Full Text of SB2329 93rd General Assembly
SB2329 93RD GENERAL ASSEMBLY
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93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004 SB2329
Introduced 1/28/2004, by Iris Y. Martinez SYNOPSIS AS INTRODUCED: |
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310 ILCS 60/1 |
from Ch. 67 1/2, par. 1151 |
310 ILCS 60/3 |
from Ch. 67 1/2, par. 1153 |
310 ILCS 60/4 |
from Ch. 67 1/2, par. 1154 |
310 ILCS 60/5 |
from Ch. 67 1/2, par. 1155 |
310 ILCS 60/6 |
from Ch. 67 1/2, par. 1156 |
310 ILCS 60/7 |
from Ch. 67 1/2, par. 1157 |
310 ILCS 60/10.1 |
from Ch. 67 1/2, par. 1160.1 |
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Amends the Federally Subsidized Housing Preservation Act. Changes the short
title to the Federally Assisted Housing Preservation Act, and replaces
references to
"subsidized housing" with references to "assisted housing". Requires the owner
of an
assisted housing development to give 12 (instead of 6) months notice of the
owner's
intent to sell or otherwise dispose of the assisted housing; also requires
notice of the
owner's intent to complete prepayment or complete termination of the development's participation in a federal subsidy program or termination of the development's affordability restrictions. Provides for representation of a tenant association by a not-for-profit
corporation or private purchaser. Requires that the owner offer the property for sale to a
tenant association within 60 days after the association has complied with the
requirements of the Act concerning notice to the owner. Requires that a tenant
association notify the owner of its intent to purchase the property within 90 (instead of
30) days after receiving the owner's offer of sale. Effective immediately.
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A BILL FOR
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SB2329 |
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LRB093 18462 DRJ 44174 b |
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| AN ACT in relation to housing.
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| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
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| Section 5. The Federally Subsidized Housing Preservation | 5 |
| Act is amended by
changing Sections 1, 3, 4, 5, 6, 7, and 10.1 | 6 |
| as follows:
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| (310 ILCS 60/1) (from Ch. 67 1/2, par. 1151)
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| Sec. 1. Short title. This Act shall be known and may be | 9 |
| cited as
the Federally Assisted
Subsidized Housing | 10 |
| Preservation Act.
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| (Source: P.A. 86-810.)
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| (310 ILCS 60/3) (from Ch. 67 1/2, par. 1153)
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| Sec. 3. Definitions. As used in this Act:
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| (a) "IHDA" means the Illinois Housing Development | 15 |
| Authority.
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| (b) (Blank).
"FmHA" means the Farmers Home Administration | 17 |
| or a local
housing
authority administering an FmHA program.
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| (c) (Blank).
"HUD" means the United States Department of | 19 |
| Housing and
Urban
Development, or the Federal Housing | 20 |
| Administration or a local housing
authority administering a HUD | 21 |
| program.
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| (d) "Owner" means the person, partnership, or corporation | 23 |
| that
holds title to an assisted housing development
is a
party | 24 |
| to a contract with HUD or FmHA providing for a mortgage, | 25 |
| mortgage
assistance, mortgage insurance, or rent subsidy; or | 26 |
| any spouse, employee,
agent, partner, master lessee, business | 27 |
| affiliate or associate, or
successor in interest of such | 28 |
| person, partnership or corporation, that
receives or demands | 29 |
| rent for the subsidized housing.
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| (e) "Assisted housing" or "assisted housing development" | 31 |
| means a rental
housing
development, or a mixed use development |
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| that includes rental housing, that receives government | 2 |
| assistance under any of the following
programs:
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| (1) New construction, substantial rehabilitation, | 4 |
| moderate
rehabilitation, property disposition and loan | 5 |
| management set-aside programs, or
any other program | 6 |
| providing project-based
rental assistance, under Section 8 | 7 |
| of the United States Housing
Act of 1937, as amended.
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| (2) The Below-Market-Interest-Rate Program under | 9 |
| Section
221(d)(3) of the National Housing Act.
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| (3) Section 236 of the National Housing Act.
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| (4) Section 202 of the National Housing Act.
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| (5) Programs for rent supplement assistance under | 13 |
| Section
101 of the Housing and Urban Development Act of | 14 |
| 1965, as amended.
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| (6) Programs under Section 514 or 515 of the Housing | 16 |
| Act of
1949.
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| (7) Section 42 of the Internal Revenue Code.
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| "Subsidized housing" means any housing or unit of housing | 19 |
| financed
by a loan or mortgage insured or held by HUD as | 20 |
| follows:
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| (1) insured or held by HUD under Section 221(d)(3) of the | 22 |
| National
Housing Act and assisted under Section 101 of the | 23 |
| Housing and Urban
Development Act of 1965 or Section 8 of the | 24 |
| United States Housing Act of 1937;
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| (2) insured or held by HUD and bears interest at a rate | 26 |
| determined under
the proviso of Section 221(d)(3) of the | 27 |
| National Housing Act;
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| (3) insured, assisted or held by HUD under Section 236 of | 29 |
| the National
Housing Act;
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| (4) insured or held by HUD under Section 514 or 515 of the | 31 |
| Housing Act of
1949; or
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| (5) held by HUD and formerly insured under a program listed | 33 |
| in this
subsection (e).
