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). This affords another level of protection for consumers, creating an even more through examination of potential encumbrances that could impair a seller’s ability to deliver clean title to property.
At issue is the recording of liens against person(s) or entity(s) who owes money/taxes to the Illinois Department of Revenue (“IDOR”). In the past, the IDOR recorded its liens or releases with local county recorders. This created extra work for the IDOR, as well as the title companies conducting lien searches. It also introduced many opportunities for errors, both in the data handoffs between the IDOR and country recorders, and title companies, who were being asked to review voluminous data.
To address this, on July 6, 2017, Public Act 100-22 (SB9), became effective, allowing the IDOR to create its own state tax lien registry. This database launched on January 1, 2018.
By maintaining a single statewide database and no longer recording its liens or releases with local county recorders, the IDOR hopes to streamline the lien search process. From this author’s perspective as a Six Sigma Green Belt, it certainly seems like it should reduce unnecessary waste from the process, which should reduce the aforementioned opportunities for error, speed up the lien search process, and ultimately, reduce costs (including but not limited to recording costs) for taxpayers and consumers.
In many instances, a STLR search will disclose a large number of possible liens against the party the title company is searching, making accuracy on name searches will become more important than ever. In order to reduce the amount of “false positives” (e.g., false alarms), attorneys should expect title companies to make personal information affidavits completed by the buyer and seller prior to closing mandatory and should add them to closing document packages submitted to their clients prior to closing.
This new policy will also require the last four digits of a person’s or entity’s #SSN or #FEIN. Attorneys should use caution when transmitting this type of sensitive information using unencrypted email. Byrne Law is at the forefront of cybersecurity and privacy matters and is committed to observing best practices to protect its clients against threats like identity theft and wire fraud.
Byrne Law will continue to provide news and updates on matters affecting the Illinois real estate community. If you have further questions, please contact Sean Byrne.