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91_HB1286eng
HB1286 Engrossed 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 have a fiduciary duty to
16 the 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 act in a fiduciary capacity
HB1286 Engrossed -2- LRB9102550LDpkA
1 for the benefit of all holders of the beneficial interest in
2 the trust. The beneficial interest shall be indefeasible and
3 the power of direction shall not be so exercised to alter,
4 amend, revoke, terminate, defeat, or otherwise affect or
5 change the enjoyment of any beneficial interest.
6 Section 20. Application of Act. This Act is declaratory
7 of existing law and is intended to remove any possible
8 conflicts or ambiguities, thereby confirming the existing
9 law pertinent to land trusts and shall apply to all land
10 trusts in effect before, on, or after the effective date of
11 this Act.
12 Section 99. Effective date. This Act takes effect upon
13 becoming law.
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