Full Text of HB2723 100th General Assembly
HB2723enr 100TH GENERAL ASSEMBLY |
| | HB2723 Enrolled | | LRB100 08926 HEP 19069 b |
|
| 1 | | AN ACT concerning civil law.
| 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 | | Timeshare Lien and Security Interest Act. | 6 | | Section 3. Definitions. As used in this Act: | 7 | | "Accommodation" means any apartment, condominium or | 8 | | cooperative unit,
cabin, lodge, hotel or motel room, or other | 9 | | private or commercial structure
containing
toilet facilities | 10 | | therein that is designed and available, pursuant to
applicable | 11 | | law, for use
and occupancy as a residence by one or more | 12 | | individuals, or any unit or berth
on a
commercial cruise line | 13 | | ship, which is included in the offering of a timeshare
plan.
| 14 | | "Assessment" means the share of funds required for the | 15 | | payment of common
expenses which is assessed from time to time | 16 | | against each purchaser by the
managing
entity.
| 17 | | "Developer" means and includes any person or entity, other | 18 | | than a sales
agent,
acquisition agent, or resale agent, who | 19 | | creates a timeshare plan or is in the
business of
selling | 20 | | timeshare interests, or employs agents to do the same, or any | 21 | | person or
entity who
succeeds to the interest of a developer by | 22 | | sale, lease, assignment, mortgage,
or other
transfer, but the | 23 | | term includes only those persons who offer timeshare
interests |
| | | HB2723 Enrolled | - 2 - | LRB100 08926 HEP 19069 b |
|
| 1 | | for
disposition in the ordinary course of business.
| 2 | | "Managing entity" means the person who undertakes the | 3 | | duties,
responsibilities,
and obligations of the management of | 4 | | a timeshare plan.
| 5 | | "Managing entity lien" means a lien created pursuant to | 6 | | Section 5.
| 7 | | "Purchaser" means any person, other than a developer, who | 8 | | by means of a
voluntary transfer acquires a legal or equitable | 9 | | interest in a timeshare plan
other than as
security for an | 10 | | obligation.
| 11 | | "Timeshare instrument" means one or more documents, by | 12 | | whatever name
denominated, creating or governing the operation | 13 | | of a timeshare plan.
| 14 | | "Timeshare interest" means and includes either:
| 15 | | (1) a "timeshare estate", which is the right to occupy | 16 | | a timeshare
property,
coupled with a freehold estate or an | 17 | | estate for years with a future interest in
a
timeshare | 18 | | property or a specified portion thereof; or
| 19 | | (2) a "timeshare use", which is the right to occupy a | 20 | | timeshare property,
which right is neither coupled with a | 21 | | freehold interest, nor coupled with an
estate
for years | 22 | | with a future interest, in a timeshare property.
| 23 | | "Timeshare plan" means any arrangement, plan, scheme, or | 24 | | similar device,
other
than an exchange program, whether by | 25 | | membership agreement, sale, lease, deed,
license,
or | 26 | | right-to-use agreement or by any other means, whereby a |
| | | HB2723 Enrolled | - 3 - | LRB100 08926 HEP 19069 b |
|
| 1 | | purchaser, in
exchange for
consideration, receives ownership | 2 | | rights in or the right to use accommodations
for a
period of | 3 | | time less than a full year during any given year, but not | 4 | | necessarily
for
consecutive years. A timeshare plan may be:
| 5 | | (1) a "single-site timeshare plan", which is the right | 6 | | to use
accommodations at a single timeshare property; or
| 7 | | (2) a "multi-site timeshare plan", which includes:
| 8 | | (A) a "specific timeshare interest", which is the | 9 | | right to use
accommodations at a specific timeshare | 10 | | property, together with use rights
in accommodations | 11 | | at one or more other component sites created by or
| 12 | | acquired through the timeshare plan's reservation | 13 | | system; or
| 14 | | (B) a "non-specific timeshare interest", which is | 15 | | the right to use
accommodations at more than one | 16 | | component site created by or acquired
through the | 17 | | timeshare plan's reservation system, but including no | 18 | | specific
right to use any particular accommodations.
