98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB2832

 

Introduced , by Rep. Lou Lang

 

SYNOPSIS AS INTRODUCED:
 
55 ILCS 5/3-5010.5 new

    Amends the Counties Code. Provides that a county recorder may establish a Review Index and procedures for investigating filings that would cause the recorder to reasonably believe that the filing may be fraudulent, unlawfully altered, or intended to unlawfully cloud or transfer the title of any real property. Provides the General Assembly's findings regarding property fraud and fraudulent filings. Provides for the following: (1) the filing of a notice sheet regarding a suspected fraudulent filing; (2) criteria that a recorder may rely upon to identify a filing as appropriate to be placed in the Review Index; (3) notification requirements of a recorder's determinations regarding a filing; (4) procedures for removal of a filing from the Review Index; (5) administrative review of a recorder's determination; (6) priority of filing; and (7) fees associated with filing a deed or instrument that is determined to be fraudulent. Further provides that no recorder, nor any of his or her employees or agents, shall be liable for any omission or error under this Section, nor for the failure to place a deed or instrument into the Review Index. Provides that this Section only applies to deeds or instruments filed after the effective date of this amendatory Act. Effective immediately.


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A BILL FOR

 

HB2832LRB098 10729 OMW 41064 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Counties Code is amended by adding Section
53-5010.5 as follows:
 
6    (55 ILCS 5/3-5010.5 new)
7    Sec. 3-5010.5. Purpose.
8    (a) The General Assembly finds that property fraud,
9including fraudulent filings intended to cloud or steal title
10to property by recording false or altered documents and deeds
11is a rapidly growing problem throughout the State. In order to
12combat the rise in these filings, a recorder may establish a
13Review Index as provided for herein.
14    (b) For purposes of this Section, "Review Index" means an
15index of filings identified by the recorder as having one or
16more of the criteria identified under subsection (c) of this
17Section, or other basis for suspicion, that would cause the
18recorder to reasonably believe that the filing may be
19fraudulent, unlawfully altered, or intended to unlawfully
20cloud or transfer the title of any real property.
21    The terms "recording" and "filing" are used
22interchangeably in this Section.
23    (c) Review Index. A recorder who establishes a Review Index

 

 

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1under the provisions of this Section shall index deeds and
2instruments that cause the recorder to reasonably believe that
3the filing may be fraudulent, unlawfully altered, or intended
4to unlawfully cloud or transfer the title of any real property.
5The recorder shall investigate any deed or instrument placed in
6the Review Index, and may enter into an intergovernmental
7agreement with local law enforcement officials for the purposes
8of this investigation.
9    Any document that is placed in the Review Index shall be
10posted to the recorder's website if a website exists. The
11document shall only be represented in the chain of title by a
12notice sheet that does not allow the public to see an image of
13the suspected fraudulent filing. The notice sheet filing shall
14contain text that states that it represents a document
15suspected to be fraudulent. The document shall be assigned a
16unique reference number that is tied to the Property
17Identification Number that shall allow the document to be
18viewable in the Review Index to the recorder, filer, the last
19owner of record, anyone deemed by the office of the recorder to
20be necessary for investigative or law enforcement purposes, or
21by submission to the recorder of a valid court subpoena or
22court order.
23    A recorder may rely on the any of the following criteria to
24identify a filing as appropriate to be placed in the Review
25Index including, but not limited to:
26        (1) The owner of the property or his or her designated

 

 

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1    representative has reported to the recorder that another
2    individual is attempting or has attempted to record a
3    fraudulent deed or other instrument upon the property;
4        (2) A law enforcement official has contacted the
5    recorder indicating that he or she has probable cause to
6    suspect title or recording fraud;
7        (3) The filer's name has a copyright attached to it or
8    the property owner's name has nonstandard punctuation
9    attached to it;
10        (4) A document asserts fines that do not exist or have
11    no basis under current law or that require payment in gold
12    or silver;
13        (5) Maritime Liens, or liens under the Federal Maritime
14    Lien Act or the Preferred Ship Mortgage Act, or not
15    authorized by the United States Coast Guard;
16        (6) Land Patents not authorized and certified by the
17    United States Department of the Interior Bureau of Land
18    Management;
19        (7) Documents filed by the property owner or third
20    party, not the lien holder, that purport to release the
21    owner from a lien;
22        (8) Documents protesting or disputing a foreclosure
23    proceeding that are not filed within the foreclosure suit
24    and with the court presiding over the matter;
25        (9) Uniform Commercial Code filings referencing birth
26    certificates or other private records that are not in

 

 

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1    compliance with Section 9-501 of the Uniform Commercial
2    Code;
3        (10) Re-recording deeds to re-notarize or attach
4    notary certification if prior notarization already appears
5    unaltered on the document of record;
6        (11) Documents that assert any of the following:
7    independence from the laws of the United States, diplomatic
8    credentials or immunity, or non-United States citizenship;
9        (12) Claims that a bank cannot hold title after a
10    foreclosure;
11        (13) Deeds not properly signed by the last legal owner
12    of record or their court appointed representative or
13    attorney-in-fact under legally drafted power of attorney;
14        (14) Recording of manipulated or altered federal or
15    State legal or court forms that release a lien;
16        (15) A document that is not related to a valid existing
17    or potential adverse transaction, existing lien, or
18    judgment of a court of competent jurisdiction;
19        (16) A document that is not related to a valid existing
20    or potential commercial or financial transaction, existing
21    agricultural or other lien, or judgment of a court of
22    competent jurisdiction;
23        (17) A document filed with the intent to harass or
24    defraud the person identified in the record or any other
25    person;
26        (18) A document filed with the intent to harass or

 

 

