SB2919 103RD GENERAL ASSEMBLY

LRB103 35721 LNS 65801 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2919

Introduced 1/26/2024, by Sen. Robert F. Martwick

SYNOPSIS AS INTRODUCED:

735 ILCS 5/15-1506	from Ch. 110, par. 15-1506
735 ILCS 5/15-1507	from Ch. 110, par. 15-1507
735 ILCS 5/15-1507.2 new
735 ILCS 5/1510.1 new

Amends the Mortgage Foreclosure Article of the Code of Civil Procedure. Allows a judge, sheriff, or other person to conduct a judicial foreclosure sale online in accordance with the Article. Allows the person conducting the sale to engage a third party online sale provider to assist with performance of the online sale and charge an additional fee as a reasonable expense of the sale for costs associated with conducting the sale online. Requires the person conducting the sale online to obtain court approval and demonstrate the ability to provide substantial marketing of the sale, appropriate and documented process and procedures for conducting online auctions, adequate recordkeeping, substantial expertise in online real estate auctions, and adequate data security. Requires, if the sale takes place online and in person, all bids to be simultaneously announced at the in-person sale and visible to the public online at the time the bids are placed. Prohibits a fee from being charged to the public to view properties for sale online, to participate in any auction in person or online, or to purchase property at an auction in person or online. Requires persons seeking to bid online to complete a registration form and to have their identity verified before a bid can be placed online. Provides that no fee may be charged to a bidder or purchaser at the sale of real estate under the Article beyond the winning bid amount to cover an expense of sale. Makes conforming changes.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Code of Civil Procedure is amended by changing Sections 15-1506 and 15-1507 and by adding Sections 15-1507.2 and 1510.1 as follows:

(735 ILCS 5/15-1506) (from Ch. 110, par. 15-1506)

Sec. 15-1506. Judgment.

(a) Evidence. In the trial of a foreclosure, the evidence to support the allegations of the complaint shall be taken in open court, except:

(1) where an allegation of fact in the complaint is not denied by a party's verified answer or verified counterclaim, or where a party pursuant to subsection (b) of Section 2-610 of the Code of Civil Procedure states, or is deemed to have stated, in its pleading that it has no knowledge of such allegation sufficient to form a belief and attaches the required affidavit, a sworn verification of the complaint or a separate affidavit setting forth such fact is sufficient evidence thereof against such party and no further evidence of such fact shall be required; and

(2) where all the allegations of fact in the complaint have been proved by verification of the complaint or affidavit, the court upon motion supported by an affidavit stating the amount which is due the mortgagee, shall enter a judgment of foreclosure as requested in the complaint.

(b) Instruments. In all cases the evidence of the indebtedness and the mortgage foreclosed shall be exhibited to the court and appropriately marked, and copies thereof shall be filed with the court.

(c) Summary and Default Judgments. Nothing in this Section 15-1506 shall prevent a party from obtaining a summary or default judgment authorized by Article II of the Code of Civil Procedure.

(d) Notice of Entry of Default. When any judgment in a foreclosure is entered by default, notice of such judgment shall be given in accordance with Section 2-1302 of the Code of Civil Procedure.

(e) Matters Required in Judgment. A judgment of foreclosure shall include the last date for redemption and all rulings of the court entered with respect to each request for relief set forth in the complaint. The omission of the date for redemption shall not extend the time for redemption or impair the validity of the judgment.

(f) Special Matters in Judgment. Without limiting the general authority and powers of the court, special matters may be included in the judgment of foreclosure if sought by a party in the complaint or by separate motion. Such matters may include, without limitation:

(1) a manner of sale other than public auction;

(2) a sale by sealed bid;

(3) an official or other person who shall be the officer to conduct the sale other than the one customarily designated by the court;

(4) provisions for non-exclusive broker listings or designating a duly licensed real estate broker nominated by one of the parties to exclusively list the real estate for sale;

(5) the fees or commissions to be paid out of the sale proceeds to the listing or other duly licensed broker, if any, who shall have procured the accepted bid;

(6) the fees to be paid out of the sale proceeds to an auctioneer, if any, who shall have been authorized to conduct a public auction sale;

(7) whether and in what manner and with what content signs shall be posted on the real estate;

(8) a particular time and place at which such bids shall be received, including whether a sale will take place online, in person, or both;

(9) a particular newspaper or newspapers in which notice of sale shall be published;

(10) the format for the advertising of such sale, including the size, content and format of such advertising, and additional advertising of such sale;

(11) matters or exceptions to which title in the real estate may be subject at the sale;

(12) a requirement that title insurance in a specified form be provided to a purchaser at the sale, and who shall pay for such insurance;

(13) whether and to what extent bids with mortgage or other contingencies will be allowed;

(14) such other matters as approved by the court to ensure sale of the real estate for the most commercially favorable price for the type of real estate involved.

(g) Agreement of the Parties. If all of the parties agree in writing on the minimum price and that the real estate may be sold to the first person who offers in writing to purchase the real estate for such price, and on such other commercially reasonable terms and conditions as the parties may agree, then the court shall order the real estate to be sold on such terms, subject to confirmation of the sale in accordance with Section 15-1508.