| 19 | | "Timeshare property" means one or more accommodations | 20 | | subject to the same
timeshare instrument, together with any | 21 | | other property or rights to property
appurtenant
to those | 22 | | accommodations. | 23 | | Section 5. Managing entity lien created. | 24 | | (a) A managing entity has a lien on a timeshare interest | 25 | | for any of the following respectively levied or imposed against |
| | | HB2723 Enrolled | - 4 - | LRB100 08926 HEP 19069 b |
|
| 1 | | a timeshare interest: | 2 | | (1) assessments, which, unless the timeshare | 3 | | instrument provides otherwise, include fees, charges, late | 4 | | charges, fines, collection costs, and interest charged in | 5 | | accordance with the timeshare instrument; | 6 | | (2) reasonable collection and attorney's fees and | 7 | | costs the managing entity incurs to collect assessments; | 8 | | and | 9 | | (3) taxes, interest, penalties, late payment fees, or | 10 | | fines in accordance with applicable law or the timeshare | 11 | | instrument. | 12 | | (b) Managing entity liens pursuant to this Section are | 13 | | created and attached when the charges described in subsection | 14 | | (a) become due. If such amounts are payable in installments, | 15 | | the full amount of such charges is a managing entity lien from | 16 | | the time that the first installment thereof becomes due. | 17 | | (c) Managing entity liens pursuant to this Section are | 18 | | perfected on the date that the managing entity: | 19 | | (1) In the case of a timeshare estate, records a notice | 20 | | of lien against the timeshare estate in the office of the | 21 | | recorder in the county where the timeshare estate is | 22 | | located, which notice of lien must identify each of the | 23 | | following: | 24 | | (A) the name of the timeshare estate owner; | 25 | | (B) the name and address of the managing entity; | 26 | | (C) the description of the timeshare estate in the |
| | | HB2723 Enrolled | - 5 - | LRB100 08926 HEP 19069 b |
|
| 1 | | same manner required for recording a mortgage against a | 2 | | timeshare estate; and | 3 | | (D) the amount of the debt secured by the managing | 4 | | entity lien. | 5 | | (2) In the case of a timeshare use, files a notice of | 6 | | lien against the timeshare use in the filing office of the | 7 | | Illinois Secretary of State pursuant to Article 9 of the | 8 | | Uniform Commercial Code, which notice of lien, in addition | 9 | | to any other filing requirements imposed by Article 9 of | 10 | | the Uniform Commercial Code, must identify each of the | 11 | | following: | 12 | | (A) the name of the timeshare use owner as the | 13 | | debtor; | 14 | | (B) the name of the managing entity as the secured | 15 | | party; | 16 | | (C) the address of the managing entity; | 17 | | (D) the timeshare use as the collateral; and | 18 | | (E) the amount of the debt secured by the managing | 19 | | entity lien. | 20 | | (d) The managing entity must send a copy of the recorded or | 21 | | filed notice of lien on the timeshare interest, as the case may | 22 | | be, to the last known address of the timeshare interest owner. | 23 | | (e) A managing entity lien against a timeshare estate, at | 24 | | the managing entity's option, may be foreclosed: | 25 | | (1) as provided in Section 10; or | 26 | | (2) in the same manner as a mortgage under the Illinois |
| | | HB2723 Enrolled | - 6 - | LRB100 08926 HEP 19069 b |
|
| 1 | | Mortgage Foreclosure Law. | 2 | | (f) A managing entity lien against a timeshare use, at the | 3 | | managing entity's option, may: | 4 | | (1) be foreclosed as provided in Section 15; or | 5 | | (2) be enforced in the same manner as a security | 6 | | interest pursuant to Article 9 of the Uniform Commercial | 7 | | Code. | 8 | | Section 10. Nonjudicial foreclosure against timeshare | 9 | | estates. | 10 | | (a) Notwithstanding anything in the Illinois Mortgage | 11 | | Foreclosure Law or other applicable law to the contrary: | 12 | | (1) the holder of a mortgage against a timeshare estate | 13 | | may foreclose or otherwise enforce a security interest | 14 | | pursuant to this Section; and | 15 | | (2) the holder of a managing entity lien against a | 16 | | timeshare estate may foreclose the managing entity lien | 17 | | pursuant to this Section. | 18 | | (b) Upon default, and after all applicable cure periods | 19 | | identified in the mortgage (if the default is under a mortgage) | 20 | | or the timeshare instrument (if the default is under a managing | 21 | | entity lien) have expired, the holder of the mortgage or | 22 | | managing entity lien must: | 23 | | (1) Provide written notice of the default to the | 24 | | timeshare estate owner at the last known address of the | 25 | | timeshare estate owner by: |
