Full Text of HB5201 100th General Assembly
HB5201sam001 100TH GENERAL ASSEMBLY | Sen. Cristina Castro Filed: 5/17/2018
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| 1 | | AMENDMENT TO HOUSE BILL 5201
| 2 | | AMENDMENT NO. ______. Amend House Bill 5201 by replacing | 3 | | everything after the enacting clause with the following:
| 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 |
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| 1 | | to an administrative law judge for resolution or demand that | 2 | | the lienholder commence suit or forfeit the lien. | 3 | | (b) Definitions. As used in this Section: | 4 | | "Demand to Commence Suit" means the written demand | 5 | | specified in Section 34 of the Mechanics Lien Act. | 6 | | "Mechanics lien" and "lien" are used interchangeably in | 7 | | this Section. | 8 | | "Notice of Expired Mechanics Lien" means the notice a | 9 | | recorder gives to a property owner under subsection (d) | 10 | | informing the property owner of an expired lien. | 11 | | "Notice of Referral" means the document referring a | 12 | | mechanics lien to a county's code hearing unit. | 13 | | "Recording" and "filing" are used interchangeably in this | 14 | | Section. | 15 | | "Referral" or "refer" means a recorder's referral of a | 16 | | mechanics lien to a county's code hearing unit to obtain a | 17 | | determination as to whether a recorded mechanics lien is valid. | 18 | | "Residential property" means real property improved with | 19 | | not less than one nor more than 4 residential dwelling units; a | 20 | | residential condominium unit, including, but not limited to, | 21 | | the common elements allocated to the exclusive use of the | 22 | | condominium unit that form an integral part of the condominium | 23 | | unit and any parking unit or units specified by the declaration | 24 | | to be allocated to a specific residential condominium unit; or | 25 | | a single tract of agriculture real estate consisting of 40 | 26 | | acres or less that is improved with a single-family residence. |
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| 1 | | If a declaration of condominium ownership provides for | 2 | | individually owned and transferable parking units, | 3 | | "residential property" does not include the parking unit of a | 4 | | specified residential condominium unit unless the parking unit | 5 | | is included in the legal description of the property against | 6 | | which the mechanics lien is recorded. | 7 | | "Subcontractor" has the meaning given to that term in | 8 | | subsection (a) of Section 21 of the Mechanics Lien Act. | 9 | | (c) Establishment of a mechanics lien demand and referral | 10 | | process. After a public hearing, a recorder in a county with a | 11 | | code hearing unit may adopt rules establishing a mechanics lien | 12 | | demand and referral process for residential property. A | 13 | | recorder shall provide public notice 90 days before the public | 14 | | hearing. The notice shall include a statement of the recorder's | 15 | | intent to create a mechanics lien demand and referral process | 16 | | and shall be published in a newspaper of general circulation in | 17 | | the county and, if feasible, be posted on the recorder's | 18 | | website and at the recorder's office or offices. | 19 | | (d) Notice of Expired Lien. If a recorder determines, after | 20 | | review by legal staff or counsel, that a mechanics lien | 21 | | recorded in the grantor's index or the grantee's index is an | 22 | | expired lien, the recorder shall serve a Notice of Expired Lien | 23 | | by certified mail to the last known address of the owner. The | 24 | | owner or legal representative of the owner of the residential | 25 | | property shall confirm in writing his or her belief that the | 26 | | lien is not involved in pending litigation and, if there is no |
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| 1 | | pending litigation, as verified and confirmed by county court | 2 | | records, the owner may request that the recorder proceed with a | 3 | | referral or serve a Demand to Commence Suit. | 4 | | For the purposes of this Section, a recorder shall | 5 | | determine a lien is an expired lien if the lien fits into one | 6 | | of the following classifications: | 7 | | (1) unenforced (if a suit to enforce the lien has not | 8 | | been commenced by the lienholder or a counterclaim has not | 9 | | been filed (within 2 years after the completion date of the | 10 | | contract as specified in the recorded mechanics lien, the | 11 | | completion of extra or additional work, or furnishing of | 12 | | extra or additional material under Section 9 of the | 13 | | Mechanics Lien Act) and if an automatic stay under Section | 14 | | 362(a) of the United States Bankruptcy Code does not | 15 | | prohibit a suit or counterclaim to foreclose; if a | 16 | | completion date is not specified in the recorded lien, | 17 | | then, as provided under Section 6 of the Mechanics Lien | 18 | | Act: (A) if the work is done or material is furnished | 19 | | within 3 years from the commencement of the work or the | 20 | | commencement of furnishing the material in the case of work | 21 | | done or material furnished as to residential property; or | 22 | | (B) if no later than 5 years from the commencement of the | 23 | | work or the commencement of furnishing the material in the | 24 | | case of work done or material furnished as to any other | 25 | | type of property and if an automatic stay under Section | 26 | | 362(a) of the United States Bankruptcy Code does not |
