Possible issues with paying Property Taxes late?

Question

I'm in the final stages of a Flip project in Chicago (~3 weeks to completion) and the Property Taxes are due on March 1st. I'm close to maxed out on the rehab budget, and the $1900 for the 1st Instalment of Property Taxes would be a decent hit to my remaining cash/budget. What are the repercussions if I don't pay the taxes by March 1st, and then just have them deducted on the HUD1 at closing (which would hopefully be early May.) Is it possible that I could get into issues that quickly and potentially have a tax lien placed on the property? Or is 2 months late not really a big deal and maybe common? Thanks in advance for any info.

Jamie Engledow · Answer

The previous posters responded same way that I would, penalties and interest. I have had no personal experience, but from what I see the major reprocussions happen waaaaaay later than a couple of months.

Ned Carey · Answer

@Peter Maguire Paying my taxes late is like getting a hard money loan from the city with no qualifying or points. In most areas paying late even by a few months is just some extra interest on the amount due.

Most of the properties I sell, have a year or even two that are due. They just get paid off at settlement.

That is not legal advice, and the laws in your area may be different but it is common for investors to pay taxes late.

John Weidner · Answer

@Peter Maguire

You can pay them late - it's listed on the bill what you will owe and it goes out 2 mos exactly

Peter Maguire · Answer

@John Weidner @Ned Carey

Thanks guys...this is exactly what I was hoping to hear!

Peter Maguire · Answer

Thanks @Edmund Ricker Thats what I was thinking. I emailed the tax collectors office yesterday, but figured I'd post here in the meantime to see what the consensus was. I'll give them a call tomorrow if I don't hear back. For only 2 months late, I'd say it's just a late penalty and interest. I'm ok with that.

Edmund Ricker · Answer

@Peter Maguire

I am not sure how things work in Chicago, but I know in my area the repercussions of paying taxes late are penalties and interest.  I don't believe you have to worry about a tax lien, but that is my guess.

If it were me, I would call the tax collectors office and just ask them the consequences for paying your taxes a couple months late.  Then it is not speculation, it is fact.  Just to cover yourself, I would document the day you called and to whom you spoke.

I hope this helps.

Ed

Possible issues with paying Property Taxes late?

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