HB1109ham003 97TH GENERAL ASSEMBLY

Rep. Karen A. Yarbrough

Filed: 3/16/2011

09700HB1109ham003 LRB097 07685 KMW 53142 a

AMENDMENT TO HOUSE BILL 1109

AMENDMENT NO. ______. Amend House Bill 1109 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Municipal Code is amended by changing Sections 11-20-15 and 11-20-15.1 and by adding Section 11-20-17 as follows:

(65 ILCS 5/11-20-15)

Sec. 11-20-15. Lien for removal costs.

(a) If the municipality incurs a removal cost under Section 11-20-7, 11-20-8, 11-20-12, or 11-20-13, or 11-20-17 with respect to any underlying parcel, then that cost is a lien upon that underlying parcel. This lien is superior to all other liens and encumbrances, except tax liens and as otherwise provided in subsection (c) of this Section.

(b) To perfect a lien under this Section, the municipality must, within one year after the removal cost is incurred, file notice of lien in the office of the recorder in the county in which the underlying parcel is located or, if the underlying parcel is registered under the Torrens system, in the office of the Registrar of Titles of that county. The notice must consist of a sworn statement setting out:

(1) a description of the underlying parcel that sufficiently identifies the parcel;

(2) the amount of the removal cost; and

(3) the date or dates when the removal cost was incurred by the municipality.

If, for any one parcel, the municipality engaged in any removal activity on more than one occasion during the course of one year, then the municipality may combine any or all of the costs of each of those activities into a single notice of lien.

(c) A lien under this Section is not valid as to: (i) any purchaser whose rights in and to the underlying parcel arose after the removal activity but before the filing of the notice of lien; or (ii) any mortgagee, judgment creditor, or other lienor whose rights in and to the underlying parcel arose before the filing of the notice of lien.

(d) The removal cost is not a lien on the underlying parcel unless a notice is personally served on, or sent by certified mail to, the person to whom was sent the tax bill for the general taxes on the property for the taxable year immediately preceding the removal activities. The notice must be delivered or sent after the removal activities have been performed, and it must: (i) state the substance of this Section and the substance of any ordinance of the municipality implementing this Section; (ii) identify the underlying parcel, by common description; and (iii) describe the removal activity.

(e) A lien under this Section may be enforced by proceedings to foreclose as in the case of mortgages or mechanics' liens. An action to foreclose a lien under this Section must be commenced within 2 years after the date of filing notice of lien.

(f) Any person who performs a removal activity by the authority of the municipality may, in his or her own name, file a lien and foreclose on that lien in the same manner as a municipality under this Section.

(g) A failure to file a foreclosure action does not, in any way, affect the validity of the lien against the underlying parcel.

(h) Upon payment of the lien cost by the owner of the underlying parcel after notice of lien has been filed, the municipality (or its agent under subsection (f)) shall release the lien, and the release may be filed of record by the owner at his or her sole expense as in the case of filing notice of lien.

(i) For the purposes of this Section:

"Lien cost" means the removal cost and the filing costs for any notice of lien under subsection (b).

"Removal activity" means any activity for which a removal cost was incurred.

"Removal cost" means a removal cost as defined under Section 11-20-7, 11-20-8, 11-20-12, or 11-20-13, or 11-20-17.

"Underlying parcel" means a parcel of private property upon which a removal activity was performed.

"Year" means a 365-day period.

(j) This Section applies only to liens filed after August 14, 2009 (the effective date of Public Act 96-462).

(k) This Section shall not apply to a lien filed pursuant to Section 11-20-15.1.

(Source: P.A. 96-462, eff. 8-14-09; 96-856, eff. 3-1-10; 96-1000, eff. 7-2-10.)

(65 ILCS 5/11-20-15.1)

Sec. 11-20-15.1. Lien for costs of removal, securing, and enclosing on abandoned residential property.

