Full Text of HB5201 100th General Assembly
HB5201enr 100TH GENERAL ASSEMBLY |
| | HB5201 Enrolled | | LRB100 18632 AWJ 33857 b |
|
| 1 | | AN ACT concerning local government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Counties Code is amended by adding Sections | 5 | | 3-5010.8, 5-41065, and 5-43043 as follows: | 6 | | (55 ILCS 5/3-5010.8 new) | 7 | | Sec. 3-5010.8. Mechanics lien demand and referral pilot | 8 | | program. | 9 | | (a) Legislative findings. The General Assembly finds that | 10 | | expired mechanics liens on residential property, which cloud | 11 | | title to property, are a rapidly growing problem throughout the | 12 | | State. In order to address the increase in expired mechanics | 13 | | liens and, more specifically, those that have not been released | 14 | | by the lienholder, a recorder may establish a process to demand | 15 | | and refer mechanics liens that have been recorded but not | 16 | | litigated or released in accordance with the Mechanics Lien Act | 17 | | to an administrative law judge for resolution or demand that | 18 | | the lienholder commence suit or forfeit the lien. | 19 | | (b) Definitions. As used in this Section: | 20 | | "Demand to Commence Suit" means the written demand | 21 | | specified in Section 34 of the Mechanics Lien Act. | 22 | | "Mechanics lien" and "lien" are used interchangeably in | 23 | | this Section. |
| | | HB5201 Enrolled | - 2 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | "Notice of Expired Mechanics Lien" means the notice a | 2 | | recorder gives to a property owner under subsection (d) | 3 | | informing the property owner of an expired lien. | 4 | | "Notice of Referral" means the document referring a | 5 | | mechanics lien to a county's code hearing unit. | 6 | | "Recording" and "filing" are used interchangeably in this | 7 | | Section. | 8 | | "Referral" or "refer" means a recorder's referral of a | 9 | | mechanics lien to a county's code hearing unit to obtain a | 10 | | determination as to whether a recorded mechanics lien is valid. | 11 | | "Residential property" means real property improved with | 12 | | not less than one nor more than 4 residential dwelling units; a | 13 | | residential condominium unit, including, but not limited to, | 14 | | the common elements allocated to the exclusive use of the | 15 | | condominium unit that form an integral part of the condominium | 16 | | unit and any parking unit or units specified by the declaration | 17 | | to be allocated to a specific residential condominium unit; or | 18 | | a single tract of agriculture real estate consisting of 40 | 19 | | acres or less that is improved with a single-family residence. | 20 | | If a declaration of condominium ownership provides for | 21 | | individually owned and transferable parking units, | 22 | | "residential property" does not include the parking unit of a | 23 | | specified residential condominium unit unless the parking unit | 24 | | is included in the legal description of the property against | 25 | | which the mechanics lien is recorded. | 26 | | (c) Establishment of a mechanics lien demand and referral |
| | | HB5201 Enrolled | - 3 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | process. After a public hearing, a recorder in a county with a | 2 | | code hearing unit may adopt rules establishing a mechanics lien | 3 | | demand and referral process for residential property. A | 4 | | recorder shall provide public notice 90 days before the public | 5 | | hearing. The notice shall include a statement of the recorder's | 6 | | intent to create a mechanics lien demand and referral process | 7 | | and shall be published in a newspaper of general circulation in | 8 | | the county and, if feasible, be posted on the recorder's | 9 | | website and at the recorder's office or offices. | 10 | | (d) Notice of Expired Lien. If a recorder determines, after | 11 | | review by legal staff or counsel, that a mechanics lien | 12 | | recorded in the grantor's index or the grantee's index is an | 13 | | expired lien, the recorder shall serve a Notice of Expired Lien | 14 | | by certified mail to the last known address of the owner. The | 15 | | owner or legal representative of the owner of the residential | 16 | | property shall confirm in writing his or her belief that the | 17 | | lien is not involved in pending litigation and, if there is no | 18 | | pending litigation, as verified and confirmed by county court | 19 | | records, the owner may request that the recorder proceed with a | 20 | | referral or serve a Demand to Commence Suit. | 21 | | For the purposes of this Section, a recorder shall | 22 | | determine a lien is an expired lien if the lien is unenforced | 23 | | (if a suit to enforce the lien has not been commenced by the | 24 | | lienholder or a counterclaim has not been filed (within 2 years | 25 | | after the completion date of the contract as specified in the | 26 | | recorded mechanics lien, the completion of extra or additional |
