less any liens on the mobile home, the fair cash value shall be reduced by the principal amount of all taxes paid by the tax purchaser or his or her assignee before the issuance of the tax certificate of title.
  • (4) If an award made under paragraph (1) or (2) is subject to a reduction by the amount of an outstanding lien on the mobile home, other than the principal amount of all taxes paid by the tax purchaser or his or her assignee before the issuance of the tax certificate of title and the petitioner would be personally liable to the lienholder for all or part of that reduction amount, the court shall order an additional indemnity award to be paid directly to the lienholder sufficient to discharge the petitioner's personal liability. The court, in its discretion, may order the joinder of the lienholder as an additional party to the indemnity action.

(b) Indemnity fund; subrogation.

  • (1) Any person claiming indemnity hereunder shall petition the court which ordered the tax certificate of title to issue, shall name the county treasurer, as trustee of the indemnity fund, as defendant to the petition, and shall ask that judgment be entered against the county treasurer, as trustee, in the amount of the indemnity sought. The provisions of the Civil Practice Law shall apply to proceedings under the petition, except that neither the petitioner nor county treasurer shall be entitled to trial by jury on the issues presented in the petition. The court shall liberally construe this Section to provide compensation wherever in the discretion of the Court the equities warrant such action.
  • (2) The county treasurer, as trustee of the indemnity fund, shall be subrogated to all parties in whose favor judgment may be rendered against him or her, and by third party complaint may bring in as a defendant any person, other than the tax certificate of title grantee and its successors in title, not a party to the action who is or may be liable to him or her, as subrogee, for all or part of the petitioner's claim against him or her.

(c) Any contract involving the proceeds of a judgment for indemnity under this Section, between the tax certificate of title grantee or its successors in title and the indemnity petitioner or his or her successors, shall be in writing. In any action brought under this Section, the Collector shall be entitled to discovery regarding, but not limited to, the following:

  • (1) the identity of all persons beneficially interested in the contract, directly or indirectly, including at least the following information: the names and addresses of any natural persons; the place of incorporation of any corporation and the names and addresses of its shareholders unless it is publicly held; the names and addresses of all general and limited partners of any partnership; the names and addresses of all persons having an ownership interest in any entity doing business under an assumed name, and the county in which the assumed business name is registered; and the nature and extent of the interest in the contract of each person identified;
  • (2) the time period during which the contract was negotiated and agreed upon, from the date of the first direct or indirect contact between any of the contracting parties to the date of its execution;
  • (3) the name and address of each natural person who took part in negotiating the contract, and the identity and relationship of the party that the person represented in the negotiations; and
  • (4) the existence of an agreement for payment of attorney's fees by or on behalf of each party.

Any information disclosed during discovery may be subject to protective order as deemed appropriate by the court. The terms of the contract shall not be used as evidence of value.

(Source: P.A. 92-807, eff. 1-1-03.)

 

(35 ILCS 516/250)

Sec. 250. Indemnity fund fraud.

(a) A person commits the offense of indemnity fund fraud when that person knowingly:

  • (1) offers or agrees to become a party to, or to acquire an interest in, a contract involving the proceeds of a judgment for indemnity under Section 245 before the end of the period of redemption from the tax sale to which the judgment relates;
  • (2) fraudulently induces a party to forego bringing an action for the recovery of the mobile home;
  • (3) makes a deceptive misrepresentation during the course of negotiating an agreement under subsection (c) of Section 245; or
  • (4) conspires to violate any of the provisions of this subsection.

(b) Commission of any one act described in subsection (a) is a Class A misdemeanor. Commission of more than one act described in subsection (a) during a single course of conduct is a Class 4 felony. A second or subsequent conviction for violation of any portion of this Section is a Class 4 felony.

(c) The State's Attorney of the county in which a judgment for indemnity under Section 245 is entered may bring a civil action in the name of the People of the State of Illinois against a person who violates paragraph (1), (2), or (3) of subsection (a). Upon a finding of liability in the action the court shall enter judgment in favor of the People in a sum equal to 3 times the amount of the judgment for indemnity, together with costs of the action and reasonable attorney's fees. The proceeds of any judgment under this subsection shall be paid into the general fund of the county.

(Source: P.A. 92-807, eff. 1-1-03.)

 

(35 ILCS 516/255)

Sec. 255. Sales in error.