(a) If the municipality elects to incur a removal cost pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, or subsection (e) of Section 11-20-13, or subsection (i) of Section 11-20-17, or a securing or enclosing cost pursuant to Section 11-31-1.01 with respect to an abandoned residential property, then that cost is a lien upon the underlying parcel of that abandoned residential property. This lien is superior to all other liens and encumbrances, except tax liens and as otherwise provided in this Section.

(b) To perfect a lien under this Section, the municipality must, within one year after the cost is incurred for the activity, file notice of the lien in the office of the recorder in the county in which the abandoned residential property is located or, if the abandoned residential property is registered under the Torrens system, in the office of the Registrar of Titles of that county, a sworn statement setting out:

(1) a description of the abandoned residential property that sufficiently identifies the parcel;

(2) the amount of the cost of the activity;

(3) the date or dates when the cost for the activity was incurred by the municipality; and

(4) a statement that the lien has been filed pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (i) of Section 11-20-17, or Section 11-31-1.01, as applicable.

If, for any abandoned residential property, the municipality engaged in any activity on more than one occasion during the course of one year, then the municipality may combine any or all of the costs of each of those activities into a single notice of lien.

(c) To enforce a lien pursuant to this Section, the municipality must maintain contemporaneous records that include, at a minimum: (i) a dated statement of finding by the municipality that the property for which the work is to be performed has become abandoned residential property, which shall include (1) the date when the property was first known or observed to be unoccupied by any lawful occupant or occupants, (2) a description of the actions taken by the municipality to contact the legal owner or owners of the property identified on the recorded mortgage, or, if known, any agent of the owner or owners, including the dates such actions were taken, and (3) a statement that no contacts were made with the legal owner or owners or their agents as a result of such actions, (ii) a dated certification by an authorized official of the municipality of the necessity and specific nature of the work to be performed, (iii) a copy of the agreement with the person or entity performing the work that includes the legal name of the person or entity, the rate or rates to be charged for performing the work, and an estimate of the total cost of the work to be performed, (iv) detailed invoices and payment vouchers for all payments made by the municipality for such work, and (v) a statement as to whether the work was engaged through a competitive bidding process, and if so, a copy of all proposals submitted by the bidders for such work.

(d) A lien under this Section shall be enforceable exclusively at the hearing for confirmation of sale of the abandoned residential property that is held pursuant to subsection (b) of Section 15-1508 of the Code of Civil Procedure and shall be limited to a claim of interest in the proceeds of the sale and subject to the requirements of this Section. Any mortgagee who holds a mortgage on the property, or any beneficiary or trustee who holds a deed of trust on the property, may contest the lien or the amount of the lien at any time during the foreclosure proceeding upon motion and notice in accordance with court rules applicable to motions generally. Grounds for forfeiture of the lien or the superior status of the lien granted by subsection (a) of this Section shall include, but not be limited to, a finding by the court that: (i) the municipality has not complied with subsection (b) or (c) of this Section, (ii) the scope of the work was not reasonable under the circumstances, (iii) the work exceeded the authorization for the work to be performed under subsection (a) of Section 11-20-7, subsection (a) of Section 11-20-8, subsection (a) of Section 11-20-12, subsection (a) of Section 11-20-13, or subsection (a) of Section 11-31-1.01, as applicable, or (iv) the cost of the services rendered or materials provided was not commercially reasonable. Forfeiture of the superior status of the lien otherwise granted by this Section shall not constitute a forfeiture of the lien as a subordinate lien.

(e) Upon payment of the amount of a lien filed under this Section by the mortgagee, servicer, owner, or any other person, the municipality shall release the lien, and the release may be filed of record by the person making such payment at the person's sole expense as in the case of filing notice of lien.

