093_SB1063eng

 
SB1063 Engrossed                     LRB093 10795 LCB 11222 b

 1        AN ACT concerning deposits.

 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    Builder Purchaser Deposit Act.

 6        Section  5.  Purposes.  The  purposes of this Act are: to
 7    protect any money deposit of a purchaser paid  to  a  builder
 8    from  attachment  by any creditor of the builder and to limit
 9    the application of the purchaser's deposits to the final cost
10    of the property; and to establish the role of the builder  as
11    that  of  a  fiduciary and to require the builder to act in a
12    fiduciary capacity for the benefit of the purchaser.

13        Section 10.  Definitions.  As used in  this  Act,  unless
14    this context otherwise requires:
15        "Builder"  means  an  individual  or  any  other  entity,
16    including  a  domestic  or  foreign  real  estate  developer,
17    engaged  in  the  construction  of a single family residence,
18    townhouse, or a multi-family residence of no greater  than  4
19    units for sale to a purchaser.
20        "Purchaser"  means  any person or persons, other than the
21    builder, who purchase and occupy a single  family  residence,
22    townhouse,  or  multi-family  residence  of no greater than 4
23    units in a bona fide transaction for value.
24        "Property" means all the land and  space  comprising  the
25    real  estate  to  be  sold,  all  improvements and structures
26    erected, constructed, or  contained  thereon,  including  the
27    building   and   all  easements,  rights,  and  appurtenances
28    belonging thereto, and all fixtures  and  equipment  intended
29    for the use, benefit, and enjoyment of the purchaser.
 
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 1        Section  15.  Application.  Any  earnest  money, deposit,
 2    payment, or advance in payment of the purchase price, or  any
 3    other  related  expense, in the aggregate amount of $5,000 or
 4    greater,  paid  for  the  construction  of  a  single  family
 5    residence, townhouse, or multi-family residence of no greater
 6    than 4 units received by a builder, developer, or an agent of
 7    the builder or developer,  shall  be  held  in  a  segregated
 8    account  until  title  to  the  property  is  conveyed to the
 9    purchaser. No ownership rights in the deposits shall vest  in
10    the  builder, developer, or agent of the builder or developer
11    until the conveyance of title to the purchaser.  The  deposit
12    shall  be  segregated in an account established by a builder,
13    developer, or agent of the builder or  developer  as  trustee
14    for  the  benefit of the purchaser. The deposit shall be held
15    in a federally  insured  interest  bearing  account  and  the
16    interest  shall  be  credited  to  the  purchaser  toward the
17    purchase  price  of  the  residence.  No  interest  shall  be
18    credited if the transfer of title occurs less  than  60  days
19    from  the  date  of  contract.  In  the  event of a refund or
20    default, the deposit or any  interest  earned  shall  not  be
21    subject  to attachment by any creditor of a purchaser or of a
22    builder or by the holder of a lien against any portion of the
23    property. The terms and provisions of this Act shall apply to
24    any contract executed after the effective date of this Act.

25        Section 20.  Verification.  Upon receipt  of  the  moneys
26    referenced  in  Section  15, the builder shall provide to the
27    purchaser, within 10 business days, the name of the financial
28    institution and the name on the account in which the money is
29    held.

30        Section 25.  Opt out; purchaser security.  The parties to
31    the contract may opt out of the requirements of this  Act  in
32    writing,  signed  by  the builder and the purchaser, provided
 
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 1    that the builder delivers to  the  purchaser  an  irrevocable
 2    letter  of  credit, issued by a financial institution that is
 3    guaranteed by the Federal Deposit Insurance  Corporation,  in
 4    the  amount  of  the deposit money advanced to the builder by
 5    the purchaser. The letter of credit shall serve to secure the
 6    deposit money and shall expressly provide for payment to  the
 7    purchaser of the amount if the financial institution receives
 8    a court order directing that amount be paid to the purchaser.

 9        Section  30.  Exemption.  This  Act does not apply to any
10    transaction in which the purchaser is the owner of  the  real
11    property on which the construction is to be completed.

12        Section  35.  Violation.  Violation  of  this  Act  shall
13    constitute  an  unlawful  practice  within the meaning of the
14    Consumer Fraud and Deceptive Business Practices Act.

15        Section 90.  The Consumer Fraud  and  Deceptive  Business
16    Practices Act is amended by changing Section 2Z as follows:

17        (815 ILCS 505/2Z) (from Ch. 121 1/2, par. 262Z)
18        Sec.  2Z.   Violations  of  other  Acts.   Any person who
19    knowingly violates the Automotive Repair Act, the Home Repair
20    and Remodeling  Act,  the  Dance  Studio  Act,  the  Physical
21    Fitness   Services   Act,  the  Hearing  Instrument  Consumer
22    Protection  Act,  the  Illinois  Union  Label  Act,  the  Job
23    Referral and Job Listing Services  Consumer  Protection  Act,
24    the  Travel  Promotion  Consumer  Protection  Act, the Credit
25    Services Organizations Act, the Automatic  Telephone  Dialers
26    Act,  the  Pay-Per-Call Services Consumer Protection Act, the
27    Telephone Solicitations Act, the Illinois Funeral  or  Burial
28    Funds  Act,  the Cemetery Care Act, the Safe and Hygienic Bed
29    Act, the Pre-Need Cemetery Sales Act, subsection (a)  or  (b)
30    of  Section  3-10 of the Cigarette Tax Act, subsection (a) or
 
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 1    (b) of Section  3-10  of  the  Cigarette  Use  Tax  Act,  the
 2    Electronic  Mail  Act,  the Builder Purchaser Deposit Act, or
 3    paragraph (6) of subsection  (k)  of  Section  6-305  of  the
 4    Illinois Vehicle Code commits an unlawful practice within the
 5    meaning of this Act.
 6    (Source:  P.A.  91-164,  eff.  7-16-99;  91-230, eff. 1-1-00;
 7    91-233, eff.  1-1-00;  91-810,  eff.  6-13-00;  92-426,  eff.
 8    1-1-02.)