Bulletin: IL2014002

Dear Associates:

The following is a summary of Legislation that has been signed into law through September 1, 2014:

RECORDINGS:

A.         Effective June 2, 2014, Waukegan Ordinance 14-O-68 was passed which may prevent parties from recording a deed in Lake County for property located in the city of Waukegan. The ordinance requires that all sellers, buyers, or their agents obtain a closing letter from the city setting forth all fees and charges due the city prior to closing; and further requires that such fees and charges must be paid in full prior to the transfer of property located in Waukegan. The ordinance does not appear to create a transfer tax or transfer stamp. The ordinance also requires title companies to add an exception to any title commitment issued for property located in Waukegan. Stewart Title Guaranty Company’s requirements for exceptions to be raised on title have not changed based on this ordinance.

B.         Effective immediately, PA 98-1063 amends the Local Records Act to provide that any person who knowingly, without lawful authority and with the intent to defraud any party, public officer, or entity, alters, destroys, removes, or conceals any public record commits a Class 4 felony.

FORECLOSURE:

            Effective August 26, 2014, PA 98-1099 defines "omitted subordinate interest". It provides that certain persons holding real estate encumbered by an omitted subordinate interest may file a strict foreclosure complaint consisting substantially of certain specified information. It provides that subject to the objection of the defendant, the court shall enter a judgment extinguishing the omitted subordinate interest by vesting absolute title to the mortgaged real estate in the plaintiff. It provides procedures by which a holder of an omitted subordinate interest may redeem the interest. It provides that a person whose omitted subordinate interest was not terminated by a prior foreclosure action does not have a right to file a strict foreclosure action.

TITLE INSURANCE:

            Effective January 1, 2015, PA 98-0832 amends the Title Insurance Act with regards to the requirement that every application for registration of a title insurance agent shall include a signed and notarized affidavit of the applicant, affirming that the applicant and every owner, officer, director, principal, member, or manager of the applicant has never been convicted or pled guilty to any felony or misdemeanor involving a crime of theft or dishonesty (Good Moral Character Affidavit). It provides that, alternatively, the affidavit may accurately disclose any such felony or misdemeanor involving a crime of theft or dishonesty. It provides that no person who has had a conviction or pled guilty to any felony or misdemeanor involving theft or dishonesty may be registered by a title insurance company without a written notification (rather than a separate written notification) to the Secretary disclosing the conviction or plea.

            Effective August 26, 2014, PA 98-1067 amends the Title Insurance Act by deleting the language that sunsets a provision concerning disbursement of settlement funds out of fiduciary trust accounts on January 1, 2015.

PROBATE:

            Effective August 1, 2014, PA 98-0833 amends the Probate Act of 1975 (rules regarding persons convicted of elder abuse). It provides that provisions barring certain persons from receiving any property, benefit, or other interest by reason of the death of an elderly person or person with a disability apply also to persons who have been found liable for financial exploitation, abuse, or neglect of an elderly person or a person with a disability by a preponderance of evidence in a civil proceeding. It provides that a civil action against a person for financial exploitation, abuse, or neglect of an elderly person or a person with a disability may be brought after the death of the victim or during the lifetime of the victim if the victim is adjudicated disabled. It provides that the court may, in its discretion, consider such facts and circumstances, as it deems appropriate to allow the person found liable for financial exploitation, abuse, or neglect of an elderly person or a person with a disability to receive a reduction in interest or benefit rather than no interest or benefit.

            Effective January 1, 2015, PA 98-0836 amends the Probate Act of 1975 (small estate affidavit). It requires a person executing a small estate affidavit to list and classify the debts of the decedent. It provides that all valid claims against the decedent's estate must be paid before any distribution is made to any heir or legatee. It also provides that the decedent's estate should pay all claims in the order set forth in the listed classifications, and if the decedent's estate is insufficient to pay the claims in any one class, the claims in that class shall be paid pro rata. It requires the affiant to describe his or her relationship to the decedent or decedent's estate, and requires the affiant to agree to indemnify and hold harmless persons and entities who incur any loss because of reliance on the affidavit, up to the amount lost because of any act or omission by the affiant. It requires the affiant to state that any person, corporation, or financial institution recovering under the new provisions shall be entitled to reasonable attorney's fees and the expenses of recovery. It provides that the small estate affidavit shall be notarized. It provides that parties that act in good faith reliance on a copy of a document purporting to be a small estate affidavit shall be fully protected and released upon fulfillment of requirements under such a document to the same extent as if the party had been complying with requests of the representative of the estate. It provides that distributions pursuant to an affidavit may be made to the affiant notwithstanding the disclosure of known unpaid debts. It provides that the affiant (instead of other specified persons) may in writing appoint one or more persons, or himself or herself, to access the safe deposit box of a decedent. It adds applicability language. It makes corresponding changes. It amends the Safety Deposit Box Opening Act. It provides that the lessor of a safety deposit box shall not open the box in accordance with the Act if the lessor has received a copy of a small estate affidavit, and provides that the lessor shall authorize a representative of a decedent's estate or a person designated in a small estate affidavit, upon presentation of letters of office, other applicable court order, or small estate affidavit, to open the box and examine and remove the contents.

