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1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Timeshare Lien and Security Interest Act.
 
6    Section 3. Definitions. As used in this Act:
7    "Accommodation" means any apartment, condominium or
8cooperative unit, cabin, lodge, hotel or motel room, or other
9private or commercial structure containing toilet facilities
10therein that is designed and available, pursuant to applicable
11law, for use and occupancy as a residence by one or more
12individuals, or any unit or berth on a commercial cruise line
13ship, which is included in the offering of a timeshare plan.
14    "Assessment" means the share of funds required for the
15payment of common expenses which is assessed from time to time
16against each purchaser by the managing entity.
17    "Developer" means and includes any person or entity, other
18than a sales agent, acquisition agent, or resale agent, who
19creates a timeshare plan or is in the business of selling
20timeshare interests, or employs agents to do the same, or any
21person or entity who succeeds to the interest of a developer by
22sale, lease, assignment, mortgage, or other transfer, but the
23term includes only those persons who offer timeshare interests

 

 

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1for disposition in the ordinary course of business.
2    "Managing entity" means the person who undertakes the
3duties, responsibilities, and obligations of the management of
4a timeshare plan.
5    "Managing entity lien" means a lien created pursuant to
6Section 5.
7    "Purchaser" means any person, other than a developer, who
8by means of a voluntary transfer acquires a legal or equitable
9interest in a timeshare plan other than as security for an
10obligation.
11    "Timeshare instrument" means one or more documents, by
12whatever name denominated, creating or governing the operation
13of a timeshare plan.
14    "Timeshare interest" means and includes either:
15        (1) a "timeshare estate", which is the right to occupy
16    a timeshare property, coupled with a freehold estate or an
17    estate for years with a future interest in a timeshare
18    property or a specified portion thereof; or
19        (2) a "timeshare use", which is the right to occupy a
20    timeshare property, which right is neither coupled with a
21    freehold interest, nor coupled with an estate for years
22    with a future interest, in a timeshare property.
23    "Timeshare plan" means any arrangement, plan, scheme, or
24similar device, other than an exchange program, whether by
25membership agreement, sale, lease, deed, license, or
26right-to-use agreement or by any other means, whereby a

 

 

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1purchaser, in exchange for consideration, receives ownership
2rights in or the right to use accommodations for a period of
3time less than a full year during any given year, but not
4necessarily for consecutive years. A timeshare plan may be:
5        (1) a "single-site timeshare plan", which is the right
6    to use accommodations at a single timeshare property; or
7        (2) a "multi-site timeshare plan", which includes:
8            (A) a "specific timeshare interest", which is the
9        right to use accommodations at a specific timeshare
10        property, together with use rights in accommodations
11        at one or more other component sites created by or
12        acquired through the timeshare plan's reservation
13        system; or
14            (B) a "non-specific timeshare interest", which is
15        the right to use accommodations at more than one
16        component site created by or acquired through the
17        timeshare plan's reservation system, but including no
18        specific right to use any particular accommodations.
19    "Timeshare property" means one or more accommodations
20subject to the same timeshare instrument, together with any
21other property or rights to property appurtenant to those
22accommodations.
 
23    Section 5. Managing entity lien created.
24    (a) A managing entity has a lien on a timeshare interest
25for any of the following respectively levied or imposed against

 

 

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1a timeshare interest:
2        (1) assessments, which, unless the timeshare
3    instrument provides otherwise, include fees, charges, late
4    charges, fines, collection costs, and interest charged in
5    accordance with the timeshare instrument;
6        (2) reasonable collection and attorney's fees and
7    costs the managing entity incurs to collect assessments;
8    and
9        (3) taxes, interest, penalties, late payment fees, or
10    fines in accordance with applicable law or the timeshare
11    instrument.
12    (b) Managing entity liens pursuant to this Section are
13created and attached when the charges described in subsection
14(a) become due. If such amounts are payable in installments,
15the full amount of such charges is a managing entity lien from
16the time that the first installment thereof becomes due.
17    (c) Managing entity liens pursuant to this Section are
18perfected on the date that the managing entity:
19        (1) In the case of a timeshare estate, records a notice
20    of lien against the timeshare estate in the office of the
21    recorder in the county where the timeshare estate is
22    located, which notice of lien must identify each of the
23    following:
24            (A) the name of the timeshare estate owner;
25            (B) the name and address of the managing entity;
26            (C) the description of the timeshare estate in the

