LEGISLATIVE UPDATE

Barry S. Wolfinsohn,

Regional Counsel

This has been an extremely busy year for legislation. While some issues may be deemed controversial and of interest only to those that practice or focus in particular areas, there have certainly been many different issues on the legislative table. Prominently in the foreground are the newsworthy issues of foreclosures and consumer legislation. I am presenting a list of legislation concerning several issues that should prove to be of interest to real estate and title practitioners - a little bit of “everything in no particular order.” The first sections summarize bills that have made it all the way through the process to become Public Acts, while the final section includes some legislation still pending at the time this goes to press. We are presently in the Veto session, and while budget issues are in the forefront, many other bills are seeing activity.

FORECLOSURE / MORTGAGES

1.  PA 96-901 (HB 3762) Provides for foreclosure protection for members of military on active military duty. Upon application, a ninety day stay of proceedings will be granted to a mortgage foreclosure defendant who was deployed to a combat or combat support posting while on active military duty and serving overseas within the previous 12 months. Effective 1/1/11

2.  PA 96-1144 (HB 5232) Foreclosure Legal Notices/Publication – makes provision for publication notices when no newspapers are published in a county, and for posting to a statewide website maintained by the various publishing papers.

3.  PA 96-1245 (HB 5735) Limited right to set aside judicial sale prior to confirmation

Further amends the Code of Civil Procedure. Provides that the court shall set aside a judicial sale, prior to the sale confirmation, if the mortgagor proves that the mortgagor applied for assistance under the Making Home Affordable Program established by the Department of the Treasury pursuant to federal law, and the mortgaged real estate was sold in material violation of the program's judicial sale requirements. These provisions become inoperative on January 1, 2013 for all actions filed after December 31, 2012, as to which the mortgagor did not apply for assistance under the program by December 31, 2012. Effective immediately.

4.  PA 96-1419 (SB 3739) IMFL amendments – “Save our Neighborhoods Act of 2010”

Includes provisions for new fees, establishment of the Foreclosure Prevention Fund and the Abandoned Residential Property Municipal Relief Fund.

CONDOMINIUMS

5.  PA 96-0228 (HB 155) Condo Right of First Refusal

Amends the Condominium Property Act to provide that in the event of sale of a condo unit by a unit owner, no condo association shall excersice any right of refusal, option to purchase, or right to disapprove the sale, on the basis that the purchaser’s financing is guaranteed by the FHA. http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=096-0228

6.  PA 96-1400 (SB 3180) Common Interest Communities

“COMMENT: The Common Interest Community Association Act is a first-of-its-kind regulation of non-condominium developments in Illinois. It will have a significant impact on the drafting of townhome and similar declarations. Counsel representing developers should study its provisions carefully. Unlike the Condominium Property Act, however, this new Act does not mandate the inclusion of certain provisions in the declaration. Compare 765 ILCS 605/18. The new Act may have more significance in the operation of townhome and other homeowner developments. It may compel owners in these developments to form associations and to adopt and comply with statutory formalities. As unregulated entities, many of these developments ignored sound business practices and unit owner rights in the past.”

7.  PA 96-1045 (HB 5509) Condominium Property Act – common expenses

Amends the Code of Civil Procedure. Provides that the notice of a judicial sale of a unit of a common interest community must contain a statement concerning liability for common expenses. Amends the Condominium Property Act to provide that a purchaser of such a unit at a judicial foreclosure sale or who acquires title from a mortgagee has the duty to pay certain proportionate common expenses. Contains other provisions. Effective immediately.

8.  PA 96-977 (HB 6082) Condominium Property Act – Voting percentages/garage units

Amends provisions of the Condominium Property Act stating that when 30% or fewer of the units, by number, possess over 50% in the aggregate of the votes in the association, any percentage vote of members shall require the specified percentage by number of units rather than by percentage of interest in the common elements allocated to units that would otherwise be applicable. Adds language providing that garage units or storage units, or both, shall have, in total, no more votes than their aggregate percentage of ownership in the common elements and that those provisions mean that if garage units or storage units, or both, are to be given a vote, or portion of a vote, that the association must add the total number of votes cast of garage units or storage units and divide the total by the number of garage units or storage units and multiply by the aggregate percentage of ownership of garage units and storage units to determine the vote, or portion of a vote, that garage units or storage units have. Effective immediately.