(a) When, upon application of the county collector, the owner of the certificate of purchase, or a municipality that owns or has owned the mobile home ordered sold, it appears to the satisfaction of the court that ordered the mobile home sold that any of the following subsections are applicable, the court shall declare the sale to be a sale in error:

  • (1) the mobile home was not subject to taxation,
  • (1.5) the mobile home has been moved to a different location,
  • (2) the taxes had been paid prior to the sale of the mobile home,
  • (3) there is a double computation of the tax,
  • (4) the description is void for uncertainty,
  • (5) the assessor, chief county assessment officer, board of review, board of appeals, or other county official has made an error (other than an error of judgment as to the value of any mobile home),
  • (5.5) the owner of the mobile home had tendered timely and full payment to the county collector that the owner reasonably believed was due and owing on the mobile home, and the county collector did not apply the payment to the mobile home; provided that this provision applies only to mobile home owners, not their agents or third-party payors,
  • (6) prior to the tax sale a voluntary or involuntary petition has been filed by or against the legal or beneficial owner of the mobile home requesting relief under the provisions of 11 U.S.C. Chapter 7, 11, 12, or 13, or
  • (7) the mobile home is owned by the United States, the State of Illinois, a municipality, or a taxing district.

(b) When, upon application of the owner of the certificate of purchase only, it appears to the satisfaction of the court that ordered the mobile home sold that any of the following subsections are applicable, the court shall declare the sale to be a sale in error:

  • (1) A voluntary or involuntary petition under the provisions of 11 U.S.C. Chapter 7, 11, 12, or 13 has been filed subsequent to the tax sale and prior to the issuance of the tax certificate of title.
  • (2) The mobile home sold has been substantially destroyed or rendered uninhabitable or otherwise unfit for occupancy subsequent to the tax sale and prior to the issuance of the tax certificate of title.

(c) When the county collector discovers, prior to the expiration of the period of redemption, that a tax sale should not have occurred for one or more of the reasons set forth in subdivision (a)(1), (a)(2), (a)(6), or (a)(7) of this Section, the county collector shall notify the last known owner of the certificate of purchase by certified and regular mail, or other means reasonably calculated to provide actual notice, that the county collector intends to declare an administrative sale in error and of the reasons therefor, including documentation sufficient to establish the reason why the sale should not have occurred. The owner of the certificate of purchase may object in writing within 28 days after the date of the mailing by the county collector. If an objection is filed, the county collector shall not administratively declare a sale in error, but may apply to the circuit court for a sale in error as provided in subsection (a) of this Section. Thirty days following the receipt of notice by the last known owner of the certificate of purchase, or within a reasonable time thereafter, the county collector shall make a written declaration, based upon clear and convincing evidence, that the taxes were sold in error and shall deliver a copy thereof to the county clerk within 30 days after the date the declaration is made for entry in the tax judgment, sale, redemption, and forfeiture record pursuant to subsection (d) of this Section. The county collector shall promptly notify the last known owner of the certificate of purchase of the declaration by regular mail and shall promptly pay the amount of the tax sale, together with interest and costs as provided in Sections 260 through 280, upon surrender of the original certificate of purchase.

(d) If a sale is declared to be a sale in error, the county clerk shall make entry in the tax judgment, sale, redemption and forfeiture record, that the mobile home was erroneously sold, and the county collector shall, on demand of the owner of the certificate of purchase, refund the amount paid, pay any interest and costs as may be ordered under Sections 260 through 280, and cancel the certificate so far as it relates to the mobile home. The county collector shall deduct from the accounts of the appropriate taxing bodies their pro rata amounts paid.

(Source: P.A. 98-949, eff. 8-15-14.)

 

(35 ILCS 516/260)

Sec. 260. Interest on refund.

(a) In those cases which arise solely under grounds set forth in Section 255 or 395, and in no other cases, the court which orders a sale in error shall also award interest on the refund of the amount paid for the certificate of purchase, together with all costs paid by the owner of the certificate of purchase or his or her assignor which were posted to the tax judgment, sale, redemption and forfeiture record, except as otherwise provided in this Section. Except as otherwise provided in this Section, interest shall be awarded and paid at the rate of 1% per month from the date of sale to the date of payment to the tax purchaser, or in an amount equivalent to the penalty interest which would be recovered on a redemption at the time of payment pursuant to the order for sale in error, whichever is less.

(b) Interest on the refund to the owner of the certificate of purchase shall not be paid (i) in any case in which the mobile home sold has been substantially destroyed or rendered uninhabitable or otherwise unfit for occupancy, (ii) when the sale in error is made pursuant to Section 395, or (iii) in any other case where the court determines that the tax purchaser had actual knowledge prior to the sale of the grounds on which the sale is declared to be erroneous.

