Pursuant to 35 ILCS 200/9-45, counties may establish a property index system to be used to assess and collect taxes. In counties that have established a permanent index system, a unique permanent index number (PIN) is assigned for each property. For example, the PIN in Cook County is made up of 14 numbers:

All the numbers in the PIN provide information about the property. The first two numbers indicate the township of the property. The second set of numbers indicates the section the property is in. The third set of numbers signifies what block the property is located in. The fourth set of numbers indicates the lot number. The last set of numbers is for condominium properties and is unique for each unit within the condominium development.

So what happens if the property is changed in some way? For example, what if you sell two feet to the neighbor? Or what if a condominium is built on what was previous vacant land? Or what if a parcel of real estate is divided into multiple tracts from an original parcel? Under all these scenarios, the seller must apply for a tax division. Generally, information on the requirements for a tax division can be obtained from the county assessor's office.

For the most part a tax division is done automatically by the county. However, in Cook County there are certain situations where parties are required to apply for a tax division.

765 ILCS 5/35d provides that in counties with 3,000,000 or more inhabitants (Cook County) a grantor must provide the grantee with a PIN that represents the legal description of the property that is being conveyed. If the PIN does not match the legal description, the statute mandates that the grantor provide one of the following three items to the grantee:(1) Proof that proper application for division, which requests division of property, a portion of which would result in a permanent index number or numbers that represent the legal description found in the deed or instrument of conveyance, has been filed with the county assessor;

(2) A recorded plat of subdivision that would result in the issuance of a permanent index number or numbers as described in subdivision (1); or

(3) A recorded condominium declaration that would result in the issuance of a permanent index number or numbers as described in subdivision (1).

765 ILCS5/35d(1)-(3).Failure to comply with one of the above three options will cause the grantor to "be personally liable to the grantee for taxes...and attorney's fees." The liability extends until there is compliance with the requirement.

A prudent seller's attorney will make sure that the PIN represents the legal description being conveyed in order to prevent the seller from having personal liability to the buyer. Similarly, a buyer's attorney should make sure that the PIN represents the legal description being conveyed to make sure that the buyer does not end up with a problem when he goes to sell the property.

If you have any questions, Contact an Underwriter.