9.  PA 96-1435 (SB 3747) Transfer Fee Covenants – declares that transfer fee covenants violate Illinois Public Policy. Such a covenant recorded after the effective date (January 1, 2011) will be void as being against public policy.

Probate, Powers Of Attorney

  1. PA 96-0968 (HB 5161) Increases minimum surviving spouse award.

Amends the Probate Act of 1975. Provides that the increase in the amount of the spouse's award and the changes to the child's award apply to a decedent whose date of death is on or after the effective date. Makes corresponding changes to the small estate affidavit provisions. effective 7/2/10

11.  PA 96-1195 (HB6477) Power of Attorney Act – comprehensive amendments

Amends the Illinois Power of Attorney Act. Makes numerous substantive and stylistic changes. In relation to Durable Powers Of Attorney: Defines "incapacity". Provides that the execution of a new power of attorney does not revoke a prior power of attorney, unless the new power expressly revokes the prior power. Adds specific requirements relating to an agent's records and disclosures, and provides remedies for violations of an agent's duties. Creates a form to be used for the agent's certification and acceptance of authority. Includes provisions relating to co-agents and successor agents, and creates separate forms for their use. Limits liability in certain cases of good faith reliance. Sets forth requirements, including acknowledgement of the principal's signature, for nonstatutory forms. Includes savings provisions. In relation to both the Statutory Short Form Power Of Attorney For Property and Powers Of Attorney For Health Care: Makes both substantive and stylistic changes in the prescribed statutory short forms. Requires an explanatory Notice page to be a part of the form, and includes various Notes and instructions in the body of the form. Also provides for a Notice to Agent form that describes the agent's duties. Prohibits certain persons from acting as witnesses. Includes savings provisions. Also in relation to Powers Of Attorney For Health Care: Defines "incurable or irreversible medical condition", "permanent unconsciousness", and ""terminal condition". Amends the form to provide that its use does revoke all prior powers of attorney for health care. Adds provisions relating to the agent's power to authorize an autopsy, direct the disposition of remains, and make anatomical gifts, and makes those decisions binding. Provides that signing the power of attorney authorizes physicians, health care providers, insurance companies, and others to disclose the principal's confidential health care information to the designated agent, and supersedes any contrary agreement with the health care provider. Grants the agent power to use and disclose individually identifiable health information and confidential medical records covered by HIPAA and other confidentiality Acts. Provides that the agent's powers to obtain, use, and disclose that confidential information take effect upon signing the form, even before the agency itself takes effect, and do not expire unless specifically revoked in a writing delivered to the health care provider. Makes other changes. Effective July 1, 2011.

Real Estate Taxes & Tax sales

12.  PA 96-0231 (HB 212) Tax sale – title search fees. Amends the Property Tax Code. In a Section concerning deposits for redemption, provides that the deposit shall include, if a petition for tax deed has been filed, all fees paid to a registered title insurance company or title insurance agent for a title search. http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=096-0231

13.  PA 96-1142 (HB 5144) – Amends the Property Tax Code. Provides that a Section of the Code that provides for an abatement of unpaid taxes and existing liens for property that is acquired by a unit of local government applies to counties, municipalities, school districts, and park districts (now, counties and municipalities only). Provides that property that is transferred to a county, municipality, school district, or park district under the terms of an annexation agreement, development agreement, donation agreement, plat of subdivision, or zoning ordinance by an entity that has been dissolved or is being dissolved or has been in bankruptcy proceedings or is in bankruptcy proceedings also qualifies for the abatement. Effective immediately.

  1. 96-1067 (HB5158) – Amends the Property Tax Code. Provides that the portion of a deposit for redemption that includes fees for title searches may not exceed $150 per redemption. Effective January 1, 2011.