| | | HB5201 Enrolled | - 4 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | work, or furnishing of extra or additional material under | 2 | | Section 9 of the Mechanics Lien Act; if a completion date is | 3 | | not specified in the recorded lien, then the work completion | 4 | | date shall be deemed the date of recording of the mechanics | 5 | | lien) and if an automatic stay under Section 362(a) of the | 6 | | United States Bankruptcy Code does not prohibit a suit or | 7 | | counterclaim to foreclose. | 8 | | (e) Demand to Commence Suit. Upon receipt of an owner's | 9 | | confirmation that the lien is not involved in pending | 10 | | litigation and a request for the recorder to serve a Demand to | 11 | | Commence Suit, the recorder shall serve a Demand to Commence | 12 | | Suit on the lienholder of the expired lien as provided in | 13 | | Section 34 of the Mechanics Lien Act. A recorder may request | 14 | | that the Secretary of State assist in providing registered | 15 | | agent information or obtain information from the Secretary of | 16 | | State's registered business database when the recorder seeks to | 17 | | serve a Demand to Commence suit on the lienholder. Upon | 18 | | request, the Secretary of State, or his or her designee, shall | 19 | | provide the last known address or registered agent information | 20 | | for a lienholder who is incorporated or doing business in the | 21 | | State. The recorder must record a copy of the Demand to | 22 | | Commence suit in the grantor's index or the grantee's index | 23 | | identifying the mechanics lien and include the corresponding | 24 | | document number and the date of demand. The recorder may, at | 25 | | his or her discretion, notify the Secretary of State regarding | 26 | | a Demand to Commence suit determined to involve a company, |
| | | HB5201 Enrolled | - 5 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | corporation, or business registered with that office. | 2 | | When the lienholder commences a suit or files an answer | 3 | | within 30 days or the lienholder records a release of lien with | 4 | | the county recorder as required by subsection (a) of Section 34 | 5 | | of the Mechanics Lien Act, then the demand and referral process | 6 | | is completed for the recorder for that property. If service | 7 | | under this Section is responded to consistent with Section 34 | 8 | | of the Mechanics Lien Act, the recorder may not proceed under | 9 | | subsection (f). If no response is received consistent with | 10 | | Section 34 of the Mechanics Lien Act, the recorder may proceed | 11 | | under subsection (f). | 12 | | (f) Referral. Upon receipt of an owner's confirmation that | 13 | | the lien is not involved in pending litigation and a request | 14 | | for the recorder to proceed with a referral, the recorder | 15 | | shall: (i) file the Notice of Referral with the county's code | 16 | | hearing unit; (ii) identify and notify the lienholder by | 17 | | telephone, if available, of the referral and send a copy of the | 18 | | Notice of Referral by certified mail to the lienholder using | 19 | | information included in the recorded mechanics lien or the last | 20 | | known address or registered agent received from the Secretary | 21 | | of State or obtained from the Secretary of State's registered | 22 | | business database; (iii) send a copy of the Notice of Referral | 23 | | by mail to the physical address of the property owner | 24 | | associated with the lien; and (iv) record a copy of the Notice | 25 | | of Referral in the grantor's index or the grantee's index | 26 | | identifying the mechanics lien and include the corresponding |