(h) Postponement of Proving Priority. With the approval of the court prior to the entry of the judgment of foreclosure, a party claiming an interest in the proceeds of the sale of the mortgaged real estate may defer proving the priority of such interest until the hearing to confirm the sale.

(i) Effect of Judgment and Lien.

(1) Upon the entry of the judgment of foreclosure, all rights of a party in the foreclosure against the mortgagor provided for in the judgment of foreclosure or this Article shall be secured by a lien on the mortgaged real estate, which lien shall have the same priority as the claim to which the judgment relates and shall be terminated upon confirmation of a judicial sale in accordance with this Article.

(2) Upon the entry of the judgment of foreclosure, the rights in the real estate subject to the judgment of foreclosure of (i) all persons made a party in the foreclosure and (ii) all nonrecord claimants given notice in accordance with paragraph (2) of subsection (c) of Section 15-1502, shall be solely as provided for in the judgment of foreclosure and in this Article.

(3) Entry of a judgment of foreclosure does not terminate or otherwise affect a bona fide lease of a dwelling unit in residential real estate in foreclosure, whether or not the lessee has been made a party in the foreclosure.

(Source: P.A. 98-514, eff. 11-19-13.)

(735 ILCS 5/15-1507) (from Ch. 110, par. 15-1507)

Sec. 15-1507. Judicial Sale.

(a) In General. Except as provided in Sections 15-1402 and 15-1403, upon entry of a judgment of foreclosure, the real estate which is the subject of the judgment shall be sold at a judicial sale in accordance with this Section 15-1507.

(b) Sale Procedures.

(1) Upon expiration of the reinstatement period and the redemption period in accordance with subsection (b) or (c) of Section 15-1603 or upon the entry of a judgment of foreclosure after the waiver of all rights of redemption, except as provided in subsection (g) of Section 15-1506, the real estate shall be sold at a sale as provided in this Article, on such terms and conditions as shall be specified by the court in the judgment of foreclosure. A sale may be conducted by any judge, or sheriff, or other person as set forth in paragraph (3) of subsection (f) of Section 15-1506.

(2) Without limiting the general authority and powers of the court, the mortgagee, or such other party designated by the court, in a foreclosure under this Article may direct that the judge, sheriff, or other person conduct the sale either in person, online, or both.

(c) Notice of Sale. The mortgagee, or such other party designated by the court, in a foreclosure under this Article shall give public notice of the sale as follows:

(1) The notice of sale shall include at least the following information, but an immaterial error in the information shall not invalidate the legal effect of the notice:

(A) the name, address and telephone number of the person to contact for information regarding the real estate;

(B) the common address and other common description (other than legal description), if any, of the real estate;

(C) a legal description of the real estate sufficient to identify it with reasonable certainty;

(D) a description of the improvements on the real estate;

(E) the times specified in the judgment, if any, when the real estate may be inspected prior to sale;

(F) the time and place of the sale, including: ;

(i) whether the sale will place online, in person, or both; and

(ii) the website where the online bidding may take place, if applicable;

(G) the terms of the sale;

(H) the case title, case number and the court in which the foreclosure was filed;

(H-1) in the case of a condominium unit to which subsection (g) of Section 9 of the Condominium Property Act applies, the statement required by subdivision (g)(5) of Section 9 of the Condominium Property Act;

(H-2) in the case of a unit of a common interest community to which subsection (g-1) of Section 18.5 of the Condominium Property Act applies, the statement required by subdivision (g-1) of Section 18.5 of the Condominium Property Act; and

(I) such other information ordered by the Court.

(2) The notice of sale shall be published at least 3 consecutive calendar weeks (Sunday through Saturday), once in each week, the first such notice to be published not more than 45 days prior to the sale, the last such notice to be published not less than 7 days prior to the sale, by: (i) (A) advertisements in a newspaper circulated to the general public in the county in which the real estate is located, in the section of that newspaper where legal notices are commonly placed and (B) separate advertisements in the section of such a newspaper, which (except in counties with a population in excess of 3,000,000) may be the same newspaper, in which real estate other than real estate being sold as part of legal proceedings is commonly advertised to the general public; provided, that the separate advertisements in the real estate section need not include a legal description and that where both advertisements could be published in the same newspaper and that newspaper does not have separate legal notices and real estate advertisement sections, a single advertisement with the legal description shall be sufficient; in counties with a population of more than 3,000,000, the notice required by this item (B) shall be published in a newspaper different from the newspaper that publishes the notice required by item (A), and the newspaper in which the notice required by this item (B) is published shall be a newspaper published in the township in which the real estate is located; and (ii) such other publications as may be further ordered by the court.

(3) The party who gives notice of public sale in accordance with subsection (c) of Section 15-1507 shall also give notice to all parties in the action who have appeared and have not theretofore been found by the court to be in default for failure to plead. Such notice shall be given in the manner provided in the applicable rules of court for service of papers other than process and complaint, not more than 45 days nor less than 7 days prior to the day of sale. After notice is given as required in this Section a copy thereof shall be filed in the office of the clerk of the court entering the judgment, together with a certificate of counsel or other proof that notice has been served in compliance with this Section.

