How to Recover Surplus Funds in Boone County, Illinois: County-Level Guide

When a property is sold at a tax sale in Illinois, and the sale price exceeds the amount of delinquent taxes, penalties, interest, and costs, the remaining funds are known as "surplus funds" or "excess proceeds." These funds rightfully belong to the former property owner or other parties with a legal interest in the property. Recovering these funds can be a complex process, but understanding the specific procedures in Boone County, Illinois, is the first step.

This guide will walk you through the county-level specifics for navigating the surplus funds recovery process in Boone County, Illinois. While the general framework is set by state law, the local implementation and points of contact are crucial for a successful claim.

Understanding Tax Sales in Boone County

Tax sales in Illinois are conducted to collect delinquent property taxes. If taxes remain unpaid for a specified period, the county treasurer can offer the property for sale. The purchaser at a tax sale does not immediately acquire ownership of the property but rather a lien against it, which can mature into a tax deed if the property is not redeemed by the original owner within a statutory redemption period. When a tax sale generates more money than is owed, those surplus funds are held by the county.

Which County Office Handles Surplus Funds?

In Boone County, as is typical across Illinois, the Boone County Treasurer's Office is generally responsible for managing and holding the proceeds from tax sales. This office is the primary point of contact for inquiries regarding tax sales, delinquent properties, and the existence of surplus funds. While the Treasurer's Office holds the funds, the process for claiming them often involves the Boone County Clerk's Office and potentially the Boone County Circuit Clerk's Office for formal legal filings.

How Boone County Publishes Tax Sale Information

Boone County, like other Illinois counties, is required by law to publish notice of its annual tax sale. This publication serves to inform the public and delinquent property owners about the impending sale. Typically, these notices are published in a local newspaper of general circulation within Boone County for several weeks leading up to the tax sale. The specific newspaper can vary, but it will be a widely circulated local publication.

In addition to newspaper publications, some counties may also post lists of delinquent properties or tax sale results on their official county websites. While a direct, consistently updated public URL specifically for surplus funds lists might not be available, information regarding tax sales and potentially the properties involved can sometimes be found on the Boone County Treasurer's Office website or through direct inquiry to their office.

Local Claim Procedure in Boone County

Recovering surplus funds in Boone County requires adherence to specific procedures, which are largely governed by state law but executed at the county level. The process generally involves making a formal claim for the funds.

Steps to File a Claim:

1. Identify the Surplus Funds: The first step is to confirm that surplus funds exist for a specific property and to determine the exact amount. This information can typically be obtained from the Boone County Treasurer's Office.

2. Gather Necessary Documentation: To prove your entitlement to the funds, you will need to provide documentation. This commonly includes:

   • Proof of Identity: A government-issued photo ID (e.g., driver's license, state ID, passport) for all claimants.
   • Proof of Ownership: Documents establishing your interest in the property at the time of the tax sale. This could include a deed, mortgage documents, probate records (if claiming as an heir), or other legal instruments.
   • Claim Form: The Boone County Treasurer's Office or Circuit Clerk's Office may have specific forms for claiming surplus funds. It's crucial to inquire about and obtain these forms directly.
   • Notarization: Many claim forms and supporting affidavits require notarization. Ensure all necessary signatures are properly notarized by a public notary.

3. Determining Priority: If multiple parties claim an interest in the surplus funds (e.g., former owner, mortgage holder, judgment lienholder), their priority is determined by Illinois law. Generally, lienholders (such as mortgagees or judgment creditors) have priority over the former owner to the extent of their outstanding liens. The distribution of surplus funds will often require a court order to determine the proper disbursement to all interested parties.

4. Where to File: While the Boone County Treasurer's Office holds the funds, the formal claim process often involves filing a petition with the Boone County Circuit Clerk's Office. This is particularly true when there are competing claims or when a court order is required to authorize the release of funds. The Circuit Court will then adjudicate the claims and issue an order directing the Treasurer to disburse the funds.

Timing Considerations:

It is essential to act promptly. While the funds are held, there can be a statute of limitations for making a claim.

State-Level Statute of Limitations

In Illinois, the statute of limitations for claiming surplus funds from a tax sale is generally governed by 735 ILCS 5/13-205, which sets a five-year limitation period for "all civil actions not otherwise provided for." While the specific application to tax sale surplus funds can sometimes be debated in court, it is widely understood that claimants should file their petition for surplus funds within five years from the date the tax deed was issued or the date the right to redemption expired and the surplus funds became available. Delaying beyond this period can result in the forfeiture of your right to claim the funds.

Lienholder vs. Former-Owner Priority and Assignment Contracts

Priority of Claims

Illinois law establishes a clear hierarchy for claims against surplus funds. Generally, the order of priority is as follows:

1. Tax Purchasers: Any remaining balance owed to the tax purchaser (though this is typically covered by the initial sale price).
2. Lienholders: Valid and recorded liens against the property at the time of the tax sale, such as mortgages, judgment liens, and mechanic's liens, are typically paid out in the order of their recording date, up to the amount of the outstanding debt.
3. Former Owner: After all valid liens have been satisfied, any remaining surplus funds are paid to the former owner of the property.

This means that if a property had a mortgage at the time of the tax sale, the mortgage holder would likely have priority over the former owner for the amount of the outstanding mortgage balance.

Assignment Contracts

Assignment contracts, where a former owner assigns their right to claim surplus funds to a third party (often a surplus fund recovery company) in exchange for a percentage of the funds, are common in the industry. While these contracts are generally permissible under Illinois law, they are subject to scrutiny. Courts will examine such contracts to ensure they are fair, not unconscionable, and that the former owner fully understood the terms. It's advisable for anyone considering such an assignment to understand the implications fully, as they typically involve giving up a significant portion of the funds.

Common Pitfalls Specific to County-Level Filing

Navigating the surplus funds recovery process can present several challenges, even with a clear understanding of the steps. Specific to a county-level filing in Boone County, be aware of the following:

• Lack of Specific Forms: Some county offices may not have a dedicated, pre-printed form specifically for surplus fund claims. You might need to draft a petition or affidavit yourself, or with legal assistance, to file with the Circuit Clerk.
• Varying Information Availability: The level of detail and accessibility of information regarding surplus funds can vary. While the Treasurer's Office holds the funds, they may not proactively notify claimants. It's often up to the claimant to initiate the inquiry.
• Court Involvement: Unlike some states where administrative claims are common, Illinois often requires a court order from the Circuit Court to release surplus funds, especially when there are multiple claimants or complex lien situations. This means navigating the court system, which can be time-consuming and may require legal representation.
• Proof of Identity and Interest: Ensuring all required documentation is accurate, complete, and properly notarized is critical. Any discrepancies can delay or derail your claim.
• Statute of Limitations: Missing the five-year deadline can result in the permanent loss of the funds, as the county may eventually transfer unclaimed funds to the state as unclaimed property, but often with a more stringent deadline for the original claimant.

Conclusion

Recovering surplus funds from a tax sale in Boone County, Illinois, is a structured process that requires diligence and attention to detail. By understanding which county offices to contact, the documentation required, and the legal framework governing these claims, former property owners and lienholders can effectively pursue their rightful share of these funds. Given the potential complexities, particularly concerning court filings and competing claims, consulting with an attorney experienced in Illinois property law and tax sales is often a prudent step.

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Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. The information provided may not be applicable to your specific situation, and laws can change. You should consult with a qualified legal professional for advice tailored to your individual circumstances.