Illinois General Assembly - Full Text of SB0062
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Full Text of SB0062  101st General Assembly




SB0062 EnrolledLRB101 04056 AWJ 49064 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 changing Section
53-5010.8 as follows:
6    (55 ILCS 5/3-5010.8)
7    (This Section may contain text from a Public Act with a
8delayed effective date)
9    (Section scheduled to be repealed on January 1, 2022)
10    Sec. 3-5010.8. Mechanics lien demand and referral pilot
12    (a) Legislative findings. The General Assembly finds that
13expired mechanics liens on residential property, which cloud
14title to property, are a rapidly growing problem throughout the
15State. In order to address the increase in expired mechanics
16liens and, more specifically, those that have not been released
17by the lienholder, a recorder may establish a process to demand
18and refer mechanics liens that have been recorded but not
19litigated or released in accordance with the Mechanics Lien Act
20to an administrative law judge for resolution or demand that
21the lienholder commence suit or forfeit the lien.
22    (b) Definitions. As used in this Section:
23    "Demand to Commence Suit" means the written demand



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1specified in Section 34 of the Mechanics Lien Act.
2    "Mechanics lien" and "lien" are used interchangeably in
3this Section.
4    "Notice of Expired Mechanics Lien" means the notice a
5recorder gives to a property owner under subsection (d)
6informing the property owner of an expired lien.
7    "Notice of Referral" means the document referring a
8mechanics lien to a county's code hearing unit.
9    "Recording" and "filing" are used interchangeably in this
11    "Referral" or "refer" means a recorder's referral of a
12mechanics lien to a county's code hearing unit to obtain a
13determination as to whether a recorded mechanics lien is valid.
14    "Residential property" means real property improved with
15not less than one nor more than 4 residential dwelling units; a
16residential condominium unit, including, but not limited to,
17the common elements allocated to the exclusive use of the
18condominium unit that form an integral part of the condominium
19unit and any parking unit or units specified by the declaration
20to be allocated to a specific residential condominium unit; or
21a single tract of agriculture real estate consisting of 40
22acres or less that is improved with a single-family residence.
23If a declaration of condominium ownership provides for
24individually owned and transferable parking units,
25"residential property" does not include the parking unit of a
26specified residential condominium unit unless the parking unit



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1is included in the legal description of the property against
2which the mechanics lien is recorded.
3    (c) Establishment of a mechanics lien demand and referral
4process. After a public hearing, a recorder in a county with a
5code hearing unit may adopt rules establishing a mechanics lien
6demand and referral process for residential property. A
7recorder shall provide public notice 90 days before the public
8hearing. The notice shall include a statement of the recorder's
9intent to create a mechanics lien demand and referral process
10and shall be published in a newspaper of general circulation in
11the county and, if feasible, be posted on the recorder's
12website and at the recorder's office or offices.
13    (d) Notice of Expired Lien. If a recorder determines, after
14review by legal staff or counsel, that a mechanics lien
15recorded in the grantor's index or the grantee's index is an
16expired lien, the recorder shall serve a Notice of Expired Lien
17by certified mail to the last known address of the owner. The
18owner or legal representative of the owner of the residential
19property shall confirm in writing his or her belief that the
20lien is not involved in pending litigation and, if there is no
21pending litigation, as verified and confirmed by county court
22records, the owner may request that the recorder proceed with a
23referral or serve a Demand to Commence Suit.
24    For the purposes of this Section, a recorder shall
25determine if a lien is an expired lien. A lien is expired if
26the lien is unenforced (if a suit to enforce the lien has not



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1been commenced by the lienholder or a counterclaim has not been
2filed by the lienholder (within 2 years after the completion
3date of the contract as specified in the recorded mechanics
4lien. The 2-year period shall be increased to the extent that
5an automatic stay under Section 362(a) of the United States
6Bankruptcy Code stays a suit or counterclaim to foreclose the
7lien. If a work , the completion of extra or additional work, or
8furnishing of extra or additional material under Section 9 of
9the Mechanics Lien Act; if a completion date is not specified
10in the recorded lien, then the work completion date is shall be
11deemed the date of recording of the mechanics lien) and if an
12automatic stay under Section 362(a) of the United States
13Bankruptcy Code does not prohibit a suit or counterclaim to
15    (e) Demand to Commence Suit. Upon receipt of an owner's
16confirmation that the lien is not involved in pending
17litigation and a request for the recorder to serve a Demand to
18Commence Suit, the recorder shall serve a Demand to Commence
19Suit on the lienholder of the expired lien as provided in
20Section 34 of the Mechanics Lien Act. A recorder may request
21that the Secretary of State assist in providing registered
22agent information or obtain information from the Secretary of
23State's registered business database when the recorder seeks to
24serve a Demand to Commence suit on the lienholder. Upon
25request, the Secretary of State, or his or her designee, shall
26provide the last known address or registered agent information



