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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 5. The Condominium Property Act is amended by | |||||||||||||||||||
5 | adding Section 14.5 as follows: | |||||||||||||||||||
6 | (765 ILCS 605/14.5 new) | |||||||||||||||||||
7 | Sec. 14.5. Distressed condominium property. | |||||||||||||||||||
8 | (a) As used in this Section: | |||||||||||||||||||
9 | (1) "Distressed condominium property" means a parcel | |||||||||||||||||||
10 | containing condominium units which are operated in a manner | |||||||||||||||||||
11 | or have conditions which may constitute a danger, blight, | |||||||||||||||||||
12 | or nuisance to the surrounding community or to the general | |||||||||||||||||||
13 | public, including but not limited to one or more of the | |||||||||||||||||||
14 | following conditions: | |||||||||||||||||||
15 | (A) the building is substantially unoccupied, or | |||||||||||||||||||
16 | has serious violations of any applicable local | |||||||||||||||||||
17 | building code; | |||||||||||||||||||
18 | (B) 60% or more of the condominium units are in | |||||||||||||||||||
19 | foreclosure or are units against which a judgment of | |||||||||||||||||||
20 | foreclosure was entered within the last 18 months; | |||||||||||||||||||
21 | (C) there has been a recording of more condominium | |||||||||||||||||||
22 | units on the parcel than physically exist; | |||||||||||||||||||
23 | (D) any of the essential utilities to the parcel or |
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1 | condominium units is either terminated or threatened | ||||||
2 | with termination; | ||||||
3 | (E) there is a delinquency on the property taxes | ||||||
4 | for at least 60% of the condominium units; or | ||||||
5 | (F) the board of managers has not met within the | ||||||
6 | last 12 months or is otherwise not functioning. | ||||||
7 | (2) "Party in interest" means any unit owner or owner | ||||||
8 | of record, mortgagee of record, lienholder of record, | ||||||
9 | judgment creditor, tax purchaser, or other party of record | ||||||
10 | having any legal or equitable title or other interest in | ||||||
11 | the distressed condominium property or in a unit of the | ||||||
12 | property. | ||||||
13 | (3) "Municipality" means a city, village, or | ||||||
14 | incorporated town in which the distressed condominium | ||||||
15 | property is located. | ||||||
16 | (b) A proceeding under this Section shall be commenced by a | ||||||
17 | municipality filing a verified petition or verified complaint | ||||||
18 | in the circuit court in the county in which the property is | ||||||
19 | located. The petition or complaint shall allege conditions | ||||||
20 | specified in paragraph (1) of subsection (a) of this Section | ||||||
21 | and shall request the relief available under this Section. All | ||||||
22 | parties in interest of the property shall be named as | ||||||
23 | defendants in the petition or complaint and summons shall be | ||||||
24 | issued and service had as in other civil cases. The hearing | ||||||
25 | upon the suit shall be expedited by the court and shall be | ||||||
26 | given precedence over other actions. |
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1 | (c) If a court finds that the property is a distressed | ||||||
2 | condominium property: | ||||||
3 | (1) the court may order the appointment
of a receiver | ||||||
4 | for the property with the powers specified in this Section; | ||||||
5 | or | ||||||
6 | (2) the court may appoint a receiver for the property | ||||||
7 | and if the court further finds that the property is not | ||||||
8 | viable as a condominium, then the court may declare: | ||||||
9 | (A) that the property is no longer a condominium; | ||||||
10 | (B) that the property shall be deemed to be owned | ||||||
11 | in common by the unit owners; | ||||||
12 | (C) that the undivided interest in the property | ||||||
13 | which shall appertain to each unit owner shall be the | ||||||
14 | percentage of undivided interest previously owned by | ||||||
15 | the owner in the common elements; and | ||||||
16 | (D) that any liens affecting any unit shall be | ||||||
17 | deemed to be attached to the undivided interest of the | ||||||
18 | unit owner in the property as provided herein. | ||||||
19 | A copy of the court's declaration under this subsection (c) | ||||||
20 | shall be recorded by the municipality in the office of the | ||||||
21 | recorder of deeds in the county where the property is located | ||||||
22 | against both the individual units and owners and the general | ||||||
23 | property. The court's declaration shall be forwarded to the | ||||||
24 | county assessor's office in the county where the property is | ||||||
25 | located. | ||||||
26 | (d) If a court finds that property is subject to paragraph |
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1 | (2) of subsection (c) of this Section, the court may authorize | ||||||
2 | the receiver to enter into a sales contract and transfer the | ||||||
3 | title of the property on behalf of the owners of the property | ||||||
4 | without their consent. In the event of such a sale, the net | ||||||
5 | proceeds of sale, after payment of all the receiver's costs, | ||||||
6 | time, expenses, and fees as evidenced by the receiver's notes | ||||||
7 | or certificates duly issued and assigned as provided for in | ||||||
8 | subsection (f) of this Section, shall be deposited into an | ||||||
9 | escrow account. Proceeds in the escrow account shall be | ||||||
10 | segregated into the respective shares of each unit owner as | ||||||
