Full Text of SB3810 97th General Assembly
SB3810 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 SB3810 Introduced 2/10/2012, by Sen. John G. Mulroe SYNOPSIS AS INTRODUCED: |
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Creates the Uniform Assignment of Rents Act. Provides for the creation, perfection, priority, and enforcement of a security interest in rents. Includes provisions concerning: assignments of rents; appointment of a receiver; enforcement by notices; and coordination with the Uniform Commercial Code.
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| | A BILL FOR |
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| 1 | | AN ACT concerning rent assignments.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Uniform Assignment of Rents Act. | 6 | | Section 2. Definitions. In this Act: | 7 | | (1) "Assignee" means a person entitled to enforce an | 8 | | assignment of rents. | 9 | | (2) "Assignment of rents" means a transfer of an interest | 10 | | in rents in connection with an obligation secured by real | 11 | | property located in this State and from which the rents arise. | 12 | | (3) "Assignor" means a person that makes an assignment of | 13 | | rents or the successor owner of the real property from which | 14 | | the rents arise. | 15 | | (4) "Cash proceeds" means proceeds that are money, checks, | 16 | | deposit accounts, or the like. | 17 | | (5) "Day" means calendar day. | 18 | | (6) "Deposit account" means a demand, time, savings, | 19 | | passbook, or similar account maintained with a bank, savings | 20 | | bank, savings and loan association, credit union, or trust | 21 | | company. | 22 | | (7) "Document" means information that is inscribed on a | 23 | | tangible medium or that is stored on an electronic or other |
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| 1 | | medium and is retrievable in perceivable form. | 2 | | (8) "Notification" means a document containing information | 3 | | that this Act requires a person to provide to another, signed | 4 | | by the person required to provide the information.
| 5 | | (9) "Person" means an individual, corporation, business | 6 | | trust, estate, trust, partnership, limited liability company, | 7 | | association, joint venture, public corporation, government, or | 8 | | governmental subdivision, agency, or instrumentality, or any | 9 | | other legal or commercial entity. | 10 | | (10) "Proceeds" means personal property that is received or | 11 | | collected on account of a tenant's obligation to pay rents.
| 12 | | (11) "Purchase" means to take by sale, lease, discount, | 13 | | negotiation, mortgage, pledge, lien, security interest, issue | 14 | | or reissue, gift, or any other voluntary transaction creating | 15 | | an interest in property. | 16 | | (12) "Rents" means: | 17 | | (A) sums payable for the right to possess or occupy, or | 18 | | for the actual possession or occupation of, real property | 19 | | of another person; | 20 | | (B) sums payable to an assignor under a policy of | 21 | | rental interruption insurance covering real property; | 22 | | (C) claims arising out of a default in the payment of | 23 | | sums payable for the right to possess or occupy real | 24 | | property of another person; | 25 | | (D) sums payable to terminate an agreement to possess | 26 | | or occupy real property of another person; |
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| 1 | | (E) sums payable to an assignor for payment or | 2 | | reimbursement of expenses incurred in owning, operating | 3 | | and maintaining, or constructing or installing | 4 | | improvements on, real property; or | 5 | | (F) any other sums payable under an agreement relating | 6 | | to the real property of another person that constitute | 7 | | rents under law of this State other than this Act. | 8 | | (13) "Secured obligation" means an obligation the | 9 | | performance of which is secured by an assignment of rents. | 10 | | (14) "Security instrument" means a document, however | 11 | | denominated, that creates or provides for a security interest | 12 | | in real property, whether or not it also creates or provides | 13 | | for a security interest in personal property. | 14 | | (15) "Security interest" means an interest in property that | 15 | | arises by agreement and secures performance of an obligation. | 16 | | (16) "Sign" means, with present intent to authenticate or | 17 | | adopt a document: | 18 | | (A) to execute or adopt a tangible symbol; or | 19 | | (B) to attach to or logically associate with the | 20 | | document an electronic sound, symbol, or process. | 21 | | (17) "State" means a state of the United States, the | 22 | | District of Columbia, Puerto Rico, the United States Virgin | 23 | | Islands, or any territory or insular possession subject to the | 24 | | jurisdiction of the United States. | 25 | | (18) "Submit for recording" means to submit a document | 26 | | complying with applicable legal standards, with required fees |
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| 1 | | and taxes, to the appropriate governmental office under the | 2 | | Conveyance Act. | 3 | | (19) "Tenant" means a person that has an obligation to pay | 4 | | sums for the right to possess or occupy, or for possessing or | 5 | | occupying, the real property of another person.
