SB2230 96TH GENERAL ASSEMBLY

LRB096 11441 AJO 21916 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB2230

Introduced 2/20/2009, by Sen. Jacqueline Y. Collins

SYNOPSIS AS INTRODUCED:

735 ILCS 5/15-1504.5
735 ILCS 5/15-1504.6 new
735 ILCS 5/15-1508.5 new
735 ILCS 5/15-1701	from Ch. 110, par. 15-1701
735 ILCS 5/15-1703	from Ch. 110, par. 15-1703
735 ILCS 5/15-1704	from Ch. 110, par. 15-1704

Amends the Code of Civil Procedure. Provides that the homeowner notice attached to the summons in a residential mortgage foreclosure action shall include directions concerning giving written notice to any tenants about the foreclosure and the tenant's right to remain on the premises. Provides that an occupant may file an action for failure to provide notice and recover $200 plus actual damages, attorney's fees, and costs. Provides that a purchaser of property in a foreclosure must give notice to any occupants of the property that he or she has acquired the mortgaged real estate. Provides that a mortgagor in a foreclosure must notify any occupant or potential occupant of the foreclosure action. Provides that the purchaser of property sold at a court foreclosure sale must provide a notice of rights to occupants of the property within 7 days after the confirmation of the sale. Provides that until the rights of possession of all occupants of foreclosed property have been terminated, the purchaser of foreclosed property must maintain the property in a condition that is safe, healthful, and fit for occupancy. Provides that a receiver shall give similar written notices and may not increase the rent without leave of court. Provides that the court may allow a rent increase by a receiver or a mortgagee in possession if it finds that an increase is necessary to operate the property, after notice to all occupants affected by an increase, but nothing in the Act shall alter the lease. Makes other changes. Effective immediately.

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 15-1504.5, 15-1508, 15-1701, 15-1703, and 15-1704 and by adding Sections 15-1504.6, and 15-1508.5 as follows:

(735 ILCS 5/15-1504.5)

Sec. 15-1504.5. Homeowner notice to be attached to summons. For all residential foreclosure actions filed, the plaintiff must attach a Homeowner Notice to the summons. The Homeowner Notice must be in at least 12 point type and in English and Spanish. The Spanish translation shall be prepared by the Attorney General and posted on the Attorney General's website. A notice that includes the Attorney General's Spanish translation in substantially similar form shall be deemed to comply with the Spanish notice requirement in this Section. The Notice must be in substantially the following form:

IMPORTANT INFORMATION FOR HOMEOWNERS IN FORECLOSURE

1. POSSESSION: The lawful occupants of a home have the right to live in the home until a judge enters an order for possession.

2. OWNERSHIP: You continue to own your home until the court rules otherwise.

3. REINSTATEMENT: As the homeowner you have the right to bring the mortgage current within 90 days after you receive the summons.

4. REDEMPTION: As the homeowner you have the right to sell your home, refinance, or pay off the loan during the redemption period.

5. SURPLUS: As the homeowner you have the right to petition the court for any excess money that results from a foreclosure sale of your home.

6. WORKOUT OPTIONS: The mortgage company does not want to foreclose on your home if there is any way to avoid it. Call your mortgage company [insert name of the homeowner's current mortgage servicer in bold and 14 point type] or its attorneys to find out the alternatives to foreclosure.

7. PAYOFF AMOUNT: You have the right to obtain a written statement of the amount necessary to pay off your loan. Your mortgage company (identified above) must provide you this statement within 10 business days of receiving your request, provided that your request is in writing and includes your name, the address of the property, and the mortgage account or loan number. Your first payoff statement will be free.

8. GET ADVICE: This information is not exhaustive and does not replace the advice of a professional. You may have other options. Get professional advice from a lawyer or certified housing counselor about your rights and options to avoid foreclosure.

9. LAWYER: If you do not have a lawyer, you may be able to find assistance by contacting the Illinois State Bar Association or a legal aid organization that provides free legal assistance.

10. PROCEED WITH CAUTION: You may be contacted by people offering to help you avoid foreclosure. Before entering into any transaction with persons offering to help you, please contact a lawyer, government official, or housing counselor for advice.