11 | determined under subparagraph (C) of paragraph (2) of | ||||||
12 | subsection (c) of this Section and shall be distributed from | ||||||
13 | each respective share as follows: (1) to pay taxes attributable | ||||||
14 | to the unit owner; then (2) to pay other liens attributable to | ||||||
15 | the unit owner; and then (3) to pay each unit owner any | ||||||
16 | remaining sums from his or her respective share. | ||||||
17 | (e) A receiver appointed under this Section shall have | ||||||
18 | possession of the property and shall have full power and | ||||||
19 | authority to operate, manage, and conserve the property. A | ||||||
20 | receiver appointed pursuant to this Section must manage the | ||||||
21 | property as would a prudent person. A receiver may, without an | ||||||
22 | order of the court, delegate managerial functions to a person | ||||||
23 | in the business of managing real estate of the kind involved | ||||||
24 | who is financially responsible and prudently selected. | ||||||
25 | Without limiting the foregoing, a receiver during such time | ||||||
26 | shall have the power and authority to: |
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1 | (1) secure, clean, board and enclose, and keep secure, | ||||||
2 | clean, boarded and enclosed, the property or any portion of | ||||||
3 | the property; | ||||||
4 | (2) secure tenants and execute leases for the property, | ||||||
5 | the duration and terms of which are reasonable and | ||||||
6 | customary for the type of use involved, and the leases | ||||||
7 | shall have the same priority as if made by the owner of the | ||||||
8 | property; | ||||||
9 | (3) collect the rents, issues, and profits, including
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10 | assessments which have been or may be levied; | ||||||
11 | (4) insure the property against loss by fire or other | ||||||
12 | casualty; | ||||||
13 | (5) employ counsel, custodians, janitors, and other | ||||||
14 | help; | ||||||
15 | (6) pay taxes which may have been or may be levied | ||||||
16 | against the property; | ||||||
17 | (7) maintain
or disconnect, as appropriate, any | ||||||
18 | essential utility to the property; | ||||||
19 | (8) make repairs and improvements necessary to comply | ||||||
20 | with building, housing,
and other similar codes; | ||||||
21 | (9) hold receipts as reserves as reasonably required | ||||||
22 | for the foregoing purposes; and | ||||||
23 | (10) exercise the other powers as are granted to the | ||||||
24 | receiver by the appointing court. | ||||||
25 | (f) If the court orders the appointment of a receiver, the | ||||||
26 | receiver may use the rents and issues of the property toward |
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1 | maintenance, repair, and rehabilitation of the property prior | ||||||
2 | to and despite any assignment of rents; and the court may | ||||||
3 | further authorize the receiver to recover the cost of any | ||||||
4 | feasibility study, sale, management, maintenance, repair, and | ||||||
5 | rehabilitation by the issuance and sale of notes or receiver's | ||||||
6 | certificates bearing such interest as the court may fix, and | ||||||
7 | the notes or certificates, after their initial issuance and | ||||||
8 | transfer by the receiver, shall be freely transferable and when | ||||||
9 | sold or transferred by the receiver in return for a valuable | ||||||
10 | consideration in money, material, labor, or services shall be a | ||||||
11 | first lien upon the real estate and the rents and issues | ||||||
12 | thereof and shall be superior to all prior assignments of rents | ||||||
13 | and all prior existing liens and encumbrances, except taxes; | ||||||
14 | provided, that within 90 days of the sale or transfer for value | ||||||
15 | by the receiver of a note or certificate, the holder thereof | ||||||
16 | shall file notice of the lien in the office of the recorder in | ||||||
17 | the county in which the real estate is located. The notice of | ||||||
18 | the lien filed shall set forth (i) a description of the real | ||||||
19 | estate affected sufficient for the identification thereof, | ||||||
20 | (ii) the face amount of the receiver's note or certificate, | ||||||
21 | together with the interest payable thereon, and (iii) the date | ||||||
22 | when the receiver's note or certificate was sold or transferred | ||||||
23 | for value by the receiver. Upon payment to the holder of the | ||||||
24 | receiver's note or certificate of the face amount thereof | ||||||
25 | together with any interest thereon to the date of payment, and | ||||||
26 | upon the filing of record of a sworn statement of such payment, |
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1 | the lien of such certificate shall be released. The lien may be | ||||||
2 | enforced by proceedings to foreclose as in the case of a | ||||||
3 | mortgage or a mechanics lien, and the action to foreclose the | ||||||
4 | lien may be commenced at any time after the date of default. | ||||||
5 | For the purposes of this subsection, the date of default shall | ||||||
6 | be deemed to occur 30 days from the date of issuance of the | ||||||
7 | receiver's certificate if at that time the certificate remains | ||||||
8 | unpaid in whole or in part. The receiver's lien shall be paid | ||||||
9 | upon the sale of the property as set forth in subsection (e) of | ||||||
10 | this Section. | ||||||
11 | (g) The court may remove a receiver upon a showing of good | ||||||
12 | cause, in which case a new receiver may be appointed in | ||||||
13 | accordance with this Section.
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