Illinois General Assembly - Full Text of HB4322
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Full Text of HB4322  102nd General Assembly

HB4322 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4322

 

Introduced 1/5/2022, by Rep. Curtis J. Tarver, II

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Residential Real Property Disclosure Act. Changes the definition of "seller". Defines "contract". Changes the phrases "disclosure document" and "disclosure statement" to "disclosure report". Provides that if a seller is involved in specified types of transfers, the seller is exempt from the Act, regardless of whether a disclosure report is delivered. Provides that the seller shall deliver to the prospective buyer the written disclosure report before the signing of a contract (rather than before the signing of a written agreement by the seller and prospective buyer that would require the prospective buyer to accept a transfer of the residential real property). Provides that if, prior to closing, any seller becomes aware (rather than has actual knowledge) of an error, inaccuracy, or omission in any prior disclosure report or supplement after delivery of that disclosure report or supplement to a prospective buyer, that seller shall supplement the prior disclosure report. Makes changes to the disclosure report form. Provides that if a seller discloses a material defect in the disclosure report, a prospective buyer, within 5 (rather than 3) business days after receipt of the disclosure report, may terminate the contract. Provides that if a seller discloses a material defect in a supplement to the disclosure, the prospective buyer shall not have a right to terminate unless: (i) the material defect results from an error, inaccuracy, or omission of which the seller had actual knowledge at the time of the prior disclosure; (ii) the material defect is not repairable prior to closing; or (iii) the material defect is repairable prior to closing, but within 5 business days after delivery of the supplemental disclosure, the seller declines, or otherwise fails to agree in writing, to repair the material defect. Allows for the disclosure report to be delivered by email or other electronic delivery. Makes other changes. Effective immediately.


LRB102 22898 LNS 32051 b

 

 

A BILL FOR

 

HB4322LRB102 22898 LNS 32051 b

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 5. The Residential Real Property Disclosure Act is
5amended by changing Sections 5, 15, 20, 30, 35, 40, 45, 50, and
655 as follows:
 
7    (765 ILCS 77/5)
8    Sec. 5. Definitions. As used in this Act, unless the
9context otherwise requires, the following terms have the
10meaning given in this Section: .
11    "Residential real property" means real property improved
12with not less than one nor more than 4 residential dwelling
13units; units in residential cooperatives; or, condominium
14units, including the limited common elements allocated to the
15exclusive use thereof that form an integral part of the
16condominium unit. The term includes a manufactured home as
17defined in subdivision (53) of Section 9-102 of the Uniform
18Commercial Code that is real property as defined in the
19Conveyance and Encumbrance of Manufactured Homes as Real
20Property and Severance Act.
21    "Seller" means every person or entity who:
22        (1) is a beneficiary of an Illinois land trust; or
23        (2) has an interest, legal or equitable, in

 

 

HB4322- 2 -LRB102 22898 LNS 32051 b

1    residential property as:
2            (i) an owner; ,
3            (ii) a beneficiary of a trust; ,
4            (iii) a beneficiary pursuant to testate
5        disposition, intestate succession, or a transfer on
6        death instrument; or
7            (iv) a contract purchaser or lessee of a ground
8        lease, who has an interest (legal or equitable) in
9        residential real property. However, "seller" shall not
10        include any person who has both (i) never occupied the
11        residential real property and (ii) never had the
12        management responsibility for the residential real
13        property nor delegated such responsibility for the
14        residential real property to another person or entity.
15    "Seller" does not include a party to a transfer that is
16exempt under Section 15.
17    "Prospective buyer" means any person or entity negotiating
18or offering to become an owner or lessee of a ground lease of
19residential real property by means of a transfer for value to
20which this Act applies.
21    "Contract" means a written agreement by the seller and
22prospective buyer that would, subject to the satisfaction of
23any negotiated contingencies, require the prospective buyer to
24accept a transfer of the residential real property.
25(Source: P.A. 98-749, eff. 7-16-14; 99-78, eff. 7-20-15.)
 

