HB6478ham001 96TH GENERAL ASSEMBLY

Rep. André M. Thapedi

Filed: 3/26/2010

09600HB6478ham001 LRB096 21112 RLJ 39586 a

AMENDMENT TO HOUSE BILL 6478

AMENDMENT NO. ______. Amend House Bill 6478 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This amendatory Act may be referred to as the Vacant Property Maintenance Law.

Section 5. Findings. The General Assembly finds that additional action is needed to help prevent foreclosures and revitalize the economy in the State of Illinois. Foreclosures are leaving families homeless or in dire financial straits. They are contributing to the number of vacant and abandoned properties that threaten communities around the State because those properties diminish property values, enable crime, and create health hazards. Municipalities lack many of the tools necessary to ensure adequate property maintenance of vacant property. Municipalities are unable to recover the reasonable costs of their property maintenance activity.

Section 10. 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 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.

"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.)

(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 (j) 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 (j) 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, subsection (j) of Section 11-20-17, or Section 11-31-1.01 shall apply only to activities performed, costs incurred, and liens filed after March 1, 2010 (the effective date of Public this amendatory Act 96-856) of the 96th General Assembly. Subsection (j) 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 96th 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 (j) 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 (j) 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, subsection (j) of Section 11-20-17, 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.

(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, and subsection (j) of Section 11-20-17 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.)

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

Sec. 11-20-17. Vacant and abandoned property.

(a) For the purposes of this Section, "municipality" means a municipality with a population of over 2,000,000.

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

(c) Pursuant to those rules, regulations, or 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 local rule, regulation, or ordinance requiring the owner to provide the municipality contact information of the person or entity to whom the owner conveyed the property until the previous owner has provided the information requested by the municipality under any such local rule, regulation, or ordinance, (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.

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

(e) 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 rules, regulations, and 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.

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

(g) 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 on 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.

(h) For the purpose of this Section, "vacant property" means any property having complete or incomplete structures that are empty or otherwise uninhabited.

(i) 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.

(j) 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.".