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91_HB1286
LRB9102550LDpkA
1 AN ACT to create the Land Trust Fiduciary Duties Act.
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 Land Trust Fiduciary Duties Act.
6 Section 5. Legislative findings; purpose.
7 (a) The General Assembly finds that the Illinois
8 judiciary system and the federal judiciary system have
9 unclear court decisions as to whether the holders of powers
10 of direction have fiduciary duties to the beneficial
11 interests of land trusts. The terms "land trust" and
12 "beneficial interest" have the same meanings as in Section 2
13 of the Land Trustee as Creditor Act.
14 (b) It is the purpose of this Act to codify the accepted
15 practice that holders of powers of direction have a fiduciary
16 duty to the beneficial interests of land trusts.
17 Section 10. Holders of powers of direction; definition.
18 "Holders of powers of direction" means persons who have the
19 authority to direct a trustee to convey, execute a mortgage,
20 distribute proceeds of sale or financing, and execute a
21 variety of documents incidental to the operation of the
22 property in a land trust.
23 Section 15. Fiduciary duties of holders of powers of
24 direction. The powers of direction, unless provided
25 otherwise in the land trust agreement, are conferred upon the
26 holders thereof for the use and benefit of all of the
27 beneficial interests of the land trust. In exercising these
28 powers of direction, the holders act as a fiduciary and are
29 fully accountable to all the beneficial interests of the
-2- LRB9102550LDpkA
1 trust as its interests may appear. The beneficial interests
2 shall be indefeasible and the powers of direction shall not
3 be so exercised by the holders to alter, amend, revoke,
4 terminate, or defeat any beneficial interests.
5 Section 20. Application of Act. This Act confirms the
6 fiduciary duties of holders of powers of direction in
7 Illinois and shall apply to all land trusts in effect before,
8 on, or after the effective date of this Act.
9 Section 99. Effective date. This Act takes effect upon
10 becoming law.