 

 

HB4322- 3 -LRB102 22898 LNS 32051 b

1    (765 ILCS 77/15)
2    Sec. 15. Seller exemptions. The provisions of this Act do
3not apply to the following: A seller in any of the following
4transfers is exempt from this Act, regardless of whether a
5disclosure report is delivered:
6    (1) Transfers pursuant to court order, including, but not
7limited to, transfers ordered by a probate court in
8administration of an estate, transfers between spouses
9resulting from a judgment of dissolution of marriage or legal
10separation, transfers pursuant to an order of possession,
11transfers by a trustee in bankruptcy, transfers by eminent
12domain, and transfers resulting from a decree for specific
13performance.
14    (2) Transfers from a mortgagor to a mortgagee by deed in
15lieu of foreclosure or consent judgment, transfer by judicial
16deed issued pursuant to a foreclosure sale to the successful
17bidder or the assignee of a certificate of sale, transfer by a
18collateral assignment of a beneficial interest of a land
19trust, or a transfer by a mortgagee or a successor in interest
20to the mortgagee's secured position or a beneficiary under a
21deed in trust who has acquired the real property by deed in
22lieu of foreclosure, consent judgment or judicial deed issued
23pursuant to a foreclosure sale.
24    (3) Transfers by a fiduciary in the course of the
25administration of a decedent's estate, guardianship,
26conservatorship, or trust. As used in this paragraph, "trust"

 

 

HB4322- 4 -LRB102 22898 LNS 32051 b

1includes an Illinois land trust.
2    (4) Transfers from one co-owner to one or more other
3co-owners.
4    (5) Transfers from a decedent pursuant to testate
5disposition, or intestate succession, or a transfer on death
6instrument.
7    (6) Transfers made to a spouse, or to a person or persons
8in the lineal line of consanguinity of one or more of the
9sellers.
10    (7) Transfers from an entity that has taken title to
11residential real property from a seller for the purpose of
12assisting in the relocation of the seller, so long as the
13entity makes available to all prospective buyers a copy of the
14disclosure report form furnished to the entity by the seller.
15    (8) Transfers to or from any governmental entity.
16    (9) Transfers of newly constructed residential real
17property that has never not been occupied. This does not
18include rehabilitation of an existing home.
19(Source: P.A. 88-111.)
 
20    (765 ILCS 77/20)
21    Sec. 20. Disclosure report requirements. A seller of
22residential real property shall complete all applicable items
23in the disclosure report document described in Section 35 of
24this Act. The seller shall deliver to the prospective buyer
25the written disclosure report statement required by this Act

 

 

HB4322- 5 -LRB102 22898 LNS 32051 b

1before the signing of a contract written agreement by the
2seller and prospective buyer that would, subject to the
3satisfaction of any negotiated contingencies, require the
4prospective buyer to accept a transfer of the residential real
5property.
6(Source: P.A. 88-111.)
 
7    (765 ILCS 77/30)
8    Sec. 30. Disclosure report supplement. If, prior to
9closing, any seller becomes aware has actual knowledge of an
10error, inaccuracy, or omission in any prior disclosure report
11or supplement document after delivery of that disclosure
12report or supplement document to a prospective buyer, that
13seller shall supplement the prior disclosure report or
14supplement document with a written supplemental disclosure,
15delivered by any method set forth in Section 50.
16(Source: P.A. 90-383, eff. 1-1-98; 91-357, eff. 7-29-99.)
 
17    (765 ILCS 77/35)
18    Sec. 35. Disclosure report form. The disclosures required
19of a seller by this Act shall be made in the following form:
20
RESIDENTIAL REAL PROPERTY DISCLOSURE REPORT
21    NOTICE: THE PURPOSE OF THIS REPORT IS TO PROVIDE
22PROSPECTIVE BUYERS WITH INFORMATION ABOUT MATERIAL DEFECTS IN
23THE RESIDENTIAL REAL PROPERTY BEFORE THE SIGNING OF A
24CONTRACT. THIS REPORT DOES NOT LIMIT THE PARTIES' RIGHT TO

 

 

