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Public Act 103-0993
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| SB3420 Enrolled | LRB103 36346 SPS 66445 b |
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AN ACT concerning business.
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Be it enacted by the People of the State of Illinois, |
represented in the General Assembly:
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Section 1. Short title. This Act may be cited as the |
Prohibition of Unfair Service Agreements Act.
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Section 5. Purpose. The General Assembly declares that it |
is the purpose of this Act: |
(1) to prohibit the use of service agreements that are |
unfair to an owner of residential real estate or to |
persons who may become owners of that real estate in the |
future; |
(2) to prohibit the recording of unfair service |
agreements so that the public records will not be clouded |
by them and future owners will not be put to the burden of |
bringing suits to remove them from their chains of title; |
and |
(3) to provide remedies for owners who are |
inconvenienced or damaged by the recording of unfair |
service agreements.
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Section 10. Definitions. As used in this Act: |
"Person" means a natural person, partnership, association, |
cooperative, corporation, trust, or other legal entity. |
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"Recording" means presenting a document to a county |
recorder for official placement in the public land records. |
"Residential real estate" means real property located in |
this State that is used primarily for personal, family, or |
household purposes and is improved by one to 4 dwelling units. |
"Service agreement" means a contract under which a person |
agrees to provide services in connection with the maintenance |
of or purchase or sale of residential real estate. |
"Service provider" means an individual or entity that |
provides services to a person.
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Section 15. Characteristics of unfair service agreements. |
(a) A service agreement is unfair under this Act if any |
part of the service subject to the agreement is not to be |
performed within one year after the service agreement is |
entered into and the service agreement has any of the |
following characteristics: |
(1) the service agreement purports to run with the |
land or to be binding on future owners of interests in the |
real property; |
(2) the service agreement allows for assignment of the |
right to provide service without notice to and consent of |
the owner of residential real estate; or |
(3) the service agreement purports to create a lien, |
encumbrance, or other real property security interest. |
(b) This Act does not apply to: |
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(1) a home warranty or similar product that covers the |
cost of maintenance of a major home system, including |
plumbing, heating, ventilation, air conditioning, or |
electrical wiring, for a fixed period; |
(2) an insurance contract; |
(3) an option or right of refusal to purchase the |
residential real estate; |
(4) a declaration created in the formation of a common |
interest community or an amendment to the declaration; |
(5) a maintenance or repair agreement entered into by |
a homeowners' association in a common interest community; |
(6) a mortgage loan or a commitment to make or receive |
a mortgage loan; |
(7) a security agreement under the Uniform Commercial |
Code relating to the sale or rental of personal property |
or fixtures; or |
(8) water, sewer, electrical, telephone, cable, or |
other utility service providers. |
(c) This Act shall not impair rights and remedies granted |
under the Mechanics Lien Act.
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Section 20. Unfair service agreements unenforceable. If a |
service agreement is unfair under this Act it is unenforceable |
and shall not create a contractual obligation.
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Section 25. Deceptive business practice. Entering into an |
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unfair service agreement with a consumer constitutes an |
unlawful practice under the Consumer Fraud and Deceptive |
Business Practices Act. All remedies, penalties, and authority |
granted to the Attorney General by the Consumer Fraud and |
Deceptive Business Practices Act shall be available to the |
Attorney General for the enforcement of this Act.
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Section 30. Recording prohibited. |
(a) No person shall knowingly record or knowingly cause to |
be recorded an unfair service agreement or a notice or |
memorandum of the unfair service agreement. |
(b) Notwithstanding any law to the contrary, a county |
recorder may refuse to accept for recordation an unfair |
service agreement. |
(c) If an unfair service agreement is recorded, it shall |
not provide actual or constructive notice against a bona fide |
purchaser or creditor.
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Section 35. Remedies. If an unfair service agreement or a |
notice or memorandum of the unfair service agreement is |
recorded, any person with an interest in the real property |
that is the subject of that agreement may apply to a court in |
the county where the recording exists to record a court order |
declaring the agreement unenforceable and that person may |
recover actual damages, costs, and attorney's fees as may be |
proven against the service provider who recorded the |