Two and a half years after the U.S. Supreme Court ruled that certain property tax sales amounted to unconstitutional “equity theft,” five suburban Illinois counties are proceeding with their annual sales of unpaid property taxes this fall. Meanwhile, Cook County—home to the majority of Illinois’ delinquent parcels—continues to delay its sale, now seeking a second postponement until summer 2026. The different approaches between Cook and the collar counties highlight both the complexity of Illinois’ property tax sale system and the legal uncertainty that has followed the court’s 2023 Tyler v. Hennepin County decision.
In Tyler, the Supreme Court held that when governments or third-party buyers seize and sell a property to recover back taxes but retain any excess value beyond the debt owed, they violate the Fifth Amendment’s Takings Clause. The ruling forced at least a dozen states to revise their property tax laws—but Illinois remains the lone state that has not yet enacted a legislative remedy. The result has left county treasurers unsure whether continuing tax sales puts them on shaky constitutional ground.
Cook County Treasurer Maria Pappas successfully lobbied for a state law to postpone the county’s August 2024 tax sale until March 2026, citing the need for time to develop a fair and lawful process. Now, Pappas is asking Springfield to delay again until next summer. “Cook County should delay selling tax certificates until the courts and General Assembly determine a legal and equitable property tax foreclosure process for Illinois,” she said. Her caution contrasts with suburban counties like Kane, Will, and Lake, where treasurers say they must follow existing law until the legislature acts, with sales already scheduled from October through December.
Despite their willingness to proceed, county officials acknowledge both the moral and legal dilemmas. Kane County Treasurer Chris Lauzen called himself “deeply sympathetic” to taxpayers who lose equity beyond what they owe but emphasized that “my role as an elected county treasurer is not to make or interpret the laws; it is to administer them.” Lake County Treasurer Holly Kim noted that very few properties in her county reach the point where ownership is transferred to a third party, reducing local exposure to potential claims of “equity theft.”
Still, Illinois counties face growing legal risk. In September, a federal judge ruled that counties’ administration of tax sales is a “discretionary policy decision,” not a state mandate—opening the door to liability. Lauzen and others have criticized the General Assembly for failing to address the issue, noting that proposed legislative fixes stalled during the 2024 spring session. The Illinois County Treasurers’ Association says it is now collaborating with lawmakers on language to comply with the Supreme Court ruling but warns that delaying sales alone “does not resolve the core issues.”
Further uncertainty looms as the U.S. Supreme Court considers Pung v. Isabella County, Michigan, which could determine whether such tax sales also violate the Eighth Amendment’s prohibition on excessive fines. If the Court expands its interpretation, states may need to redesign their systems again to ensure property owners recover their home equity beyond tax debts. Ironically, Cook County’s decision to delay may position it to adapt more efficiently should that happen—allowing Illinois to fix both constitutional problems in one legislative overhaul instead of two.
This story is based on reporting from Crain's Chicago Business.