11. IF YOU HAVE TENANTS OR RENT YOUR PROPERTY:

A. Within 7 days after receiving this notice, you must notify any tenants living in your property, and anyone who routinely makes rental payments on behalf of a tenant, that the building is in foreclosure proceedings. This must be in writing and must provide the tenants with the case name and case number of the pending foreclosure action, and shall notify tenants of the court where the foreclosure action is pending. The notice must also include the following language: "This is not a notice to vacate the premises. This notice does not mean ownership of the building has changed. All tenants are still responsible for payment of rent and other obligations under the rental agreement. The owner or landlord is still responsible for his or her obligations under the rental agreement. You shall receive additional notice if there is a change in owner."

B. You must also give written notice to anyone who might rent or lease your property, that the building is in foreclosure proceedings, before you rent or lease the property to him or her.

C. If you do not provide these notices to anyone entitled to notice, you may be liable to your tenants for any damages that they suffer, as well as a penalty of $200, and any attorney's fees or court costs that the tenant may accrue.

D. Even though your building is in foreclosure, you must still keep your property in good repair and utilities must be paid under the terms of any lease or as required by State and local law.

(Source: P.A. 95-961, eff. 1-1-09.)

(735 ILCS 5/15-1504.6 new)

Sec. 15-1504.6. Notice by mortgagor to occupants.

(a) Within 7 days after being served a foreclosure complaint, as defined in Section 15-1504, a mortgagor or owner of the mortgaged real estate that is the subject of the foreclosure complaint shall notify, in writing, all occupants of the mortgaged real estate that a foreclosure action has been filed against the mortgagor or owner. A mortgagor or owner shall also notify, in writing, any other third party who has a consistent pattern and practice of paying rent to the mortgagor or owner on behalf of an occupant that the mortgaged real estate is in foreclosure. The notice shall include the court in which the foreclosure action is pending, the case name, and the case number and shall include the following language:

"This is not a notice to vacate the premises. This notice does not mean ownership of the building has changed. All tenants are still responsible for payment of rent and other obligations under the lease or rental agreement. The owner or landlord is still responsible for his or her obligations under the lease or rental agreement. You shall receive additional notice if there is a change in owner."

(b) The written notice required by subsection (a) of this Section shall be served: by delivering a copy to the occupant, or by leaving the same with some person of the age of 13 years or older, residing on or in possession of the premises; or by sending a copy of the notice to the occupant by certified or registered mail, return receipt requested.

(c) Once served with a foreclosure complaint, the mortgagor or owner of the mortgaged real estate shall also disclose to a prospective occupant, in writing, that the mortgaged real estate is in foreclosure prior to entering into a lease or rental agreement for a dwelling unit at the mortgaged real estate.

(d) Penalty for noncompliance. If the mortgagor or owner fails to comply with this Section, the occupant may terminate any lease by written notice. The written notice shall specify a date of termination no later than 30 days after the date of the written notice. An occupant may bring an action in the circuit court against a mortgagor or owner for failure to provide notice as required in this Section. If the occupant establishes that a violation of this Section has occurred, the occupant is entitled to recover $200 plus actual damages, attorney's fees, and costs.

(735 ILCS 5/15-1508.5 new)

Sec. 15-1508.5. Notice by holder or purchaser to occupants of mortgaged real estate.

(a) Within 7 days after the confirmation of sale under Section 15-1508, the holder of the certificate of sale or deed issued pursuant to that certificate or, if no certificate or deed was issued, the purchaser, shall notify all occupants of the mortgaged real estate, except the mortgagor, that he or she has acquired the mortgaged real estate.

(b) The notice required under subsection (a) shall be in writing and shall:

(1) provide the name and address of the holder or purchaser who acquired the mortgaged real estate and the date it was acquired;

(2) provide the name, address, and telephone number of the individual or entity to whom the occupants should pay rent and whom occupants may contact with concerns about the mortgaged real estate or to request repairs of that property;

(3) provide the occupant not less than 5 days from the date of service of the notice to pay the rent, if rent is due for the current rental period, and not less than 5 days from the beginning of each subsequent rental period to pay rent for that rental period;

(4) include the following language:

"This is notice that the ownership of the building has changed. It is not a notice to vacate the premises. If the new owner decides to end your lease or rental agreement at the building, you will receive additional notice of the termination of your tenancy. You may wish to contact a lawyer or your local legal aid or housing counseling agency to discuss any rights you may have."; and

(5) attach a copy of the order confirming sale or other court order that indicates the holder or purchaser has acquired the mortgaged real estate.

