Tax Deeds

AP Properties, Inc v Goshinsky, 714 NE2d 519.

Facts: A.P. Properties, Inc. (A.P.) purchased the delinquent taxes on property that Goshinsky owned. Before the redemption period expired, Goshinsky sold the property to the Illinois Real Estate Opportunity Fund, LLC (the Fund), who later redeemed the taxes. When the Fund sought to dismiss A.P.'s petition for tax deed, A.P. responded that because the Fund had not filed a written redemption under protest, it was prohibited from challenging A.P.'s petition for tax deed. In addition, A.P. filed a chancery complaint alleging that the transfer of the property violated the Uniform Fraudulent Transfer Act (UFTA), 740 ILCS 160/1 et seq. The trial court and the appellate court dismissed both motions. A.P. appealed.

Holding: Affirmed. The Supreme Court of Illinois held that in order for the UFTA to apply, a debtor/creditor relationship must exist. Illinois tax deed procedures establish a debtor/creditor relationship between the tax purchaser and the county and a separate debtor/creditor relationship between the county and the landowner. The Illinois Tax Code goes to great lengths to ensure that a debtor/creditor relationship does not exist between the landowner and the tax purchaser. Consequently, the UFTA does not apply to tax deed procedures.

Regarding the assertion that the redemption was not proper because the Fund did not file a form for redeeming under protest, the Supreme Court held that if a party is not redeeming under protest, it would be absurd to require that party to file a form specifying non-existent grounds for objection. Section 21-380 applies only when the party redeeming taxes is seeking to preserve its right to defend against the petition for tax deed.

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