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| 1 | | prohibit a suit or counterclaim to foreclose); or | 2 | | (2) failure to record a satisfaction or release (if the | 3 | | lienholder has failed to fulfill the requirements of | 4 | | subsection (a) of Section 35 of the Mechanics Lien Act). | 5 | | (e) Demand to Commence Suit. Upon receipt of an owner's | 6 | | confirmation that the lien is not involved in pending | 7 | | litigation and a request for the recorder to serve a Demand to | 8 | | Commence Suit, the recorder shall serve a Demand to Commence | 9 | | Suit on the lienholder of the expired lien as provided in | 10 | | Section 34 of the Mechanics Lien Act. A recorder may request | 11 | | that the Secretary of State assist in providing registered | 12 | | agent information or obtain information from the Secretary of | 13 | | State's registered business database when the recorder seeks to | 14 | | serve a Demand to Commence suit on the lienholder. Upon | 15 | | request, the Secretary of State, or his or her designee, shall | 16 | | provide the last known address or registered agent information | 17 | | for a lienholder who is incorporated or doing business in the | 18 | | State. The recorder must record a copy of the Demand to | 19 | | Commence suit in the grantor's index or the grantee's index | 20 | | identifying the mechanics lien and include the corresponding | 21 | | document number and the date of demand. The recorder may, at | 22 | | his or her discretion, notify the Secretary of State regarding | 23 | | a Demand to Commence suit determined to involve a company, | 24 | | corporation, or business registered with that office. | 25 | | When the lienholder commences a suit or files an answer | 26 | | within 30 days or the lienholder records a release of lien with |
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| 1 | | the county recorder as required by subsection (a) of Section 34 | 2 | | of the Mechanics Lien Act, then the demand and referral process | 3 | | is completed for the recorder for that property. | 4 | | (f) Referral. Upon receipt of an owner's confirmation that | 5 | | the lien is not involved in pending litigation and a request | 6 | | for the recorder to proceed with a referral, the recorder | 7 | | shall: (i) file the Notice of Referral with the county's code | 8 | | hearing unit; (ii) identify and notify the lienholder by | 9 | | telephone, if available, of the referral and send a copy of the | 10 | | Notice of Referral by certified mail to the lienholder using | 11 | | information included in the recorded mechanics lien or the last | 12 | | known address or registered agent received from the Secretary | 13 | | of State or obtained from the Secretary of State's registered | 14 | | business database; (iii) send a copy of the Notice of Referral | 15 | | by mail to the physical address of the property owner | 16 | | associated with the lien; and (iv) record a copy of the Notice | 17 | | of Referral in the grantor's index or the grantee's index | 18 | | identifying the mechanics lien and include the corresponding | 19 | | document number. The Notice of Referral shall clearly identify | 20 | | the person, persons, or entity believed to be the owner, | 21 | | assignee, successor, or beneficiary of the lien. The recorder | 22 | | may, at his or her discretion, notify the Secretary of State | 23 | | regarding a referral determined to involve a company, | 24 | | corporation, or business registered with that office. | 25 | | No later than 30 business days after receipt of the Notice | 26 | | of Referral, the code hearing unit shall schedule a hearing to |
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| 1 | | occur no later than 30 days after receiving the referral. | 2 | | Notice of the hearing shall be provided by the county recorder, | 3 | | by and through his or her representative, to the filer, or the | 4 | | party represented by the filer, of the expired lien, the legal | 5 | | representative of the recorder of deeds who referred the case, | 6 | | and the last owner of record, as identified in the Notice of | 7 | | Referral. | 8 | | If the recorder shows by clear and convincing evidence that | 9 | | the lien in question is an expired lien, the administrative law | 10 | | judge shall rule the lien is forfeited under Section 34.5 of | 11 | | the Mechanics Lien Act and that the lien no longer affects the | 12 | | chain of title of the property in any way. The judgment shall | 13 | | be forwarded to all parties identified in this subsection. Upon | 14 | | receiving judgment of a forfeited lien, the recorder shall, | 15 | | within 5 business days, record a copy of the judgment in the | 16 | | grantor's index or the grantee's index. | 17 | | If the administrative law judge finds the lien to be valid | 18 | | and still within the statutorily prescribed period of time to | 19 | | remain as an active lien in the property's chain of title, the | 20 | | recorder shall, no later than 5 business days after receiving | 21 | | notice of the decision of the administrative law judge, record | 22 | | a copy of the judgment in the grantor's index or the grantee's | 23 | | index. | 24 | | A decision by an administrative law judge is reviewable | 25 | | under the Administrative Review Law, and nothing in this | 26 | | Section precludes a property owner or lienholder from |