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| (f) "Tenant" means a tenant, subtenant, lessee, sublessee | 35 |
| or other
person entitled to possession, occupancy or benefits | 36 |
| of a rental unit
within the assisted
subsidized housing.
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| (g) "Tenant Association" means an association, corporation | 2 |
| or other
organization that represents at least a majority of | 3 |
| the tenants in the
assisted
subsidized housing building.
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| (h) "Prepayment" means the payment in full or refinancing | 5 |
| of the
federally insured or federally held mortgage | 6 |
| indebtedness prior to its
original maturity date, or the | 7 |
| voluntary cancellation of mortgage
insurance, on an assisted | 8 |
| housing development described in paragraph
(2), (3), or (4) of | 9 |
| subsection (e) that would have the effect of
removing the | 10 |
| affordability restrictions applicable to the assisted housing | 11 |
| development under the programs described in paragraph (2), (3), | 12 |
| or (4) of subsection (e).
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| (i) "Termination" means: | 14 |
| (1) the expiration or early termination of an assisted | 15 |
| housing development's participation in a federal subsidy | 16 |
| program for assisted housing described in paragraph (1) of | 17 |
| subsection (e), or | 18 |
| (2) the expiration or early termination of an assisted | 19 |
| housing development's affordability restrictions described | 20 |
| in Section 42(g) of the Internal Revenue Code for assisted | 21 |
| housing described in paragraph (7) of subsection (e),
when | 22 |
| that event results in an increase in tenant rents, a change | 23 |
| in the form of subsidy from project-based to tenant-based, | 24 |
| or a change in use of the assisted housing development to a | 25 |
| use other than rental housing.
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| (j) "Affected public entities" means: the mayor of the city | 27 |
| in
which the assisted housing development is located or, if the
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| development is located in an unincorporated area, the | 29 |
| chairperson of
the county board; the public
housing authority | 30 |
| in whose jurisdiction the assisted housing development is | 31 |
| located, if any; and IHDA.
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| (k) "Affordability restrictions" means limits on rents | 33 |
| that owners may charge for occupancy of a rental unit in | 34 |
| assisted housing and limits on tenant income for persons or | 35 |
| families seeking to qualify as tenants in assisted housing.
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| (Source: P.A. 86-810.)
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| (310 ILCS 60/4) (from Ch. 67 1/2, par. 1154)
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| Sec. 4. Notice of intent to sell.
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| (a) An owner may not sell or otherwise dispose of
assisted
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| subsidized housing , complete prepayment, or complete a | 5 |
| termination
unless, not less than 12
6 months before the | 6 |
| prepayment, termination, sale , or
disposal, the owner submits | 7 |
| to all tenants of the assisted
subsidized
housing and to all | 8 |
| affected public entities
IHDA a notice of intent to
complete | 9 |
| prepayment, complete termination, sell , or otherwise dispose
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| of the property.
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| (a-5) Every notice required under subsection (a) must | 12 |
| include the address
of
the
assisted housing, characteristics of | 13 |
| the property including the number of
units, and the
names and | 14 |
| addresses of the owners. The notice must also include the date | 15 |
| on
which
the
owner intends to sell, lease, complete prepayment, | 16 |
| complete termination, or otherwise dispose of the property, as | 17 |
| well as a detailed list of affordability restrictions | 18 |
| applicable to the property.
IHDA shall adopt rules concerning | 19 |
| the content, format, delivery, and
publication of such
notices.
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| (b) Within 60 days after the date of the owner's notice | 21 |
| pursuant to
subsection (a), the tenants may notify the owner | 22 |
| that they have formed a
Tenant Association meeting the | 23 |
| requirements of this Act and shall designate
the name of its | 24 |
| representative or representatives in the notice.
The Tenant | 25 |
| Association may enter into an agreement with a not-for-profit
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| corporation or private purchaser in which the not-for-profit
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| corporation or private purchaser agrees to represent the | 28 |
| residents and
maintain the development in a manner that | 29 |
| preserves the housing development's
existing affordability | 30 |
| restrictions or that would qualify the housing development as | 31 |
| affordable housing as defined in the Illinois Affordable | 32 |
| Housing Act. The agreement must set forth the minimum length of | 33 |
| time that the affordability restrictions will be in effect. The | 34 |
| Tenant Association and individual tenants in the assisted | 35 |
| housing shall each have the right to bring an action for |
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| specific performance or other injunctive relief for | 2 |
| enforcement of the agreement, and the agreement must contain | 3 |
| provisions to this effect along with such other remedies for | 4 |
| breach as the Tenant Association and the not-for-profit | 5 |
| corporation or private purchaser may agree. Once such an | 6 |
| agreement is entered into, the
not-for-profit corporation or | 7 |
| private purchaser shall assume all rights and
responsibilities | 8 |
| attributed to the Tenant Association under this Act.