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1for a lienholder who is incorporated or doing business in the
2State. The recorder must record a copy of the Demand to
3Commence suit in the grantor's index or the grantee's index
4identifying the mechanics lien and include the corresponding
5document number and the date of demand. The recorder may, at
6his or her discretion, notify the Secretary of State regarding
7a Demand to Commence suit determined to involve a company,
8corporation, or business registered with that office.
9    When the lienholder commences a suit or files an answer
10within 30 days or the lienholder records a release of lien with
11the county recorder as required by subsection (a) of Section 34
12of the Mechanics Lien Act, then the demand and referral process
13is completed for the recorder for that property. If service
14under this Section is responded to consistent with Section 34
15of the Mechanics Lien Act, the recorder may not proceed under
16subsection (f). If no response is received consistent with
17Section 34 of the Mechanics Lien Act, the recorder may proceed
18under subsection (f).
19    (f) Referral. Upon receipt of an owner's confirmation that
20the lien is not involved in pending litigation and a request
21for the recorder to proceed with a referral, the recorder
22shall: (i) file the Notice of Referral with the county's code
23hearing unit; (ii) identify and notify the lienholder by
24telephone, if available, of the referral and send a copy of the
25Notice of Referral by certified mail to the lienholder using
26information included in the recorded mechanics lien or the last



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1known address or registered agent received from the Secretary
2of State or obtained from the Secretary of State's registered
3business database; (iii) send a copy of the Notice of Referral
4by mail to the physical address of the property owner
5associated with the lien; and (iv) record a copy of the Notice
6of Referral in the grantor's index or the grantee's index
7identifying the mechanics lien and include the corresponding
8document number. The Notice of Referral shall clearly identify
9the person, persons, or entity believed to be the owner,
10assignee, successor, or beneficiary of the lien. The recorder
11may, at his or her discretion, notify the Secretary of State
12regarding a referral determined to involve a company,
13corporation, or business registered with that office.
14    No earlier than 30 business days after the date the
15lienholder is required to respond to a Demand to Commence Suit
16under Section 34 of the Mechanics Lien Act, the code hearing
17unit shall schedule a hearing to occur at least 30 days after
18sending notice of the date of hearing. Notice of the hearing
19shall be provided by the county recorder, by and through his or
20her representative, to the filer, or the party represented by
21the filer, of the expired lien, the legal representative of the
22recorder of deeds who referred the case, and the last owner of
23record, as identified in the Notice of Referral.
24    If the recorder shows by clear and convincing evidence that
25the lien in question is an expired lien, the administrative law
26judge shall rule the lien is forfeited under Section 34.5 of



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1the Mechanics Lien Act and that the lien no longer affects the
2chain of title of the property in any way. The judgment shall
3be forwarded to all parties identified in this subsection. Upon
4receiving judgment of a forfeited lien, the recorder shall,
5within 5 business days, record a copy of the judgment in the
6grantor's index or the grantee's index.
7    If the administrative law judge finds the lien is not
8expired, the recorder shall, no later than 5 business days
9after receiving notice of the decision of the administrative
10law judge, record a copy of the judgment in the grantor's index
11or the grantee's index.
12    A decision by an administrative law judge is reviewable
13under the Administrative Review Law, and nothing in this
14Section precludes a property owner or lienholder from
15proceeding with a civil action to resolve questions concerning
16a mechanics lien.
17    A lienholder or property owner may remove the action from
18the code hearing unit to the circuit court as provided in
19subsection (i).
20    (g) Final administrative decision. The recorder's decision
21to refer a mechanics lien or serve a Demand to Commence Suit is
22a final administrative decision that is subject to review under
23the Administrative Review Law by the circuit court of the
24county where the real property is located. The standard of
25review by the circuit court shall be consistent with the
26Administrative Review Law.



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1    (h) Liability. A recorder and his or her employees or
2agents are not subject to personal liability by reason of any
3error or omission in the performance of any duty under this
4Section, except in the case of willful or wanton conduct. The
5recorder and his or her employees or agents are not liable for
6the decision to refer a lien or serve a Demand to Commence
7Suit, or failure to refer or serve a Demand to Commence Suit,
8of a lien under this Section.
9    (i) Private actions; use of demand and referral process.
10Nothing in this Section precludes a private right of action by
11any party with an interest in the property affected by the
12mechanics lien or a decision by the code hearing unit. Nothing
13in this Section requires a person or entity who may have a
14mechanics lien recorded against his or her property to use the
15mechanics lien demand and referral process created by this
17    A lienholder or property owner may remove a matter in the
18referral process to the circuit court at any time prior to the
19final decision of the administrative law judge by delivering a
20certified notice of the suit filed in the circuit court to the
21administrative law judge. Upon receipt of the certified notice,
22the administrative law judge shall dismiss the matter without
23prejudice. If the matter is dismissed due to removal, then the
24demand and referral process is completed for the recorder for
25that property. If the circuit court dismisses the removed
26matter without deciding on whether the lien is expired and



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1without prejudice, the recorder may reinstitute the demand and
2referral process under subsection (d).
3    (j) Repeal. This Section is repealed on January 1, 2022.
4(Source: P.A. 100-1061, eff. 1-1-19.)
5    Section 99. Effective date. This Act takes effect upon
6becoming law.