| 6 | | Section 3. Manner of giving notification.
| 7 | | (a) Except as otherwise provided in subsections (c) and | 8 | | (d), a person gives a notification or a copy of a notification | 9 | | under this Act: | 10 | | (1) by depositing it with the United States Postal | 11 | | Service or with a commercially reasonable delivery | 12 | | service, properly addressed to the intended recipient's | 13 | | address as specified in subsection (b), with first-class | 14 | | postage or cost of delivery provided for; or | 15 | | (2) if the recipient agreed to receive notification by | 16 | | facsimile transmission, electronic mail, or other | 17 | | electronic transmission, by sending it to the recipient in | 18 | | the agreed manner at the address specified in the | 19 | | agreement. | 20 | | (b) The following rules determine the proper address for | 21 | | giving a notification under subsection (a): | 22 | | (1) A person giving a notification to an assignee shall | 23 | | use the address for notices to the assignee provided in the | 24 | | document creating the assignment of rents, but, if the | 25 | | assignee has provided the person giving the notification |
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| 1 | | with a more recent address for notices, the person giving | 2 | | the notification shall use that address. | 3 | | (2) A person giving a notification to an assignor shall | 4 | | use the address for notices to the assignor provided in the | 5 | | document creating the assignment of rents, but, if the | 6 | | assignor has provided the person giving the notification | 7 | | with a more recent address for notices, the person giving | 8 | | the notification shall use that address. | 9 | | (3) If a tenant's agreement with an assignor provides | 10 | | an address for notices to the tenant and the person giving | 11 | | notification has received a copy of the agreement or knows | 12 | | the address for notices specified in the agreement, the | 13 | | person giving the notification shall use that address in | 14 | | giving a notification to the tenant. Otherwise, the person | 15 | | shall use the address of the premises covered by the | 16 | | agreement. | 17 | | (c) If a person giving a notification pursuant to this Act | 18 | | and the recipient have agreed to the method for giving a | 19 | | notification, any notification must be given by that method. | 20 | | (d) If a notification is received by the recipient, it is | 21 | | effective even if it was not given in accordance with | 22 | | subsection (a) or (c).
| 23 | | Section 4. Security instrument creates assignment of | 24 | | rents; assignment of rents creates security interest.
| 25 | | (a) An enforceable security instrument creates an |
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| 1 | | assignment of rents arising from the real property described in | 2 | | the security instrument, unless the security instrument | 3 | | provides otherwise. | 4 | | (b) An assignment of rents creates a presently effective | 5 | | security interest in all accrued and unaccrued rents arising | 6 | | from the real property described in the document creating the | 7 | | assignment, regardless of whether the document is in the form | 8 | | of an absolute assignment, an absolute assignment conditioned | 9 | | upon default, an assignment as additional security, or any | 10 | | other form. The security interest in rents is separate and | 11 | | distinct from any security interest held by the assignee in the | 12 | | real property.
| 13 | | Section 5. Recordation; perfection of security interest in | 14 | | rents; priority of conflicting interests in rents. | 15 | | (a) A document creating an assignment of rents may be | 16 | | submitted for recording in the recorder's office in the same | 17 | | manner as any other document evidencing a conveyance of an | 18 | | interest in real property. | 19 | | (b) Upon recording, the security interest in rents created | 20 | | by an assignment of rents is fully perfected, even if a | 21 | | provision of the document creating the assignment or law of | 22 | | this State other than this Act would preclude or defer | 23 | | enforcement of the security interest until the occurrence of a | 24 | | subsequent event, including a subsequent default of the | 25 | | assignor, the assignee's obtaining possession of the real |
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| 1 | | property, or the appointment of a receiver. | 2 | | (c) Except as otherwise provided in subsection (d), a | 3 | | perfected security interest in rents takes priority over the | 4 | | rights of a person that, after the security interest is | 5 | | perfected: | 6 | | (1) acquires a judicial lien against the rents or the | 7 | | real property from which the rents arise; or | 8 | | (2) purchases an interest in the rents or the real | 9 | | property from which the rents arise. | 10 | | (d) A perfected security interest in rents has priority | 11 | | over the rights of a person described in subsection (c) with | 12 | | respect to future advances to the same extent as the assignee's | 13 | | security interest in the real property has priority over the | 14 | | rights of that person with respect to future advances.
