Rep. Jay C. Hoffman
Filed: 4/6/2005
 
 

 




 

 		












09400HB2217ham001

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AMENDMENT TO HOUSE BILL 2217




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    AMENDMENT NO. ______. Amend House Bill 2217 by replacing 
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everything after the enacting clause with the following:

 
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    "Section 5. The Illinois Vehicle Code is amended  by 
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changing Section 3-114 as follows:
 



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    (625 ILCS 5/3-114)  (from Ch. 95 1/2, par. 3-114)



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    Sec. 3-114. Transfer by operation of law. 

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    (a) If the interest of an owner in a vehicle passes to 
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another other
than by voluntary transfer, the transferee shall, 
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except as provided in
paragraph (b), promptly mail or deliver 
11
within 20 days to the
Secretary of State the last certificate 
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of title, if available, proof of
the transfer, and his 
13
application for a new certificate in the form the
Secretary of 
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State prescribes. It shall be unlawful for any person
having 
15
possession of a certificate of title for a motor vehicle,

16
semi-trailer, or house car by reason of his having a lien or 
17
encumbrance
on such vehicle, to fail or refuse to deliver such 
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certificate to the
owner, upon the satisfaction or discharge of 
19
the lien or encumbrance,
indicated upon such certificate of 
20
title.

21
    (b) If the interest of an owner in a vehicle passes to 
22
another under
the provisions of the Small Estates provisions of 
23
the Probate Act of 1975 the
transferee shall promptly mail or 
24
deliver to the Secretary of State, within 120
days, the last 
 


 






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certificate of title, if available, the documentation required

2
under the provisions of the Probate Act of 1975, and an 
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application for
certificate of title. The Small Estate 
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Affidavit form shall be furnished by the
Secretary of State. 
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The transfer may be to the transferee or to the nominee of
the 
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transferee.

7
    (c) If the interest of an owner in a vehicle passes to 
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another under
other provisions of the Probate Act of 1975, as 
9
amended, and the transfer is
made by a representative or 
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guardian, such transferee shall promptly mail or
deliver to the 
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Secretary of State, the last certificate of title, if 
12
available,
and a certified copy of the letters of office or 
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guardianship, and an
application for certificate of title. Such 
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application shall be made before the
estate is closed. The 
15
transfer may be to the transferee or to the nominee of
the 
16
transferee.

17
    (d) If the interest of an owner in joint tenancy passes to 
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the other
joint tenant with survivorship rights as provided by 
19
law, the transferee
shall promptly mail or deliver to the 
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Secretary of State, the last
certificate of title, if 
21
available, proof of death of the one joint
tenant and 
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survivorship of the surviving joint tenant, and an
application 
23
for certificate of title. Such application shall be made
within 
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120 days after the death of the joint tenant. The transfer may

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be to the transferee or to the nominee of the transferee.

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    (e) The Secretary of State shall transfer a decedent's 
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vehicle title to
any legatee, representative or heir of the 
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decedent who submits to the
Secretary a death certificate and 
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an affidavit by an attorney at law on the
letterhead stationery  
30
of the attorney at law stating the facts of the
transfer.

31
    (f) Repossession with assignment of title.  In all cases 
32
wherein a
lienholder has repossessed a vehicle by other
than 
33
judicial process and holds it for resale under a security 
34
agreement, and
the owner of record has executed an assignment 
 


 






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of the existing certificate of
title after default, the 
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lienholder may proceed to sell or otherwise dispose of
the 
3
vehicle
as authorized under the Uniform Commercial Code.  Upon 
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selling the vehicle to
another person, the lienholder need not 
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send the certificate of title to the
Secretary of State, but 
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shall promptly and within 20 days mail or deliver to
the 
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purchaser
as transferee the existing certificate of title for 
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the repossessed vehicle,
reflecting the release of the 
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lienholder's security interest in the vehicle.
The application 
10
for a certificate of title made by the
purchaser shall comply 
11
with subsection (a) of Section 3-104 and be accompanied
by the 
12
existing certificate of title for the repossessed vehicle.
The 
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lienholder shall execute the assignment and warranty of title 
14
showing the
name and address of the purchaser in the spaces 
15
provided therefor on the
certificate of title or as the 
16
Secretary of State prescribes.  The lienholder
shall complete 
17
the assignment of title in the certificate of title to reflect

18
the transfer of the vehicle to the lienholder and also a 
19
reassignment to
reflect the transfer from the lienholder to the 
20
purchaser.  For this purpose,
the lienholder is specifically 
21
authorized
to complete and execute
the space reserved in the 
22
certificate of title for a dealer reassignment,

23
notwithstanding that the lienholder is not a licensed dealer.  
24
Nothing herein
shall be construed to mean that the lienholder 
25
is taking title to the
repossessed vehicle for purposes of 
26
liability for retailer occupation, vehicle
use, or other tax 
27
with respect to the proceeds from the repossession sale.