(c) The written notice required by subsection (a) shall be served: by delivering a copy to the occupant, or by leaving the same with some person of the age of 13 years or older, residing on or in possession of the premises; or by sending a copy of the notice to the occupant by certified or registered mail, return receipt requested.

(d) An occupant of mortgaged real estate shall not be liable for rent to the holder or purchaser, and the holder or purchaser shall not terminate an occupant's tenancy for non-payment of such rent, until the holder or purchaser has served the notice prescribed in subsection (a). An occupant who previously paid rent for the current rental period to the mortgagor, or other entity with the authority to operate, manage, and conserve the mortgaged real estate at the time of payment, shall not be held liable for that rent by the holder or purchaser, and the occupant's tenancy shall not be terminated for non-payment of such rent.

(735 ILCS 5/15-1701) (from Ch. 110, par. 15-1701)

Sec. 15-1701. Right to possession.

(a) General. The provisions of this Article shall govern the right to possession of the mortgaged real estate during foreclosure. Possession under this Article includes physical possession of the mortgaged real estate to the same extent to which the mortgagor, absent the foreclosure, would have been entitled to physical possession. For the purposes of Part 17, real estate is residential real estate only if it is residential real estate at the time the foreclosure is commenced.

(b) Pre-Judgment. Prior to the entry of a judgment of foreclosure:

(1) In the case of residential real estate, the mortgagor shall be entitled to possession of the real estate except if (i) the mortgagee shall object and show good cause, (ii) the mortgagee is so authorized by the terms of the mortgage or other written instrument, and (iii) the court is satisfied that there is a reasonable probability that the mortgagee will prevail on a final hearing of the cause, the court shall upon request place the mortgagee in possession. If the residential real estate consists of more than one dwelling unit, then for the purpose of this Part residential real estate shall mean only that dwelling unit or units occupied by persons described in clauses (i), (ii) and (iii) of Section 15-1219.

(2) In all other cases, if (i) the mortgagee is so authorized by the terms of the mortgage or other written instrument, and (ii) the court is satisfied that there is a reasonable probability that the mortgagee will prevail on a final hearing of the cause, the mortgagee shall upon request be placed in possession of the real estate, except that if the mortgagor shall object and show good cause, the court shall allow the mortgagor to remain in possession.

(c) Judgment Through 30 Days After Sale Confirmation. After the entry of a judgment of foreclosure and through the 30th day after a foreclosure sale is confirmed:

(1) Subsection (b) of Section 15-1701 shall be applicable, regardless of the provisions of the mortgage or other instrument, except that after a sale pursuant to the judgment the holder of the certificate of sale (or, if none, the purchaser at the sale) shall have the mortgagee's right to be placed in possession, with all rights and duties of a mortgagee in possession under this Article.

(2) Notwithstanding paragraph (1) of subsection (b) and paragraph (1) of subsection (c) of Section 15-1701, upon request of the mortgagee, a mortgagor of residential real estate shall not be allowed to remain in possession between the expiration of the redemption period and through the 30th day after sale confirmation unless (i) the mortgagor pays to the mortgagee or such holder or purchaser, whichever is applicable, monthly the lesser of the interest due under the mortgage calculated at the mortgage rate of interest applicable as if no default had occurred or the fair rental value of the real estate, or (ii) the mortgagor otherwise shows good cause. Any amounts paid by the mortgagor pursuant to this subsection shall be credited against the amounts due from the mortgagor.

