HB3150 EnrolledLRB100 09000 AWJ 19146 b

1    AN ACT concerning local government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Counties Code is amended by changing Section
53-5010.5 as follows:
6    (55 ILCS 5/3-5010.5)
7    (Section scheduled to be repealed on June 1, 2018)
8    Sec. 3-5010.5. Fraud referral and review.
9    (a) Legislative findings. The General Assembly finds that
10property fraud, including fraudulent filings intended to cloud
11or fraudulently transfer title to property by recording false
12or altered documents and deeds, is a rapidly growing problem
13throughout the State. In order to combat the increase in the
14number of these filings, a recorder may establish a process to
15review and refer documents suspected to be fraudulent.
16    (b) Definitions. The terms "recording" and "filing" are
17used interchangeably in this Section.
18    (c) Establishment and use of a fraud referral and review
19process. A recorder who establishes a fraud referral and review
20process under the provisions of this Section may use it to
21review deeds and instruments and refer any of them to an
22administrative law judge for review pursuant to subsection (g)
23of this Section that cause the recorder to reasonably believe



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1that the filing may be fraudulent, unlawfully altered, or
2intended to unlawfully cloud or transfer the title of any real
3property. The recorder may enter into an intergovernmental
4agreement with local law enforcement officials for the purposes
5of this referral and review. A recorder may request that the
6Secretary of the Department of Financial and Professional
7Regulation assist in reviewing possible fraudulent filings.
8Upon request, the Secretary, or his or her designee, shall
9assist in identifying the validity of filings. The recorder
10shall notify the Secretary when a document suspected to be
11fraudulent is discovered.
12    In counties with a population of less than 3 million, a
13recorder shall provide public notice 90 days before the
14establishment of the fraud referral and review process. The
15notice shall include a statement of the recorder's intent to
16create a fraud referral and review process and shall be
17published in a newspaper of general circulation in the county
18and, if feasible, posted on the recorder's website and at the
19recorder's office or offices.
20    In determining whether to refer a document to an
21administrative law judge for review, a recorder may take into
22consideration any of the following factors:
23        (1) whether the owner of the property or his or her
24    designated representative has reported to the recorder
25    that another individual is attempting or has attempted to
26    record a fraudulent deed or other instrument upon the



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1    property;
2        (2) whether a law enforcement official has contacted
3    the recorder indicating that he or she has probable cause
4    to suspect title or recording fraud;
5        (3) whether the filer's name has a copyright attached
6    to it or the property owner's name has nonstandard
7    punctuation attached to it;
8        (4) whether the documents assert fines that do not
9    exist or have no basis under current law or that require
10    payment in gold or silver;
11        (5) whether the documents are maritime liens, or liens
12    under the Federal Maritime Lien Act or the Preferred Ship
13    Mortgage Act, or not authorized by the United States Coast
14    Guard;
15        (6) whether the documents are land patents not
16    authorized and certified by the United States Department of
17    the Interior Bureau of Land Management;
18        (7) whether the documents are representing that the
19    subject of the lien is releasing itself from a lien held by
20    another entity, with no apparent cooperation or
21    authorization provided by the lienholder;
22        (8) whether the documents are protesting or disputing a
23    foreclosure proceeding that are not filed within the
24    foreclosure suit and with the court presiding over the
25    matter;
26        (9) whether the documents are Uniform Commercial Code



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1    filings referencing birth certificates or other private
2    records that are not in compliance with Section 9-501 of
3    the Uniform Commercial Code;
4        (10) whether the documents are re-recording deeds to
5    re-notarize or attach notary certification if prior
6    notarization already appears unaltered on the document of
7    record;
8        (11) whether the documents are asserting diplomatic
9    credentials or immunity, non-United States citizenship, or
10    independence from the laws of the United States;
11        (12) whether the documents are claims that a bank
12    cannot hold title after a foreclosure;
13        (13) whether the documents are deeds not properly
14    signed by the last legal owner of record or his or her
15    court appointed representative or attorney-in-fact under a
16    power of attorney;
17        (14) whether the documents are manipulated or altered
18    federal or State legal or court forms that release a lien;
19        (15) whether a document is not related to a valid
20    existing or potential adverse transaction, existing lien,
21    or judgment of a court of competent jurisdiction;
22        (16) a document that is not related to a valid existing
23    or potential commercial or financial transaction, existing
24    agricultural or other lien, or judgment of a court of
25    competent jurisdiction;
26        (17) whether the document is filed with the intent to