28
Delivery of the existing certificate of title to the purchaser 
29
shall be deemed
disclosure to the purchaser of the owner of the 
30
vehicle.

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    (f-5) Repossession without assignment of title.  In all 
32
cases wherein a
lienholder has repossessed a vehicle
by other 
33
than judicial process and holds it for resale under a security

34
agreement,
and the owner of record has not executed an 
 


 






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assignment of the existing
certificate of title,
the lienholder 
2
shall comply with the following provisions:


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        (1) Prior to sale, the lienholder shall deliver or 
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    mail, by certified or registered mail, to the owner at
the 
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    owner's last known address and to any other lienholder of 
6
    record, a notice
of redemption
setting forth the following 
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    information: (i) the name of the owner of record
and in 
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    bold type at or near the top of the notice a statement that 
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    the owner's
vehicle was repossessed on a specified date for 
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    failure to make payments on the
loan (or other reason), 
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    (ii) a
description of the vehicle subject to the lien 
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    sufficient to identify it, (iii)
the right of the owner to 
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    redeem the vehicle, (iv) the lienholder's intent to
sell or 
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    otherwise dispose of the vehicle after the expiration of 21 
15
    days from
the date of mailing or delivery of the notice, 
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    and (v) the name, address, and
telephone number of the 
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    lienholder from
whom information may be
obtained 
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    concerning the amount due to redeem the vehicle and from 
19
    whom
the vehicle may be redeemed under
Section 9-623 of the 
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    Uniform Commercial Code.  At the
lienholder's option, the

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    information required to be set forth in this notice of 
22
    redemption
may be made a part of or accompany the 
23
    notification of sale or other
disposition
required under 
24
    Section 9-611 of the
Uniform
Commercial Code, but none of 
25
    the information required by this notice shall
be construed 
26
    to impose any requirement under Article 9 of the Uniform

27
    Commercial Code.


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        (2) With respect to the repossession of a vehicle used 
29
    primarily for
personal, family, or household purposes, the 
30
    lienholder shall also deliver or
mail to the owner at the 
31
    owner's last known address an affidavit
of defense.  The 
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    affidavit of defense shall accompany the notice of

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    redemption
required in subdivision (f-5)(1) of
this 
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    Section. The affidavit of defense shall (i) identify the 
 


 






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    lienholder,
owner, and the
vehicle; (ii) provide space for 
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    the owner to state the defense claimed by the
owner; and 
3
    (iii) include an acknowledgment by the owner that the owner 
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    may be
liable to the lienholder for fees, charges, and 
5
    costs incurred by the
lienholder in establishing the 
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    insufficiency or invalidity of the owner's
defense.  To stop 
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    the transfer of title, the affidavit of defense must be

8
    received by the
lienholder no later than 21 days after the 
9
    date of mailing or delivery of the
notice required in 
10
    subdivision (f-5)(1) of this Section. If the lienholder

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    receives the affidavit from the owner in a timely manner, 
12
    the lienholder must
apply to a court of competent 
13
    jurisdiction to determine if the lienholder is
entitled to 
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    possession of the vehicle.


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        (3) Upon selling the vehicle to another person, the 
16
    lienholder need not
send the certificate of title to the 
17
    Secretary of State, but shall
promptly and within 20 days 
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    mail or deliver to the purchaser as transferee (i)
the 
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    existing
certificate of title for the repossessed vehicle, 
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    reflecting the release of the
lienholder's security 
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    interest in the vehicle; and (ii) an affidavit of

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    repossession made by or on behalf of the lienholder which 
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    provides the
following information: that the vehicle was 
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    repossessed, a description of the
vehicle sufficient to 
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    identify it, whether the vehicle has been damaged in
excess 
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    of 33 1/3% of its fair market value as required under 
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    subdivision (b)(3)
of Section 3-117.1, that the owner and 
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    any other lienholder of record were
given the notice 
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    required in subdivision (f-5)(1) of this Section,
that the 
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    owner of record was given the affidavit of defense required 
31
    in
subdivision (f-5)(2) of this Section,
that the interest 
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    of the owner was lawfully terminated or sold pursuant to 
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    the
terms of the security agreement, and the purchaser's 
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    name and address.
If the vehicle is damaged in excess of 33 
 


 






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    1/3% of its fair market value, the
lienholder shall make 
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    application for a salvage certificate under Section

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    3-117.1 and transfer the vehicle to a person eligible to 
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    receive assignments of
salvage certificates identified in 
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    Section 3-118.


