Full Text of SB0062 101st General Assembly
SB0062enr 101ST GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning local government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Counties Code is amended by changing Section | 5 | | 3-5010.8 as follows: | 6 | | (55 ILCS 5/3-5010.8) | 7 | | (This Section may contain text from a Public Act with a | 8 | | delayed effective date ) | 9 | | (Section scheduled to be repealed on January 1, 2022) | 10 | | Sec. 3-5010.8. Mechanics lien demand and referral pilot | 11 | | program. | 12 | | (a) Legislative findings. The General Assembly finds that | 13 | | expired mechanics liens on residential property, which cloud | 14 | | title to property, are a rapidly growing problem throughout the | 15 | | State. In order to address the increase in expired mechanics | 16 | | liens and, more specifically, those that have not been released | 17 | | by the lienholder, a recorder may establish a process to demand | 18 | | and refer mechanics liens that have been recorded but not | 19 | | litigated or released in accordance with the Mechanics Lien Act | 20 | | to an administrative law judge for resolution or demand that | 21 | | the lienholder commence suit or forfeit the lien. | 22 | | (b) Definitions. As used in this Section: | 23 | | "Demand to Commence Suit" means the written demand |
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| 1 | | specified in Section 34 of the Mechanics Lien Act. | 2 | | "Mechanics lien" and "lien" are used interchangeably in | 3 | | this Section. | 4 | | "Notice of Expired Mechanics Lien" means the notice a | 5 | | recorder gives to a property owner under subsection (d) | 6 | | informing the property owner of an expired lien. | 7 | | "Notice of Referral" means the document referring a | 8 | | mechanics lien to a county's code hearing unit. | 9 | | "Recording" and "filing" are used interchangeably in this | 10 | | Section. | 11 | | "Referral" or "refer" means a recorder's referral of a | 12 | | mechanics lien to a county's code hearing unit to obtain a | 13 | | determination as to whether a recorded mechanics lien is valid. | 14 | | "Residential property" means real property improved with | 15 | | not less than one nor more than 4 residential dwelling units; a | 16 | | residential condominium unit, including, but not limited to, | 17 | | the common elements allocated to the exclusive use of the | 18 | | condominium unit that form an integral part of the condominium | 19 | | unit and any parking unit or units specified by the declaration | 20 | | to be allocated to a specific residential condominium unit; or | 21 | | a single tract of agriculture real estate consisting of 40 | 22 | | acres or less that is improved with a single-family residence. | 23 | | If a declaration of condominium ownership provides for | 24 | | individually owned and transferable parking units, | 25 | | "residential property" does not include the parking unit of a | 26 | | specified residential condominium unit unless the parking unit |
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| 1 | | is included in the legal description of the property against | 2 | | which the mechanics lien is recorded. | 3 | | (c) Establishment of a mechanics lien demand and referral | 4 | | process. After a public hearing, a recorder in a county with a | 5 | | code hearing unit may adopt rules establishing a mechanics lien | 6 | | demand and referral process for residential property. A | 7 | | recorder shall provide public notice 90 days before the public | 8 | | hearing. The notice shall include a statement of the recorder's | 9 | | intent to create a mechanics lien demand and referral process | 10 | | and shall be published in a newspaper of general circulation in | 11 | | the county and, if feasible, be posted on the recorder's | 12 | | website and at the recorder's office or offices. | 13 | | (d) Notice of Expired Lien. If a recorder determines, after | 14 | | review by legal staff or counsel, that a mechanics lien | 15 | | recorded in the grantor's index or the grantee's index is an | 16 | | expired lien, the recorder shall serve a Notice of Expired Lien | 17 | | by certified mail to the last known address of the owner. The | 18 | | owner or legal representative of the owner of the residential | 19 | | property shall confirm in writing his or her belief that the | 20 | | lien is not involved in pending litigation and, if there is no | 21 | | pending litigation, as verified and confirmed by county court | 22 | | records, the owner may request that the recorder proceed with a | 23 | | referral or serve a Demand to Commence Suit. | 24 | | For the purposes of this Section, a recorder shall | 25 | | determine if a lien is an expired lien . A lien is expired if | 26 | | the lien is unenforced ( if a suit to enforce the lien has not |