HB4322- 6 -LRB102 22898 LNS 32051 b

1CONTRACT FOR THE SALE OF RESIDENTIAL REAL PROPERTY IN "AS IS"
2CONDITION. UNDER COMMON LAW, SELLERS WHO DISCLOSE MATERIAL
3DEFECTS MAY BE UNDER A CONTINUING OBLIGATION TO ADVISE THE
4PROSPECTIVE BUYERS ABOUT THE CONDITION OF THE RESIDENTIAL REAL
5PROPERTY EVEN AFTER THE REPORT IS DELIVERED TO THE PROSPECTIVE
6BUYER. COMPLETION OF THIS REPORT BY THE SELLER CREATES LEGAL
7OBLIGATIONS ON THE SELLER; THEREFORE THE SELLER MAY WISH TO
8CONSULT AN ATTORNEY PRIOR TO COMPLETION OF THIS REPORT.
9Property Address: ...........................................
10City, State & Zip Code: .....................................
11Seller's Name: ..............................................
12    This Report is a disclosure of certain conditions of the
13residential real property listed above in compliance with the
14Residential Real Property Disclosure Act. This information is
15provided as of ...(month) ...(day) ...(year), and does not
16reflect any changes made or occurring after that date or
17information that becomes known to the seller after that date.
18The disclosures herein shall not be deemed warranties of any
19kind by the seller or any person representing any party in this
20transaction.
21    In this form, "am aware" means to have actual notice or
22actual knowledge without any specific investigation or
23inquiry. In this form, "material defect" means a condition
24that would have a substantial adverse effect on the value of
25the residential real property or that would significantly
26impair the health or safety of future occupants of the

 

 

HB4322- 7 -LRB102 22898 LNS 32051 b

1residential real property unless the seller reasonably
2believes that the condition has been corrected.
3    The seller discloses the following information with the
4knowledge that even though the statements herein are not
5deemed to be warranties, prospective buyers may choose to rely
6on this information in deciding whether or not and on what
7terms to purchase the residential real property.
8    The seller represents that to the best of his or her actual
9knowledge, the following statements have been accurately noted
10as "yes" (correct), "no" (incorrect), or "not applicable" to
11the property being sold. If the seller indicates that the
12response to any statement, except number 1, is yes or not
13applicable, the seller shall provide an explanation, in the
14additional information area of this form.
15YESNON/A
161................Seller has occupied the property
17 within the last 12 months.
18
19 (If "no," please explain relationship to property.) (No explanation is needed.)
202. ..... ..... ..... I currently have flood hazard
21 insurance on the property.
223 2................I am aware of flooding or recurring
23 leakage problems in the crawl
24 space or basement.
254 3................I am aware that the property is
26 located in a floodplain flood plain or

 

 

HB4322- 8 -LRB102 22898 LNS 32051 b

1 that I currently have flood hazard
2 insurance on the property.
35 4................I am aware of material defects in
4 the basement or foundation
5 (including cracks and bulges).
66 5................I am aware of leaks or material
7 defects in the roof, ceilings, or
8 chimney.
97 6................I am aware of material defects in
10 the walls, windows, doors, or floors.
118 7................I am aware of material defects in
12 the electrical system.
139 8................I am aware of material defects in
14 the plumbing system (includes
15 such things as water heater, sump
16 pump, water treatment system,
17 sprinkler system, and swimming
18 pool).
1910 9................I am aware of material defects in
20 the well or well equipment.
2111 10................I am aware of unsafe conditions in
22 the drinking water.
2312 11................I am aware of material defects in
24 the heating, air conditioning, or
25 ventilating systems.
2613 12................I am aware of material defects in

 

 

HB4322- 9 -LRB102 22898 LNS 32051 b

1 the fireplace or woodburning
2 stove.
314 13................I am aware of material defects in
4 the septic, sanitary sewer, or
5 other disposal system.
615 14................I am aware of unsafe concentrations
7 of radon on the premises.
816 15................I am aware of unsafe concentrations
9 of or unsafe conditions relating
10 to asbestos on the premises.
1117 16................I am aware of unsafe concentrations
12 of or unsafe conditions relating
13 to lead paint, lead water pipes,
14 lead plumbing pipes or lead in
15 the soil on the premises.
1618 17................I am aware of mine subsidence,
17 underground pits, settlement,
18 sliding, upheaval, or other earth
19 stability defects on the
20 premises.
2119 18................I am aware of current infestations
22 of termites or other wood boring
23 insects.
2420 19................I am aware of a structural defect
25 caused by previous infestations
26 of termites or other wood boring

 

 

