A buyer's attorney notices that the closing statement credits the seller for property taxes covering months in the current year even though no tax bill for that year has been issued yet. Which statement best explains this practice under Illinois law?
Correct Answer
A) Illinois property taxes are levied and billed in arrears, so the seller owes the buyer a credit for the portion of the current tax year during which the seller owned the property, even though the bill will not be paid until the following year.
Option A is correct. Illinois real property taxes are assessed and billed in arrears — taxes for a given calendar year are not billed or due until the following year. Because the seller owned the property during the pre-closing portion of the current tax year, the seller is responsible for that period's taxes even though no bill has yet been issued. Standard Illinois closing practice therefore credits the buyer for the seller's accrued but unpaid tax obligation, calculated by prorating the most recent available tax bill. This protects the buyer, who will ultimately pay the full bill when it arrives.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Recording is the act of placing a document in the public records at the county recorder's office to give constructive notice to the world of an interest in real property. Recording protects the holder's interest against subsequent claims.
A special warranty deed guarantees that the grantor has not caused any title defects during their period of ownership, but does not warrant against defects that existed before the grantor acquired the property.
Title insurance is a policy that protects the insured party against financial loss from defects in title that were not discovered during the title search. Unlike other insurance, it covers past events rather than future risks.
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- → Wyoming has:
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