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| 1 | | been commenced by the lienholder or a counterclaim has not been | 2 | | filed by the lienholder ( within 2 years after the completion | 3 | | date of the contract as specified in the recorded mechanics | 4 | | lien . The 2-year period shall be increased to the extent that | 5 | | an automatic stay under Section 362(a) of the United States | 6 | | Bankruptcy Code stays a suit or counterclaim to foreclose the | 7 | | lien. If a work , the completion of extra or additional work, or | 8 | | furnishing of extra or additional material under Section 9 of | 9 | | the Mechanics Lien Act; if a completion date is not specified | 10 | | in the recorded lien, then the work completion date is shall be | 11 | | deemed the date of recording of the mechanics lien ) and if an | 12 | | automatic stay under Section 362(a) of the United States | 13 | | Bankruptcy Code does not prohibit a suit or counterclaim to | 14 | | foreclose . | 15 | | (e) Demand to Commence Suit. Upon receipt of an owner's | 16 | | confirmation that the lien is not involved in pending | 17 | | litigation and a request for the recorder to serve a Demand to | 18 | | Commence Suit, the recorder shall serve a Demand to Commence | 19 | | Suit on the lienholder of the expired lien as provided in | 20 | | Section 34 of the Mechanics Lien Act. A recorder may request | 21 | | that the Secretary of State assist in providing registered | 22 | | agent information or obtain information from the Secretary of | 23 | | State's registered business database when the recorder seeks to | 24 | | serve a Demand to Commence suit on the lienholder. Upon | 25 | | request, the Secretary of State, or his or her designee, shall | 26 | | provide the last known address or registered agent information |
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| 1 | | for a lienholder who is incorporated or doing business in the | 2 | | State. The recorder must record a copy of the Demand to | 3 | | Commence suit in the grantor's index or the grantee's index | 4 | | identifying the mechanics lien and include the corresponding | 5 | | document number and the date of demand. The recorder may, at | 6 | | his or her discretion, notify the Secretary of State regarding | 7 | | a Demand to Commence suit determined to involve a company, | 8 | | corporation, or business registered with that office. | 9 | | When the lienholder commences a suit or files an answer | 10 | | within 30 days or the lienholder records a release of lien with | 11 | | the county recorder as required by subsection (a) of Section 34 | 12 | | of the Mechanics Lien Act, then the demand and referral process | 13 | | is completed for the recorder for that property. If service | 14 | | under this Section is responded to consistent with Section 34 | 15 | | of the Mechanics Lien Act, the recorder may not proceed under | 16 | | subsection (f). If no response is received consistent with | 17 | | Section 34 of the Mechanics Lien Act, the recorder may proceed | 18 | | under subsection (f). | 19 | | (f) Referral. Upon receipt of an owner's confirmation that | 20 | | the lien is not involved in pending litigation and a request | 21 | | for the recorder to proceed with a referral, the recorder | 22 | | shall: (i) file the Notice of Referral with the county's code | 23 | | hearing unit; (ii) identify and notify the lienholder by | 24 | | telephone, if available, of the referral and send a copy of the | 25 | | Notice of Referral by certified mail to the lienholder using | 26 | | information included in the recorded mechanics lien or the last |
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| 1 | | known address or registered agent received from the Secretary | 2 | | of State or obtained from the Secretary of State's registered | 3 | | business database; (iii) send a copy of the Notice of Referral | 4 | | by mail to the physical address of the property owner | 5 | | associated with the lien; and (iv) record a copy of the Notice | 6 | | of Referral in the grantor's index or the grantee's index | 7 | | identifying the mechanics lien and include the corresponding | 8 | | document number. The Notice of Referral shall clearly identify | 9 | | the person, persons, or entity believed to be the owner, | 10 | | assignee, successor, or beneficiary of the lien. The recorder | 11 | | may, at his or her discretion, notify the Secretary of State | 12 | | regarding a referral determined to involve a company, | 13 | | corporation, or business registered with that office. | 14 | | No earlier than 30 business