Effective January 1, 2018, whenever a title company is searching property for the purpose of issuing commitments or policies, a search must be conducted on the Illinois State Tax Lien Registry (STLR).
Illinois will have an online database for the recording of a lien against a person or entity who owes money/taxes to the Illinois Department of Revenue (“IDOR”). On July 6, 2017, Public Act 100-22 (SB9), became effective allowing the IDOR to create its own state tax lien registry.
Put simply, the IDOR will no longer be recording its liens or releases with local county recorders. Instead, the IDOR now maintains its own searchable lien registry. The IDOR proposed this registry after seeing Mississippi and Georgia successfully administer similar cost-saving programs in their own states. This self-admitted cost savings program will offset recording costs paid by Illinois to individual counties.
In many instances, the search of the STLR will disclose a large number of possible liens against the party the title company is searching. We anticipate that it will become almost mandatory for title companies to require personal information affidavits completed by the buyer and seller prior to closing. This new policy may require the last four digits of a person’s or entity’s #SSN or #FEIN.
This step will be carried out more frequently by title agents to ensure accuracy on title companies’ name searches.
A notice of tax lien registered in the STLR on or after January 1, 2018, will be a lien upon all property owned by the taxpayer in the State of Illinois, without any further requirement of recording in any specific county. When a notice of tax lien is filed by the Department in the registry, the tax lien is perfected and shall be attached to all of the existing and after-acquired property of the debtor, both real and personal, tangible and intangible, which is located in any and all counties within the State of Illinois.
With the implementation of STLR, the lien will continue to have an internal IDOR association with the county where the IDOR has reason to believe the taxpayer has or had, a presence; and will be searchable with the county as a parameter. Despite the specific language in the statute, the IDOR materials suggest the position that all liens, even those in the registry, are merely county liens. However, any association on the STLR to any specific county does not limit the attachment of the lien to all property owned in the entire state.
Questions regarding the internal workings of the STLR can be emailed to [email protected].