(f) Notwithstanding any other provision of this Section, a municipality may not file a lien pursuant to this Section for activities performed pursuant to Section 11-20-7, Section 11-20-8, Section 11-20-12, Section 11-20-13, or Section 11-31-1.01, if: (i) the mortgagee or servicer of the abandoned residential property has provided notice to the municipality that the mortgagee or servicer has performed or will perform the remedial actions specified in the notice that the municipality otherwise might perform pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, or Section 11-31-1.01, provided that the remedial actions specified in the notice have been performed or are performed or initiated in good faith within 30 days of such notice; or (ii) the municipality has provided notice to the mortgagee or servicer of a problem with the property requiring the remedial actions specified in the notice that the municipality otherwise would perform pursuant to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, or Section 11-31-1.01, and the mortgagee or servicer has performed or performs or initiates in good faith the remedial actions specified in the notice within 30 days of such notice.

(g) This Section and subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, or Section 11-31-1.01 shall apply only to activities performed, costs incurred, and liens filed after the effective date of this amendatory Act of the 96th General Assembly. Subsection (i) of Section 11-20-17 shall apply only to activities performed, costs incurred, and liens filed after the effective date of this amendatory Act of the 97th General Assembly.

(h) For the purposes of this Section and subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (i) of Section 11-20-17, or Section 11-31-1.01:

"Abandoned residential property" means any type of permanent residential dwelling unit, including detached single family structures, and townhouses, condominium units and multifamily rental apartments covering the entire property, and manufactured homes treated under Illinois law as real estate and not as personal property, that has been unoccupied by any lawful occupant or occupants for at least 90 days, and for which after such 90 day period, the municipality has made good faith efforts to contact the legal owner or owners of the property identified on the recorded mortgage, or, if known, any agent of the owner or owners, and no contact has been made. A property for which the municipality has been given notice of the order of confirmation of sale pursuant to subsection (b-10) of Section 15-1508 of the Code of Civil Procedure shall not be deemed to be an abandoned residential property for the purposes of subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, subsection (i) of Section 11-20-17, and Section 11-31-1.01 of this Code.

"MERS program" means the nationwide Mortgage Electronic Registration System approved by Fannie Mae, Freddie Mac, and Ginnie Mae that has been created by the mortgage banking industry with the mission of registering every mortgage loan in the United States to lawfully make information concerning each residential mortgage loan and the property securing it available by Internet access to mortgage originators, servicers, warehouse lenders, wholesale lenders, retail lenders, document custodians, settlement agents, title companies, insurers, investors, county recorders, units of local government, and consumers.

(i) Any entity or person who performs a removal, securing, or enclosing activity pursuant to the authority of a municipality under subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, subsection (e) of Section 11-20-13, or Section 11-31-1.01, may, in its, his, or her own name, file a lien pursuant to subsection (b) of this Section and appear in a foreclosure action on that lien pursuant to subsection (d) of this Section in the place of the municipality, provided that the municipality shall remain subject to subsection (c) of this Section, and such party shall be subject to all of the provisions in this Section as if such party were the municipality.

(i-5) All amounts received by the municipality for costs incurred pursuant to this Section for which the municipality has been reimbursed under Section 7.31 of the Illinois Housing Development Act shall be remitted to the State Treasurer for deposit into the Abandoned Residential Property Municipality Relief Fund.

(j) If prior to subsection (d) of Section 11-20-7, subsection (d) of Section 11-20-8, subsection (d) of Section 11-20-12, and subsection (e) of Section 11-20-13 becoming inoperative a lien is filed pursuant to any of those subsections, then the lien shall remain in full force and effect after the subsections have become inoperative, subject to all of the provisions of this Section. If prior to the repeal of Section 11-31-1.01 a lien is filed pursuant to Section 11-31-1.01, then the lien shall remain in full force and effect after the repeal of Section 11-31-1.01, subject to all of the provisions of this Section.

(Source: P.A. 96-856, eff. 3-1-10; 96-1419, eff. 10-1-10.)

(65 ILCS 5/11-20-17 new)

Sec. 11-20-17. Vacant property.

(a) For the purposes of minimizing the hazards to persons and property resulting from vacant property, the corporate authorities of each municipality may, by ordinance, prescribe rules or regulations for the maintenance and security of vacant property. The corporate authorities of a municipality may impose registration fees for vacant property and fines for failure to comply with ordinances enacted pursuant to this Section.

