If you are still staring at your eyewatering Cook County property tax bill — due Dec. 15, as in Monday — you might well be wondering what would happen if you failed to pay in a timely fashion.

First, you’ll be charged a late fee of 0.75% per month (9% annually), which is actually less egregious than was previously the case, thanks to the efforts of Cook County Treasurer Maria Pappas. About 13 months after the second installment due date, the county must by Illinois law sell your debt at a public auction called the Annual Tax Sale. There, investors who know how to play this system (often because their parents taught them) immediately pay your tax debt to the county. They don’t get your property (yet), but they do obtain a so-called tax certificate, giving them a claim. If you have not paid (taxes, interest, fees etc.) after about another 30 months (less if it is commercial property) that buyer can snag your place and kick you to the curb. Often, the delinquent owner stays put but is no longer a property owner; instead they now owe rent to the taxpayer to live in the place they used to own.

As we have written before, this system feels like something from the 19th century; it has the historical stench of a racist method to strip equity from Black homeowners.

There is only one argument in its favor: Cook County gets paid in a timely way. But it then interjects a self-interested private party into the procedure even though the dispute is between the homeowner and Cook County. And, of course, the sale results in a loss of equity. Let’s say your home is worth $200,000 and you have a mortgage of $150,000 and you can’t pay your $5,000 bill. You’d end up losing the $45,000 you have in the house, even after the sale.

That part, that heinous aspect of this system, is what a federal judge found to be unconstitutional last Monday. Ruling on a class-action lawsuit filed more than three years ago and falling in line with a 2023 U.S. Supreme Court decision involving a case in Hennepin County, Minnesota (Hennepin v. Tyler), U.S. District Judge Matthew F. Kennelly found that the sales violate the Fifth Amendment’s prohibition against taking property without just compensation and the Eighth Amendment’s ban on excessive fines. He’s right, of course. Everybody involved in the system knows he’s right.

So this cannot — will not — continue. The salient question now, yet to be ruled upon, is what liability Cook County has for those wronged in the past. We’d say the plaintiffs have a very good case and not just the 1,700 who are part of the class-action suit. Similar cases are pending in DuPage and Lake counties.

The wild thing here is that Illinois is the only U.S. state that failed to nix its tax sales in light of the Supreme Court’s ruling. As a result, the counties have argued that they should not be the ones paying out because they were following state law. They may well have a decent case when they claim to have had no choice in the matter. The state? Perhaps not as much.

The counties have made other novel legal arguments: it’s a private investor who gets the equity so it’s not their fault (sue the buyer instead); there is more than ample chance to pay and even a fund to help — that kind of thing. But that stuff is mostly balderdash. Equity was being stripped and the Supremes have said, no can do. Either the state or the county is the responsible party. If you lose your home, you won’t care which unit of government is responsible.

This mess might be yet bigger.

There’s another interesting case involving a situation in Isabella County, Michigan. Michigan does not now have a system like Illinois but when it is determining what equity it should be remitting back to the homeowner, it uses the basis of the tax sale. But in this case, the descendent of a deceased homeowner argues that the proceeds from the sale are not a fair representation of the home’s true market value, but a mere fraction.

Obviously, you get more if you sell your house on the open market over time than you do in a rushed, shady auction (and these are rushed, shady auctions). So that’s another problem for Cook County. Even if it agrees to repay equity as part of some settlement, how will it determine what that amount should be?

You could argue that if you don’t want your home sold under duress, then pay your darn property taxes. Fair point there. Banks foreclose all the time and sell property at auction, often getting less than a standard listing would bring in. But the justices have said equity must be repaid by government entities and we’ve heard plenty of stories of Cook County tax sales resulting in buyer bargains. After all, that’s why these buyers are willing to show up and then wait 30 months for their bounty.

So, reform is needed here and, based on the actions of the courts, needed quickly. The solution won’t be easy; maybe Cook County is going to need some kind of real estate sales arm, which might not be as crazy as it sounds, given that we think it’s fair for government to recoup its costs from the property tax scofflaws.

The real value to the Illinois counties, of course, is not the tax sale but the threat of the tax sale that gets people to pay up. However this is resolved, some kind of consequence for not paying will have to be in place.

But the courts are clear and, in this case, morally right: Government can’t take your entire equity if it is more than what you owe.

Of course, if Illinois did not have such crushing property taxes in the first place, this would be far less of a problem.

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