| 15 | | Section 6. Enforcement of security interest in rents.
| 16 | | (a) An assignee may enforce an assignment of rents using | 17 | | one or more of the methods specified in Sections 7, 8, and 9 or | 18 | | any other method sufficient to enforce the assignment under law | 19 | | of this State other than this Act. | 20 | | (b) From the date of enforcement, the assignee or, in the | 21 | | case of enforcement by appointment of a receiver under Section | 22 | | 7, the receiver, is entitled to collect all rents that: | 23 | | (1) have accrued but remain unpaid on that date; and | 24 | | (2) accrue on or after that date, as those rents | 25 | | accrue.
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| 1 | | Section 7. Enforcement by appointment of receiver.
| 2 | | (a) An assignee is entitled to the appointment of a | 3 | | receiver for the real property subject to the assignment of | 4 | | rents if: | 5 | | (1) the assignor is in default and: | 6 | | (A) the assignor has agreed in a signed document to | 7 | | the appointment of a receiver in the event of the | 8 | | assignor's default; | 9 | | (B) it appears likely that the real property may | 10 | | not be sufficient to satisfy the secured obligation; | 11 | | (C) the assignor has failed to turn over to the | 12 | | assignee proceeds that the assignee was entitled to | 13 | | collect; or | 14 | | (D) a subordinate assignee of rents obtains the | 15 | | appointment of a receiver for the real property; or
| 16 | | (2) other circumstances exist that would justify the | 17 | | appointment of a receiver under law of this State other than | 18 | | this Act. | 19 | | (b) An assignee may file a petition for the appointment of | 20 | | a receiver in connection with an action: | 21 | | (1) to foreclose the security instrument; | 22 | | (2) for specific performance of the assignment; | 23 | | (3) seeking a remedy on account of waste or threatened | 24 | | waste of the real property subject to the assignment; or | 25 | | (4) otherwise to enforce the secured obligation or the |
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| 1 | | assignee's remedies arising from the assignment. | 2 | | (c) An assignee that files a petition under subsection (b) | 3 | | shall also give a copy of the petition in the manner specified | 4 | | in Section 3 to any other person that, 10 days before the date | 5 | | the petition is filed, held a recorded assignment of rents | 6 | | arising from the real property. | 7 | | (d) If an assignee enforces an assignment of rents under | 8 | | this Section, the date of enforcement is the date on which the | 9 | | court enters an order appointing a receiver for the real | 10 | | property subject to the assignment. | 11 | | (e) From the date of its appointment, a receiver is | 12 | | entitled to collect rents as provided in Section 6(b). The | 13 | | receiver also has the authority provided in the order of | 14 | | appointment and law of this State other than this Act. | 15 | | (f) The following rules govern priority among receivers: | 16 | | (1) If more than one assignee qualifies under this | 17 | | Section for the appointment of a receiver, a receivership | 18 | | requested by an assignee entitled to priority in rents | 19 | | under this Act has priority over a receivership requested | 20 | | by a subordinate assignee, even if a court has previously | 21 | | appointed a receiver for the subordinate assignee. | 22 | | (2) If a subordinate assignee obtains the appointment | 23 | | of a receiver, the receiver may collect the rents and apply | 24 | | the proceeds in the manner specified in the order | 25 | | appointing the receiver until a receiver is appointed under | 26 | | a senior assignment of rents. |
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| 1 | | Section 8. Enforcement by notification to assignor. | 2 | | (a) Upon the assignor's default, or as otherwise agreed by | 3 | | the assignor, the assignee may give the assignor a notification | 4 | | demanding that the assignor pay over the proceeds of any rents | 5 | | that the assignee is entitled to collect under Section 6. The | 6 | | assignee shall also give a copy of the notification to any | 7 | | other person that, 10 days before the notification date, held a | 8 | | recorded assignment of rents arising from the real property. | 9 | | (b) If an assignee enforces an assignment of rents under | 10 | | this Section, the date of enforcement is the date on which the | 11 | | assignor receives a notification under subsection (a). | 12 | | (c) An assignee's failure to give a notification under | 13 | | subsection (a) to any person holding a recorded assignment of | 14 | | rents does not affect the effectiveness of the notification as | 15 | | to the assignor, but the other person is entitled to any relief | 16 | | permitted under law of this State other than this Act. | 17 | | (d) An assignee that holds a security interest in rents | 18 | | solely by virtue of Section 4(a) may not enforce the security | 19 | | interest under this Section while the assignor occupies the | 20 | | real property as the assignor's primary residence.
