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Shrake v. The Rock Island County Treasurer & Ex-Officio Collector

Court of Appeals of Illinois, Third District

July 3, 2019

KEVIN SHRAKE and JILL SHRAKE, Plaintiffs-Appellants,
v.
THE ROCK ISLAND COUNTY TREASURER AND EX-OFFICIO COLLECTOR, Defendant-Appellee.

          Appeal from the Circuit Court of the 14th Judicial Circuit, Rock Island County, Illinois. Circuit No. 17-TX-2 The Honorable James G. Conway Jr., Judge, presiding.

          JUSTICE CARTER delivered the judgment of the court, with opinion. Presiding Justice Schmidt and Justice O'Brien concurred in the judgment and opinion.

          OPINION

          CARTER JUSTICE.

         ¶ 1 Plaintiffs, Kevin and Jill Shrake, filed a tax objection complaint in the trial court to challenge the denial of their application for the general homestead exemption for the 2015 real property taxes (payable in 2016). Defendant, the Rock Island County Treasurer, opposed the tax objection complaint. Both sides filed motions for summary judgment. After a hearing on the motions, the trial court granted defendant's motion and denied plaintiffs'. Plaintiffs filed a motion to reconsider, which the trial court also denied. Plaintiffs appeal. We reverse the trial court's ruling and remand with directions to the trial court to enter an order granting plaintiffs' motion for summary judgment and for any other further necessary proceedings consistent with our ruling in this case.

         ¶ 2 FACTS

         ¶ 3 In June 2012, plaintiffs signed a multiyear lease agreement [1] and an option to purchase agreement as to a certain single family residence in Moline, Rock Island County, Illinois, which plaintiffs occupied as their primary residence. The residence was owned by First Financial Group, L.C. (First Financial). Both the lease and option agreements were subsequently recorded.

         ¶ 4 Of relevance to this appeal, the June 2012 lease agreement provided, in pertinent part, as follows:

"3. Lessee shall be liable for the payment of real estate taxes with respect to the residence in accordance with the terms and conditions of 35 ILCS 200/15-175 and for insurance. The parcel number for the premises is SM-6819, and, according to the most recent property tax bill, the current amount of real estate taxes associated with the premises is $3, 214.44 per year. The parties agree that the additional rent set forth above shall be increased or decreased pro rata (effective January 1 of each calendar year) to reflect any increase or decrease in real estate taxes and insurance. Lessee shall be deemed to be satisfying Lessee's liability for the above mentioned real estate taxes and insurance with the additional rent payments as set forth above (or increased or decreased as set forth herein). Lessee may deduct the real estate taxes paid. Lessee agrees to sign up for the General Homestead Exemption in a timely manner. Lessor and Lessee agree to notify the Assessment Office of any change in occupancy that would result in a loss of said exemption."

         Additional paragraphs in the lease agreement provided that the property-tax and liability-insurance bills would actually be paid by the lessor (First Financial) and that the lessees (plaintiffs) could forfeit all sums that they had paid under the lease agreement if they failed to pay rent or any other amount that they owed within a specified period of time.

         ¶ 5 In February 2015, the lease and option agreements were amended. Of relevance to this appeal, the amendment provided, in pertinent part, that

"1. Lessee shall be liable for the payment of real estate taxes with respect to the residence in accordance with the terms and conditions of 35 ILCS 200/15-175 and for insurance, which Lessee shall pay out of their own funds. The Parcel Identification Number for the premises is 1709108062 [handwritten], and, according to the most recent property tax bill, the current amount of real estate taxes associated with the premises per year is $3, 176.48 [handwritten]. The tax bill shall be mailed directly to the Lessee. The parties agree that the amount payable for taxes and insurance shall be increased or decreased pro rata (effective January 1 of each calendar year) to reflect any increase or decrease in real estate taxes and insurance. Lessee may satisfy its liability for the above-mentioned real estate taxes and insurance by making the additional payments as set forth above (or increased or decreased as set forth herein). Such funds shall at all times be the property of Lessee[;] however, Lessor shall hold such funds in escrow on Lessee's behalf for payment of the same. Lessee may deduct the real estate taxes paid on their income tax return. Lessee agrees to sign up for the General Homestead Exemption and any other tax [sic] property tax relief exemptions in a timely manner. Lessor and Lessee agree to notify the Assessment Office of any change in occupancy that would result in a loss of said exemption. Lessee hereby irrevocably appoints Richard I. Vesole as its attorney in fact for purposes of signing up for the General Homestead Exemption and/or any other property tax relief exemptions which Lessee may be eligible for. Richard I. Vesole, as such attorney in fact, may execute all documents on Lessee's behalf in connection therewith."

         The February 2015 amendment also provided that plaintiffs could forfeit all sums that they had paid under the lease or option agreements (or the amendment) if they failed to comply with any of the terms of the agreements or if they failed to exercise the option agreement before the date specified. The amendment further provided that, in all other respects, the original lease and option agreements were to remain in full force and effect.

         ¶ 6 In March 2015, plaintiffs filed a notarized application with the assessment office in Rock Island County to receive the general homestead exemption for the 2015 real property taxes (payable in 2016). The application form, which apparently had been established by the assessment office, was divided into three main sections. The first section contained the instructions for preparing the application. Among other things, the instructions section stated that the following requirements had to be satisfied for a lessee to be eligible for the general homestead exemption: (1) the property had to be a single-family home occupied as the primary residence by an eligible taxpayer as of January 1, 2015, (2) the eligible taxpayer had to be liable for paying the 2015 real estate taxes on the property as evidenced by a written lease that was executed and effective on or before January 1, 2015, and was duly recorded, (3) the property owner had to direct that the property tax bill be mailed directly to the lessee, and (4) the eligible taxpayer's lease had to require that the lessee pay the real estate taxes out of the lessee's own funds. The text of the fourth requirement included the following comment: "a statement such as 'Tenant shall be deemed to be satisfying Tenant's liability for such real estate taxes through the monthly rent payments' is NOT sufficient for this purpose."

         ¶ 7 The second section of the application contained the property identification information and listed the name and address of the owner of the property, the address and parcel identification ...


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