(d) After 30 Days After Sale Confirmation. The holder of the certificate of sale or deed issued pursuant to that certificate or, if no certificate or deed was issued, the purchaser, except to the extent the holder or purchaser may consent otherwise, shall be entitled to possession of the mortgaged real estate, as of the date 30 days after the order confirming the sale is entered, against those parties to the foreclosure whose interests the court has ordered terminated, without further notice to any party, further order of the court, or resort to proceedings under any other statute other than this Article. This right to possession shall be limited by the provisions governing entering and enforcing orders of possession under subsection (g) of Section 15-1508. If the holder or purchaser determines that there are occupants of the mortgaged real estate who have not been made parties to the foreclosure and had their interests terminated therein, the holder or purchaser may bring a proceeding under subsection (h) of this Section or under Article 9 of this Code to terminate the rights of possession of any such occupants. The holder or purchaser shall not be entitled to proceed against any such occupant under Article 9 of this Code until after 30 days after the order confirming the sale is entered. Until the rights of possession of all such occupants have been terminated, the holder or purchaser shall maintain the mortgaged real estate in a condition that is safe, healthful, and fit for occupancy and in compliance with the terms of any lease and with the requirements of State and local law. The holder or purchaser shall also accept all rental payments from an occupant of the mortgaged property and any payments from a third party or any rental assistance program in support of an occupant's housing. The holder or purchaser shall not charge an occupant of the mortgaged real estate a rental amount greater than that which the occupant had been paying for use and occupancy of the mortgaged real estate prior to the confirmation of sale, for the 12 months following the confirmation of sale.

(e) Termination of Leases. A lease of all or any part of the mortgaged real estate shall not be terminated automatically solely by virtue of the entry into possession by (i) a mortgagee or receiver prior to the entry of an order confirming the sale, (ii) the holder of the certificate of sale, (iii) the holder of the deed issued pursuant to that certificate, or (iv) if no certificate or deed was issued, the purchaser at the sale.

(f) Other Statutes; Instruments. The provisions of this Article providing for possession of mortgaged real estate shall supersede any other inconsistent statutory provisions. In particular, and without limitation, whenever a receiver is sought to be appointed in any action in which a foreclosure is also pending, a receiver shall be appointed only in accordance with this Article. Except as may be authorized by this Article, no mortgage or other instrument may modify or supersede the provisions of this Article.

(g) Certain Leases. Leases of the mortgaged real estate entered into by a mortgagee in possession or a receiver and approved by the court in a foreclosure shall be binding on all parties, including the mortgagor after redemption, the purchaser at a sale pursuant to a judgment of foreclosure and any person acquiring an interest in the mortgaged real estate after entry of a judgment of foreclosure in accordance with Sections 15-1402 and 15-1403.

(h) Proceedings Against Certain Occupants.

(1) The mortgagee-in-possession of the mortgaged real estate under Section 15-1703, a receiver appointed under Section 15-1704, a holder of the certificate of sale or deed, or the purchaser may, at any time during the pendency of the foreclosure and up to 90 days after the date of the order confirming the sale, file a supplemental petition for possession against a person not personally named as a party to the foreclosure. The supplemental petition for possession shall name each such occupant against whom possession is sought and state the facts upon which the claim for relief is premised.

(2) The petitioner shall serve upon each named occupant the petition, a notice of hearing on the petition, and, if any, a copy of the certificate of sale or deed. The proceeding for the termination of such occupant's possessory interest, including service of the notice of the hearing and the petition, shall in all respects comport with the requirements of Article 9 of this Code, except as otherwise specified in this Section. The hearing shall be no less than 21 days from the date of service of the notice.

(3) The supplemental petition shall be heard as part of the foreclosure proceeding and without the payment of additional filing fees. An order for possession obtained under this Section shall name each occupant whose interest has been terminated, shall recite that it is only effective as to the occupant so named and those holding under them, and shall be enforceable for no more than 90 days after its entry, except that the 90-day period may be extended to the extent and in the manner provided in Section 9-117 of Article 9 and except as provided in item (4) of this subsection (h).

