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1 | AN ACT concerning civil law.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the Home | ||||||||||||||||||||||||
5 | Buyer's Protection Lien Act. | ||||||||||||||||||||||||
6 | Section 5. Definitions. As used in this Act: | ||||||||||||||||||||||||
7 | "Deposit" means any money held by the residential developer | ||||||||||||||||||||||||
8 | to secure the performance by the prospective purchaser of his | ||||||||||||||||||||||||
9 | or her obligations under a purchase agreement. | ||||||||||||||||||||||||
10 | "Interest in a residential development" shall include, | ||||||||||||||||||||||||
11 | without limitation, any interest in a land trust as defined in | ||||||||||||||||||||||||
12 | Section 15-1205 of the Code of Civil Procedure. | ||||||||||||||||||||||||
13 | "Prospective purchase agreement" means any agreement | ||||||||||||||||||||||||
14 | whereby a residential developer offers a residential dwelling | ||||||||||||||||||||||||
15 | unit in a residential development for sale to the public on | ||||||||||||||||||||||||
16 | terms which permit a deposit payment for the residential | ||||||||||||||||||||||||
17 | dwelling unit, and with respect to which, delivery is deferred | ||||||||||||||||||||||||
18 | until completion of payment of the entire purchase price. | ||||||||||||||||||||||||
19 | "Prospective purchaser" means any person or entity who has | ||||||||||||||||||||||||
20 | advanced any asset of value to a residential developer as part | ||||||||||||||||||||||||
21 | of the purchase of a residential unit in a residential | ||||||||||||||||||||||||
22 | development. | ||||||||||||||||||||||||
23 | "Real estate" means and includes leaseholds as well as any |
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1 | other interest or estate in land, whether corporeal, | ||||||
2 | incorporeal, freehold, or non-freehold, including timeshare | ||||||
3 | interests. | ||||||
4 | "Residential developer" means any individual, corporation, | ||||||
5 | or partnership that constructs or improves a fixed building or | ||||||
6 | structure for sale or use by another as a residential dwelling | ||||||
7 | unit that is part of a residential development. | ||||||
8 | "Residential development" means any real estate located in | ||||||
9 | Illinois other than (i) commercial real estate or (ii) real | ||||||
10 | estate classified as farmland for assessment purposes under the | ||||||
11 | Property Tax Code, that has a use for residential purposes. A | ||||||
12 | residential development shall include single family | ||||||
13 | residential units such as condominiums, townhouses, or homes in | ||||||
14 | a subdivision when sold, leased, or otherwise conveyed on a | ||||||
15 | unit by unit basis even though these units may be part of a | ||||||
16 | larger building or parcel of real estate containing several | ||||||
17 | residential units and also means a house, building, or other | ||||||
18 | structure or property that is suitable or capable of being used | ||||||
19 | for residential purposes that has been constructed or improved, | ||||||
20 | or will be constructed or improved, to provide residential | ||||||
21 | dwelling units.
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22 | Section 10. Prospective purchaser's lien.
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23 | (a) Any prospective purchaser shall have a lien, upon real | ||||||
24 | estate or any interest in that real estate, in the amount of | ||||||
25 | the deposit that the prospective purchaser has advanced to a |
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1 | residential developer as part of the purchase of a residential | ||||||
2 | unit in a residential development: | ||||||
3 | (1) under a written instrument signed by the | ||||||
4 | residential developer of a residential development or the | ||||||
5 | residential developer's duly authorized agent; or | ||||||
6 | (2) under a written instrument signed by a prospective | ||||||
7 | purchaser or his or her duly authorized agent as to the | ||||||
8 | purchase or other conveyance to the prospective purchaser | ||||||
9 | of an interest in the residential development. | ||||||
10 | (b) The lien under this Act shall attach to the residential | ||||||
11 | development, or any interest in the residential development, | ||||||
12 | upon: | ||||||
13 | (1) the prospective purchaser being otherwise entitled | ||||||
14 | to possession or to receive some other substantial benefit | ||||||
15 | under a written instrument for the purchase of a | ||||||
16 | residential dwelling unit signed by the residential | ||||||
17 | developer or his or her respective duly authorized agent, | ||||||
18 | as applicable; and | ||||||
19 | (2) the prospective purchaser recording a notice of | ||||||
20 | lien in the recorder's office, or the office of the | ||||||
21 | registrar of titles, of the county in which the residential | ||||||
22 | development is located prior to the actual conveyance or | ||||||
23 | transfer of the residential development against which the | ||||||
24 | prospective purchaser is claiming a lien. The lien shall | ||||||
25 | attach as of the date of the recording of the notice of | ||||||
26 | lien and does not relate back to the date of the written |
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1 | agreement. | ||||||
2 | (c) The prospective purchaser shall within 10 days of | ||||||
3 | recording his or her notice of lien mail a copy of the notice | ||||||
4 | of lien to the residential developer of record of the | ||||||
5 | residential development by registered or certified mail, with | ||||||
6 | return receipt requested, or personally serve a copy of the | ||||||
7 | notice of lien on the residential developer of record or his or | ||||||
8 | her agent. Mailing of the copy of the notice of lien is
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9 | effective if mailed to the residential developer at the address | ||||||
10 | of the residential development that is the subject of the | ||||||
11 | notice of lien. Mailing of the copy of the notice of claim for | ||||||