(b) Pursuant to those ordinances, the corporate authorities of each municipality may hold responsible for maintaining and securing a vacant property (i) any owner of the property, (ii) any previous owner of the property who conveyed the property during the time it was vacant and failed to comply with any ordinance regarding the registration of vacant property, (iii) any trust beneficiary or other trustee who holds a deed of trust on the property, (iv) any mortgagee who holds a mortgage on the property, and (v) any assignee of an owner, beneficiary, trustee, or mortgagee.

(c) A beneficiary, trustee, or mortgagee seeking to comply with ordinances regarding the maintenance or security of vacant property may enter that property to remedy any potential violation of an ordinance to maintain or secure vacant property, provided that entry is not barred by an automatic stay issued by a bankruptcy court.

(d) Beneficiaries, trustees, mortgagees, and their agents and assignees shall be held harmless from and against all claims of negligence, civil trespass, and criminal trespass in connection with compliance activity under the ordinances for the maintenance or security of vacant property, provided that the person authorizing or engaging in the compliance activity has (i) made a good faith effort to identify any owner and occupant of the property and (ii) made a good faith effort to contact any owner and occupant in a manner reasonably calculated to give the owner and occupant notice that the compliance activity is imminent.

(e) For the purpose of this Section, "owner" means the legal or beneficial owner of an improved or unimproved parcel of real estate.

(f) For the purpose of this Section, "mortgagee" means (i) the holder of an indebtedness, the obligee of a non-monetary obligation secured by a mortgage, any assignee of the mortgage, or any person designated or authorized to act on behalf of such holder, (ii) any person or entity who previously initiated a foreclosure of the vacant property or obtained a foreclosure judgment against the vacant property if the deed to vacant property has not been transferred to the purchaser at the judicial sale, and (iii) any person claiming through a mortgagee as successor.

(g) For the purpose of this Section, "vacant property" means any property having complete or incomplete structures that are empty or otherwise uninhabited by persons legally entitled to inhabit the structures.

(h) For the purpose of this Section, "removal cost" means the total value of fees and fines imposed pursuant to rules, regulations, or ordinances regarding maintenance, security, or demolition of vacant property.

(i) To enforce fees and fines pursuant to this Section, a municipality has the following options: (i) the municipality may elect to obtain a lien upon the underlying property for the removal cost in accordance with Section 11-20-15; (ii) in the case of an abandoned residential property as defined in Section 11-20-15.1, the municipality may elect to obtain a lien for the removal cost pursuant to Section 11-20-15.1, in which case the provisions of Section 11-20-15.1 shall be the exclusive remedy for the removal cost; or (iii) the municipality may elect to obtain a lien for the removal cost by exercising any enforcement actions available under its police powers or other statutory grant of authority.

(j) Nothing in this Section prohibits a municipality from obtaining and enforcing liens pursuant to any other local, State, or federal law.

Section 10. The Code of Civil Procedure is amended by changing Section 15-1603 as follows:

(735 ILCS 5/15-1603) (from Ch. 110, par. 15-1603)

Sec. 15-1603. Redemption.

(a) Owner of Redemption. Except as provided in subsection (b) of Section 15-1402, only an owner of redemption may redeem from the foreclosure, and such owner of redemption may redeem only during the redemption period specified in subsection (b) of Section 15-1603 and only if the right of redemption has not been validly waived.

(b) Redemption Period.

(1) In the foreclosure of a mortgage of real estate which is residential real estate at the time the foreclosure is commenced, the redemption period shall end on the later of (i) the date 7 months from the date the mortgagor or, if more than one, all the mortgagors (A) have been served with summons or by publication or (B) have otherwise submitted to the jurisdiction of the court, or (ii) the date 3 months from the date of entry of a judgment of foreclosure.

(2) In all other foreclosures, the redemption period shall end on the later of (i) the date 6 months from the date the mortgagor or, if more than one, all the mortgagors (A) have been served with summons or by publication or (B) have otherwise submitted to the jurisdiction of the court, or (ii) the date 3 months from the date of entry of a judgment of foreclosure.

