Full Text of HB1069 95th General Assembly
HB1069eng 95TH GENERAL ASSEMBLY
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| AN ACT concerning civil law.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Condominium Property Act is amended by | 5 |
| adding Section 14.5 as follows: | 6 |
| (765 ILCS 605/14.5 new) | 7 |
| Sec. 14.5. Distressed condominium property. | 8 |
| (a) As used in this Section: | 9 |
| (1) "Distressed condominium property" means a parcel | 10 |
| containing condominium units which are operated in a manner | 11 |
| or have conditions which may constitute a danger, blight, | 12 |
| or nuisance to the surrounding community or to the general | 13 |
| public, including but not limited to one or more of the | 14 |
| following conditions: | 15 |
| (A) the building is substantially unoccupied, or | 16 |
| has serious violations of any applicable local | 17 |
| building code; | 18 |
| (B) 60% or more of the condominium units are in | 19 |
| foreclosure or are units against which a judgment of | 20 |
| foreclosure was entered within the last 18 months; | 21 |
| (C) there has been a recording of more condominium | 22 |
| units on the parcel than physically exist; | 23 |
| (D) any of the essential utilities to the parcel or |
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| condominium units is either terminated or threatened | 2 |
| with termination; | 3 |
| (E) there is a delinquency on the property taxes | 4 |
| for at least 60% of the condominium units; or | 5 |
| (F) the board of managers has not met within the | 6 |
| last 12 months or is otherwise not functioning. | 7 |
| (2) "Party in interest" means any unit owner or owner | 8 |
| of record, mortgagee of record, lienholder of record, | 9 |
| judgment creditor, tax purchaser, or other party of record | 10 |
| having any legal or equitable title or other interest in | 11 |
| the distressed condominium property or in a unit of the | 12 |
| property. | 13 |
| (3) "Municipality" means a city, village, or | 14 |
| incorporated town in which the distressed condominium | 15 |
| property is located. | 16 |
| (b) A proceeding under this Section shall be commenced by a | 17 |
| municipality filing a verified petition or verified complaint | 18 |
| in the circuit court in the county in which the property is | 19 |
| located. The petition or complaint shall allege conditions | 20 |
| specified in paragraph (1) of subsection (a) of this Section | 21 |
| and shall request the relief available under this Section. All | 22 |
| parties in interest of the property shall be named as | 23 |
| defendants in the petition or complaint and summons shall be | 24 |
| issued and service had as in other civil cases. The hearing | 25 |
| upon the suit shall be expedited by the court and shall be | 26 |
| given precedence over other actions. |
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| (c) If a court finds that the property is a distressed | 2 |
| condominium property: | 3 |
| (1) the court may order the appointment
of a receiver | 4 |
| for the property with the powers specified in this Section; | 5 |
| or | 6 |
| (2) the court may appoint a receiver for the property | 7 |
| and if the court further finds that the property is not | 8 |
| viable as a condominium, then the court may declare: | 9 |
| (A) that the property is no longer a condominium; | 10 |
| (B) that the property shall be deemed to be owned | 11 |
| in common by the unit owners; | 12 |
| (C) that the undivided interest in the property | 13 |
| which shall appertain to each unit owner shall be the | 14 |
| percentage of undivided interest previously owned by | 15 |
| the owner in the common elements; and | 16 |
| (D) that any liens affecting any unit shall be | 17 |
| deemed to be attached to the undivided interest of the | 18 |
| unit owner in the property as provided herein. | 19 |
| A copy of the court's declaration under this subsection | 20 |
| (c) shall be recorded by the municipality in the office of | 21 |
| the recorder of deeds in the county where the property is | 22 |
| located against both the individual units and owners and | 23 |
| the general property. The court's declaration shall be | 24 |
| forwarded to the county assessor's office in the county | 25 |
| where the property is located. | 26 |
| (d) If a court finds that the property is subject to |
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| paragraph (2) of subsection (c) of this Section, the court may | 2 |
| authorize the receiver to enter into a sales contract and | 3 |
| transfer the title of the property on behalf of the owners of | 4 |
| the property without their consent. In the event of such a | 5 |
| sale, the net proceeds of sale, after payment of all the | 6 |
| receiver's costs, time, expenses, and fees as evidenced by the | 7 |
| receiver's notes or certificates duly issued and assigned as | 8 |
| provided for in subsection (f) of this Section, shall be | 9 |
| deposited into an escrow account. Proceeds in the escrow | 10 |
| account shall be segregated into the respective shares of each | 11 |
| unit owner as determined under subparagraph (C) of paragraph | 12 |