            Effective January 1, 2015, PA 98-1093 amends the Illinois Probate Act of 1975, and creates a rebuttable presumption that the transfer instrument is void if the transferee is a caregiver and the fair market value of the transferred property exceeds $20,000.

PROPERTY TAX CODE:

            Effective August 26, 2014, PA 98-1101 amends the Property Tax code. It provides that, for tax year 2013 and subsequent years, all applications for judgment and order of sale and special assessments on delinquent properties shall be made by July 1 of the calendar year following the second installment due date.

TRANSFER ON DEATH INSTRUMENTS:

            Effective January 1, 2015, PA 98-0821 amends the Illinois Residential Real Property Transfer on Death Instrument Act. It changes the definition of "residential real estate" by replacing the phrase "units in residential cooperatives; or, condominium units" with "a residential condominium unit" and by providing that residential condominium units include any parking unit or other amenity used with and owned by the owner of the condominium unit. It provides that an agent under a durable power of attorney or other instrument creating an agency does not have the authority to create or revoke a transfer on death instrument on behalf of the owner, but the restriction shall not be construed to prohibit the agent from selling, transferring, or encumbering the residential real estate under the terms of the agency. It provides that an instrument under the Act is effective if it is executed, witnessed, and acknowledged in substantial compliance (rather than "in compliance") with certain provisions of the Act. It provides that a transfer on death instrument is effective without acceptance. It replaces the provisions of a Section concerning the notice of death affidavit, and provides that a beneficiary who takes under a transfer on death instrument may file in the office of the recorder in the county or counties where the residential real estate is located a notice of death affidavit to confirm title following the death of the owner. It adds provisions concerning the required contents of the notice of death affidavit. It provides that the affidavit shall be acknowledged under penalty of perjury before a notary public or person authorized to administer oaths. It provides that the filing of a notice of death affidavit is not a condition to the transfer of title. It provides that a purchaser or mortgagee for value and without notice before the recordation of a lis pendens for an action to set aside or contest the transfer on death instrument for any reason shall take free and clear of any such action or contest. It repeals the Section concerning the statutory form for the notice of death affidavit and acceptance.

CONDOMINIUM:

            Effective January 1, 2015, PA 98-0735 amends the Condominium Property Act changing the list of powers and duties of the board of managers, and adds the power to adopt and amend rules and regulations by: (1) authorizing electronic delivery of notices and other communications required or contemplated by the Act to each unit owner who provides the association with written authorization for electronic delivery and an electronic address to which such communications are to be electronically transmitted; and (2) authorizing each unit owner to designate an electronic address or a U.S. Postal Service address, or both, as the unit owner's address on any list of members or unit owners which an association is required to provide upon request.

            Effective January 1, 2015, PA 98-0996 amends the Forcible Entry and Detainer Article of the Code of Civil Procedure. It provides that, after the entry of a judgment in favor of a condominium board of managers for possession of a unit under specified provisions, the board of managers may lease the unit to a bona fide tenant for a term which may commence at any time within 8 months after the month in which the date of expiration of the stay of judgment occurs, and may not exceed 13 months from the date of commencement of the lease. It removes language providing that the term of the lease is not to exceed 13 months from the expiration of the stay of judgment unless extended by order of the court. It provides that, upon motion of the board of managers and with notice to the dispossessed unit owner, the court may permit or extend a lease for one or more additional terms not to exceed 13 months per term.

