Full Text of SB3747 96th General Assembly
SB3747eng 96TH GENERAL ASSEMBLY
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| AN ACT concerning real property.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 1. Short title. This Act may be cited as the | 5 |
| Transfer Fee Covenant Act. | 6 |
| Section 5. Legislative findings. The General Assembly | 7 |
| finds and declares that the public policy of this State favors | 8 |
| the marketability of real property and the transferability of | 9 |
| interests in real property free of title defects or | 10 |
| unreasonable restraints on alienation. The General Assembly | 11 |
| further finds and declares that transfer fee covenants violate | 12 |
| this public policy by impairing the marketability and | 13 |
| transferability of real property and by constituting an | 14 |
| unreasonable restraint on alienation regardless of the | 15 |
| duration of the covenants or the amount of the transfer fees, | 16 |
| and do not run with the title to the property or bind | 17 |
| subsequent owners of the property under common law or equitable | 18 |
| principles. | 19 |
| Section 10. Definitions. As used in this Act: | 20 |
| "Transfer" means the sale, gift, conveyance, assignment, | 21 |
| inheritance, or other transfer of an ownership interest in real | 22 |
| property located in this State. |
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| "Transfer fee" means a fee or charge required by a transfer | 2 |
| fee covenant and payable upon the transfer of an interest in | 3 |
| real property, or payable for the right to make or accept such | 4 |
| transfer, regardless of whether the fee or charge is a fixed | 5 |
| amount or is determined as a percentage of the value of the | 6 |
| property, the purchase price, or other consideration given for | 7 |
| the transfer. The following are not transfer fees for purposes | 8 |
| of this Act: | 9 |
| (1) any consideration payable by the grantee to the | 10 |
| grantor for the interest in real property being | 11 |
| transferred, including any subsequent additional | 12 |
| consideration for the property payable by the grantee based | 13 |
| upon any subsequent appreciation, development, or sale of | 14 |
| the property. For the purposes of this paragraph (1), an | 15 |
| interest in real property may include a separate mineral | 16 |
| estate and its appurtenant surface access rights; | 17 |
| (2) any commission payable to a licensed real estate | 18 |
| broker for the transfer of real property under an agreement | 19 |
| between the broker and the grantor or the grantee, | 20 |
| including any subsequent additional commission for that | 21 |
| transfer payable by the grantor or the grantee based upon | 22 |
| any subsequent appreciation, development, or sale of the | 23 |
| property; | 24 |
| (3) any interest, charges, fees, or other amounts | 25 |
| payable by a borrower to a lender under a loan secured by a | 26 |
| mortgage against real property, including but not limited |
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| to any fee payable to the lender for consenting to an | 2 |
| assumption of the loan or a transfer of the real property | 3 |
| subject to the mortgage, any fees or charges payable to the | 4 |
| lender for estoppel letters or certificates, and any other | 5 |
| consideration allowed by law and payable to the lender in | 6 |
| connection with the loan;
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| (4) any rent, reimbursement, charge, fee, or other | 8 |
| amount payable by a lessee to a lessor under a lease, | 9 |
| including but not limited to any fee payable to the lessor | 10 |
| for consenting to an assignment, subletting, encumbrance, | 11 |
| or transfer of the lease;
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| (5) any consideration payable to the holder of an | 13 |
| option to purchase an interest in real property or the | 14 |
| holder of a right of first refusal or first offer to | 15 |
| purchase an interest in real property for waiving, | 16 |
| releasing, or not exercising the option or right upon the | 17 |
| transfer of the property to another person;
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| (6) any tax, fee, charge, assessment, fine, or other | 19 |
| amount payable to or imposed by a governmental authority, | 20 |
| as long as such tax, fee, charge, assessment, fine, or | 21 |
| other amount payable is not imposed or payable by virtue of | 22 |
| a covenant or declaration;
or | 23 |
| (7) any fee, charge, assessment, fine, or other amount | 24 |
| payable to a homeowners', condominium, cooperative, mobile | 25 |
| home, or property owners' association pursuant to a | 26 |
| declaration or covenant or law applicable to such |
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| association, including, but not limited to, fees or charges | 2 |
| payable for estoppel letters or certificates issued by the | 3 |
| association or its authorized agent.
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| "Transfer fee covenant" means a declaration or covenant | 5 |
| purporting to affect real property which requires or purports | 6 |
| to require the payment of a transfer fee to the declarant or | 7 |
| other person specified in the declaration or covenant or to | 8 |
| their successors or assigns upon a subsequent transfer of an | 9 |
| interest in the real property.
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| Section 15. Transfer fee covenant prohibition. A transfer | 11 |
| fee covenant recorded in this State on or after the effective | 12 |
| date of this Act shall not run with the title to real property | 13 |
| and is not binding on or enforceable at law or in equity | 14 |
| against any subsequent owner, purchaser, or mortgagee of any | 15 |
| interest in real property as an equitable servitude or | 16 |
| otherwise. Any lien purporting to secure the payment of a | 17 |
| transfer fee under a transfer fee covenant recorded in this | 18 |
| State on or after the effective date of this Act is void and | 19 |
| unenforceable. This Section does not mean that a transfer fee | 20 |
| covenant or lien recorded in this State before the effective | 21 |
| date of this Act is presumed valid and enforceable.
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