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91_HB1286enr
HB1286 Enrolled 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 finding; 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 the
10 power of direction have fiduciary duties to the holders of
11 the beneficial interest in land trusts. The terms "land
12 trust" and "beneficial interest" have the same meanings as
13 defined in Section 2 of the Land Trustee as Creditor Act.
14 (b) It is the purpose of this Act to clarify that
15 holders of the power of direction are accountable to the
16 holders of the beneficial interest in land trusts as
17 declaratory of existing law.
18 Section 10. Holders of the power of direction;
19 definition. "Holders of the power of direction" means the
20 persons or entities having the authority to direct the
21 trustee to convey, execute a mortgage, distribute proceeds of
22 sale or financing, and execute documents incidental to the
23 execution of a land trust.
24 Section 15. Fiduciary duties of holders of the power of
25 direction. The power of direction, unless provided otherwise
26 in the land trust agreement, is conferred upon the holders
27 thereof for the use and benefit of all of the holders of the
28 beneficial interest in the land trust. In exercising the
29 power of direction, the holders are presumed to act in a
HB1286 Enrolled -2- LRB9102550LDpkA
1 fiduciary capacity for the benefit of all holders of the
2 beneficial interest in the trust, unless otherwise provided
3 in the land trust agreement. The beneficial interest shall
4 be indefeasible and the power of direction shall not be so
5 exercised to alter, amend, revoke, terminate, defeat, or
6 otherwise affect or change the enjoyment of any beneficial
7 interest.
8 Section 20. Application of Act. This Act is declaratory
9 of existing law and is intended to remove any possible
10 conflicts or ambiguities, thereby confirming the existing
11 law pertinent to land trusts and shall apply to all land
12 trusts in effect before, on, or after the effective date of
13 this Act.
14 Section 99. Effective date. This Act takes effect upon
15 becoming law.
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