| 21 | | Section 9. Enforcement by notification to tenant. | 22 | | (a) Upon the assignor's default, or as otherwise agreed by | 23 | | the assignor, the assignee may give to a tenant of the real | 24 | | property a notification demanding that the tenant pay to the |
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| 1 | | assignee all unpaid accrued rents and all unaccrued rents as | 2 | | they accrue. The assignee shall give a copy of the notification | 3 | | to the assignor and to any other person that, 10 days before | 4 | | the notification date, held a recorded assignment of rents | 5 | | arising from the real property. The notification must be signed | 6 | | by assignee and: | 7 | | (1) identify the tenant, assignor, assignee, premises | 8 | | covered by the agreement between the tenant and the | 9 | | assignor, and assignment of rents being enforced; | 10 | | (2) provide the recording data for the document | 11 | | creating the assignment or other reasonable proof that the | 12 | | assignment was made; | 13 | | (3) state that the assignee has the right to collect | 14 | | rents in accordance with the assignment;
| 15 | | (4) direct the tenant to pay to the assignee all unpaid | 16 | | accrued rents and all unaccrued rents as they accrue; | 17 | | (5) describe the manner in which subsections (c) and | 18 | | (d) affect the tenant's payment obligations; | 19 | | (6) provide the name and telephone number of a contact | 20 | | person and an address to which the tenant can direct | 21 | | payment of rents and any inquiry for additional information | 22 | | about the assignment or the assignee's right to enforce the | 23 | | assignment; and | 24 | | (7) contain a statement that the tenant may consult a | 25 | | lawyer if the tenant has questions about its rights and | 26 | | obligations. |
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| 1 | | (b) If an assignee enforces an assignment of rents under | 2 | | this Section, the date of enforcement is the date on which the | 3 | | tenant receives a notification substantially complying with | 4 | | subsection (a). | 5 | | (c) Subject to subsection (d) and any other claim or | 6 | | defense that a tenant has under law of this State other than | 7 | | this Act, following receipt of a notification substantially | 8 | | complying with subsection (a):
| 9 | | (1) a tenant is obligated to pay to the assignee all | 10 | | unpaid accrued rents and all unaccrued rents as they | 11 | | accrue, unless the tenant has previously received a | 12 | | notification from another assignee of rents given by that | 13 | | assignee in accordance with this Section and the other | 14 | | assignee has not canceled that notification; | 15 | | (2) unless the tenant occupies the premises as the | 16 | | tenant's primary residence, a tenant that pays rents to the | 17 | | assignor is not discharged from the obligation to pay rents | 18 | | to the assignee; | 19 | | (3) a tenant's payment to the assignee of rents then | 20 | | due satisfies the tenant's obligation under the tenant's | 21 | | agreement with the assignor to the extent of the payment | 22 | | made; and | 23 | | (4) a tenant's obligation to pay rents to the assignee | 24 | | continues until the tenant receives a court order directing | 25 | | the tenant to pay the rent in a different manner or a | 26 | | signed document from the assignee canceling its |
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| 1 | | notification, whichever occurs first. | 2 | | (d) A tenant that has received a notification under | 3 | | subsection (a) is not in default for nonpayment of rents | 4 | | accruing within 30 days after the date the notification is | 5 | | received before the earlier of: | 6 | | (1) 10 days after the date the next regularly scheduled | 7 | | rental payment would be due; or
| 8 | | (2) 30 days after the date the tenant receives the | 9 | | notification. | 10 | | (e) Upon receiving a notification from another creditor | 11 | | that is entitled to priority under Section 5(c) that the other | 12 | | creditor has enforced and is continuing to enforce its interest | 13 | | in rents, an assignee that has given a notification to a tenant | 14 | | under subsection (a) shall immediately give another | 15 | | notification to the tenant canceling the earlier notification. | 16 | | (f) An assignee's failure to give a notification under | 17 | | subsection (a) to any person holding a recorded assignment of | 18 | | rents does not affect the effectiveness of the notification as | 19 | | to the assignor and those tenants receiving the notification. | 20 | | However, the person entitled to the notification is entitled to | 21 | | any relief permitted by law of this State other than this Act. | 22 | | (g) An assignee that holds a security interest in rents | 23 | | solely by virtue of Section 4(a) may not enforce the security | 24 | | interest under this Section while the assignor occupies the | 25 | | real property as the assignor's primary residence.