15.  PA 96-1248 (HB 6062) Property Tax payment by credit card

Provides that a county with a population of more than 3,000,000 is required by accept property tax payments by credit card beginning on January 1, 2012 (instead of January 1, 2011). Provides that all service charges or fees associated with the processing or accepting of a credit card payment by the county shall be paid by the taxpayer and shall not be refundable. Provides that the county shall not incur liability for or associated with the collection of a property tax payment by credit card. Provides that the acceptance of credit cards by a county with a population of more than 3,000,000 is not subject to the public hearing requirement of the Local Governmental Acceptance of Credit Cards Act. Amends the Local Government Acceptance of Credit Cards Act to make conforming changes.

Effective 1-1-2011

16.  PA 96-1297 (SB 3446) Cook County Tax delinquency date - changes due date of Cook County taxes from March 1 to April 1 beginning with payments due in 2011 (tax year 2010).

17.  PA 96-1329 (HB 6126) extends time for treasurer to apply for judgment and order of sale to 90 days from 2nd inst delinquency date. Effective 7/27/2010

  1. PA 96-1250 (HB 6125) 35 ILCS 200/20-25 collector may refuse to take a check

Amends the Property Tax Code. Provides that a county collector may refuse to accept a personal or corporate check (instead of a personal check only) within 45 days (instead of 30 days) before a tax sale or at any time if a previous payment by the same payer was returned by a bank for any reason. Effective immediately (7/23/2010)

RECORDERS

  1. PA 96-1356 (SB 0082) establishes fees for non-certified copies of recorded instruments, up to half of the fee for certified copies.

TITLE and TITLE INSURANCE

  1. PA 96-1145 (HB 5282) Tenancy by the Entirety amended to apply to revocable inter vivos trusts. (765 ILCS 1005) (735 ILCS5/12-112)

Amends the Code of Civil Procedure. Provides that any real property, or any beneficial interest in a land trust, or any interest in real property held in a revocable living trust created for estate planning purposes, held in tenancy by the entirety shall not be liable to be sold upon judgment (instead of any real property or any beneficial interest in a land trust, held in tenancy by the entirety shall not be liable to be sold upon judgment). Amends the Joint Tenancy Act. Provides that where the homestead is maintained in a revocable living trust created for estate planning purposes by both husband and wife, the husband and wife are the primary beneficiaries of the trust, and the terms of the trust specifically state that the interests of the beneficiaries to the homestead property are held as tenants by the entirety, the estate created is a tenancy by the entirety.

In the language amending the Code of Civil Procedure changes a reference to "revocable inter vivos trust" to also include "revocable inter vivos trusts". Replaces the language amending the Joint Tenancy Act with language providing that where a homestead is held in the name or names of a trustee or trustees of a revocable inter vivos trust or of revocable inter vivos trusts made by the settlors of the trust or trusts who are husband and wife, and the husband and wife are the primary beneficiaries of one or both of the trusts, and the deed or deeds conveying title to the homestead to the trustee or trustees of the trust or trusts specifically state that the interests of the husband and wife to the homestead property are to be held as tenants by the entirety, the estate created is deemed to be a tenancy by the entirety.

Effective 1-1-2011

  1. PA 96-1457 (HB 5677) Good funds amendment

Amends the Title Insurance Act. In the provision concerning settlement funds, provides that a purchaser, a seller, or a lender are each considered a single party to the transaction, regardless of the number of people or entities making up the purchaser, seller, or lender. Makes changes to the provision concerning settlement funds. Provides that where funds in the aggregate amount of $50,000 or greater are received from any purchaser of residential real property, as "residential real property" is defined in the Act, the aggregate amount may consist of less than $50,000 per form in good funds in the forms of (i) cashier's checks, certified checks, bank money orders, official bank checks, or teller's checks and (ii) a check drawn on the trust account of any lawyer or real estate broker and of up to $5,000 in good funds in the form of a personal check or checks. Effective January 1, 2011