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90_SB1618 815 ILCS 307/10-25 815 ILCS 307/10-115 Amends the Illinois Business Brokers Act of 1995. In provisions authorizing the imposition of liens on the proceeds of a sale of a business for amounts due a business broker, provides that no claim for lien shall attach to any real property asset of a business until the claim for lien is filed with the recorder of the county in which the real property asset is located. Provides that the Secretary of State shall not impose a fee on a business broker for filing a notice of lien with the recorder on a real property business asset. In provisions requiring a plaintiff suing to enforce a business broker lien to name as defendants all persons whom the plaintiff has knowledge are interested parties, provides that the knowledge be actual or constructive knowledge. Effective immediately. LRB9010682SMdv LRB9010682SMdv 1 AN ACT to amend the Illinois Business Brokers Act of 1995 2 by changing Sections 10-25 and 10-115. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Business Brokers Act of 1995 is 6 amended by changing Sections 10-25 and 10-115 as follows: 7 (815 ILCS 307/10-25) 8 Sec. 10-25. Fees and funds. All fees and funds accruing 9 for the administration of this Act shall be accounted for by 10 the Secretary of State and shall be deposited with the State 11 Treasurer who shall deposit them in the Securities Audit and 12 Enforcement Fund. 13 (a) The Secretary of State shall, by rule or regulation, 14 impose and collect fees necessary for the administration of 15 this Act, including but not limited to, fees for the 16 following purposes: 17 (1) Filing an application pursuant to Section 10-10 18 of this Act; 19 (2) Examining an application pursuant to Sections 20 10-10 and 10-20 of this Act; 21 (3) Registering a business broker under Section 22 10-10 of this Act; 23 (4) Renewing registration of a business broker 24 pursuant to Section 10-20 of this Act; 25 (5) Failure to file or file timely any document or 26 information required under this Act; 27 (6) Filing a notice of lien pursuant to Section 28 10-115 of this Act, except notice of a lien filed with 29 the recorder of the county pursuant to subsection (p) of 30 Section 10-115. 31 (b) The Secretary of State may, by rule or regulation, -2- LRB9010682SMdv 1 raise or lower any fee imposed by, and which he or she is 2 authorized by law to collect under, this Act. 3 (Source: P.A. 89-209, eff. 1-1-96; 90-70, eff. 7-8-97.) 4 (815 ILCS 307/10-115) 5 Sec. 10-115. Business broker lien. 6 (a) Any business broker shall have a lien upon the 7 assets of a business that is the subject of a business 8 broker's contract and the proceeds from the sale of such 9 business in the amount that the broker is due. 10 (b) The lien shall be available to the business broker 11 named in the instrument signed by the seller or purchaser. 12 The lien arising under this Act shall be in addition to any 13 other rights that a business broker may have. 14 (c) The lien under this Act shall attach upon the 15 business broker being otherwise entitled to a fee or 16 commission under a written instrument signed by the seller or 17 purchaser or the seller or purchaser's duly authorized agent, 18 as applicable. 19 (d) When payment to a business broker is due in 20 installments, a portion of which is due only after the 21 conveyance or transfer of the business, any claim for lien 22 for those payments due after the transfer or conveyance may 23 be filed at any time subsequent to the transfer or conveyance 24 of the business and prior to the date on which the payment is 25 due but shall only be effective as a lien against the 26 business or proceeds to the extent moneys are still owed to 27 the transferor by the transferee. The lien shall attach as of 28 the filing of the notice of lien and not relate back to the 29 date of the written agreement. 30 (e) If a business broker has a written agreement with a 31 prospective purchaser or seller, then the lien shall attach 32 upon the prospective purchaser or seller that is purchasing, 33 selling, or otherwise accepting a conveyance or transfer of -3- LRB9010682SMdv 1 the business and the filing of a notice of lien by the 2 business broker in the Office of the Secretary of State 3 within 90 days after the purchase, sale, or other conveyance 4 or transfer of the business that is the subject of the 5 written agreement with the business broker. The lien shall 6 attach as of the date of the receipt of any consideration by 7 the seller of the business that is the subject of the written 8 agreement with the business broker. 9 (f) The business broker shall, within 10 days after 10 filing its notice of lien, mail a copy of the notice of lien 11 to the owner of the business by registered or certified mail, 12 with return receipt requested, or personally served on the 13 owner of record or his agent. If the lien is filed within 10 14 days prior to closing, the business broker is not required to 15 mail or personally serve a copy of the notice of lien. 16 Mailing of the copy of the notice of lien is effective if 17 mailed to the address of the business that is the subject of 18 the notice of lien, or to such other address as the seller or 19 purchaser has provided to the business broker in writing and 20 signed by the seller or purchaser. Mailing of the copy of 21 the notice of claim for lien is effective when deposited in a 22 United States mailbox with postage prepaid. The broker's 23 lien shall be unenforceable if mailing of the copy of the 24 notice of lien does not occur at the time and in the manner 25 required by this Act. 26 (g) A business broker may bring suit to enforce a lien 27 in the circuit court in the county where the headquarters of 28 the business being sold is located, where the purchaser 29 resides (or maintains its headquarters) if the lien is being 30 filed against the purchaser, or where the seller resides (or 31 maintains its headquarters) if the lien is filed against the 32 seller, by filing a complaint and sworn affidavit that the 33 lien has been filed. 