(4) Any order of possession shall allow the occupant In a case of foreclosure where the tenant is current on his or her rent, or where timely written notice of to whom and where the rent is to be paid has not been provided to the tenant, or where the tenant has made good-faith efforts to make rental payments in order to keep current, any order of possession must allow the tenant to retain possession of the property covered in his or her rental agreement (i) for 120 days following the notice of the hearing on the supplemental petition that has been properly served upon the tenant, or (ii) through the duration of his or her lease, whichever is shorter. If the tenant has been given timely written notice of to whom and where the rent is to be paid, this item (4) shall only apply if the tenant continues to pay his or her rent in full during the 120-day period or has made good-faith efforts to pay the rent in full during that period. No mortgagee-in-possession, receiver or holder of a certificate of sale or deed, or purchaser who fails to file a supplemental petition under this subsection during the pendency of a mortgage foreclosure shall file a forcible entry and detainer action against an occupant a tenant of the mortgaged real estate until 90 days after a notice of intent to file such action has been properly served in the manner provided in this Code upon the occupant tenant. This notice requirement shall be in addition to, and shall not replace, the provisions of Article 9 of this Code, including, but not limited to, the procedures for terminating the tenancy of an occupant.

(4.5) Notwithstanding the provisions of item (4) of this subsection (h), all orders of possession granted pursuant to this Article shall allow the occupant to retain possession of the property covered in his or her lease for no less than 30 days.

(4.6) The court may shorten the period of time that an occupant is allowed to retain possession of the mortgaged real estate under items (4) and (4.5) of this subsection (h) if, upon separate motion by the petitioner or as a part of the supplemental petition for possession, the court finds, by a preponderance of the evidence, that: (i) the occupant has been given the required notice under Section 15-1508.5, 15-1703, or 15-1704; and (ii) the occupant has failed to pay rent or make a good faith effort to pay rent within the time period prescribed in the required notice.

(5) The court records relating to a supplemental petition for possession filed under this subsection (h) against a tenant who is entitled to notice under item (4) of this subsection (h), or relating to a forcible entry and detainer action brought against a tenant who would have lawful possession of the premises but for the foreclosure of a mortgage on the property, shall be ordered sealed and shall not be disclosed to any person, other than a law enforcement officer or any other representative of a governmental entity, except upon further order of the court.

(Source: P.A. 95-262, eff. 1-1-08; 95-933, eff. 8-26-08.)

(735 ILCS 5/15-1703) (from Ch. 110, par. 15-1703)

Sec. 15-1703. Mortgagee in Possession. (a) Powers and Duties. A mortgagee placed in possession of the real estate pursuant to Section 15-1701 or Section 15-1702 shall have:

(1) such power and authority with respect to the real estate and other property subject to the mortgage, including the right to receive the rents, issues and profits thereof, as may have been conferred upon the mortgagee by the terms of the mortgage or other written instrument authorizing the taking of possession;

(2) all other rights and privileges of a mortgagee in possession under law not inconsistent herewith; and

(3) the same powers, duties and liabilities as a receiver appointed for the real estate in accordance with this Article. If an order placing a mortgagee in possession is modified, revoked or set aside, the mortgagee shall not be liable for any damages to the extent such damages arise solely out of the fact that the mortgagor was removed from possession or that the mortgagee was placed in possession.

(a-5) Notice to occupants.

(1) Within 7 days after taking possession of the mortgaged real estate, the mortgagee in possession shall notify all occupants of the mortgaged real estate that he or she has acquired the mortgaged real estate. The notice shall be in writing and shall:

(i) provide the name and address of the mortgagee in possession and the date the mortgagee took possession;

(ii) provide the name, address, and telephone number of the individual or entity to whom the occupants should pay rent and whom occupants may contact with concerns about the mortgaged real estate or to request repairs of that property;

(iii) provide the occupant not less than 5 days from the date of service of the notice to pay the rent, if rent is due for the current rental period, and not less than 5 days from the beginning of each subsequent rental period to pay rent for that rental period; and

(iv) attach a copy of the court order placing the mortgagee in possession of the mortgaged real estate.

(2) The written notice required by item (1) of this subsection (a-5) shall be served: by delivering a copy thereof to the occupant, or by leaving the same with some person of the age of 13 years or older, residing on or in possession of the premises; or by sending a copy of the notice to the occupant by certified or registered mail, returned receipt requested.