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1    harass or defraud the person identified in the record or
2    any other person;
3        (18) whether the document is filed with the intent to
4    harass or defraud any member of a governmental office,
5    including, but not limited to, the recorder's office, local
6    government offices, the State of Illinois, or the Federal
7    government; and
8        (19) whether the documents are previous court
9    determinations, including a previous determination by a
10    court of competent jurisdiction that a particular document
11    is fraudulent, invalid, or forged.
12    (d) Determinations. If a recorder determines, after review
13by legal staff and counsel, that a deed or instrument that is
14recorded in the grantor's index or the grantee's index may be
15fraudulent, unlawfully altered, or intended to unlawfully
16cloud or transfer the title of any real property, he or she
17shall refer the deed or instrument to an administrative law
18judge for review pursuant to subsection (g) of this Section.
19The recorder shall record a Notice of Referral in the grantor's
20index or the grantee's index identifying the document,
21corresponding document number in question, and the date of
22referral. The recorder shall also notify the parties set forth
23in subsection (e) of this Section. The recorder may, at his or
24her discretion, notify law enforcement officials regarding a
25filing determined to be fraudulent, unlawfully altered, or
26intended to unlawfully cloud or transfer the title of any real



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2    (e) Notice. The recorder shall use county property tax
3records to identify and provide notice to the last owner of
4record by telephone, if available, and certified mail both
5when: (1) a deed or instrument has been referred for review and
6determination; and (2) a final determination has been made
7regarding the deed or instrument. Notice, by mail, shall also
8be sent to the physical address of the property associated with
9the deed or instrument.
10    (f) Administrative decision. The recorder's decision to
11add a Notice of Referral and refer a document for review is a
12final administrative decision that is subject to review by the
13circuit court of the county where the real property is located
14under the Administrative Review Law. The standard of review by
15the circuit court shall be de novo.
16    (g) Referral and review process. Prior to referral, the
17recorder shall notify the last owner of record of the document
18or documents suspected to be fraudulent. The person, entity, or
19legal representative thereof shall confirm in writing his or
20her belief that a document or documents are suspected to be
21fraudulent and may request that the recorder refer the case for
22review. Upon request, the recorder shall bring a case to its
23county department of administrative hearings and, within 10
24business days after receipt, an administrative law judge shall
25schedule a hearing to occur no later than 30 days after
26receiving the referral. The referral and case shall clearly



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1identify the person, persons, or entity believed to be the last
2true owner of record as the petitioner. Notice of the hearing
3shall be provided by the administrative law judge to the filer,
4or the party represented by the filer, of the suspected
5fraudulent document, the legal representative of the recorder
6of deeds who referred the case, and the last owner of record,
7as identified in the referral.
8    If clear and convincing evidence shows the document in
9question to be fraudulent, the administrative law judge shall
10rule the document to be fraudulent and forward the judgment to
11all the parties identified in this subsection. Upon receiving
12notice of the judgment of fraud, the recorder shall, within 5
13business days, record a new document that includes a copy of
14the judgment in front of the Notice of Referral that shall
15clearly state that the document in question has been found to
16be fraudulent and shall not be considered to affect the chain
17of title of the property in any way.
18    If the administrative law judge finds the document to be
19legitimate, the recorder shall, within 5 business days after
20receiving notice, record a copy of the judgment.
21    A decision by an administrative law judge shall not
22preclude a State's attorney or sheriff from proceeding with a
23criminal investigation or criminal charges. If a county does
24not have an administrative law judge that specializes in public
25records, one shall be appointed within 3 months after the
26effective date of this amendatory Act of the 98th General



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1Assembly, or the original case shall be forwarded to the proper
2circuit court with jurisdiction.
3    Nothing in this Section precludes a private right of action
4by any party with an interest in the property affected by the
5review and referral, or the filer of the document or documents
6suspected to be fraudulent. Nothing in this Section requires a
7person or entity who may have had a fraudulent document or
8encumbrance filed against his or her property to use the fraud
9review and referral process or administrative review created by
10this Section.
11    (h) Fees. The recorder shall retain any filing fees
12associated with filing a deed or instrument that is determined
13to be fraudulent, unlawfully altered, or intended to unlawfully
14cloud or transfer the title of any real property under this
16    (i) Liability. Neither a recorder nor any of his or her
17employees or agents shall be subject to personal liability by
18reason of any error or omission in the performance of any duty
19under this Section, except in case of willful or wanton
20conduct. Neither the recorder nor any of his or her employees
21shall incur liability for the referral or review, or failure to
22refer or review, a document or instrument under this Section.
23    (j) Applicability. This Section applies only to filings
24provided to the recorder on and after the effective date of
25this amendatory Act of the 98th General Assembly.
26    (k) (Blank). This Section is repealed June 1, 2018.



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1(Source: P.A. 98-99, eff. 7-19-13.)
2    Section 99. Effective date. This Act takes effect upon
3becoming law.