HB4322- 10 -LRB102 22898 LNS 32051 b

1 insects.
221 20................I am aware of underground fuel
3 storage tanks on the property.
422 21................I am aware of boundary or lot line
5 disputes.
623 22................I have received notice of violation
7 of local, state or federal laws
8 or regulations relating to this
9 property, which violation has not
10 been corrected.
1124 23................I am aware that this property has
12 been used for the manufacture
13 of methamphetamine as
14 defined in Section 10 of
15 the Methamphetamine Control
16 and Community Protection Act.
17    Note: These disclosures are not intended to cover the
18common elements of a condominium, but only the actual
19residential real property including limited common elements
20allocated to the exclusive use thereof that form an integral
21part of the condominium unit.
22    Note: These disclosures are intended to reflect the
23current condition of the premises and do not include previous
24problems, if any, that the seller reasonably believes have
25been corrected.
26    If any of the above are marked "not applicable" or "yes",

 

 

HB4322- 11 -LRB102 22898 LNS 32051 b

1please explain here or use additional pages, if necessary:
2.............................................................
3.............................................................
4.............................................................
5    Check here if additional pages used: .....
6    Seller certifies that seller has prepared this report
7statement and certifies that the information provided is based
8on the actual notice or actual knowledge of the seller without
9any specific investigation or inquiry on the part of the
10seller. The seller hereby authorizes any person representing
11any principal in this transaction to provide a copy of this
12report, and to disclose any information in the report, to any
13person in connection with any actual or anticipated sale of
14the property.
15    (This paragraph shall be printed in boldface type.) THE
16SELLER ACKNOWLEDGES THAT THE SELLER IS REQUIRED TO PROVIDE
17THIS DISCLOSURE REPORT TO THE PROSPECTIVE BUYER BEFORE THE
18SIGNING OF THE CONTRACT AND HAS A CONTINUING OBLIGATION,
19PURSUANT TO SECTION 30 OF THE RESIDENTIAL REAL PROPERTY
20DISCLOSURE ACT, TO SUPPLEMENT THIS DISCLOSURE PRIOR TO
21CLOSING.
22Seller: ............................... Date: ...............
23Seller: ............................... Date: ...............
24    THE PROSPECTIVE BUYER IS AWARE THAT THE PARTIES MAY CHOOSE
25TO NEGOTIATE AN AGREEMENT FOR THE SALE OF THE PROPERTY SUBJECT
26TO ANY OR ALL MATERIAL DEFECTS DISCLOSED IN THIS REPORT ("AS

 

 

HB4322- 12 -LRB102 22898 LNS 32051 b

1IS"). THIS DISCLOSURE IS NOT A SUBSTITUTE FOR ANY INSPECTIONS
2OR WARRANTIES THAT THE PROSPECTIVE BUYER OR SELLER MAY WISH TO
3OBTAIN OR NEGOTIATE. (The remainder of this paragraph shall be
4printed in boldface type.) THE FACT THAT THE SELLER IS NOT
5AWARE OF A PARTICULAR CONDITION OR PROBLEM IS NO GUARANTEE
6THAT IT DOES NOT EXIST. THE PROSPECTIVE BUYER IS AWARE THAT THE
7PROSPECTIVE BUYER HE MAY REQUEST AN INSPECTION OF THE PREMISES
8PERFORMED BY A QUALIFIED PROFESSIONAL.
9Prospective Buyer: .................. Date: ...... Time: ....
10Prospective Buyer: .................. Date: ...... Time: ....
11(Source: P.A. 98-754, eff. 1-1-15.)
 
12    (765 ILCS 77/40)
13    Sec. 40. Material defect.
14    (a) If a seller discloses a material defect in the
15Residential Real Property Disclosure Report, including a
16response to any statement that is answered "yes" except
17numbers 1 and 2, and, in violation of Section 20, it is
18delivered to the prospective buyer after all parties have
19signed a contract, the prospective buyer, within 5 business
20days after receipt of that report, may terminate the contract
21or other agreement with the return of all earnest money
22deposits or down payments paid by the prospective buyer in the
23transaction without any liability to or recourse by the
24seller. If a material defect is disclosed in the Residential
25Real Property Disclosure Report, after acceptance by the

 

 