(3) An occupant of mortgaged real estate shall not be liable for rent to the mortgagee in possession, and the mortgagee in possession shall not terminate an occupant's tenancy for non-payment of such rent, until the mortgagee in possession has served the notice prescribed in item (1) of this subsection (a-5). An occupant who previously paid rent for the current rental period to the mortgagor, or to another entity with the authority to operate, manage, and conserve the mortgaged real estate at the time of payment, shall not be held liable for that rent by the mortgagee after taking possession, and the mortgagee in possession shall not terminate an occupant's tenancy for non-payment of such rent.

(b) Fees and Expenses. A mortgagee in possession shall not be entitled to any fees for so acting, but shall be entitled to reimbursement for reasonable costs, expenses and third party management fees incurred in connection with such possession.

(Source: P.A. 84-1462.)

(735 ILCS 5/15-1704) (from Ch. 110, par. 15-1704)

Sec. 15-1704. Receivers. (a) Receiver. Notwithstanding the provisions of subsections (b), (c) and (d) of Section 15-1701, and except as provided in Section 15-1702, upon request of any party and a showing of good cause, the court shall appoint a receiver for the mortgaged real estate.

(b) Powers. A receiver appointed pursuant to this Article shall have possession of the mortgaged real estate and other property subject to the mortgage during the foreclosure, shall have full power and authority to operate, manage and conserve such property, and shall have all the usual powers of receivers in like cases. Without limiting the foregoing, a receiver shall have the power and authority to:

(1) secure tenants and execute leases for the real estate, the duration and terms of which are reasonable and customary for the type of use involved, and such leases shall have the same priority as if made by the owner of the real estate; but, unless approved by the Court, the receiver shall not execute oil, gas or other mineral leases, or (even if otherwise allowed by law) leases extending beyond the time of the receiver's possession; provided, however, with respect to residential real estate leased by the receiver, nothing in this Section shall affect the legal rights of any lessee with respect to the safety and habitability of the residential real estate;

(2) collect the rents, issues and profits from the mortgaged real estate;

(3) insure the mortgaged real estate against loss by fire or other casualty;

(4) employ counsel, custodians, janitors and other help; and

(5) pay taxes which may have been or may be levied against the mortgaged real estate.

(c) Duties. A receiver appointed pursuant to this Article must manage the mortgaged real estate as would a prudent person, taking into account the effect of the receiver's management on the interest of the mortgagor. A receiver may, without an order of the court, delegate managerial functions to a person in the business of managing real estate of the kind involved who is financially responsible, not related to the mortgagee or receiver and prudently selected. However, the receiver shall remain responsible to the mortgagor or other persons for the acts or omissions of such management agent. When fees are paid to such a management agent, the receiver's fees may be adjusted to the extent the court deems appropriate. In managing the mortgaged real estate and other property subject to the mortgage, a receiver or receiver's delegate, to the extent the receiver receives sufficient receipts from the mortgaged real estate, such other property or other sources, except to the extent ordered otherwise by the court:

(1) shall maintain the existing casualty and liability insurance required in accordance with the mortgage or applicable to the real estate and other property subject to the mortgage at the time the receiver took possession;

(2) shall use reasonable efforts to maintain the real estate and other property subject to the mortgage in at least as good condition as existed at the time the receiver took possession, excepting reasonable wear and tear and damage by any casualty;

(3) shall maintain the mortgaged real estate in a condition that is safe, healthful, and fit for occupancy and in compliance with the terms of any lease and with the requirements of State and local law;

(4) shall accept all rental payments from an occupant of the mortgaged property and any payments from a third party or any rental assistance program in support of an occupant's housing;

(5) (3) shall apply receipts to payment of ordinary operating expenses, including royalties, rents and other expenses of management;

(6) (4) shall pay any shared or common expense assessments due to any association of owners of interests in real estate to the extent that such assessments are or may become a lien against the mortgaged real estate;

(7) (5) may pay the amounts due under any mortgage if the mortgagee thereof is not a party in the foreclosure;

(8) (6) may carry such additional casualty and liability insurance as is reasonably available and reasonable as to amounts and risks covered;

(9) (7) may make other repairs and improvements necessary to comply with building, housing, and other similar codes or with existing contractual obligations affecting the mortgaged real estate;

(10) (8) may hold receipts as reserves reasonably required for the foregoing purposes; and

(11) (9) may take such other actions as may be reasonably necessary to conserve the mortgaged real estate and other property subject to the mortgage, or as otherwise authorized by the court.

