State of Illinois
91st General Assembly
Legislation

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91_HB1286

 
                                              LRB9102550LDpkA

 1        AN ACT to create the Land Trust Fiduciary Duties Act.

 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    Land Trust Fiduciary Duties Act.

 6        Section 5. Legislative findings; purpose.
 7        (a)  The   General   Assembly  finds  that  the  Illinois
 8    judiciary  system  and  the  federal  judiciary  system  have
 9    unclear court decisions as to whether the holders  of  powers
10    of   direction   have  fiduciary  duties  to  the  beneficial
11    interests  of  land  trusts.   The  terms  "land  trust"  and
12    "beneficial interest" have the same meanings as in Section  2
13    of the Land Trustee as Creditor Act.
14        (b)  It is the purpose of this Act to codify the accepted
15    practice that holders of powers of direction have a fiduciary
16    duty to the beneficial interests of land trusts.

17        Section  10.  Holders of powers of direction; definition.
18    "Holders of powers of direction" means persons who  have  the
19    authority  to direct a trustee to convey, execute a mortgage,
20    distribute proceeds of  sale  or  financing,  and  execute  a
21    variety  of  documents  incidental  to  the  operation of the
22    property in a land trust.

23        Section 15.  Fiduciary duties of  holders  of  powers  of
24    direction.    The   powers   of  direction,  unless  provided
25    otherwise in the land trust agreement, are conferred upon the
26    holders thereof for  the  use  and  benefit  of  all  of  the
27    beneficial  interests of the land trust.  In exercising these
28    powers of direction, the holders act as a fiduciary  and  are
29    fully  accountable  to  all  the  beneficial interests of the
 
                            -2-               LRB9102550LDpkA
 1    trust as its interests may appear.   The beneficial interests
 2    shall be indefeasible and the powers of direction  shall  not
 3    be  so  exercised  by  the  holders  to alter, amend, revoke,
 4    terminate, or defeat any beneficial interests.

 5        Section 20.  Application of Act.  This Act  confirms  the
 6    fiduciary  duties  of  holders  of  powers  of  direction  in
 7    Illinois and shall apply to all land trusts in effect before,
 8    on, or after the effective date of this Act.

 9        Section  99.  Effective date.  This Act takes effect upon
10    becoming law.

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