| | | HB5201 Enrolled | - 6 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | document number. The Notice of Referral shall clearly identify | 2 | | the person, persons, or entity believed to be the owner, | 3 | | assignee, successor, or beneficiary of the lien. The recorder | 4 | | may, at his or her discretion, notify the Secretary of State | 5 | | regarding a referral determined to involve a company, | 6 | | corporation, or business registered with that office. | 7 | | No earlier than 30 business days after the date the | 8 | | lienholder is required to respond to a Demand to Commence Suit | 9 | | under Section 34 of the Mechanics Lien Act, the code hearing | 10 | | unit shall schedule a hearing to occur at least 30 days after | 11 | | sending notice of the date of hearing. Notice of the hearing | 12 | | shall be provided by the county recorder, by and through his or | 13 | | her representative, to the filer, or the party represented by | 14 | | the filer, of the expired lien, the legal representative of the | 15 | | recorder of deeds who referred the case, and the last owner of | 16 | | record, as identified in the Notice of Referral. | 17 | | If the recorder shows by clear and convincing evidence that | 18 | | the lien in question is an expired lien, the administrative law | 19 | | judge shall rule the lien is forfeited under Section 34.5 of | 20 | | the Mechanics Lien Act and that the lien no longer affects the | 21 | | chain of title of the property in any way. The judgment shall | 22 | | be forwarded to all parties identified in this subsection. Upon | 23 | | receiving judgment of a forfeited lien, the recorder shall, | 24 | | within 5 business days, record a copy of the judgment in the | 25 | | grantor's index or the grantee's index. | 26 | | If the administrative law judge finds the lien is not |
| | | HB5201 Enrolled | - 7 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | expired, the recorder shall, no later than 5 business days | 2 | | after receiving notice of the decision of the administrative | 3 | | law judge, record a copy of the judgment in the grantor's index | 4 | | or the grantee's index. | 5 | | A decision by an administrative law judge is reviewable | 6 | | under the Administrative Review Law, and nothing in this | 7 | | Section precludes a property owner or lienholder from | 8 | | proceeding with a civil action to resolve questions concerning | 9 | | a mechanics lien. | 10 | | A lienholder or property owner may remove the action from | 11 | | the code hearing unit to the circuit court as provided in | 12 | | subsection (i). | 13 | | (g) Final administrative decision. The recorder's decision | 14 | | to refer a mechanics lien or serve a Demand to Commence Suit is | 15 | | a final administrative decision that is subject to review under | 16 | | the Administrative Review Law by the circuit court of the | 17 | | county where the real property is located. The standard of | 18 | | review by the circuit court shall be consistent with the | 19 | | Administrative Review Law. | 20 | | (h) Liability. A recorder and his or her employees or | 21 | | agents are not subject to personal liability by reason of any | 22 | | error or omission in the performance of any duty under this | 23 | | Section, except in the case of willful or wanton conduct. The | 24 | | recorder and his or her employees or agents are not liable for | 25 | | the decision to refer a lien or serve a Demand to Commence | 26 | | Suit, or failure to refer or serve a Demand to Commence Suit, |
| | | HB5201 Enrolled | - 8 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | of a lien under this Section. | 2 | | (i) Private actions; use of demand and referral process. | 3 | | Nothing in this Section precludes a private right of action by | 4 | | any party with an interest in the property affected by the | 5 | | mechanics lien or a decision by the code hearing unit. Nothing | 6 | | in this Section requires a person or entity who may have a | 7 | | mechanics lien recorded against his or her property to use the | 8 | | mechanics lien demand and referral process created by this | 9 | | Section. | 10 | | A lienholder or property owner may remove a matter in the | 11 | | referral process to the circuit court at any time prior to the | 12 | | final decision of the administrative law judge by delivering a | 13 | | certified notice of the suit filed in the circuit court to the | 14 | | administrative law judge. Upon receipt of the certified notice, | 15 | | the administrative law judge shall dismiss the matter without | 16 | | prejudice. If the matter is dismissed due to removal, then the | 17 | | demand and referral process is completed for the recorder for | 18 | | that property. If the circuit court dismisses the removed | 19 | | matter without deciding on whether the lien is expired and | 20 | | without prejudice, the recorder may reinstitute the demand and | 21 | | referral process under subsection (d). | 22 | | (j) Repeal. This Section is repealed on January 1, 2022. | 23 | | (55 ILCS 5/5-41065 new) | 24 | | Sec. 5-41065. Mechanics lien demand and referral | 25 | | adjudication. |
