State of Illinois
91st General Assembly
Legislation

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91_HB1286eng

 
HB1286 Engrossed                              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 have a fiduciary duty to
16    the 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 act in a fiduciary capacity
 
HB1286 Engrossed            -2-               LRB9102550LDpkA
 1    for the benefit of all holders of the beneficial interest  in
 2    the trust.  The beneficial interest shall be indefeasible and
 3    the  power  of  direction shall not be so exercised to alter,
 4    amend, revoke, terminate,  defeat,  or  otherwise  affect  or
 5    change the enjoyment of any beneficial interest.

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

12        Section  99.  Effective date.  This Act takes effect upon
13    becoming law.

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