(3) Notwithstanding paragraphs (1) and (2), the redemption period shall end at the later of the expiration of any reinstatement period provided for in Section 15-1602 or the date 60 days after the date the judgment of foreclosure is entered, if the court finds that (i) the value of the mortgaged real estate as of the date of the judgment is less than 90% of the amount specified pursuant to subsection (d) of Section 15-1603 and (ii) the mortgagee waives any and all rights to a personal judgment for a deficiency against the mortgagor and against all other persons liable for the indebtedness or other obligations secured by the mortgage.

(4) Notwithstanding paragraphs (1) and (2), the redemption period shall end on the date 30 days after the date the judgment of foreclosure is entered if, upon motion and notice in accordance with court rules applicable to motions generally, the court finds that the mortgaged real estate has been abandoned. In cases where the redemption period is shortened on account of abandonment, the reinstatement period shall not extend beyond the redemption period as shortened.

(A) The court may find that the mortgaged real estate has been abandoned if evidence is presented supporting the fact that the mortgaged property has been abandoned. The court may not find that the mortgaged real estate has been abandoned if an appearance has been made and an objection has been filed to the finding that the property has been abandoned, or if the owner provides evidence that the owner is working with, or making an attempt to work with, the mortgagee to modify the mortgage.

(B) To determine that a property has been abandoned, the court must find the following, based on evidence presented by the moving party:

(i) the mortgaged property is not actually occupied; and

(ii) at least one of the following applies:

(aa) more than 5 attempts to contact the mortgagor have been made, at least one by certified mail and one by telephone, if there is a working telephone number for the mortgagor; and at least 2 of the following supporting facts are true:

(I) construction was initiated on the property and was discontinued prior to completion, leaving the building unsuitable for occupancy, and no construction has taken place for at least 6 months;

(II) the property has had more than one uncorrected municipal code violation over the past year, or has been declared unfit for occupancy and ordered to remain vacant and unoccupied by the municipal authorities;

(III) gas, electric, or water service to the entire premises has been terminated;

(IV) windows or entrances to the premises are boarded up or closed off, or multiple window panes are broken and unrepaired;

(V) doors to the premises are smashed through, broken off, unhinged, or continuously unlocked;

(VI) the police or sheriff's office has received at least 2 reports of trespassers on the premises or of vandalism or other illegal acts being committed on the premises in the past 6 months;

(bb) 2 or more attempts to contact the mortgagor have been made and there exist written statements of the mortgagor, the mortgagor's personal representatives or assigns, including documents of conveyance, which indicate a clear intent to abandon the premises; or

(cc) 2 or more attempts to contact the mortgagor have been made and the property is a vacant lot.

(c) Extension of Redemption Period.

(1) Once expired, the right of redemption provided for in Sections 15-1603 or 15-1604 shall not be revived. The period within which the right of redemption provided for in Sections 15-1603 or 15-1604 may be exercised runs independently of any action by any person to enforce the judgment of foreclosure or effect a sale pursuant thereto. Neither the initiation of any legal proceeding nor the order of any court staying the enforcement of a judgment of foreclosure or the sale pursuant to a judgment or the confirmation of the sale, shall have the effect of tolling the running of the redemption period.

(2) If a court has the authority to stay, and does stay, the running of the redemption period, or if the redemption period is extended by any statute of the United States, the redemption period shall be extended until the expiration of the same number of days after the expiration of the stay order as the number of days remaining in the redemption period at the time the stay order became effective, or, if later, until the expiration of 30 days after the stay order terminates. If the stay order terminates more than 30 days prior to the expiration of the redemption period, the redemption period shall not be extended.