12 | lien is effective when deposited in the United States mailbox | ||||||
13 | with postage prepaid. The prospective purchaser's lien shall be | ||||||
14 | unenforceable if mailing of the copy of the notice of lien | ||||||
15 | recording does not occur at the time and in the manner required | ||||||
16 | by this Act. | ||||||
17 | (d) A prospective purchaser may bring suit to enforce a | ||||||
18 | lien in the circuit court in the county where the property is | ||||||
19 | located by filing a complaint and sworn affidavit that the lien | ||||||
20 | has been recorded. | ||||||
21 | The person claiming a lien shall, within 2 years after | ||||||
22 | recording the lien, commence proceedings by filing a complaint. | ||||||
23 | Failure to commence proceedings within 2 years after recording | ||||||
24 | the lien shall extinguish the lien. No subsequent notice of | ||||||
25 | lien may be given for the same claim nor may that claim be | ||||||
26 | asserted in any proceeding under this Act. |
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1 | A complaint under this Section shall contain a brief | ||||||
2 | statement of the contract or agreement on which the lien is | ||||||
3 | founded, the date when the contract or agreement was made, the | ||||||
4 | amount of the deposit, a description of the property that is | ||||||
5 | subject to the lien, and other facts necessary for a full | ||||||
6 | understanding of the rights of the parties. The plaintiff shall | ||||||
7 | make all interested parties, of whose interest the plaintiff is | ||||||
8 | notified or has knowledge, defendants to the action, and shall | ||||||
9 | issue summons and provide service as in other civil actions. | ||||||
10 | When any defendant resides or has gone out of the State, or on | ||||||
11 | inquiry cannot be found, or is concealed within this State so | ||||||
12 | that process cannot be served on that defendant, the plaintiff | ||||||
13 | shall cause a notice to be given to that defendant, or cause a | ||||||
14 | copy of the complaint to be served upon that defendant, in the | ||||||
15 | manner and upon the same conditions as in other civil actions. | ||||||
16 | Failure of the plaintiff to provide proper summons or notice | ||||||
17 | shall be grounds for judgment against the plaintiff with | ||||||
18 | prejudice. All liens claimed under this Act shall be foreclosed | ||||||
19 | as provided for in the Illinois Mortgage Foreclosure Law. | ||||||
20 | (e) The lien notice shall state the name of the claimant, | ||||||
21 | the name of the residential developer, a description of the | ||||||
22 | property upon which the lien is being claimed, and the amount | ||||||
23 | of the deposit for which the lien is claimed. The notice of | ||||||
24 | lien shall recite that the information contained in the notice | ||||||
25 | is true and accurate to the knowledge of the signator. The | ||||||
26 | notice of lien shall be signed by the prospective purchaser or |
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1 | by a person authorized to sign on behalf of the prospective | ||||||
2 | purchaser and shall be verified. | ||||||
3 | (f) Whenever a claim for lien has been filed with the | ||||||
4 | county recorder or registrar of titles and a condition occurs | ||||||
5 | that would preclude the prospective purchaser from receiving | ||||||
6 | back the deposit under the terms of the prospective purchaser's | ||||||
7 | written agreement, the prospective purchaser shall provide to | ||||||
8 | the residential developer of record, within 10 days following | ||||||
9 | demand by the residential developer of record, a written | ||||||
10 | release or satisfaction of the lien. | ||||||
11 | (g) Upon written demand of the residential developer, | ||||||
12 | lienee, or other authorized agent, served on the person | ||||||
13 | claiming the lien, requiring suit to be commenced to enforce | ||||||
14 | the lien or answer to be filed in a pending suit, a suit shall | ||||||
15 | be commenced or answer filed within 30 days thereafter, or the | ||||||
16 | lien shall be extinguished. Service may be by registered or | ||||||
17 | certified mail, return receipt requested, or by personal | ||||||
18 | service. | ||||||
19 | (h) Whenever a claim for lien has been filed with the | ||||||
20 | county recorder or registrar of titles and is paid, or where | ||||||
21 | there is failure to institute a suit to enforce the lien within | ||||||
22 | the time provided by this Act, the prospective purchaser shall | ||||||
23 | acknowledge satisfaction or release of the lien, in writing, on | ||||||
24 | written demand of the residential developer within 5 days after | ||||||
25 | payment or expiration of the time in which to file the lien. | ||||||
26 | (i) The cost of proceedings asserting or defending a |
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1 | prospective purchaser's claim of lien, including reasonable | ||||||
2 | attorney's fees, costs, and prejudgment interest due to the | ||||||
3 | prevailing party, shall be borne by the nonprevailing party or | ||||||
4 | parties. When more than one party is responsible for costs, | ||||||
5 | fees, and prejudgment interest, the costs, fees, and | ||||||
6 | prejudgment interest shall be equitably apportioned by the | ||||||
7 | court among those responsible parties.
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8 | Section 15. Priority. Prior recorded liens and mortgages | ||||||
9 | shall have priority over a prospective purchaser's lien. A | ||||||
10 | prior recorded lien shall include, without limitation: (i) a | ||||||
11 | valid mechanics lien claim that is recorded subsequent to the | ||||||
12 | prospective purchaser's notice of lien but which relates back | ||||||
13 | to a date prior to the recording date of the prospective | ||||||
14 | purchaser's notice of lien; and (ii) prior recorded liens | ||||||
15 | securing revolving credit and future advances of construction | ||||||
16 | loans as described in Section 15-1302 of the Code of Civil | ||||||
17 | Procedure.
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