| | | HB2723 Enrolled | - 7 - | LRB100 08926 HEP 19069 b |
|
| 1 | | (A) certified mail, return receipt requested; or | 2 | | (B) first class mail. | 3 | | (2) Provide the timeshare estate owner an additional | 4 | | opportunity to cure for a period of 30 days following the | 5 | | later date of the mailing of the notices sent pursuant to | 6 | | paragraph (1) of this subsection. | 7 | | (c) If the timeshare estate owner does not cure the default | 8 | | before the expiration of the additional cure period granted | 9 | | pursuant to paragraph (2) of subsection (b), the holder of the | 10 | | mortgage or managing entity lien may foreclose the mortgage or | 11 | | managing entity lien by conducting a public auction that | 12 | | complies with the following requirements: | 13 | | (1) The holder of the mortgage or managing entity lien | 14 | | must provide notice of the public auction as follows: | 15 | | (A) By publishing notice of the public auction in | 16 | | at least each of 3 successive weeks in a newspaper, | 17 | | whether printed or electronic, of general circulation | 18 | | in the county where the timeshare estate is located. | 19 | | The first notice must be published no more than 30 days | 20 | | before the date of the public auction, which 30-day | 21 | | period shall be calculated by excluding the date of | 22 | | publication of the first notice and the date of the | 23 | | public auction. | 24 | | (B) By sending written notice identifying the | 25 | | time, date, and place of the public auction to the last | 26 | | known address of the owner of record of the timeshare |
| | | HB2723 Enrolled | - 8 - | LRB100 08926 HEP 19069 b |
|
| 1 | | estate at least 30 days before the date of the public | 2 | | auction by: (i) certified mail, return receipt | 3 | | requested; or (ii) first class mail. | 4 | | (C) By sending notice by certified mail, return | 5 | | receipt requested, or first class mail, at least 30 | 6 | | days before the date of the public auction, identifying | 7 | | the time, date, and place of the public auction to all | 8 | | persons known to have a lien against the timeshare | 9 | | estate. | 10 | | (2) The notices given pursuant to paragraph (1) of this | 11 | | subsection must also contain: | 12 | | (A) the name of the timeshare estate owner; | 13 | | (B) a general description of the timeshare estate; | 14 | | and | 15 | | (C) the terms of the public auction. | 16 | | (3) If more than one timeshare estate is to be included | 17 | | in the public auction, all such timeshare estates may be | 18 | | combined into one notice of public auction. | 19 | | (4) The public notice required by subparagraph (A) of | 20 | | paragraph (1) of this subsection for foreclosing a mortgage | 21 | | against a timeshare estate must be printed in the following | 22 | | or a substantially similar form: | 23 | | "NOTICE OF SALE OF TIMESHARE ESTATE OR ESTATES UNDER SECTION 10 | 24 | | OF THE TIMESHARE LIEN AND SECURITY INTEREST ACT |
| | | HB2723 Enrolled | - 9 - | LRB100 08926 HEP 19069 b |
|
| 1 | | By virtue of Section 10 of the Timeshare Lien and Security | 2 | | Interest Act and in execution of a certain mortgage (or | 3 | | mortgages, if more than one) on the timeshare estate (or | 4 | | estates, if more than one) given by the owner of the timeshare | 5 | | estate (or owners, if more than one) set forth below for breach | 6 | | of the conditions of said mortgage (or mortgages, if more than | 7 | | one) and for the purpose of foreclosing, the same will be sold | 8 | | at public auction starting at ........... on ............ 20.. | 9 | | at ........, Illinois, being all and singular the premises | 10 | | described in said mortgage (or mortgages, if more than one). | 11 | | (For each mortgage, list the name and address of the timeshare | 12 | | estate owner, a general description of the timeshare estate, | 13 | | and the book and page number of the mortgage.) | 14 | | TERMS OF SALE: (State the deposit amount to be paid by the | 15 | | purchaser at the time and place of the sale and the times for | 16 | | payment of the balance or the whole, as the case may be. The | 17 | | timeshare estates, if more than one, must be sold in individual | 18 | | lots unless there are no individual bidders, in which case, | 19 | | they may be sold as a group.) | 20 | | Other terms may be announced at the public auction. | 21 | | Signed ................................. | 22 | | Holder of mortgage or authorized agent.". |
