(a) In those cases which arise solely under grounds set forth in Section 255 or 395, and in no other cases, the court which orders a sale in error shall also award interest on the refund of the amount paid for the certificate of purchase, together with all costs paid by the owner of the certificate of purchase or his or her assignor which were posted to the tax judgment, sale, redemption and forfeiture record, except as otherwise provided in this Section. Except as otherwise provided in this Section, interest shall be awarded and paid at the rate of 1% per month from the date of sale to the date of payment to the tax purchaser, or in an amount equivalent to the penalty interest which would be recovered on a redemption at the time of payment pursuant to the order for sale in error, whichever is less.
     (b) Interest on the refund to the owner of the certificate of purchase shall not be paid (i) in any case in which the mobile home sold has been substantially destroyed or rendered uninhabitable or otherwise unfit for occupancy, (ii) when the sale in error is made pursuant to Section 395, or (iii) in any other case where the court determines that the tax purchaser had actual knowledge prior to the sale of the grounds on which the sale is declared to be erroneous.
     (c) When the county collector files a petition for sale in error under Section 255 and mails a notice thereof by certified or registered mail to the tax purchaser, any interest otherwise payable under this Section shall cease to accrue as of the date the petition is filed, unless the tax purchaser agrees to an order for sale in error upon the presentation of the petition to the court. Notices under this subsection may be mailed to the original owner of the certificate of purchase, or to the latest assignee, if known. When the owner of the certificate of purchase contests the collector’s petition solely to determine whether the grounds for sale in error are such as to support a claim for interest, the court may direct that the principal amount of the refund be paid to the owner of the certificate of purchase forthwith. If the court thereafter determines that a claim for interest lies under this Section, it shall award such interest from the date of sale to the date the principal amount was paid. If the owner of the certificate of purchase files an objection to the county collector’s intention to declare an administrative sale in error, as provided under subsection (c) of Section 255, and, thereafter, the county collector elects to apply to the circuit court for a sale in error under subsection (a) of Section 255, then, if the circuit court grants the county collector’s application for a sale in error, the court may not award interest to the owner of the certificate of purchase for the period after the mailing date of the county collector’s notice of intention to declare an administrative sale in error.