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1    defraud any member of a governmental office including, but
2    not limited to, the recorder's office, local government
3    offices, the State of Illinois, or the Federal government;
4    and
5        (19) Previous court determinations, including a
6    previous determination by a court of competent
7    jurisdiction that a particular document is fraudulent,
8    invalid, or bogus.
9    (d) Determinations. If a recorder determines, after review
10by legal staff and counsel, that the deed or instrument may be
11fraudulent, unlawfully altered, or intended to unlawfully
12cloud or transfer the title of any real property, he or she may
13record the deed or instrument in the Review Index and shall
14notify the parties set forth in subsection (e) of this Section.
15A recorder shall have the discretion to not record the deed or
16instrument if the last owner of record is not aware of the
17filing or states the filing to be fraudulent or unlawful. A
18recorder may, at his or her discretion, notify law enforcement
19officials regarding a filing determined to be fraudulent,
20unlawfully altered, or intended to unlawfully cloud or transfer
21the title of any real property.
22    If a recorder determines, after review, that the deed or
23instrument is not fraudulent, unlawfully altered, or intended
24to unlawfully cloud or transfer the title of any real property,
25he or she shall move the document or instrument to its proper
26place in the chain of title and remove any notice sheet

 

 

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1document suggesting that it may be fraudulent.
2    (e) Notice. The recorder shall provide notice to the last
3owner of record by telephone, if available, and certified mail
4when: (1) a deed or instrument has been placed in the Review
5Index and is under investigation; and (2) a final determination
6has been made regarding the deed or instrument.
7    The recorder shall advise the filer of any deed or
8instrument of ways to prove the legitimacy of the deed or
9instrument and procedures for removal of the deed or instrument
10from the Review Index under this Section. This advice shall not
11be construed as legal advice and shall be limited to directing
12the filer to the proper venue for a hearing and providing any
13other information regarding the process that the filer must
14take. The recorder shall provide notice to the filer of the
15deed or instrument by telephone, if available, and certified
16mail when: (1) a deed or instrument has been placed in the
17Review Index and is under investigation; and (2) a final
18determination has been made regarding the deed or instrument.
19    (f) Removal from Review Index. A deed or instrument may be
20removed from the Review Index if: the recorder determines,
21after investigation, that the deed or instrument is not
22fraudulent, unlawfully altered, or intended to unlawfully
23cloud or transfer the title of any real property; the last
24owner of record and the filer both appear at the recorder's
25office, sign an affidavit, and provide proper identification;
26or a court order is presented that orders the removal of the

 

 

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1document from the Review Index.
2    (g) Administrative Review. The recorder's decision that a
3deed or instrument is fraudulent, unlawfully altered, or
4intended to unlawfully cloud or transfer the title of any real
5property under this Section is a final administrative decision
6that is subject to review by the circuit court of the county
7where the real property is located under the Administrative
8Review Law. Review by the circuit court shall be de novo.
9    Within 15 business days of a determination by the recorder
10that a deed or instrument is fraudulent, unlawfully altered, or
11intended to unlawfully cloud or transfer the title of any real
12property, the recorder shall bring a case to its county
13department of administrative hearings and, within 10 business
14days of receipt, an administrative law judge must schedule a
15hearing to occur no later than 30 days after receiving the
16filing. Notice of the hearing must be provided by the
17administrative law judge (ALJ) to the filer, or the party
18represented by the filer, of the suspected fraudulent document,
19the legal representative of the recorded or deeds who filed the
20case, and the last owner of record.
21    If a preponderance of the evidence shows the document in
22question to be fraudulent, the ALJ shall rule the document to
23be fraudulent and forward the judgment to all the parties under
24this subsection. Upon receiving notice of the judgment of
25fraud, the recorder must, within 5 business days, record a new
26document before the notice sheet reference provided in

 

 

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1subsection (c) of this Section that shall clearly state that
2the document in question has been found to be fraudulent and
3must not be considered to affect the chain of title of the
4property in any way.
5    If the ALJ finds the document to be legitimate, the
6recorder must, within 5 business days of receiving notice,
7remove the notice sheet reference provided in subsection (c) of
8this Section and replace it with the original document.
9    A decision by an ALJ shall not preclude a State's attorney
10or sheriff from proceeding with a criminal investigation or
11criminal charges. If a county does not have an ALJ that
12specializes in public records, one must be appointed within 3
13months of the effective date of this amendatory Act of the 98th
14General Assembly, or the original case must be forwarded to the
15proper circuit court with jurisdiction.
16    (h) Priority of filing. When a document is moved to the
17Review Index, a notice sheet document shall be filed in its
18place that references the original filing and its location in
19the Review Index. The notice sheet document shall not provide
20an image or duplication of the document in the Review Index. If
21a document is moved from the Review Index back to the Property
22Index after a finding that the document is legitimate, the
23original document shall retain its priority of filing ahead of
24any documents that may have been filed after it.
25    (i) Fees. The recorder shall retain any filing fees
26associated with filing a deed or instrument that is determined

 

 

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1to be fraudulent, unlawfully altered, or intended to unlawfully
2cloud or transfer the title of any real property under this
3Section and use these monies to support the cost of the
4development and implementation of the Review Index.
5    (j) Liability. No recorder, nor any of his employees or
6agents, shall be subject to personal liability by reason of any
7error or omission in the performance of any duty under this
8Section, except in case of wilful or wanton conduct. Neither
9the recorder nor any of his or her employees shall incur
10liability for the review of, or failure to review, a document
11or instrument under this Section or for the refusal to accept a
12record for filing in the lawful performance of the duties of
13the recorder or employee.
14    (k) This Section applies only to filings provided to the
15recorder on and after the effective date of this amendatory Act
16of the 98th General Assembly.
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.