Public Act 103-0993
 
SB3420 EnrolledLRB103 36346 SPS 66445 b

    AN ACT concerning business.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 1. Short title. This Act may be cited as the
Prohibition of Unfair Service Agreements Act.
 
    Section 5. Purpose. The General Assembly declares that it
is the purpose of this Act:
        (1) to prohibit the use of service agreements that are
    unfair to an owner of residential real estate or to
    persons who may become owners of that real estate in the
    future;
        (2) to prohibit the recording of unfair service
    agreements so that the public records will not be clouded
    by them and future owners will not be put to the burden of
    bringing suits to remove them from their chains of title;
    and
        (3) to provide remedies for owners who are
    inconvenienced or damaged by the recording of unfair
    service agreements.
 
    Section 10. Definitions. As used in this Act:
    "Person" means a natural person, partnership, association,
cooperative, corporation, trust, or other legal entity.
    "Recording" means presenting a document to a county
recorder for official placement in the public land records.
    "Residential real estate" means real property located in
this State that is used primarily for personal, family, or
household purposes and is improved by one to 4 dwelling units.
    "Service agreement" means a contract under which a person
agrees to provide services in connection with the maintenance
of or purchase or sale of residential real estate.
    "Service provider" means an individual or entity that
provides services to a person.
 
    Section 15. Characteristics of unfair service agreements.
    (a) A service agreement is unfair under this Act if any
part of the service subject to the agreement is not to be
performed within one year after the service agreement is
entered into and the service agreement has any of the
following characteristics:
        (1) the service agreement purports to run with the
    land or to be binding on future owners of interests in the
    real property;
        (2) the service agreement allows for assignment of the
    right to provide service without notice to and consent of
    the owner of residential real estate; or
        (3) the service agreement purports to create a lien,
    encumbrance, or other real property security interest.
    (b) This Act does not apply to:
        (1) a home warranty or similar product that covers the
    cost of maintenance of a major home system, including
    plumbing, heating, ventilation, air conditioning, or
    electrical wiring, for a fixed period;
        (2) an insurance contract;
        (3) an option or right of refusal to purchase the
    residential real estate;
        (4) a declaration created in the formation of a common
    interest community or an amendment to the declaration;
        (5) a maintenance or repair agreement entered into by
    a homeowners' association in a common interest community;
        (6) a mortgage loan or a commitment to make or receive
    a mortgage loan;
        (7) a security agreement under the Uniform Commercial
    Code relating to the sale or rental of personal property
    or fixtures; or
        (8) water, sewer, electrical, telephone, cable, or
    other utility service providers.
    (c) This Act shall not impair rights and remedies granted
under the Mechanics Lien Act.
 
    Section 20. Unfair service agreements unenforceable. If a
service agreement is unfair under this Act it is unenforceable
and shall not create a contractual obligation.
 
    Section 25. Deceptive business practice. Entering into an
unfair service agreement with a consumer constitutes an
unlawful practice under the Consumer Fraud and Deceptive
Business Practices Act. All remedies, penalties, and authority
granted to the Attorney General by the Consumer Fraud and
Deceptive Business Practices Act shall be available to the
Attorney General for the enforcement of this Act.
 
    Section 30. Recording prohibited.
    (a) No person shall knowingly record or knowingly cause to
be recorded an unfair service agreement or a notice or
memorandum of the unfair service agreement.
    (b) Notwithstanding any law to the contrary, a county
recorder may refuse to accept for recordation an unfair
service agreement.
    (c) If an unfair service agreement is recorded, it shall
not provide actual or constructive notice against a bona fide
purchaser or creditor.
 
    Section 35. Remedies. If an unfair service agreement or a
notice or memorandum of the unfair service agreement is
recorded, any person with an interest in the real property
that is the subject of that agreement may apply to a court in
the county where the recording exists to record a court order
declaring the agreement unenforceable and that person may
recover actual damages, costs, and attorney's fees as may be
proven against the service provider who recorded the
agreement.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.