Illinois General Assembly - Full Text of SB3420
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Full Text of SB3420  103rd General Assembly



SB3420 EnrolledLRB103 36346 SPS 66445 b

1    AN ACT concerning business.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the
5Prohibition of Unfair Service Agreements Act.
6    Section 5. Purpose. The General Assembly declares that it
7is the purpose of this Act:
8        (1) to prohibit the use of service agreements that are
9    unfair to an owner of residential real estate or to
10    persons who may become owners of that real estate in the
11    future;
12        (2) to prohibit the recording of unfair service
13    agreements so that the public records will not be clouded
14    by them and future owners will not be put to the burden of
15    bringing suits to remove them from their chains of title;
16    and
17        (3) to provide remedies for owners who are
18    inconvenienced or damaged by the recording of unfair
19    service agreements.
20    Section 10. Definitions. As used in this Act:
21    "Person" means a natural person, partnership, association,
22cooperative, corporation, trust, or other legal entity.



SB3420 Enrolled- 2 -LRB103 36346 SPS 66445 b

1    "Recording" means presenting a document to a county
2recorder for official placement in the public land records.
3    "Residential real estate" means real property located in
4this State that is used primarily for personal, family, or
5household purposes and is improved by one to 4 dwelling units.
6    "Service agreement" means a contract under which a person
7agrees to provide services in connection with the maintenance
8of or purchase or sale of residential real estate.
9    "Service provider" means an individual or entity that
10provides services to a person.
11    Section 15. Characteristics of unfair service agreements.
12    (a) A service agreement is unfair under this Act if any
13part of the service subject to the agreement is not to be
14performed within one year after the service agreement is
15entered into and the service agreement has any of the
16following characteristics:
17        (1) the service agreement purports to run with the
18    land or to be binding on future owners of interests in the
19    real property;
20        (2) the service agreement allows for assignment of the
21    right to provide service without notice to and consent of
22    the owner of residential real estate; or
23        (3) the service agreement purports to create a lien,
24    encumbrance, or other real property security interest.
25    (b) This Act does not apply to:



SB3420 Enrolled- 3 -LRB103 36346 SPS 66445 b

1        (1) a home warranty or similar product that covers the
2    cost of maintenance of a major home system, including
3    plumbing, heating, ventilation, air conditioning, or
4    electrical wiring, for a fixed period;
5        (2) an insurance contract;
6        (3) an option or right of refusal to purchase the
7    residential real estate;
8        (4) a declaration created in the formation of a common
9    interest community or an amendment to the declaration;
10        (5) a maintenance or repair agreement entered into by
11    a homeowners' association in a common interest community;
12        (6) a mortgage loan or a commitment to make or receive
13    a mortgage loan;
14        (7) a security agreement under the Uniform Commercial
15    Code relating to the sale or rental of personal property
16    or fixtures; or
17        (8) water, sewer, electrical, telephone, cable, or
18    other utility service providers.
19    (c) This Act shall not impair rights and remedies granted
20under the Mechanics Lien Act.
21    Section 20. Unfair service agreements unenforceable. If a
22service agreement is unfair under this Act it is unenforceable
23and shall not create a contractual obligation.
24    Section 25. Deceptive business practice. Entering into an



SB3420 Enrolled- 4 -LRB103 36346 SPS 66445 b

1unfair service agreement with a consumer constitutes an
2unlawful practice under the Consumer Fraud and Deceptive
3Business Practices Act. All remedies, penalties, and authority
4granted to the Attorney General by the Consumer Fraud and
5Deceptive Business Practices Act shall be available to the
6Attorney General for the enforcement of this Act.
7    Section 30. Recording prohibited.
8    (a) No person shall knowingly record or knowingly cause to
9be recorded an unfair service agreement or a notice or
10memorandum of the unfair service agreement.
11    (b) Notwithstanding any law to the contrary, a county
12recorder may refuse to accept for recordation an unfair
13service agreement.
14    (c) If an unfair service agreement is recorded, it shall
15not provide actual or constructive notice against a bona fide
16purchaser or creditor.
17    Section 35. Remedies. If an unfair service agreement or a
18notice or memorandum of the unfair service agreement is
19recorded, any person with an interest in the real property
20that is the subject of that agreement may apply to a court in
21the county where the recording exists to record a court order
22declaring the agreement unenforceable and that person may
23recover actual damages, costs, and attorney's fees as may be
24proven against the service provider who recorded the



SB3420 Enrolled- 5 -LRB103 36346 SPS 66445 b

2    Section 99. Effective date. This Act takes effect upon
3becoming law.