 

 

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1        same manner required for recording a mortgage against a
2        timeshare estate; and
3            (D) the amount of the debt secured by the managing
4        entity lien.
5        (2) In the case of a timeshare use, files a notice of
6    lien against the timeshare use in the filing office of the
7    Illinois Secretary of State pursuant to Article 9 of the
8    Uniform Commercial Code, which notice of lien, in addition
9    to any other filing requirements imposed by Article 9 of
10    the Uniform Commercial Code, must identify each of the
11    following:
12            (A) the name of the timeshare use owner as the
13        debtor;
14            (B) the name of the managing entity as the secured
15        party;
16            (C) the address of the managing entity;
17            (D) the timeshare use as the collateral; and
18            (E) the amount of the debt secured by the managing
19        entity lien.
20    (d) The managing entity must send a copy of the recorded or
21filed notice of lien on the timeshare interest, as the case may
22be, to the last known address of the timeshare interest owner.
23    (e) A managing entity lien against a timeshare estate, at
24the managing entity's option, may be foreclosed:
25        (1) as provided in Section 10; or
26        (2) in the same manner as a mortgage under the Illinois

 

 

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1    Mortgage Foreclosure Law.
2    (f) A managing entity lien against a timeshare use, at the
3managing entity's option, may:
4        (1) be foreclosed as provided in Section 15; or
5        (2) be enforced in the same manner as a security
6    interest pursuant to Article 9 of the Uniform Commercial
7    Code.
 
8    Section 10. Nonjudicial foreclosure against timeshare
9estates.
10    (a) Notwithstanding anything in the Illinois Mortgage
11Foreclosure Law or other applicable law to the contrary:
12        (1) the holder of a mortgage against a timeshare estate
13    may foreclose or otherwise enforce a security interest
14    pursuant to this Section; and
15        (2) the holder of a managing entity lien against a
16    timeshare estate may foreclose the managing entity lien
17    pursuant to this Section.
18    (b) Upon default, and after all applicable cure periods
19identified in the mortgage (if the default is under a mortgage)
20or the timeshare instrument (if the default is under a managing
21entity lien) have expired, the holder of the mortgage or
22managing entity lien must:
23        (1) Provide written notice of the default to the
24    timeshare estate owner at the last known address of the
25    timeshare estate owner by:

 

 

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1            (A) certified mail, return receipt requested; or
2            (B) first class mail.
3        (2) Provide the timeshare estate owner an additional
4    opportunity to cure for a period of 30 days following the
5    later date of the mailing of the notices sent pursuant to
6    paragraph (1) of this subsection.
7    (c) If the timeshare estate owner does not cure the default
8before the expiration of the additional cure period granted
9pursuant to paragraph (2) of subsection (b), the holder of the
10mortgage or managing entity lien may foreclose the mortgage or
11managing entity lien by conducting a public auction that
12complies with the following requirements:
13        (1) The holder of the mortgage or managing entity lien
14    must provide notice of the public auction as follows:
15            (A) By publishing notice of the public auction in
16        at least each of 3 successive weeks in a newspaper,
17        whether printed or electronic, of general circulation
18        in the county where the timeshare estate is located.
19        The first notice must be published no more than 30 days
20        before the date of the public auction, which 30-day
21        period shall be calculated by excluding the date of
22        publication of the first notice and the date of the
23        public auction.
24            (B) By sending written notice identifying the
25        time, date, and place of the public auction to the last
26        known address of the owner of record of the timeshare

 

 