HB4322- 13 -LRB102 22898 LNS 32051 b

1prospective buyer of an offer or counter-offer made by a
2seller or after the execution of an offer made by a prospective
3buyer that is accepted by the seller for the conveyance of the
4residential real property, then the prospective buyer may,
5within 3 business days after receipt of that report by the
6prospective buyer, terminate the contract or other agreement
7without any liability or recourse except for the return to
8prospective buyer of all earnest money deposits or down
9payments paid by prospective buyer in the transaction.
10    (b) If a seller discloses a material defect is disclosed
11in a supplement to this disclosure report document, the
12prospective buyer shall not have a right to terminate unless:
13(i) the material defect results from an error, inaccuracy, or
14omission of which the seller had actual knowledge at the time
15the prior disclosure document was completed and signed by the
16seller; (ii) the material defect is not repairable prior to
17closing; or (iii) the material defect is repairable prior to
18closing, but within 5 business days after the delivery of the
19supplemental disclosure, the seller declines, or otherwise
20fails to agree in writing, to repair the material defect.
21    (c) The right to terminate the contract, however, shall no
22longer exist after the conveyance of the residential real
23property. For purposes of this Act the termination shall be
24deemed to be made when written notice of termination is
25personally delivered to at least one of the sellers by any
26method set forth in Section 50, at the contact information

 

 

HB4322- 14 -LRB102 22898 LNS 32051 b

1provided by any seller or indicated in the contract or other
2agreement. Nothing in subsection (a) or (b) shall limit the
3remedies available under the contract or Section 55 identified
4in the contract or other agreement or when deposited,
5certified or registered mail, with the United States Postal
6Service, addressed to one of the sellers at the address
7indicated in the contract or agreement, or, if there is not an
8address contained therein, then at the address indicated for
9the residential real property on the report.
10(Source: P.A. 90-383, eff. 1-1-98.)
 
11    (765 ILCS 77/45)
12    Sec. 45. Other law. This Act is not intended to limit
13remedies or modify any obligation to disclose created by any
14other statute or that may exist in common law in order to avoid
15fraud, misrepresentation, or deceit in the transaction.
16(Source: P.A. 88-111.)
 
17    (765 ILCS 77/50)
18    Sec. 50. Delivery of disclosure report. Delivery of the
19Residential Real Property Disclosure Report provided by this
20Act shall be by:
21        (1) personal delivery or facsimile, email, or other
22    electronic delivery to the prospective buyer at the
23    contact information provided by the prospective buyer or
24    indicated in the contract or other agreement;

 

 

HB4322- 15 -LRB102 22898 LNS 32051 b

1        (2) depositing the report with the United States
2    Postal Service, postage prepaid, first class mail,
3    addressed to the prospective buyer at the address provided
4    by the prospective buyer or indicated on the contract or
5    other agreement; or
6        (3) depositing the report with an alternative delivery
7    service such as Federal Express or , UPS, or Airborne,
8    delivery charges prepaid, addressed to the prospective
9    buyer at the address provided by the prospective buyer or
10    indicated on the contract or other agreement.
11    For purposes of this Act, delivery to one prospective
12buyer is deemed delivery to all prospective buyers. Delivery
13to an authorized individual acting on behalf of a prospective
14buyer constitutes delivery to all prospective buyers. Delivery
15of the report is effective upon receipt by the prospective
16buyer. Receipt may be acknowledged on the report, acknowledged
17in an agreement for the conveyance of the residential real
18property, or shown in any other verifiable manner.
19(Source: P.A. 91-357, eff. 7-29-99.)
 
20    (765 ILCS 77/55)
21    Sec. 55. Violations and damages. If the seller fails or
22refuses to provide the disclosure report document prior to the
23conveyance of the residential real property, the prospective
24buyer shall have the right to terminate the contract. A seller
25person who knowingly violates or fails to perform any duty

 

 

HB4322- 16 -LRB102 22898 LNS 32051 b

1prescribed by any provision of this Act or who discloses any
2information on the Residential Real Property Disclosure Report
3that the seller he knows to be false shall be liable in the
4amount of actual damages and court costs, and the court may
5award reasonable attorney's attorney fees incurred by the
6prevailing party.
7(Source: P.A. 90-383, eff. 1-1-98.)
 
8    Section 99. Effective date. This Act takes effect upon
9becoming law.

 

 

HB4322- 17 -LRB102 22898 LNS 32051 b

1 INDEX
2 Statutes amended in order of appearance
3    765 ILCS 77/5
4    765 ILCS 77/15
5    765 ILCS 77/20
6    765 ILCS 77/30
7    765 ILCS 77/35
8    765 ILCS 77/40
9    765 ILCS 77/45
10    765 ILCS 77/50
11    765 ILCS 77/55