(d) Allocation of Receipts. Receipts received from operation of the real estate and other property subject to the mortgage by the receiver shall be applied in the following order of priority.

(1) to reimbursement of the receiver for all reasonable costs and expenses incurred by the receiver or the receiver's delegates;

(2) to payment of insurance premiums authorized in paragraph (1) of subsection (c) of Section 15-1704;

(3) to payment of the receiver's delegates of any reasonable management fees for managing real estate of the type involved;

(4) to payment of receiver's fees allowed by the court;

(5) to payment of expenses authorized in paragraphs (2), (3), (5), and (6) (4) of subsection (c) of Section 15-1704;

(6) to payment of amounts authorized in paragraph (7) (5) of subsection (c) of Section 15-1704;

(7) to payment of expenses authorized in paragraphs (8) (6) and (9) (7) of subsection (c) of Section 15-1704; and

(8) the balance, if any, shall be held or disbursed as ordered by the court.

(e) Non-Liability for Allocations. A receiver shall in no event be liable to any person for the allocation of, or failure to allocate, receipts to possible expenditures within the same priority category.

(f) Notice to Occupants.

(1) Within 7 days after appointment, the receiver shall notify all occupants of the mortgaged real estate that he or she has been appointed receiver of the mortgaged real estate. The notice shall be in writing and shall:

(i) provide the name and address of the receiver and the date the receiver was appointed;

(ii) provide the name, address, and telephone number of the individual or entity to whom the occupants should pay rent and whom occupants may contact with concerns about the mortgaged real estate or to request repairs of that property;

(iii) provide the occupant not less than 5 days from the date of service of the notice to pay the rent, if rent is due for the current rental period, and not less than 5 days from the beginning of each subsequent rental period to pay rent for that rental period; and

(iv) attach a copy of the order appointing the receiver as receiver for the mortgaged real estate.

(2) The notice required by item (1) of this subsection (f) shall be served: by delivering a written or printed, or partly written and printed, copy thereof to the occupant, or by leaving the same with some person of the age of 13 years or older, residing on or in possession of the premises; or by sending a copy of the notice to the occupant by certified or registered mail, returned receipt requested.

(3) An occupant of mortgaged real estate shall not be liable for rent to the receiver, and the receiver shall not terminate an occupant's tenancy for non-payment of such rent, until the receiver has served the notice prescribed in item (1) of this subsection (f). An occupant who previously paid rent for the current rental period to the mortgagor, or other entity with the authority to operate, manage and conserve the mortgaged real estate at the time of payment, shall not be held liable for that rent by the receiver after appointment, and the receiver shall not terminate an occupant's tenancy for non-payment of such rent.

(g) Increase of rents. Notwithstanding any other provision of this Article, a receiver or mortgagee in possession shall not charge an occupant of the mortgaged real estate a rental amount greater than that which the occupant had been paying for use and occupancy of the mortgaged real estate prior to the appointment of a receiver or mortgagee in possession, without leave of court. The court may allow an increase of rent if, upon motion by the receiver or mortgagee in possession, the court finds by a preponderance of the evidence, that the increase of rent is necessary to operate, manage, and conserve the mortgaged real estate pursuant to this Section. A list of the current rents for each unit in the mortgaged real estate, and a list of the proposed rent increase for each of those units, must be attached to a motion for a rent increase under this subsection (g). All occupants of the mortgaged real estate who may be affected by the motion for a rent increase, if not otherwise entitled to notice, shall be notified in writing of the nature of the motion, the date and time of the motion, and the court where the motion will be heard. Such notice shall be by personal service or first-class mail. Nothing in this subsection (g) shall alter the terms of any lease agreement.

(h) (f) Removal. The court may remove a receiver upon a showing of good cause, in which case a new receiver may be appointed in accordance with subsection (b) of Section 15-1702 and subsection (a) of Section 15-1704.

(Source: P.A. 84-1462.)

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