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1        estate at least 30 days before the date of the public
2        auction by: (i) certified mail, return receipt
3        requested; or (ii) first class mail.
4            (C) By sending notice by certified mail, return
5        receipt requested, or first class mail, at least 30
6        days before the date of the public auction, identifying
7        the time, date, and place of the public auction to all
8        persons known to have a lien against the timeshare
9        estate.
10        (2) The notices given pursuant to paragraph (1) of this
11    subsection must also contain:
12            (A) the name of the timeshare estate owner;
13            (B) a general description of the timeshare estate;
14        and
15            (C) the terms of the public auction.
16        (3) If more than one timeshare estate is to be included
17    in the public auction, all such timeshare estates may be
18    combined into one notice of public auction.
19        (4) The public notice required by subparagraph (A) of
20    paragraph (1) of this subsection for foreclosing a mortgage
21    against a timeshare estate must be printed in the following
22    or a substantially similar form:
 
23"NOTICE OF SALE OF TIMESHARE ESTATE OR ESTATES UNDER SECTION 10
24OF THE TIMESHARE LIEN AND SECURITY INTEREST ACT
 

 

 

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1By virtue of Section 10 of the Timeshare Lien and Security
2Interest Act and in execution of a certain mortgage (or
3mortgages, if more than one) on the timeshare estate (or
4estates, if more than one) given by the owner of the timeshare
5estate (or owners, if more than one) set forth below for breach
6of the conditions of said mortgage (or mortgages, if more than
7one) and for the purpose of foreclosing, the same will be sold
8at public auction starting at ........... on ............ 20..
9at ........, Illinois, being all and singular the premises
10described in said mortgage (or mortgages, if more than one).
11(For each mortgage, list the name and address of the timeshare
12estate owner, a general description of the timeshare estate,
13and the book and page number of the mortgage.)
 
14TERMS OF SALE: (State the deposit amount to be paid by the
15purchaser at the time and place of the sale and the times for
16payment of the balance or the whole, as the case may be. The
17timeshare estates, if more than one, must be sold in individual
18lots unless there are no individual bidders, in which case,
19they may be sold as a group.)
 
20Other terms may be announced at the public auction.
 
21Signed .................................
 
22Holder of mortgage or authorized agent.".
 

 

 

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1        (5) The public notice required by subparagraph (A) of
2    paragraph (1) of this subsection for foreclosing a managing
3    entity lien against a timeshare estate must be printed in
4    the following or a substantially similar form:
 
5"NOTICE OF SALE OF TIMESHARE ESTATE OR ESTATES UNDER SECTION 10
6OF THE TIMESHARE LIEN AND SECURITY INTEREST ACT
 
7By virtue of the timeshare instrument of the
8................... (name and address of timeshare property)
9and Section 5 of the Timeshare Lien and Security Interest Act
10establishing a managing entity lien for failure to pay
11assessments and other costs on the timeshare estate (or
12estates, if more than one) held by the owner of the timeshare
13estate (or owners, if more than one) listed below, the
14timeshare estate (or estates, if more than one) and for the
15purpose of foreclosing, the same will be sold at public auction
16starting at ......... on ........ 20.. at .............,
17Illinois. (For each timeshare estate, list the name and address
18of the timeshare estate owner, a general description of the
19timeshare estate, and the book and page number of the deed.)
 
20TERMS OF SALE: (State the deposit amount to be paid by the
21purchaser at the time and place of the sale and the times for
22payment of the balance or the whole, as the case may be. The

 

 

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1timeshare estates, if more than one, must be sold in individual
2lots unless there are no individual bidders, in which case,
3they may be sold as a group.)
 
4Other terms may be announced at the public auction.
 
5Signed ................................
 
6Managing entity lienholder or authorized agent.".
 
7        (6) Publishing and sending notices in compliance with
8    this subsection constitutes sufficient public notice of
9    the public auction.
10    (d) Public auctions pursuant to this Section must be
11conducted as follows:
12        (1) The public auction must take place within the
13    county where the timeshare estate is located.
14        (2) The public auction must be open to the general
15    public and conducted by an auctioneer licensed pursuant to
16    the Auction License Act.
17        (3) The auctioneer, in his or her discretion, may waive
18    the reading of the names of the timeshare estate owners, if
19    more than one, the description of the timeshare estates, if
20    more than one, and the recording information of the
21    applicable mortgages or managing entity liens (as the case
22    may be), if more than one.