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        (4) The application for a certificate of title made by 
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    the purchaser shall
comply with subsection (a) of Section 
8
    3-104 and be accompanied by the affidavit
of repossession 
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    furnished by the lienholder and the existing certificate of

10
    title for the repossessed vehicle.
The lienholder shall 
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    execute the assignment and warranty of title showing the

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    name and address of the purchaser in the spaces provided 
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    therefor on the
certificate of title or as the Secretary of 
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    State prescribes.  The lienholder
shall complete the 
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    assignment of title in the certificate of title to reflect

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    the transfer of the vehicle to the lienholder and also a 
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    reassignment to
reflect the transfer from the lienholder to 
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    the purchaser.  For this purpose,
the lienholder is 
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    specifically authorized to execute the assignment on 
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    behalf
of the owner as seller if the owner has not done so 
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    and to complete and execute
the space reserved in the 
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    certificate of title for a dealer reassignment,

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    notwithstanding that the lienholder is not a licensed 
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    dealer.  Nothing herein
shall be construed to mean that the 
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    lienholder is taking title to the
repossessed vehicle for 
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    purposes of liability for retailer occupation, vehicle

27
    use, or other tax with respect to the proceeds from the 
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    repossession sale.
Delivery of the existing certificate of 
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    title to the purchaser shall be deemed
disclosure to the 
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    purchaser of the owner of the vehicle.
In the event the 
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    lienholder does not hold
the certificate of title for the 
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    repossessed vehicle, the lienholder shall
make application 
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    for and may obtain a new certificate of title in the name 
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    of
the lienholder upon furnishing information satisfactory 
 


 






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    to the Secretary of
State.  Upon receiving the new 
2
    certificate of title, the lienholder may proceed
with the 
3
    sale described in subdivision (f-5)(3), except that upon 
4
    selling the
vehicle the lienholder shall promptly and 
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    within 20 days mail or deliver to the
purchaser the new 
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    certificate of title reflecting the assignment and 
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    transfer
of title to the purchaser.


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        (5) Neither the lienholder nor the owner shall file 
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    with the Office of
the Secretary of State the notice of 
10
    redemption or affidavit of defense
 described in 
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    subdivisions (f-5)(1) and (f-5)(2) of this Section. The 
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    Office of
the Secretary of State shall not determine the 
13
    merits of an owner's affidavit
of defense, nor consider any 
14
    allegations or assertions regarding the validity
or 
15
    invalidity of a lienholder's claim to the vehicle or an 
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    owner's asserted
defenses to the repossession action.
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        (6) A lienholder who has repossessed a vehicle under 
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    this subsection (f-5) may not remove the vehicle from this 
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    State until after the expiration of 21 days from the date 
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    of the mailing or delivery of the notice of redemption.


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    (f-7) Notice of reinstatement in certain cases.


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        (1) If, at the time of repossession by a lienholder 
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    that is seeking to
transfer title pursuant to subsection 
24
    (f-5), the owner has paid an amount equal
to 30% or more of 
25
    the deferred payment price or total of payments due, the

26
    owner may, within 21 days of the date of repossession, 
27
    reinstate the contract
or loan agreement and recover the 
28
    vehicle from the lienholder by tendering in a
lump sum (i) 
29
    the total of all unpaid amounts, including any unpaid 
30
    delinquency
or deferral charges due at the date of 
31
    reinstatement, without acceleration; and
(ii) performance 
32
    necessary to cure any default other than nonpayment of the

33
    amounts due; and (iii)
all reasonable costs and fees 
34
    incurred by the lienholder in retaking, holding,
and 
 


 






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    preparing the vehicle for disposition and in arranging for 
2
    the sale of the
vehicle.  Reasonable costs and fees incurred 
3
    by the lienholder include without
limitation repossession 
4
    and storage expenses and, if authorized by the contract
or 
5
    loan agreement, reasonable attorneys' fees and collection 
6
    agency charges.