            Effective January 1, 2015, PA 98-1068 amends the Condominium Property Act. It provides that any provision in a condominium instrument is void as against public policy and ineffective if it limits or restricts the rights of the board of managers by: (1) requiring the prior consent of the unit owners in order for the board of managers to take certain actions, including the institution of any action in court or a demand for a trial by jury; or (2) requiring the board of managers to arbitrate or mediate a dispute with any one or more of all of the declarants under the condominium instruments or the developer or any person not then a unit owner prior to the institution of any action by the board of managers or a demand for a trial by jury. It provides that a provision in a declaration which would otherwise be void and ineffective under the provisions of the amendatory Act may be enforced if it is approved by a vote of not less than 75% of the unit owners at any time after the election of the first unit owner board of managers.

            SB2664 - Amendatory Veto by Governor, see note below: amends the Condominium Act (Assessments section 9(g)(4)), it provides that the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, or a purchaser of a condominium unit from a mortgagee who acquired title through a judicial foreclosure, a consent foreclosure, a common law strict foreclosure, or the delivery of a deed in lieu of foreclosure (instead of the purchaser of a condominium unit at a judicial foreclosure sale, other than a mortgagee, who takes possession of a condominium unit pursuant to a court order or a purchaser who acquires title from a mortgagee) shall have the duty to pay to the association an amount not to exceed the total of the regular monthly assessments for the condominium unit for the 9-month period immediately preceding the relevant event. It provides that the amount due may include any attorney's fees and court costs, but may not exceed 9 months of regular assessments due over the same 9-month period. It deletes language providing that the purchaser shall have the duty to pay the proportionate share, if any, of the common expenses for the unit which would have become due in the absence of any assessment acceleration for the 6 months immediately preceding the institution of an action to enforce the collection of assessments, and which remain unpaid. It deletes language providing that if the outstanding assessments are paid at any time during an action to enforce the collection of assessments, the purchaser shall have no obligation to pay any assessments which accrued before he or she acquired title. It provides that the notice of a foreclosure sale of a condominium unit shall state that a purchaser, other than a mortgagee, shall pay to the association any unpaid monthly assessments for the 9-month period preceding the sale, including attorney's fees and court costs. It provides that each notice of a judicial sale for a condominium unit and each disclosure statement issued to a prospective purchaser shall list the required fees. It provides that in certain situations, the Board of Managers (instead of the owner) of a condominium unit must make specified information available within 14 days of the request (instead of "upon demand") and may do so either electronically or in writing. It makes corresponding changes.

            Note:  Letter to the General Assembly from Governor requested that the bill be amended to include requirement that Mortgagee shall have the duty to pay to the association those amounts required by subdivision (g)(1) of section 9 of the Act.

MANUFACTURED HOMES:

            Effective July 16, 2014, PA 98-0749 creates the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act. It provides that manufactured homes are deemed to be real property, and sets forth certain conditions that must be met to convey or voluntarily encumber a manufactured home as real property. It contains provisions concerning affidavits of affixation and affidavits of severance. It contains provisions concerning security interests and liens. It amends the Use Tax Act and the Retailers' Occupation Tax Act. It amends the Property Tax Code and the Mobile Home Local Services Tax Act. It makes changes concerning the taxation of mobile homes and manufactured homes located outside of mobile home parks. It amends various Acts to define and include "manufactured homes" and to make changes to provisions concerning registration of manufactured homes and security interests in or liens on manufactured homes.

MECHANIC’S LIEN ACT:

            Effective July 16, 2014, PA 98-0764 amends the Mechanic's Lien Act. It provides that an agreement to subordinate a lien under the Act where the agreement is in anticipation of and in consideration for the awarding of a contract or subcontract, either express or implied, to perform work or supply materials for an improvement upon real property is against public policy and unenforceable. It deletes language providing that certain subordination provisions of contracts are not binding on the subcontractor unless set forth in its entirety in writing in the contract between the contractor and subcontractor or material supplier. It makes corresponding changes.

RESIDENTIAL REAL PROPERTY DISCLOSURE ACT:

            Effective January 1, 2015, PA 98-0754 amends the Residential Real Property Disclosure Act to include windows and doors to the list of disclosures required under the act.

BUSINESS CORPORATION ACT:

            Effective Jan. 1, 2015, PA 98-0776 amends The Business Corporation Act of 1983. It makes an amendment regarding the liability on dissolution.

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