State of Illinois
91st General Assembly
Legislation

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91_HB1286enr

 
HB1286 Enrolled                               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 finding; 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  the
10    power  of  direction  have fiduciary duties to the holders of
11    the beneficial interest in  land  trusts.   The  terms  "land
12    trust"  and  "beneficial  interest" have the same meanings as
13    defined in Section 2 of the Land Trustee as Creditor Act.
14        (b)  It is the  purpose  of  this  Act  to  clarify  that
15    holders  of  the  power  of  direction are accountable to the
16    holders  of  the  beneficial  interest  in  land  trusts   as
17    declaratory of existing law.

18        Section   10.   Holders   of   the  power  of  direction;
19    definition. "Holders of the power  of  direction"  means  the
20    persons  or  entities  having  the  authority  to  direct the
21    trustee to convey, execute a mortgage, distribute proceeds of
22    sale or financing, and execute documents  incidental  to  the
23    execution of a land trust.

24        Section  15.  Fiduciary duties of holders of the power of
25    direction.  The power of direction, unless provided otherwise
26    in the land trust agreement, is conferred  upon  the  holders
27    thereof  for the use and benefit of all of the holders of the
28    beneficial interest in the land  trust.   In  exercising  the
29    power  of  direction,  the  holders  are presumed to act in a
 
HB1286 Enrolled            -2-                LRB9102550LDpkA
 1    fiduciary capacity for the benefit  of  all  holders  of  the
 2    beneficial  interest  in the trust, unless otherwise provided
 3    in the land trust agreement.  The beneficial  interest  shall
 4    be  indefeasible  and  the power of direction shall not be so
 5    exercised to alter,  amend,  revoke,  terminate,  defeat,  or
 6    otherwise  affect  or  change the enjoyment of any beneficial
 7    interest.

 8        Section 20.  Application of Act.  This Act is declaratory
 9    of existing law  and  is  intended  to  remove  any  possible
10    conflicts  or   ambiguities,  thereby confirming the existing
11    law pertinent to land trusts and  shall  apply  to  all  land
12    trusts  in  effect before, on, or after the effective date of
13    this Act.

14        Section 99.  Effective date.  This Act takes effect  upon
15    becoming law.

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