(4) The party who gives notice of public sale in accordance with subsection (c) of Section 15-1507 shall again give notice in accordance with that Section of any adjourned sale; provided, however, that if the adjourned sale is to occur less than 60 days after the last scheduled sale, notice of any adjourned sale need not be given pursuant to this Section. In the event of adjournment, the person conducting the sale shall, upon adjournment, announce the date, time and place upon which the adjourned sale shall be held. Notwithstanding any language to the contrary, for any adjourned sale that is to be conducted more than 60 days after the date on which it was to first be held, the party giving notice of such sale shall again give notice in accordance with this Section.

(5) Notice of the sale may be given prior to the expiration of any reinstatement period or redemption period.

(6) No other notice by publication or posting shall be necessary unless required by order or rule of the court.

(7) The person named in the notice of sale to be contacted for information about the real estate may, but shall not be required, to provide additional information other than that set forth in the notice of sale.

(d) Election of Property. If the real estate which is the subject of a judgment of foreclosure is susceptible of division, the court may order it to be sold as necessary to satisfy the judgment. The court shall determine which real estate shall be sold, and the court may determine the order in which separate tracts may be sold.

(e) Receipt upon Sale. Upon and at the sale of mortgaged real estate, the person conducting the sale shall give to the purchaser a receipt of sale. The receipt shall describe the real estate purchased and shall show the amount bid, the amount paid, the total amount paid to date and the amount still to be paid therefor. An additional receipt shall be given at the time of each subsequent payment.

(f) Certificate of Sale. Upon payment in full of the amount bid, the person conducting the sale shall issue, in duplicate, and give to the purchaser a Certificate of Sale. The Certificate of Sale shall be in a recordable form, describe the real estate purchased, indicate the date and place of sale and show the amount paid therefor. The Certificate of Sale shall further indicate that it is subject to confirmation by the court. The duplicate certificate may be recorded in accordance with Section 12-121. The Certificate of Sale shall be freely assignable by endorsement thereon.

(g) Interest after Sale. Any bid at sale shall be deemed to include, without the necessity of a court order, interest at the statutory judgment rate on any unpaid portion of the sale price from the date of sale to the date of payment.

(Source: P.A. 100-685, eff. 8-3-18.)

(735 ILCS 5/15-1507.2 new)

Sec. 15-1507.2. Online judicial sale.

(a) The judge, sheriff, or other person may conduct the sale online in accordance with this Article.

(b) The judge, sheriff, or other person may engage a third party online sale provider to assist with performance of the online sale. Any third party online sale provider engaged by a judge or sheriff must be acquired through competitive contracting and governed by State law.

(c) The judge, sheriff, or other person may charge an additional fee as a reasonable expense of the sale for costs associated with conducting the sale online and such fee must not exceed the fee amounts allowed to the sheriff for the sale of real estate as set forth in Sections 4-5001 and 4-12001 of the Counties Code. Any fees not charged as a cost in the case may be agreed to and paid directly by the judge, sheriff, other person conducting the sale, or a party to the case without limitation.

(d) In order to conduct a sale online, the judge, sheriff, or other person conducting the sale must obtain court approval and demonstrate the ability to provide substantial marketing of the sale, appropriate and documented process and procedures for conducting online auctions, adequate recordkeeping, substantial expertise in online real estate auctions, and adequate data security.

(e) If the sale takes place both online and in person, all bids entered during the auction shall be simultaneously announced at the in-person sale and visible to the public online at the time the bids are placed. Any maximum bid amounts provided by bidders ahead of the sale shall not be visible to the public until the bid is placed.

(f) There shall be no fee charged to the public to view properties for sale online, to participate in any auction in person or online, or to purchase a property at an auction in person or online.

(g) Any third party online sale provider may not process and handle sale funds unless specifically approved by the court.

(h) The person conducting the sale must require a person seeking to bid electronically online to complete a registration form that includes information relevant to properly identifying the bidder, contacting the bidder, and completing the sale of the property.

(i) The person conducting the sale online must require all bidders who wish to participate in bidding online to have their identity verified through an identification verification process before a bid can be placed online.

(j) All winning bidders shall be checked against the federal Office of Foreign Assets Control sanction list and any property auctioned by the federal Treasury Executive Office for Asset Forfeiture prior to purchase of the property.

(k) Any person conducting a sale online must ensure satisfactory internal informational security controls that meet industry standards are maintained. Upon the request of the court or interested party to the case, the person conducting the sale shall provide evidence of satisfactory internal controls regarding data security.

(735 ILCS 5/1510.1 new)

Sec. 1510.1. Purchaser fees and costs. Notwithstanding any other provision of law to the contrary, no fee, including a buyer's premium, may be charged to a bidder or purchaser at the sale of real estate under this Article beyond the winning bid amount to cover an expense of sale.