34 (h) The person claiming a lien shall, within 2 years -4- LRB9010682SMdv 1 after filing the lien, commence proceedings by filing a 2 complaint. Failure to commence proceedings within 2 years 3 after filing the lien shall extinguish the lien. No 4 subsequent notice of lien may be given for the same claim nor 5 may that claim be asserted in any proceedings under this Act. 6 (i) A complaint under this Section shall contain a brief 7 statement of the contract or agreements on which the lien is 8 founded, the date when the contract or agreement was made, a 9 description of the services performed, the amount due and 10 unpaid, a description of the business that is, or the 11 proceeds from sale of which are, subject to the lien, and 12 other facts necessary for a full understanding of the rights 13 of the parties. The plaintiff shall make all interested 14 parties, of whose interest the plaintiff is notified or has 15 actual or constructive knowledge, defendants to the action 16 and shall issue summons and provide service as in other civil 17 actions. When any defendant resides or has gone out of the 18 State, or on inquiry cannot be found, or is concealed within 19 this State so that process cannot be served on that 20 defendant, the plaintiff shall cause a notice to be given to 21 that defendant, or cause a copy of the complaint to be served 22 upon that defendant, in the manner and upon the same 23 conditions as in other civil actions. Failure of the 24 plaintiff to provide proper summons or notice shall be 25 grounds for judgment against the plaintiff with prejudice. 26 (j) The lien notice shall state the name of the 27 claimant, the name of the purchaser or seller whose property 28 or assets are subject to the lien, a description of the 29 business upon which or upon the proceeds from the sale of 30 which the lien is being claimed, the amount for which the 31 lien is claimed, and the registration number of the business 32 broker. The notice of lien shall recite that the information 33 contained in the notice is true and accurate to the knowledge 34 of the signatory. The notice of lien shall be signed by the -5- LRB9010682SMdv 1 business broker or by a person authorized to sign on behalf 2 of the business broker and shall be verified. 3 (k) Whenever a claim for lien has been filed with the 4 Office of the Secretary of State and a condition occurs that 5 would preclude the business broker from receiving 6 compensation under the terms of the business broker's written 7 agreement, the business broker shall provide to the purchaser 8 of the business, if the lien is filed against the purchaser, 9 or the seller of the business, if the lien is filed against 10 the seller, within 10 days following demand by the owner of 11 record, a written release or satisfaction of the lien. 12 (l) Upon written demand of the owner, lienee, or other 13 authorized agent, served on the person claiming the lien 14 requiring suit to be commenced to enforce the lien or answer 15 to be filed in a pending suit, a suit shall be commenced or 16 answer filed within 30 days thereafter, or the lien shall be 17 extinguished. Service may be by registered or certified 18 mail, return receipt requested, or by personal service. 19 (m) If a claim for lien has been filed with the 20 Secretary of State and is paid, or if there is failure to 21 institute a suit to enforce the lien within the time provided 22 by this Act, the business broker shall acknowledge 23 satisfaction or release of the lien, in writing, on written 24 demand of the purchaser of the business, if the lien is filed 25 against the purchaser, or the seller of the business, if the 26 lien is filed against the seller, within 5 days after payment 27 or expiration of the time in which to file the lien. 28 (n) The cost of proceedings asserting or defending a 29 business broker's claim of lien, including reasonable 30 attorneys' fees, costs, and prejudgment interests due to the 31 prevailing party, shall be borne by the nonprevailing party 32 or parties. When more than one party is responsible for 33 costs, fees, and prejudgment interest, the costs, fees, and 34 prejudgment interest shall be equitably apportioned by the -6- LRB9010682SMdv 1 court among those responsible parties. 2 (o) Prior recorded liens and mortgages shall have 3 priority over a broker's lien. A prior recorded lien shall 4 include, without limitation, (i) a valid mechanic's lien 5 claim that is recorded subsequent to the broker's notice of 6 lien but which relates back to a date prior to the recording 7 date of the broker's notice of lien and (ii) prior recorded 8 liens securing revolving credit and future advances of 9 construction loans as described in Section 15-1302 of the 10 Code of Civil Procedure. 11 (p) No claim for lien shall attach to any real property 12 asset of a business unless and until a claim for lien is 13 filed with the recorder of the county in which the real 14 property asset is located. A lien recorded under this 15 subsection (p) shall otherwise be subject to the same notice, 16 enforcement, and limitations as any other lien under this 17 Section. 18 (Source: P.A. 90-70, eff. 7-8-97.) 19 Section 99. Effective date. This Act takes effect upon 20 becoming law.
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