| (2) of subsection (c) of this Section and shall be distributed | 13 |
| from each respective share as follows: (1) to pay taxes | 14 |
| attributable to the unit owner; then (2) to pay other liens | 15 |
| attributable to the unit owner; and then (3) to pay each unit | 16 |
| owner any remaining sums from his or her respective share. | 17 |
| (e) A receiver appointed under this Section shall have | 18 |
| possession of the property and shall have full power and | 19 |
| authority to operate, manage, and conserve the property. A | 20 |
| receiver appointed pursuant to this Section must manage the | 21 |
| property as would a prudent person. A receiver may, without an | 22 |
| order of the court, delegate managerial functions to a person | 23 |
| in the business of managing real estate of the kind involved | 24 |
| who is financially responsible and prudently selected. | 25 |
| Without limiting the foregoing, a receiver during such time | 26 |
| shall have the power and authority to: |
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| (1) secure, clean, board and enclose, and keep secure, | 2 |
| clean, boarded and enclosed, the property or any portion of | 3 |
| the property; | 4 |
| (2) secure tenants and execute leases for the property, | 5 |
| the duration and terms of which are reasonable and | 6 |
| customary for the type of use involved, and the leases | 7 |
| shall have the same priority as if made by the owner of the | 8 |
| property; | 9 |
| (3) collect the rents, issues, and profits, including
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| assessments which have been or may be levied; | 11 |
| (4) insure the property against loss by fire or other | 12 |
| casualty; | 13 |
| (5) employ counsel, custodians, janitors, and other | 14 |
| help; | 15 |
| (6) pay taxes which may have been or may be levied | 16 |
| against the property; | 17 |
| (7) maintain
or disconnect, as appropriate, any | 18 |
| essential utility to the property; | 19 |
| (8) make repairs and improvements necessary to comply | 20 |
| with building, housing,
and other similar codes; | 21 |
| (9) hold receipts as reserves as reasonably required | 22 |
| for the foregoing purposes; and | 23 |
| (10) exercise the other powers as are granted to the | 24 |
| receiver by the appointing court. | 25 |
| (f) If the court orders the appointment of a receiver, the | 26 |
| receiver may use the rents and issues of the property toward |
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| maintenance, repair, and rehabilitation of the property prior | 2 |
| to and despite any assignment of rents; and the court may | 3 |
| further authorize the receiver to recover the cost of any | 4 |
| feasibility study, sale, management, maintenance, repair, and | 5 |
| rehabilitation by the issuance and sale of notes or receiver's | 6 |
| certificates bearing such interest as the court may fix, and | 7 |
| the notes or certificates, after their initial issuance and | 8 |
| transfer by the receiver, shall be freely transferable and when | 9 |
| sold or transferred by the receiver in return for a valuable | 10 |
| consideration in money, material, labor, or services shall be a | 11 |
| first lien upon the real estate and the rents and issues | 12 |
| thereof and shall be superior to all prior assignments of rents | 13 |
| and all prior existing liens and encumbrances, except taxes; | 14 |
| provided, that within 90 days of the sale or transfer for value | 15 |
| by the receiver of a note or certificate, the holder thereof | 16 |
| shall file notice of the lien in the office of the recorder in | 17 |
| the county in which the real estate is located. The notice of | 18 |
| the lien filed shall set forth (i) a description of the real | 19 |
| estate affected sufficient for the identification thereof, | 20 |
| (ii) the face amount of the receiver's note or certificate, | 21 |
| together with the interest payable thereon, and (iii) the date | 22 |
| when the receiver's note or certificate was sold or transferred | 23 |
| for value by the receiver. Upon payment to the holder of the | 24 |
| receiver's note or certificate of the face amount thereof | 25 |
| together with any interest thereon to the date of payment, and | 26 |
| upon the filing of record of a sworn statement of such payment, |
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| the lien of such certificate shall be released. The lien may be | 2 |
| enforced by proceedings to foreclose as in the case of a | 3 |
| mortgage or a mechanics lien, and the action to foreclose the | 4 |
| lien may be commenced at any time after the date of default. | 5 |
| For the purposes of this subsection, the date of default shall | 6 |
| be deemed to occur 30 days from the date of issuance of the | 7 |
| receiver's certificate if at that time the certificate remains | 8 |
| unpaid in whole or in part. The receiver's lien shall be paid | 9 |
| upon the sale of the property as set forth in subsection (e) of | 10 |
| this Section. | 11 |
| (g) The court may remove a receiver upon a showing of good | 12 |
| cause, in which case a new receiver may be appointed in | 13 |
| accordance with this Section.
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