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| 1 | | proceeding with a civil action to resolve questions concerning | 2 | | a mechanics lien. | 3 | | A lienholder or property owner may remove the action from | 4 | | the code hearing unit to the circuit court as provided in | 5 | | subsection (i). | 6 | | (g) Final administrative decision. The recorder's decision | 7 | | to refer a mechanics lien or serve a Demand to Commence Suit is | 8 | | a final administrative decision that is subject to review under | 9 | | the Administrative Review Law by the circuit court of the | 10 | | county where the real property is located. The standard of | 11 | | review by the circuit court shall be consistent with the | 12 | | Administrative Review Law. | 13 | | (h) Liability. A recorder and his or her employees or | 14 | | agents are not subject to personal liability by reason of any | 15 | | error or omission in the performance of any duty under this | 16 | | Section, except in the case of willful or wanton conduct. The | 17 | | recorder and his or her employees or agents are not liable for | 18 | | the decision to refer a lien or serve a Demand to Commence | 19 | | Suit, or failure to refer or serve a Demand to Commence Suit, | 20 | | of a lien under this Section. | 21 | | (i) Private actions; use of demand and referral process. | 22 | | Nothing in this Section precludes a private right of action by | 23 | | any party with an interest in the property affected by the | 24 | | mechanics lien or a decision by the code hearing unit. Nothing | 25 | | in this Section requires a person or entity who may have a | 26 | | mechanics lien recorded against his or her property to use the |
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| 1 | | mechanics lien demand and referral process created by this | 2 | | Section. | 3 | | A lienholder or property owner may remove a matter in the | 4 | | referral process to the circuit court at any time prior to the | 5 | | final decision of the administrative law judge by delivering a | 6 | | certified notice of the suit filed in the circuit court to the | 7 | | administrative law judge. Upon receipt of the certified notice, | 8 | | the administrative law judge shall dismiss the matter without | 9 | | prejudice. If the matter is dismissed due to removal, then the | 10 | | demand and referral process is completed for the recorder for | 11 | | that property. If the circuit court dismisses the removed | 12 | | matter without deciding on whether the lien is expired and | 13 | | without prejudice, the recorder may reinstitute the demand and | 14 | | referral process under subsection (d). | 15 | | (j) Repeal. This Section is repealed on January 1, 2022. | 16 | | (55 ILCS 5/5-41065 new) | 17 | | Sec. 5-41065. 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 |
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| 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 | | (55 ILCS 5/5-43043 new) | 10 | | Sec. 5-43043. Mechanics lien demand and referral | 11 | | adjudication. | 12 | | (a) Notwithstanding any other provision in this Division, a | 13 | | county's code hearing unit must adjudicate an expired mechanics | 14 | | lien referred to the unit under Section 3-5010.8. | 15 | | (b) If a county does not have an administrative law judge | 16 | | in its code hearing unit who is familiar with the areas of law | 17 | | relating to mechanics liens, one may be appointed no later than | 18 | | 3 months after the effective date of this amendatory Act of the | 19 | | 100th General Assembly to adjudicate all referrals concerning | 20 | | mechanics liens under Section 3-5010.8. | 21 | | (c) If an administrative law judge familiar with the areas | 22 | | of law relating to mechanics liens has not been appointed as | 23 | | provided subsection (b) when a mechanics lien is referred under | 24 | | Section 3-5010.8 to the code hearing unit, the case shall be | 25 | | removed to the proper circuit court with jurisdiction. |
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| 1 | | (d) This Section is repealed on January 1, 2022.
| 2 | | Section 10. The Mechanics Lien Act is amended by changing | 3 | | Section 34 and adding Section 34.5 as follows:
| 4 | | (770 ILCS 60/34) (from Ch. 82, par. 34)
| 5 | | Sec. 34. Notice to commence suit. | 6 | | (a) Upon written demand of the owner, lienor, a recorder | 7 | | under Section 3-5010.8 of the Counties Code, or any person
| 8 | | interested in the real estate, or their agent or attorney, | 9 | | served on the
person claiming the lien, or his agent or | 10 | | attorney, requiring suit to be
commenced to enforce the lien or | 11 | | answer to be filed in a pending suit, suit
shall be commenced | 12 | | or answer filed within 30 days thereafter, or the lien
shall be | 13 | | forfeited. Such service may be by registered or certified mail,
| 14 | | return receipt requested, or by personal service.
| 15 | | (b) A written demand under this Section must contain the | 16 | | following language in at least 10 point bold face type: | 17 | | "Failure to respond to this notice within 30 days after | 18 | | receipt, as required by Section 34 of the Mechanics Lien Act, | 19 | | shall result in the forfeiture of the referenced lien." | 20 | | (Source: P.A. 97-1165, eff. 2-11-13.)
| 21 | | (770 ILCS 60/34.5 new) | 22 | | Sec. 34.5. Mechanics lien administrative adjudication. | 23 | | (a) Notwithstanding any other provision in this Act, a |
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| 1 | | county's code hearing unit may adjudicate the validity of a | 2 | | mechanics lien under Section 3-5010.8 of the Counties Code. If | 3 | | the recorder shows by clear and convincing evidence that the | 4 | | lien being adjudicated is an expired lien, the administrative | 5 | | law judge shall rule the lien is forfeited under this Act and | 6 | | that the lien no longer affects the chain of title of the | 7 | | property in any way. | 8 | | (b) This Section is repealed on January 1, 2022. ".
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