7
        (2) Tender of payment and performance pursuant to this 
8
    limited right of
reinstatement restores to the owner his 
9
    rights under the contract or loan
agreement as though no 
10
    default had occurred.  The owner has the right to
reinstate 
11
    the contract or loan agreement and recover the vehicle from 
12
    the
lienholder only once under this subsection.  The 
13
    lienholder may, in the
lienholder's sole discretion, 
14
    extend the period during which the owner may
reinstate the 
15
    contract or loan agreement and recover the vehicle beyond 
16
    the 21
days allowed under this subsection, and the 
17
    extension shall not subject the
lienholder to liability to 
18
    the owner under the laws of this State.


19
        (3) The lienholder shall deliver or mail written notice 
20
    to the owner at
the
owner's last known address, within 3 
21
    business days of the date of repossession,
of the owner's 
22
    right to reinstate the contract or loan agreement and 
23
    recover
the vehicle pursuant to the limited right of 
24
    reinstatement described in this
subsection.  At the 
25
    lienholder's option, the information required to be set

26
    forth in this notice of reinstatement may be made part of 
27
    or accompany the
notice of redemption required in 
28
    subdivision (f-5)(1) of this Section and the
notification 
29
    of sale or other disposition required under
Section 9-611 
30
    of the Uniform Commercial Code, but none of the
information

31
    required by this notice of reinstatement shall be construed 
32
    to impose any
requirement under Article 9 of the Uniform 
33
    Commercial Code.


34
        (4) The reinstatement period, if applicable, and the 
 


 






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    redemption period
described in subdivision (f-5)(1) of 
2
    this Section, shall run concurrently if
the information 
3
    required to be set forth in the notice of reinstatement is 
4
    part
of or accompanies the notice of redemption.  In any 
5
    event, the 21 day
redemption period described in 
6
    subdivision (f-5)(1) of this Section shall
commence on the 
7
    date of
mailing or delivery to the owner of the information 
8
    required to be set forth in
the notice of redemption, and 
9
    the 21 day reinstatement period described in this

10
    subdivision, if applicable, shall commence on the date of 
11
    mailing or delivery
to the owner of the information 
12
    required to be set forth in the notice of
reinstatement.


13
        (5) The Office of the Secretary of State shall not 
14
    determine the merits of
an owner's claim of right to 
15
    reinstatement, nor consider any allegations or
assertions 
16
    regarding the validity or invalidity of a lienholder's 
17
    claim to the
vehicle or an owner's asserted right to 
18
    reinstatement.  Where a lienholder is
subject to licensing 
19
    and regulatory supervision by the State of Illinois, the

20
    lienholder shall be subject to all of the powers and 
21
    authority of the
lienholder's primary State regulator to 
22
    enforce compliance with the procedures
set forth in this 
23
    subsection (f-7).

24
    (f-10) Repossession by judicial process.  In all cases 
25
wherein a lienholder
has repossessed a vehicle by
judicial

26
process and holds it for resale under a security agreement, 
27
order for replevin,
or other court order establishing the 
28
lienholder's right to possession of the
vehicle, the lienholder 
29
may proceed to sell or otherwise dispose of the vehicle
as 
30
authorized under the Uniform Commercial Code or the court 
31
order. Upon
selling the vehicle to another person, the 
32
lienholder need not send the
certificate of title to the 
33
Secretary of State, but shall promptly and within
20 days mail 
34
or
deliver to the purchaser as transferee (i) the existing 
 


 






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certificate of title
for the repossessed vehicle reflecting the 
2
release of the lienholder's security
interest in the vehicle; 
3
(ii) a certified copy of the court order; and (iii) a
bill of 
4
sale identifying the new owner's name and address and the year, 
5
make,
model, and vehicle identification number of the vehicle.