| | | HB2723 Enrolled | - 10 - | LRB100 08926 HEP 19069 b |
|
| 1 | | (5) The public notice required by subparagraph (A) of | 2 | | paragraph (1) of this subsection for foreclosing a managing | 3 | | entity lien against a timeshare estate must be printed in | 4 | | the following or a substantially similar form: | 5 | | "NOTICE OF SALE OF TIMESHARE ESTATE OR ESTATES UNDER SECTION 10 | 6 | | OF THE TIMESHARE LIEN AND SECURITY INTEREST ACT | 7 | | By virtue of the timeshare instrument of the | 8 | | ................... (name and address of timeshare property) | 9 | | and Section 5 of the Timeshare Lien and Security Interest Act | 10 | | establishing a managing entity lien for failure to pay | 11 | | assessments and other costs on the timeshare estate (or | 12 | | estates, if more than one) held by the owner of the timeshare | 13 | | estate (or owners, if more than one) listed below, the | 14 | | timeshare estate (or estates, if more than one) and for the | 15 | | purpose of foreclosing, the same will be sold at public auction | 16 | | starting at ......... on ........ 20.. at ............., | 17 | | Illinois. (For each timeshare estate, list the name and address | 18 | | of the timeshare estate owner, a general description of the | 19 | | timeshare estate, and the book and page number of the deed.) | 20 | | TERMS OF SALE: (State the deposit amount to be paid by the | 21 | | purchaser at the time and place of the sale and the times for | 22 | | payment of the balance or the whole, as the case may be. The |
| | | HB2723 Enrolled | - 11 - | LRB100 08926 HEP 19069 b |
|
| 1 | | timeshare estates, if more than one, must be sold in individual | 2 | | lots unless there are no individual bidders, in which case, | 3 | | they may be sold as a group.) | 4 | | Other terms may be announced at the public auction. | 5 | | Signed ................................ | 6 | | Managing entity lienholder or authorized agent.". | 7 | | (6) Publishing and sending notices in compliance with | 8 | | this subsection constitutes sufficient public notice of | 9 | | the public auction. | 10 | | (d) Public auctions pursuant to this Section must be | 11 | | conducted as follows: | 12 | | (1) The public auction must take place within the | 13 | | county where the timeshare estate is located. | 14 | | (2) The public auction must be open to the general | 15 | | public and conducted by an auctioneer licensed pursuant to | 16 | | the Auction License Act. | 17 | | (3) The auctioneer, in his or her discretion, may waive | 18 | | the reading of the names of the timeshare estate owners, if | 19 | | more than one, the description of the timeshare estates, if | 20 | | more than one, and the recording information of the | 21 | | applicable mortgages or managing entity liens (as the case | 22 | | may be), if more than one. |
| | | HB2723 Enrolled | - 12 - | LRB100 08926 HEP 19069 b |
|
| 1 | | (4) All rights of redemption of the timeshare estate | 2 | | owner are extinguished upon sale of a timeshare estate at | 3 | | the public auction. | 4 | | (5) The holder of the mortgage or managing entity lien, | 5 | | the developer, the managing entity, and the timeshare | 6 | | estate owner are not precluded from bidding at the public | 7 | | auction. | 8 | | (6) The successful purchaser at the public auction is | 9 | | not required to complete the purchase of the timeshare | 10 | | estate if the timeshare estate, at the time the auctioneer | 11 | | accepts the successful bid, is subject to liens or other | 12 | | encumbrances, other than those identified in the notice of | 13 | | public auction and those identified at the auction before | 14 | | the auctioneer opens bidding on the applicable timeshare | 15 | | estate. | 16 | | (7) The purchaser at the public auction takes title to | 17 | | the timeshare estate free and clear of any outstanding | 18 | | assessments owed by the prior timeshare estate owner to the | 19 | | managing entity. | 20 | | (e) Upon the sale of a timeshare estate pursuant to this | 21 | | Section, the holder of the mortgage or managing entity lien | 22 | | must provide the purchaser with: | 23 | | (1) a foreclosure deed or other appropriate instrument | 24 | | transferring the mortgage holder's or managing entity's | 25 | | interest in the timeshare estate; and | 26 | | (2) an affidavit affirming that all requirements of the |
