Illinois General Assembly - Full Text of Public Act 096-1345
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Public Act 096-1345


 

Public Act 1345 96TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 096-1345
 
SB3747 EnrolledLRB096 18779 AJO 34164 b

    AN ACT concerning real property.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 1. Short title. This Act may be cited as the
Transfer Fee Covenant Act.
 
    Section 5. Legislative findings. The General Assembly
finds and declares that the public policy of this State favors
the marketability of real property and the transferability of
interests in real property free of title defects or
unreasonable restraints on alienation. The General Assembly
further finds and declares that transfer fee covenants violate
this public policy by impairing the marketability and
transferability of real property and by constituting an
unreasonable restraint on alienation regardless of the
duration of the covenants or the amount of the transfer fees,
and do not run with the title to the property or bind
subsequent owners of the property under common law or equitable
principles.
 
    Section 10. Definitions. As used in this Act:
    "Transfer" means the sale, gift, conveyance, assignment,
inheritance, or other transfer of an ownership interest in real
property located in this State.
    "Transfer fee" means a fee or charge required by a transfer
fee covenant and payable upon the transfer of an interest in
real property, or payable for the right to make or accept such
transfer, regardless of whether the fee or charge is a fixed
amount or is determined as a percentage of the value of the
property, the purchase price, or other consideration given for
the transfer. The following are not transfer fees for purposes
of this Act:
        (1) any consideration payable by the grantee to the
    grantor for the interest in real property being
    transferred, including any subsequent additional
    consideration for the property payable by the grantee based
    upon any subsequent appreciation, development, or sale of
    the property. For the purposes of this paragraph (1), an
    interest in real property may include a separate mineral
    estate and its appurtenant surface access rights;
        (2) any commission payable to a licensed real estate
    broker for the transfer of real property under an agreement
    between the broker and the grantor or the grantee,
    including any subsequent additional commission for that
    transfer payable by the grantor or the grantee based upon
    any subsequent appreciation, development, or sale of the
    property;
        (3) any interest, charges, fees, or other amounts
    payable by a borrower to a lender under a loan secured by a
    mortgage against real property, including but not limited
    to any fee payable to the lender for consenting to an
    assumption of the loan or a transfer of the real property
    subject to the mortgage, any fees or charges payable to the
    lender for estoppel letters or certificates, and any other
    consideration allowed by law and payable to the lender in
    connection with the loan;
        (4) any rent, reimbursement, charge, fee, or other
    amount payable by a lessee to a lessor under a lease,
    including but not limited to any fee payable to the lessor
    for consenting to an assignment, subletting, encumbrance,
    or transfer of the lease;
        (5) any consideration payable to the holder of an
    option to purchase an interest in real property or the
    holder of a right of first refusal or first offer to
    purchase an interest in real property for waiving,
    releasing, or not exercising the option or right upon the
    transfer of the property to another person;
        (6) any tax, fee, charge, assessment, fine, or other
    amount payable to or imposed by a governmental authority,
    as long as such tax, fee, charge, assessment, fine, or
    other amount payable is not imposed or payable by virtue of
    a covenant or declaration;
        (7) any fee, charge, assessment, fine, or other amount
    payable to a homeowners', condominium, cooperative, mobile
    home, or property owners' association pursuant to a
    declaration or covenant or law applicable to such
    association, including, but not limited to, fees or charges
    payable for estoppel letters or certificates issued by the
    association or its authorized agent; or
        (8) Any fee, charge, assessment or other amount payable
    to an entity exempt from taxation under Section 501(c)(3)
    of the Internal Revenue Code whose purpose includes the
    conservation of land, natural areas, open space or water
    areas or the preservation of native plants or animals,
    biotic communities or geographic formations located within
    the same subdivision or planned unit development or within
    one-half mile of the real property to which the transfer
    fee covenant attaches for the exclusive or non-exclusive
    use and benefit of the owners of that real property.
    "Transfer fee covenant" means a declaration or covenant
purporting to affect real property which requires or purports
to require the payment of a transfer fee to the declarant or
other person specified in the declaration or covenant or to
their successors or assigns upon a subsequent transfer of an
interest in the real property.
 
    Section 15. Transfer fee covenant prohibition. A transfer
fee covenant recorded in this State on or after the effective
date of this Act shall not run with the title to real property
and is not binding on or enforceable at law or in equity
against any subsequent owner, purchaser, or mortgagee of any
interest in real property as an equitable servitude or
otherwise. Any lien purporting to secure the payment of a
transfer fee under a transfer fee covenant recorded in this
State on or after the effective date of this Act is void and
unenforceable. This Section does not mean that a transfer fee
covenant or lien recorded in this State before the effective
date of this Act is presumed valid and enforceable.

Effective Date: 1/1/2011