(d) Amount Required to Redeem. The amount required to redeem shall be the sum of:

(1) The amount specified in the judgment of foreclosure, which shall consist of (i) all principal and accrued interest secured by the mortgage and due as of the date of the judgment, (ii) all costs allowed by law, (iii) costs and expenses approved by the court, (iv) to the extent provided for in the mortgage and approved by the court, additional costs, expenses and reasonable attorneys' fees incurred by the mortgagee, (v) all amounts paid pursuant to Section 15-1505 and (vi) per diem interest from the date of judgment to the date of redemption calculated at the mortgage rate of interest applicable as if no default had occurred; and

(2) The amount of other expenses authorized by the court which the mortgagee reasonably incurs between the date of judgment and the date of redemption, which shall be the amount certified by the mortgagee in accordance with subsection (e) of Section 15-1603.

(e) Notice of Intent to Redeem. An owner of redemption who intends to redeem shall give written notice of such intent to redeem to the mortgagee's attorney of record specifying the date designated for redemption and the current address of the owner of redemption for purposes of receiving notice. Such owner of redemption shall file with the clerk of the court a certification of the giving of such notice. The notice of intent to redeem must be received by the mortgagee's attorney at least 15 days (other than Saturday, Sunday or court holiday) prior to the date designated for redemption. The mortgagee shall thereupon file with the clerk of the court and shall give written notice to the owner of redemption at least three days (other than Saturday, Sunday or court holiday) before the date designated for redemption a certification, accompanied by copies of paid receipts or appropriate affidavits, of any expenses authorized in paragraph (2) of subsection (d) of Section 15-1603. If the mortgagee fails to serve such certification within the time specified herein, then the owner of redemption intending to redeem may redeem on the date designated for redemption in the notice of intent to redeem, and the mortgagee shall not be entitled to payment of any expenses authorized in paragraph (2) of subsection (d) of Section 15-1603.

(f) Procedure for Redemption.

(1) An owner of redemption may redeem the real estate from the foreclosure by paying the amount specified in subsection (d) of Section 15-1603 to the mortgagee or the mortgagee's attorney of record on or before the date designated for redemption pursuant to subsection (e) of Section 15-1603.

(2) If the mortgagee refuses to accept payment or if the owner of redemption redeeming from the foreclosure objects to the reasonableness of the additional expenses authorized in paragraph (2) of subsection (d) of Section 15-1603 and certified in accordance with subsection (e) of Section 15-1603, the owner of redemption shall pay the certified amount to the clerk of the court on or before the date designated for redemption, together with a written statement specifying the expenses to which objection is made. In such case the clerk shall pay to the mortgagee the amount tendered minus the amount to which the objection pertains.

(3) Upon payment to the clerk, whether or not the owner of redemption files an objection at the time of payment, the clerk shall give a receipt of payment to the person redeeming from the foreclosure, and shall file a copy of that receipt in the foreclosure record. Upon receipt of the amounts specified to be paid to the mortgagee pursuant to this Section, the mortgagee shall promptly furnish the mortgagor with a release of the mortgage or satisfaction of the judgment, as appropriate, and the evidence of all indebtedness secured by the mortgage shall be cancelled.

(g) Procedure Upon Objection. If an objection is filed by an owner of redemption in accordance with paragraph (2) of subsection (f) of Section 15-1603, the clerk shall hold the amount to which the objection pertains until the court orders distribution of those funds. The court shall hold a hearing promptly to determine the distribution of any funds held by the clerk pursuant to such objection. Each party shall pay its own costs and expenses in connection with any objection, including attorneys' fees, subject to Section 2-611 of the Code of Civil Procedure.

(h) Failure to Redeem. Unless the real estate being foreclosed is redeemed from the foreclosure, it shall be sold as provided in this Article.

(i) Mortgagees electing to release, discharge, or abandon their mortgage interest in any property shall execute a binding written release declaring their discharge of the related lien and shall, within 30 days, record the release as provided in Section 28 of the Conveyances Act. The failure to record a written release creates a presumption that the mortgagee of record, or any of its, his, or her successors in interest, has knowingly interfered, delayed, and prevented the enforcement of any municipal ordinance concerning property.

(Source: P.A. 86-974.)

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