Illinois Real Estate Law strategy: county records, occupancy conflict, and what deserves review before response

Illinois real estate law has several distinctive features. Illinois uses judicial foreclosure — like New York and Florida — meaning all mortgage foreclosures must go through circuit court. The Illinois Mortgage Foreclosure Law (735 ILCS 5/15-1101 et seq.) provides borrowers meaningful procedural protections, including a right of redemption period after the foreclosure judgment. Chicago's transfer taxes are among the highest in the country, creating significant closing costs in Cook County. Illinois real estate transactions customarily involve attorneys on both sides.

Illinois Judicial Foreclosure Process

The Illinois Mortgage Foreclosure Law (IMFL, 735 ILCS 5/15-1101 et seq.) governs all mortgage foreclosures in Illinois. The process: lender files a foreclosure complaint in circuit court; borrower is served and has 30 days to respond; if uncontested, summary judgment is entered; the court issues a foreclosure judgment and order of sale; the property is sold at a judicial sale typically conducted by the county sheriff; the court confirms the sale; and a deficiency judgment can be entered against the borrower for any shortfall. Illinois provides a statutory right of redemption — for residential owner-occupied property, the borrower has 7 months from the date of the foreclosure judgment (or 3 months after the judicial sale, whichever is later) to redeem the property by paying the amount owed. This redemption period is an important protection that keeps Illinois foreclosure timelines longer than non-judicial states.

Illinois Homestead Exemption

Illinois provides a homestead exemption from judgment creditors (not mortgage foreclosure) under 735 ILCS 5/12-901: the first $15,000 of a person's equity in their primary residence is exempt from the claims of most judgment creditors ($30,000 for head of family or co-owners). This is significantly lower than Florida's unlimited homestead protection and less protective than some other states. The exemption applies to execution of judgment liens — it does not protect against mortgage foreclosure, property tax liens, or mechanic's liens.

Chicago Transfer Tax: One of the Highest in the Nation

Real estate transfers in Illinois are subject to Illinois Real Estate Transfer Tax ($0.50 per $500 of consideration — seller typically pays). In Chicago, the City of Chicago Real Estate Transfer Tax adds significantly: buyers pay $3.75 per $500 (effective April 2023 at this rate); sellers pay $1.50 per $500. Cook County imposes an additional $0.25 per $500. On a $400,000 Chicago purchase: the buyer pays $3,000 ($3.75/$500 × $400,000/500 × $500), the seller pays $1,200 from city tax plus $1,000 state tax plus $200 county tax = $2,400, for combined transfer taxes of approximately $5,400. Chicago's transfer taxes have been contentious — a 2024 ballot measure sought to increase the rate on high-value properties but was rejected.

Illinois Landlord-Tenant Law: Security Deposits

Illinois does not have a statewide security deposit limit. However, the City of Chicago's Residential Landlord and Tenant Ordinance (RLTO, Chicago Mun. Code § 5-12-080) requires landlords to: hold deposits in federally insured interest-bearing accounts; pay interest on deposits within 30 days after the end of each 12-month rental period; and return deposits (with interest) within 30 days after the tenant vacates, along with an itemized statement of deductions. Failure to comply with Chicago's RLTO deposit requirements can result in the landlord forfeiting the right to deduct from the deposit and owing the tenant twice the deposit amount plus attorney fees.