 

 

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1        (4) All rights of redemption of the timeshare estate
2    owner are extinguished upon sale of a timeshare estate at
3    the public auction.
4        (5) The holder of the mortgage or managing entity lien,
5    the developer, the managing entity, and the timeshare
6    estate owner are not precluded from bidding at the public
7    auction.
8        (6) The successful purchaser at the public auction is
9    not required to complete the purchase of the timeshare
10    estate if the timeshare estate, at the time the auctioneer
11    accepts the successful bid, is subject to liens or other
12    encumbrances, other than those identified in the notice of
13    public auction and those identified at the auction before
14    the auctioneer opens bidding on the applicable timeshare
15    estate.
16        (7) The purchaser at the public auction takes title to
17    the timeshare estate free and clear of any outstanding
18    assessments owed by the prior timeshare estate owner to the
19    managing entity.
20    (e) Upon the sale of a timeshare estate pursuant to this
21Section, the holder of the mortgage or managing entity lien
22must provide the purchaser with:
23        (1) a foreclosure deed or other appropriate instrument
24    transferring the mortgage holder's or managing entity's
25    interest in the timeshare estate; and
26        (2) an affidavit affirming that all requirements of the

 

 

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1    foreclosure pursuant to this Section have been satisfied.
2    (f) The timeshare estate is considered sold and the deed or
3other instrument transferring the timeshare estate must
4transfer the timeshare estate, subject to municipal or other
5taxes and any liens or encumbrances recorded before the
6recording of the mortgage or the managing entity lien
7foreclosed pursuant to this Section (as the case may be), but
8not including such managing entity lien.
9    (g) The purchaser of a timeshare estate at a public auction
10pursuant to this Section must record the foreclosure deed or
11other instrument with the appropriate recorder of deeds within
1230 days after the date the foreclosing mortgage holder or
13managing entity (as the case may be) delivers the foreclosure
14deed or other instrument to the purchaser.
15    (h) If the holder of a mortgage or managing entity lien
16conducts a nonjudicial foreclosure pursuant to this Section,
17the holder of the mortgage or managing entity lien forfeits its
18right to pursue a claim for any deficiency in the payment of
19the obligations of the timeshare estate owner resulting from
20the application of the proceeds of the sale to such
21obligations.
22    (i) For purposes of this Section, obligations to pay
23assessments secured by a lien established pursuant to a
24timeshare instrument before the effective date of this Act are
25considered managing entity liens.
26    (j) This Section applies to the foreclosure of mortgages

 

 

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1and liens considered to be managing entity liens that arose
2before or after the effective date of this Act.
 
3    Section 15. Foreclosure of lien or security interest on a
4timeshare use.
5    (a) Notwithstanding anything in the Illinois Mortgage
6Foreclosure Law or the Uniform Commercial Code to the contrary,
7the holder of a managing entity lien created by Section 5 on a
8timeshare use, in the case of the failure to pay assessments
9when due, or a security interest against a timeshare use, in
10the case of a breach of the security agreement, may do either
11of the following:
12        (1) enforce the security interest pursuant to Part 6 of
13    Article 9 of the Uniform Commercial Code, including
14    (without limitation) accepting the timeshare use in full or
15    partial satisfaction of the timeshare use owner's
16    obligation pursuant to Section 9-620 of the Uniform
17    Commercial Code; or
18        (2) nonjudicially foreclose in the same manner as
19    authorized by Section 10 for holders of a mortgage or
20    managing entity lien against a timeshare estate.
21    (b) All rights of redemption of a timeshare use owner are
22extinguished upon sale of a timeshare use as authorized by
23subsection (a) of Section 10.
24    (c) The holder of the security interest or managing entity
25lien, the developer, the managing entity, and the timeshare use

 

 

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1owner are not precluded from bidding at the sale of the
2timeshare use pursuant to this Section and may enter into
3agreements for the purchase of one or more timeshare uses
4following the completion of the sale proceedings.
5    (d) The purchaser at the public auction takes title to the
6timeshare use free and clear of any outstanding assessments
7owed by the prior timeshare use owner to the managing entity.