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| 1 | | Section 10. Notification to tenant; form. No particular | 2 | | phrasing is required for the notification specified in Section | 3 | | 9. However, the following form of notification, when properly | 4 | | completed, is sufficient to satisfy the requirements of Section | 5 | | 9: | 6 | | NOTIFICATION TO PAY RENTS TO | 7 | | PERSON OTHER THAN LANDLORD
| 8 | | Tenant: ..................................................
| 9 | | Property Occupied by Tenant | 10 | | (the "Address"): .....................................
| 11 | | Landlord: ............................................ | 12 | | Assignee: ............................................
| 13 | | Address of Assignee and Telephone Number | 14 | | of Contact Person: ................................... | 15 | | Address of assignee: ................................. | 16 | | Telephone number of person to contact ................
| 17 | | 1. The Assignee named above has become the person entitled | 18 | | to collect
your rents on the Premises listed above under (Name | 19 | | of document)...............
(the "Assignment of Rents") dated | 20 | | ..........., and recorded at (recording data) ........... in | 21 | | the
(Appropriate governmental office under the recording Act of | 22 | | this State)..................................
You may obtain | 23 | | additional information about the Assignment of Rents and the | 24 | | Assignee's right to enforce it at the address listed above. |
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| 1 | | 2. The Landlord is in default under the Assignment of | 2 | | Rents. Under
the Assignment of Rents, the Assignee is entitled | 3 | | to collect rents from the Premises. | 4 | | 3. This notification affects your rights and obligations | 5 | | under the
agreement under which you occupy the Premises (your | 6 | | "Agreement"). In order to
provide you with an opportunity to | 7 | | consult with a lawyer, if your next scheduled
rental payment is | 8 | | due within 30 days after you receive this notification, neither | 9 | | the Assignee nor the Landlord can hold you in default under | 10 | | your Agreement for
nonpayment of that rental payment until 10 | 11 | | days after the due date of that payment
or 30 days following | 12 | | the date you receive this notification, whichever occurs first.
| 13 | | You may consult a lawyer at your expense concerning your rights | 14 | | and obligations
under your Agreement and the effect of this | 15 | | notification.
| 16 | | 4. You must pay to the Assignee at the address listed above | 17 | | all rents
under your Agreement which are due and payable on the | 18 | | date you receive this notification and all rents accruing under | 19 | | your Agreement after you receive this notification. If you pay | 20 | | rents to the Assignee after receiving this notification, the
| 21 | | payment will satisfy your rental obligation to the extent of | 22 | | that payment.
| 23 | | 5. Unless you occupy the Premises as your primary | 24 | | residence, if you
pay any rents to the Landlord after receiving | 25 | | this notification, your payment to the
Landlord will not | 26 | | discharge your rental obligation, and the Assignee may hold you
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| 1 | | liable for that rental obligation notwithstanding your payment | 2 | | to the Landlord.
| 3 | | 6. If you have previously received a notification from | 4 | | another person
that also holds an assignment of the rents due | 5 | | under your Agreement, you should
continue paying your rents to | 6 | | the person that sent that notification until that person
| 7 | | cancels that notification. Once that notification is canceled, | 8 | | you must begin paying
rents to the Assignee in accordance with | 9 | | this notification.
| 10 | | 7. Your obligation to pay rents to the Assignee will | 11 | | continue until you
receive either: | 12 | | (a) a written order from a court directing you to pay | 13 | | the rent in a manner specified in that order; or
| 14 | | (b) written instructions from the Assignee canceling | 15 | | this notification. | 16 | | Name of assignee .............................................