6
The application for a certificate of title made by the 
7
purchaser shall comply
with subsection (a) of Section 3-104 and 
8
be accompanied by the certified copy
of the court order 
9
furnished by the
lienholder and the existing certificate of 
10
title for the repossessed vehicle.
The lienholder shall execute 
11
the assignment and warranty of title showing the
name and 
12
address of the purchaser in the spaces provided therefor on the

13
certificate of title or as the Secretary of State prescribes.  
14
The lienholder
shall complete the assignment of title in the 
15
certificate of title to reflect
the transfer of the vehicle to 
16
the lienholder and also a reassignment to
reflect the transfer 
17
from the lienholder to the purchaser.  For this purpose,
the 
18
lienholder is specifically authorized to execute the 
19
assignment on behalf
of the owner as seller if the owner has 
20
not done so and to complete and execute
the space reserved in 
21
the certificate of title for a dealer reassignment,

22
notwithstanding that the lienholder is not a licensed dealer.  
23
Nothing herein
shall be construed to mean that the lienholder 
24
is taking title to the
repossessed vehicle for purposes of 
25
liability for retailer occupation, vehicle
use, or other tax 
26
with respect to the proceeds from the repossession sale.

27
Delivery of the existing certificate of title to the purchaser 
28
shall be deemed
disclosure to the purchaser of the owner of the 
29
vehicle.
In the event the
lienholder does not hold the 
30
certificate of title for the repossessed vehicle,
the 
31
lienholder shall
make application for and may obtain a new 
32
certificate of title in the name of
the lienholder upon 
33
furnishing information satisfactory to the Secretary of
State.  
34
Upon receiving the new certificate of title, the lienholder may 
 


 






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proceed
with the sale described in this subsection, except that 
2
upon selling the
vehicle the lienholder shall promptly and 
3
within 20 days mail or deliver to the
purchaser the new 
4
certificate of title reflecting the assignment and transfer
of 
5
title to the purchaser.

6
    (f-15) The Secretary of State shall not issue a certificate 
7
of title to a
purchaser under subsection (f), (f-5), or (f-10) 
8
of this Section, unless the
person from whom the vehicle has 
9
been repossessed by the lienholder is shown to
be the last 
10
registered owner of the motor vehicle.  The Secretary of State 
11
may
provide by rule for the standards to be followed by a 
12
lienholder in assigning
and transferring certificates of title 
13
with respect to repossessed vehicles.

14
    (f-20) If applying for a salvage certificate or a junking 
15
certificate, the lienholder
shall within 20 days make an 
16
application to the Secretary of State for a salvage certificate 
17
or a junking certificate, as
set forth in this Code. The 
18
Secretary of State shall
not issue a salvage
certificate or a 
19
junking
certificate to such lienholder unless the person from 
20
whom such vehicle has
been repossessed is shown to be the last 
21
registered owner of such motor
vehicle and such lienholder 
22
establishes to the satisfaction of
the Secretary of State that 
23
he is entitled to such
salvage certificate or junking 
24
certificate. The Secretary
of State may provide by rule for the 
25
standards to be followed by
a lienholder in order to obtain a

26
salvage certificate or junking certificate for a
repossessed 
27
vehicle.

28
    (f-25) If the interest of an owner in a mobile home, as 
29
defined in the
Mobile Home Local Services Tax Act, passes to 
30
another under the provisions of
the
Mobile Home Local Services 
31
Tax Enforcement Act, the transferee shall promptly
mail or 
32
deliver to the Secretary of State (i) the last certificate of 
33
title, if
available, (ii) a certified copy of the court order 
34
ordering the transfer of
title, and (iii) an application for 
 


 






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certificate of title.

2
    (g) A person holding a certificate of title whose interest 
3
in the
vehicle has been extinguished or transferred other than 
4
by voluntary
transfer shall mail or deliver the certificate, 
5
within 20 days
upon request of the Secretary of State. The 
6
delivery of the certificate
pursuant to the request of the 
7
Secretary of State does not affect the
rights of the person 
8
surrendering the certificate, and the action of the
Secretary 
9
of State in issuing a new certificate of title as provided

10
herein is not conclusive upon the rights of an owner or 
11
lienholder named
in the old certificate.

12
    (h) The Secretary of State may decline to process any 
13
application
for a transfer of an interest in a vehicle 
14
hereunder if any fees or
taxes due under this Act from the 
15
transferor or the transferee have not
been paid upon reasonable 
16
notice and demand.

17
    (i) The Secretary of State shall not be held civilly or 
18
criminally
liable to any person because any purported 
19
transferor may not have had
the power or authority to make a 
20
transfer of any interest in any vehicle
or because a 
21
certificate of title issued in error is subsequently used to

22
commit a fraudulent act.

23
(Source: P.A. 91-893, eff. 7-1-01; 92-807, eff. 1-1-03.)".