HB5367 101ST GENERAL ASSEMBLY

LRB101 18767 AWJ 68222 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5367

Introduced , by Rep. André Thapedi

SYNOPSIS AS INTRODUCED:

65 ILCS 5/11-31-2

from Ch. 24, par. 11-31-2

Amends the Unsafe Property Division of the Illinois Municipal Code. Provides that if the holder of a receiver's certificate, note, or lien incurs or expends any sums enforcing the certificate, note, or a lien, whether by foreclosure or otherwise, the holder of the receiver's certificate, note, or lien is entitled to recover the reasonable fees and expenses incurred or expended in enforcing the receiver's certificate, note, or lien, including, but not limited to, attorney's fees, title searches or examinations, process server fees, publication charges, sheriff's sale costs, and court filing fees. Provides that the amount of fees and costs shall be added to the indebtedness secured by the receiver's certificate, note, or lien. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning local government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Municipal Code is amended by changing Section 11-31-2 as follows:

(65 ILCS 5/11-31-2) (from Ch. 24, par. 11-31-2)

Sec. 11-31-2. (a) If the appropriate official of any municipality determines, upon due investigation, that any building or structure therein fails to conform to the minimum standards of health and safety as set forth in the applicable ordinances of such municipality, and the owner or owners of such building or structure fails, after due notice, to cause such property so to conform, the municipality may make application to the circuit court for an injunction requiring compliance with such ordinances or for such other order as the court may deem necessary or appropriate to secure such compliance.

If the appropriate official of any municipality determines, upon due investigation, that any building or structure located within the area affected by a conservation plan, adopted by the municipality pursuant to the Urban Community Conservation Act, fails to conform to the standards and provisions of such plan, and the owner or owners of such building or structure fails, after due notice, to cause such property so to conform, the municipality has the power to make application to the circuit court for an injunction requiring compliance with such plan or for such other order as the court may deem necessary or appropriate to secure such compliance.

The hearing upon such suit shall be expedited by the court and shall be given precedence over all other actions.

If, upon application hereunder, the court orders the appointment of a receiver to cause such building or structure to conform, such receiver may use the rents and issues of such property toward maintenance, repair and rehabilitation of the property prior to and despite any assignment of rents; and the court may further authorize the receiver to recover the cost of such maintenance, repair and rehabilitation by the issuance and sale of notes or receiver's certificates bearing such interest as the court may fix, and such notes or certificates, after their initial issuance and transfer by the receiver, shall be freely transferable and when sold or transferred by the receiver in return for a valuable consideration in money, material, labor or services, shall be a first lien upon the real estate and the rents and issues thereof, and shall be superior to all prior assignments of rents and all prior existing liens and encumbrances, except taxes; provided, that within 90 days of such sale or transfer for value by the receiver of such note or certificate, the holder thereof shall file notice of lien in the office of the recorder in the county in which the real estate is located, or in the office of the registrar of titles of such county if the real estate affected is registered under the Registered Titles (Torrens) Act. The notice of the lien filed shall set forth (1) a description of the real estate affected sufficient for the identification thereof, (2) the face amount of the receiver's note or certificate, together with the interest payable thereon, and (3) the date when the receiver's note or certificate was sold or transferred for value by the receiver. Upon payment to the holder of the receiver's note or certificate of the face amount thereof together with any interest thereon to such date of payment, and upon the filing of record of a sworn statement of such payment, the lien of such certificate shall be released. Unless the lien is enforced pursuant to subsection (b), the lien may be enforced by proceedings to foreclose as in the case of mortgages or mechanics' liens, and such action to foreclose such lien may be commenced at any time after the date of default. For the purposes of this subsection (a), the date of default shall be deemed to occur 90 days from the date of issuance of the receiver's certificate if at that time the certificate remains unpaid in whole or in part.

In the event a receiver appointed under this subsection (a) completes a feasibility study which study finds that the property cannot be economically brought into compliance with the minimum standards of health and safety as set forth in the applicable ordinances of the municipality, the receiver may petition the court for reimbursement for the cost of the feasibility study from the receivership feasibility study and fee fund. The court shall review the petition and authorize reimbursement from the fund to the receiver if the court finds that the findings in the feasibility report are reasonable, that the fee for the feasibility report is reasonable, and that the receiver is unable to obtain reimbursement other than by foreclosure of a lien on the property. If the court grants the petition for reimbursement from the fund and, upon receiving certification from the court of the amount to be paid, the county treasurer shall order that amount paid from the fund to the receiver. If the court grants the petition for reimbursement from the fund, the court shall also authorize and direct the receiver to issue a certificate of lien against title. The recorded lien shall be a first lien upon the real estate and shall be superior to all prior liens and encumbrances except real estate taxes. The court shall also order the receiver to reimburse the fund to the extent that the receiver is reimbursed upon foreclosure of the receiver's lien upon sale of the property.

In any proceedings hereunder in which the court orders the appointment of a receiver, the court may further authorize the receiver to enter into such agreements and to do such acts as may be required to obtain first mortgage insurance on the receiver's notes or certificates from an agency of the Federal Government.

(b) In any case where a municipality has obtained a lien pursuant to subsection (a), the municipality may enforce such lien pursuant to this subsection (b) in the same proceeding in which the lien is authorized.

A municipality desiring to enforce a lien under this subsection (b) shall petition the court to retain jurisdiction for foreclosure proceedings under this subsection. Notice of the petition shall be served, by certified or registered mail, on all persons who were served notice under subsection (a). The court shall conduct a hearing on the petition not less than 15 days after such notice is served. If the court determines that the requirements of this subsection (b) have been satisfied, it shall grant the petition and retain jurisdiction over the matter until the foreclosure proceeding is completed. If the court denies the petition, the municipality may enforce the lien in a separate action as provided in subsection (a).

All persons designated in Section 15-1501 of the Code of Civil Procedure as necessary parties in a mortgage foreclosure action shall be joined as parties prior to issuance of an order of foreclosure. Persons designated in Section 15-1501 of the Code of Civil Procedure as permissible parties may also be joined as parties in the action.

The provisions of Article XV of the Code of Civil Procedure applicable to mortgage foreclosures shall apply to the foreclosure of a lien pursuant to this subsection (b), except to the extent that such provisions are inconsistent with this subsection. However, for purposes of foreclosures of liens pursuant to this subsection, the redemption period described in subsection (b) of Section 15-1603 of the Code of Civil Procedure shall end 60 days after the date of entry of the order of foreclosure.

If the holder of a receiver's certificate, note, or lien under this Section incurs or expends any sums enforcing the certificate, note, or a lien, whether by foreclosure or otherwise, the holder of the receiver's certificate, note, or lien is entitled to recover the reasonable fees and expenses incurred or expended in enforcing the receiver's certificate, note, or lien, including, but not limited to, attorney's fees, title searches or examinations, process server fees, publication charges, sheriff's sale costs, and court filing fees. The amount of fees and costs shall be added to the indebtedness secured by the receiver's certificate, note, or lien.

(Source: P.A. 91-554, eff. 8-14-99.)

Section 99. Effective date. This Act takes effect upon becoming law.