| 17 | | By: (Officer/authorized agent of assignee) | 18 | | Section 11. Effect of enforcement. The enforcement of an | 19 | | assignment of rents by one or more of the methods identified in | 20 | | Sections 7, 8, and 9, the application of proceeds by the | 21 | | assignee under Section 12 after enforcement, the payment of | 22 | | expenses under Section 13, or an action under Section 14(d) | 23 | | does not: | 24 | | (1) make the assignee a mortgagee in possession of the | 25 | | real property; |
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| 1 | | (2) make the assignee an agent of the assignor; | 2 | | (3) constitute an election of remedies that precludes a | 3 | | later action to enforce the secured obligation; | 4 | | (4) make the secured obligation unenforceable; or | 5 | | (5) limit any right available to the assignee with | 6 | | respect to the secured obligation. | 7 | | Section 12. Application of proceeds. Unless otherwise | 8 | | agreed, an assignee that collects rents under this Act or | 9 | | collects upon a judgment in an action under Section 14(d) shall | 10 | | apply the sums collected in the following order to: | 11 | | (1) the assignee's reasonable expenses of enforcing | 12 | | its assignment of rents, including, to the extent provided | 13 | | for by agreement and not prohibited by law of this State | 14 | | other than this Act, reasonable attorney's fees and costs | 15 | | incurred by the assignee; | 16 | | (2) reimbursement of any expenses incurred by the | 17 | | assignee to protect or maintain the real property subject | 18 | | to the assignment; | 19 | | (3) payment of the secured obligation; | 20 | | (4) payment of any obligation secured by a subordinate | 21 | | security interest or other lien on the rents if, before | 22 | | distribution of the proceeds, the assignor and assignee | 23 | | receive a notification from the holder of the interest or | 24 | | lien demanding payment of the proceeds; and | 25 | | (5) the assignor.
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| 1 | | Section 13. Application of proceeds to expenses of | 2 | | protection real property; claims and defenses of tenant. | 3 | | (a) Unless otherwise agreed by the assignee, and subject to | 4 | | subsection (c), an assignee that collects rents following | 5 | | enforcement under Section 8 or 9 need not apply them to the | 6 | | payment of expenses of protecting or maintaining the real | 7 | | property subject to the assignment.
| 8 | | (b) Unless a tenant has made an enforceable agreement not | 9 | | to assert claims or defenses, the right of the assignee to | 10 | | collect rents from the tenant is subject to the terms of the | 11 | | agreement between the assignor and tenant and any claim or | 12 | | defense arising from the assignor's nonperformance of that | 13 | | agreement. | 14 | | (c) This Act does not limit the standing or right of a | 15 | | tenant to request a court to appoint a receiver for the real | 16 | | property subject to the assignment or to seek other relief on | 17 | | the ground that the assignee's nonpayment of expenses of | 18 | | protecting or maintaining the real property has caused or | 19 | | threatened harm to the tenant's interest in the property. | 20 | | Whether the tenant is entitled to the appointment of a receiver | 21 | | or other relief is governed by law of this state other than | 22 | | this Act.
| 23 | | Section 14. Turnover of rents; commingling and | 24 | | identifiably of rents; liability of assignor. |
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| 1 | | (a) In this Section, "good faith" means honesty in fact and | 2 | | the observance of reasonable commercial standards of fair | 3 | | dealing. | 4 | | (b) If an assignor collects rents that the assignee is | 5 | | entitled to collect under this Act: | 6 | | (1) the assignor shall turn over the proceeds to the | 7 | | assignee, less any amount representing payment of expenses | 8 | | authorized by the assignee; and | 9 | | (2) the assignee continues to have a security interest | 10 | | in the proceeds so long as they are identifiable. | 11 | | (c) For purposes of this Act, cash proceeds are | 12 | | identifiable if they are maintained in a segregated account or, | 13 | | if commingled with other funds, to the extent the assignee can | 14 | | identify them by a method of tracing, including application of | 15 | | equitable principles, that is permitted under law of this State | 16 | | other than this Act with respect to commingled funds. | 17 | | (d) In addition to any other remedy available to the | 18 | | assignee under law of this State other than this Act, if an | 19 | | assignor fails to turn over proceeds to the assignee as | 20 | | required by subsection (b), the assignee may recover from the | 21 | | assignor in a civil action: | 22 | | (1) the proceeds, or an amount equal to the proceeds, | 23 | | that the assignor was obligated to turn over under | 24 | | subsection (b); and | 25 | | (2) reasonable attorney's fees and costs incurred by | 26 | | the assignee to the extent provided for by agreement and |
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| 1 | | not prohibited by law of this State other than this Act. | 2 | | (e) The assignee may maintain an action under subsection | 3 | | (d) without bringing an action to foreclose any security | 4 | | interest that it may have in the real property. Any sums | 5 | | recovered in the action must be applied in the manner specified | 6 | | in Section 12.