| | | HB2723 Enrolled | - 13 - | LRB100 08926 HEP 19069 b |
|
| 1 | | foreclosure pursuant to this Section have been satisfied. | 2 | | (f) The timeshare estate is considered sold and the deed or | 3 | | other instrument transferring the timeshare estate must | 4 | | transfer the timeshare estate, subject to municipal or other | 5 | | taxes and any liens or encumbrances recorded before the | 6 | | recording of the mortgage or the managing entity lien | 7 | | foreclosed pursuant to this Section (as the case may be), but | 8 | | not including such managing entity lien. | 9 | | (g) The purchaser of a timeshare estate at a public auction | 10 | | pursuant to this Section must record the foreclosure deed or | 11 | | other instrument with the appropriate recorder of deeds within | 12 | | 30 days after the date the foreclosing mortgage holder or | 13 | | managing entity (as the case may be) delivers the foreclosure | 14 | | deed or other instrument to the purchaser. | 15 | | (h) If the holder of a mortgage or managing entity lien | 16 | | conducts a nonjudicial foreclosure pursuant to this Section, | 17 | | the holder of the mortgage or managing entity lien forfeits its | 18 | | right to pursue a claim for any deficiency in the payment of | 19 | | the obligations of the timeshare estate owner resulting from | 20 | | the application of the proceeds of the sale to such | 21 | | obligations. | 22 | | (i) For purposes of this Section, obligations to pay | 23 | | assessments secured by a lien established pursuant to a | 24 | | timeshare instrument before the effective date of this Act are | 25 | | considered managing entity liens. | 26 | | (j) This Section applies to the foreclosure of mortgages |
| | | HB2723 Enrolled | - 14 - | LRB100 08926 HEP 19069 b |
|
| 1 | | and liens considered to be managing entity liens that arose | 2 | | before or after the effective date of this Act. | 3 | | Section 15. Foreclosure of lien or security interest on a | 4 | | timeshare use. | 5 | | (a) Notwithstanding anything in the Illinois Mortgage | 6 | | Foreclosure Law or the Uniform Commercial Code to the contrary, | 7 | | the holder of a managing entity lien created by Section 5 on a | 8 | | timeshare use, in the case of the failure to pay assessments | 9 | | when due, or a security interest against a timeshare use, in | 10 | | the case of a breach of the security agreement, may do either | 11 | | of the following: | 12 | | (1) enforce the security interest pursuant to Part 6 of | 13 | | Article 9 of the Uniform Commercial Code, including | 14 | | (without limitation) accepting the timeshare use in full or | 15 | | partial satisfaction of the timeshare use owner's | 16 | | obligation pursuant to Section 9-620 of the Uniform | 17 | | Commercial Code; or | 18 | | (2) nonjudicially foreclose in the same manner as | 19 | | authorized by Section 10 for holders of a mortgage or | 20 | | managing entity lien against a timeshare estate. | 21 | | (b) All rights of redemption of a timeshare use owner are | 22 | | extinguished upon sale of a timeshare use as authorized by | 23 | | subsection (a) of Section 10. | 24 | | (c) The holder of the security interest or managing entity | 25 | | lien, the developer, the managing entity, and the timeshare use |
| | | HB2723 Enrolled | - 15 - | LRB100 08926 HEP 19069 b |
|
| 1 | | owner are not precluded from bidding at the sale of the | 2 | | timeshare use pursuant to this Section and may enter into | 3 | | agreements for the purchase of one or more timeshare uses | 4 | | following the completion of the sale proceedings. | 5 | | (d) The purchaser at the public auction takes title to the | 6 | | timeshare use free and clear of any outstanding assessments | 7 | | owed by the prior timeshare use owner to the managing entity.
|
|