(c) When the county collector files a petition for sale in error under Section 255 and mails a notice thereof by certified or registered mail to the tax purchaser, any interest otherwise payable under this Section shall cease to accrue as of the date the petition is filed, unless the tax purchaser agrees to an order for sale in error upon the presentation of the petition to the court. Notices under this subsection may be mailed to the original owner of the certificate of purchase, or to the latest assignee, if known. When the owner of the certificate of purchase contests the collector's petition solely to determine whether the grounds for sale in error are such as to support a claim for interest, the court may direct that the principal amount of the refund be paid to the owner of the certificate of purchase forthwith. If the court thereafter determines that a claim for interest lies under this Section, it shall award such interest from the date of sale to the date the principal amount was paid. If the owner of the certificate of purchase files an objection to the county collector's intention to declare an administrative sale in error, as provided under subsection (c) of Section 255, and, thereafter, the county collector elects to apply to the circuit court for a sale in error under subsection (a) of Section 255, then, if the circuit court grants the county collector's application for a sale in error, the court may not award interest to the owner of the certificate of purchase for the period after the mailing date of the county collector's notice of intention to declare an administrative sale in error.

(Source: P.A. 98-949, eff. 8-15-14.)

 

(35 ILCS 516/265)

Sec. 265. Refund of other taxes paid by holder of certificate of purchase. The court which orders a sale in error shall order the refund of all other taxes paid by the owner of the certificate of purchase or his or her assignor which were validly posted to the tax judgment, sale redemption and forfeiture record subsequent to the tax sale, together with interest on the other taxes under the same terms as interest is otherwise payable under Section 260. The interest under this Section shall be calculated at the rate of 1% per month from the date the other taxes were paid and not from the date of sale. The collector shall take credit in settlement of his or her accounts for the refund of the other taxes as in other cases of sale in error under Section 255.

(Source: P.A. 92-807, eff. 1-1-03.)

 

(35 ILCS 516/270)

Sec. 270. Orders for payment of interest. The county treasurer may determine in his or her discretion whether payment of interest and costs shall be made as provided in Section 275, 280, or 285. If the treasurer determines not to make payment as provided in those Sections, the treasurer shall pay any interest or costs awarded under this Section pro rata from those accounts where the principal refund of the tax sale purchase price under Section 275 is taken.

(Source: P.A. 92-807, eff. 1-1-03.)

 

(35 ILCS 516/275)

Sec. 275. Fund for payment of interest. In counties of under 3,000,000 inhabitants, the county board may impose a fee of up to $10, which shall be paid to the county collector, upon each person purchasing any mobile home at a sale held under this Act, prior to the issuance of any certificate of purchase. That amount shall be included in the price paid for the certificate of purchase and the amount required to redeem under Section 300.

All sums of money received under this Section shall be paid by the collector to the county treasurer of the county in which the mobile home is situated for deposit into a special fund. It shall be the duty of the county treasurer, as trustee of the fund, to invest the principal and income of the fund from time to time, if not immediately required for payments under this Section, in investments as are authorized by Sections 3-10009 and 3-11002 of the Counties Code. The fund shall be held to satisfy orders for payment of interest and costs obtained against the county treasurer as trustee of the fund. No payment shall be made from the fund except by order of the court declaring a sale in error under Section 255. Any moneys accumulated in the fund by the county treasurer in excess of (i) $100,000 in counties with 250,000 or less inhabitants or (ii) $500,000 in counties with more than 250,000 inhabitants shall be paid each year prior to the commencement of the annual tax sale, first to satisfy any existing unpaid judgments entered pursuant to Section 235, and any funds remaining thereafter shall be paid to the general fund of the county.

(Source: P.A. 94-362, eff. 7-29-05.)

 

(35 ILCS 516/280)

Sec. 280. Claims for interest and costs. Any person claiming interest or costs under Sections 260 through 275 shall include the claim in his or her petition for sale in error under Section 255. Any claim for interest or costs which is not included in the petition is waived, except interest or costs may be awarded to the extent permitted by this Section upon a sale in error petition filed by the county collector, without requiring a separate filing by the claimant. Any order for interest or costs upon the petition for sale in error shall be deemed to be entered against the county treasurer as trustee of the fund created by Section 275. The fund shall be the sole source for payment and satisfaction of orders for interest or costs, except as otherwise provided in this Section. If the court determines that the fund has been depleted and will not be restored in time to pay an award with reasonable promptness, the court may authorize the collector to pay the interest portion of the award pro rata from those accounts where the principal refund of the tax sale purchase price under Section 255 is taken.

(Source: P.A. 92-807, eff. 1-1-03.)

 

(35 ILCS 516/285)

Sec. 285. Recovery of amount of tax paid by purchaser at erroneous sale. In addition to all other remedies, when the purchaser or assignee of a certificate of purchase that has been declared an erroneous sale, has paid any tax upon the mobile home sold, which was not paid by the owner of the mobile home and was not refunded to the tax purchaser or assignee by the county, the purchaser or assignee may recover from the owner the amount he or she paid, with 10% interest, as money paid for the owner's use.

(Source: P.A. 92-807, eff. 1-1-03.)


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