| 7 | | (f) Unless otherwise agreed, if an assignee entitled to | 8 | | priority under Section 5(c) enforces its interest in rents | 9 | | after another creditor holding a subordinate security interest | 10 | | in rents has enforced its interest under Section 8 or 9, the | 11 | | creditor holding the subordinate security interest in rents is | 12 | | not obligated to turn over any proceeds that it collects in | 13 | | good faith before the creditor receives notification that the | 14 | | senior assignee has enforced its interest in rents. The | 15 | | creditor shall turn over to the senior assignee any proceeds | 16 | | that it collects after it receives the notification.
| 17 | | Section 15. Perfection and priority of assignees security | 18 | | interest in proceeds. | 19 | | (a) In this Section: | 20 | | (1) "Article 9" means Article 9 of the Uniform | 21 | | Commercial Code or, to the extent applicable to any | 22 | | particular issue, Article 9 as adopted by the state whose | 23 | | laws govern that issue under the choice-of-laws rules | 24 | | contained in Article 9 as adopted by this State. | 25 | | (2) "Conflicting interest" means an interest in |
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| 1 | | proceeds, held by a person other than an assignee, that is: | 2 | | (A) a security interest arising under Article 9; or | 3 | | (B) any other interest if Article 9 resolves the | 4 | | priority conflict between that person and a secured | 5 | | party with a conflicting security interest in the | 6 | | proceeds. | 7 | | (b) An assignee's security interest in identifiable cash | 8 | | proceeds is perfected if its security interest in rents is | 9 | | perfected. An assignee's security interest in identifiable | 10 | | noncash proceeds is perfected only if the assignee perfects | 11 | | that interest in accordance with Article 9. | 12 | | (c) Except as otherwise provided in subsection (d), | 13 | | priority between an assignee's security interest in | 14 | | identifiable proceeds and a conflicting interest is governed by | 15 | | the priority rules in Article 9. | 16 | | (d) An assignee's perfected security interest in | 17 | | identifiable cash proceeds is subordinate to a conflicting | 18 | | interest that is perfected by control under Article 9 but has | 19 | | priority over a conflicting interest that is perfected other | 20 | | than by control.
| 21 | | Section 16. Priority subject to subordination. This Act | 22 | | does not preclude subordination by agreement as to rents or | 23 | | proceeds.
| 24 | | Section 17. Uniformity of Application and Construction. In |
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| 1 | | applying and construing this uniform act, consideration must be | 2 | | given to the need to promote uniformity of the law with respect | 3 | | to its subject matter among states that enact it. | 4 | | Section 18. Relation to Electronic Signatures in Global and | 5 | | National Commerce Act. This Act modifies, limits, and | 6 | | supersedes the federal Electronic Signatures in Global and | 7 | | National Commerce Act (15 U.S.C. Section 7001, et. seq.) but | 8 | | does not modify, limit, or supersede Section 101(c) of that Act | 9 | | (15 U.S.C. Section 7001(c)) or authorize electronic delivery of | 10 | | any of the notices described in Section 103(b) of that Act (15 | 11 | | U.S.C. Section 7003(b)). | 12 | | Section 19. Application to existing relationships. | 13 | | (a) Except as otherwise provided in this Section, this Act | 14 | | governs the enforcement of an assignment of rents and the | 15 | | perfection and priority of a security interest in rents, even | 16 | | if the document creating the assignment was signed and | 17 | | delivered before the effective date of this Act. | 18 | | (b) This Act does not affect an action or proceeding | 19 | | commenced before the effective date of this Act.
| 20 | | (c) Section 4(a) of this Act does not apply to any security | 21 | | instrument signed and delivered before the effective date of | 22 | | this Act. | 23 | | (d) This Act does not affect: | 24 | | (1) the enforceability of an assignee's security |
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| 1 | | interest in rents or proceeds if, immediately before the | 2 | | effective date of this Act, that security interest was | 3 | | enforceable; | 4 | | (2) the perfection of an assignee's security interest | 5 | | in rents or proceeds if, immediately before the effective | 6 | | date of this Act, that security interest was perfected; or | 7 | | (3) the priority of an assignee's security interest in | 8 | | rents or proceeds with respect to the interest of another | 9 | | person if, immediately before the effective date of this | 10 | | Act, the interest of the other person was enforceable and | 11 | | perfected, and that priority was established.
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