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| (Source: P.A. 86-810; 86-1352.)
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| (310 ILCS 60/5) (from Ch. 67 1/2, par. 1155)
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| Sec. 5. Offer for sale to Tenant Association. Within 60 | 12 |
| days after the
Tenant Association has complied with the
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| requirements of Section 4, the owner shall, before selling, | 14 |
| leasing , completing prepayment, completing termination, or
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| otherwise disposing of the
property, provide to the Tenant | 16 |
| Association a
bona fide offer for sale of the property which | 17 |
| shall contain the essential
terms of the sale, including, at a | 18 |
| minimum, the following: the
sales price; the terms of seller | 19 |
| financing, if any, including the amount,
the interest rate, and | 20 |
| amortization rate thereof; the terms of assumable
financing, if | 21 |
| any, including the amount, the interest rate, and the
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| amortization rate thereof; and proposed improvements, if any, | 23 |
| to the
property to be made by the owner in connection with the | 24 |
| sale.
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| (Source: P.A. 86-810.)
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| (310 ILCS 60/6) (from Ch. 67 1/2, par. 1156)
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| Sec. 6. Notice of intent to purchase.
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| (a) The Tenant Association shall
notify the owner in | 29 |
| writing, within 90
30 days after the receipt of the
bona
fide | 30 |
| offer of sale, of its intent to purchase the assisted
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| subsidized
housing.
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| (b) The owner shall, after receiving a notice pursuant to | 33 |
| subsection
(a), comply with any reasonable request to make | 34 |
| documents available to the
Tenant Association, during normal |
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| business hours at the owner's principal place
of
business | 2 |
| within 15 days of receiving such a request, including but not | 3 |
| limited
to: a
floor plan of the development; itemized lists of | 4 |
| monthly operating
expenses, capital expenditures in each of the | 5 |
| 2 preceding calendar years
and deferred maintenance costs; the | 6 |
| amount of project reserves; utility
consumption rates; copies | 7 |
| of financial and physical inspection reports filed
with | 8 |
| federal, State or local agencies; the most recent rent roll; a | 9 |
| list of
tenants; a list of vacant units; and a statement of the | 10 |
| vacancy rate at the
development for each of the 2 preceding | 11 |
| calendar years.
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| (Source: P.A. 86-810.)
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| (310 ILCS 60/7) (from Ch. 67 1/2, par. 1157)
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| Sec. 7. Bona fide offer to purchase; contract.
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| (a) The Tenant Association shall, within 90 days after it
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| notifies the owner of its intent to purchase, provide the owner | 17 |
| with a bona
fide offer to purchase evidenced by a purchase | 18 |
| contract reflecting a sales
price and terms agreed to by the | 19 |
| parties or the sales price and terms
determined pursuant to | 20 |
| subsection (b) of this Section and an earnest
money deposit | 21 |
| equal to 5% of the bona fide offer to purchase.
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| (b) If the parties are unable to agree to a sales price | 23 |
| within the first
60 days of the 90 day period specified in | 24 |
| subsection (a), the sale price of
the assisted
subsidized
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| housing shall be based upon its fair market
value , without | 26 |
| affordability restrictions, as
determined by 2 independent | 27 |
| appraisers qualified to perform multi-family
housing | 28 |
| appraisals. One appraiser shall be selected and paid by the | 29 |
| owner
and the other shall be selected and paid by the Tenant | 30 |
| Association. If the
appraisers fail to agree upon a fair market | 31 |
| value, the owner and the
Tenant Association shall either | 32 |
| jointly select and pay a third appraiser whose
appraisal shall | 33 |
| be binding, or agree to take an average of
the 2 appraisals. | 34 |
| All appraisers shall be MAI certified. The
determination of the | 35 |
| sales price pursuant to this subsection shall be
completed |
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| within the 90 day period specified in subsection (a) of this | 2 |
| Section.
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| (c) The Tenant Association shall agree to close on the sale | 4 |
| within 90
days from the date the parties sign the contract to | 5 |
| purchase.
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| (Source: P.A. 86-810; 86-1352.)
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| (310 ILCS 60/10.1) (from Ch. 67 1/2, par. 1160.1)
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| Sec. 10.1. Civil action against owner. The Tenant | 9 |
| Association, or one
or
more tenants in the
assisted
subsidized
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| housing, may bring a civil action against an owner
who has
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| violated this Act. An owner found to have violated any | 12 |
| provision of this
Act shall, in addition to any other damages, | 13 |
| pay a civil penalty to each
tenant in the assisted
subsidized
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| housing in the amount of $500 per
tenant, and
shall also pay | 15 |
| the attorney's fees and costs incurred in bringing the action.
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| (Source: P.A. 86-810; 86-1352)
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| Section 99. Effective date. This Act takes effect upon | 18 |
| becoming law. |
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