| | | HB5201 Enrolled | - 9 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | (a) Notwithstanding any other provision in this Division, a | 2 | | county's code hearing unit must adjudicate an expired mechanics | 3 | | lien referred to the unit under Section 3-5010.8. | 4 | | (b) If a county does not have an administrative law judge | 5 | | in its code hearing unit who is familiar with the areas of law | 6 | | relating to mechanics liens, one may be appointed no later than | 7 | | 3 months after the effective date of this amendatory Act of the | 8 | | 100th General Assembly to adjudicate all referrals concerning | 9 | | mechanics liens under Section 3-5010.8. | 10 | | (c) If an administrative law judge familiar with the areas | 11 | | of law relating to mechanics liens has not been appointed as | 12 | | provided subsection (b) when a mechanics lien is referred under | 13 | | Section 3-5010.8 to the code hearing unit, the case shall be | 14 | | removed to the proper circuit court with jurisdiction. | 15 | | (d) This Section is repealed on January 1, 2022. | 16 | | (55 ILCS 5/5-43043 new) | 17 | | Sec. 5-43043. Mechanics lien demand and referral | 18 | | adjudication. | 19 | | (a) Notwithstanding any other provision in this Division, a | 20 | | county's code hearing unit must adjudicate an expired mechanics | 21 | | lien referred to the unit under Section 3-5010.8. | 22 | | (b) If a county does not have an administrative law judge | 23 | | in its code hearing unit who is familiar with the areas of law | 24 | | relating to mechanics liens, one may be appointed no later than | 25 | | 3 months after the effective date of this amendatory Act of the |
| | | HB5201 Enrolled | - 10 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | 100th General Assembly to adjudicate all referrals concerning | 2 | | mechanics liens under Section 3-5010.8. | 3 | | (c) If an administrative law judge familiar with the areas | 4 | | of law relating to mechanics liens has not been appointed as | 5 | | provided subsection (b) when a mechanics lien is referred under | 6 | | Section 3-5010.8 to the code hearing unit, the case shall be | 7 | | removed to the proper circuit court with jurisdiction. | 8 | | (d) This Section is repealed on January 1, 2022.
| 9 | | Section 10. The Mechanics Lien Act is amended by changing | 10 | | Section 34 and adding Section 34.5 as follows:
| 11 | | (770 ILCS 60/34) (from Ch. 82, par. 34)
| 12 | | Sec. 34. Notice to commence suit. | 13 | | (a) Upon written demand of the owner, lienor, a recorder | 14 | | under Section 3-5010.8 of the Counties Code, or any person
| 15 | | interested in the real estate, or their agent or attorney, | 16 | | served on the
person claiming the lien, or his agent or | 17 | | attorney, requiring suit to be
commenced to enforce the lien or | 18 | | answer to be filed in a pending suit, suit
shall be commenced | 19 | | or answer filed within 30 days thereafter, or the lien
shall be | 20 | | forfeited. Such service may be by registered or certified mail,
| 21 | | return receipt requested, or by personal service.
| 22 | | (b) A written demand under this Section must contain the | 23 | | following language in at least 10 point bold face type: | 24 | | "Failure to respond to this notice within 30 days after |
| | | HB5201 Enrolled | - 11 - | LRB100 18632 AWJ 33857 b |
|
| 1 | | receipt, as required by Section 34 of the Mechanics Lien Act, | 2 | | shall result in the forfeiture of the referenced lien." | 3 | | (Source: P.A. 97-1165, eff. 2-11-13.)
| 4 | | (770 ILCS 60/34.5 new) | 5 | | Sec. 34.5. Mechanics lien administrative adjudication. | 6 | | (a) Notwithstanding any other provision in this Act, a | 7 | | county's code hearing unit may adjudicate the validity of a | 8 | | mechanics lien under Section 3-5010.8 of the Counties Code. If | 9 | | the recorder shows by clear and convincing evidence that the | 10 | | lien being adjudicated is an expired lien, the administrative | 11 | | law judge shall rule the lien is forfeited under this Act and | 12 | | that the lien no longer affects the chain of title of the | 13 | | property in any way. | 14 | | (b) This Section is repealed on January 1, 2022.
|
|