days after the date the | 15 | | lienholder is required to respond to a Demand to Commence Suit | 16 | | under Section 34 of the Mechanics Lien Act, the code hearing | 17 | | unit shall schedule a hearing to occur at least 30 days after | 18 | | sending notice of the date of hearing. Notice of the hearing | 19 | | shall be provided by the county recorder, by and through his or | 20 | | her representative, to the filer, or the party represented by | 21 | | the filer, of the expired lien, the legal representative of the | 22 | | recorder of deeds who referred the case, and the last owner of | 23 | | record, as identified in the Notice of Referral. | 24 | | If the recorder shows by clear and convincing evidence that | 25 | | the lien in question is an expired lien, the administrative law | 26 | | judge shall rule the lien is forfeited under Section 34.5 of |
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| 1 | | the Mechanics Lien Act and that the lien no longer affects the | 2 | | chain of title of the property in any way. The judgment shall | 3 | | be forwarded to all parties identified in this subsection. Upon | 4 | | receiving judgment of a forfeited lien, the recorder shall, | 5 | | within 5 business days, record a copy of the judgment in the | 6 | | grantor's index or the grantee's index. | 7 | | If the administrative law judge finds the lien is not | 8 | | expired, the recorder shall, no later than 5 business days | 9 | | after receiving notice of the decision of the administrative | 10 | | law judge, record a copy of the judgment in the grantor's index | 11 | | or the grantee's index. | 12 | | A decision by an administrative law judge is reviewable | 13 | | under the Administrative Review Law, and nothing in this | 14 | | Section precludes a property owner or lienholder from | 15 | | proceeding with a civil action to resolve questions concerning | 16 | | a mechanics lien. | 17 | | A lienholder or property owner may remove the action from | 18 | | the code hearing unit to the circuit court as provided in | 19 | | subsection (i). | 20 | | (g) Final administrative decision. The recorder's decision | 21 | | to refer a mechanics lien or serve a Demand to Commence Suit is | 22 | | a final administrative decision that is subject to review under | 23 | | the Administrative Review Law by the circuit court of the | 24 | | county where the real property is located. The standard of | 25 | | review by the circuit court shall be consistent with the | 26 | | Administrative Review Law. |
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| 1 | | (h) Liability. A recorder and his or her employees or | 2 | | agents are not subject to personal liability by reason of any | 3 | | error or omission in the performance of any duty under this | 4 | | Section, except in the case of willful or wanton conduct. The | 5 | | recorder and his or her employees or agents are not liable for | 6 | | the decision to refer a lien or serve a Demand to Commence | 7 | | Suit, or failure to refer or serve a Demand to Commence Suit, | 8 | | of a lien under this Section. | 9 | | (i) Private actions; use of demand and referral process. | 10 | | Nothing in this Section precludes a private right of action by | 11 | | any party with an interest in the property affected by the | 12 | | mechanics lien or a decision by the code hearing unit. Nothing | 13 | | in this Section requires a person or entity who may have a | 14 | | mechanics lien recorded against his or her property to use the | 15 | | mechanics lien demand and referral process created by this | 16 | | Section. | 17 | | A lienholder or property owner may remove a matter in the | 18 | | referral process to the circuit court at any time prior to the | 19 | | final decision of the administrative law judge by delivering a | 20 | | certified notice of the suit filed in the circuit court to the | 21 | | administrative law judge. Upon receipt of the certified notice, | 22 | | the administrative law judge shall dismiss the matter without | 23 | | prejudice. If the matter is dismissed due to removal, then the | 24 | | demand and referral process is completed for the recorder for | 25 | | that property. If the circuit court dismisses the removed | 26 | | matter without deciding on whether the lien is expired and |
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| 1 | | without prejudice, the recorder may reinstitute the demand and | 2 | | referral process under subsection (d). | 3 | | (j) Repeal. This Section is repealed on January 1, 2022.
| 4 | | (Source: P.A. 100-1061, eff. 1-1-19.)
| 5 | | Section 99. Effective date. This Act takes effect upon | 6 | | becoming law.
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