Public Act 093-0727
 
SB2329 Enrolled LRB093 18462 DRJ 44174 b

    AN ACT in relation to housing.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Federally Subsidized Housing Preservation
Act is amended by changing Sections 1, 3, 4, 5, 6, 7, 8, and
10.1 as follows:
 
    (310 ILCS 60/1)  (from Ch. 67 1/2, par. 1151)
    Sec. 1. Short title. This Act shall be known and may be
cited as the Federally Assisted Subsidized Housing
Preservation Act.
(Source: P.A. 86-810.)
 
    (310 ILCS 60/3)  (from Ch. 67 1/2, par. 1153)
    Sec. 3. Definitions. As used in this Act:
    (a) "IHDA" means the Illinois Housing Development
Authority.
    (b) (Blank). "FmHA" means the Farmers Home Administration
or a local housing authority administering an FmHA program.
    (c) (Blank). "HUD" means the United States Department of
Housing and Urban Development, or the Federal Housing
Administration or a local housing authority administering a HUD
program.
    (d) "Owner" means the person, partnership, or corporation
that holds title to an assisted housing development is a party
to a contract with HUD or FmHA providing for a mortgage,
mortgage assistance, mortgage insurance, or rent subsidy; or
any spouse, employee, agent, partner, master lessee, business
affiliate or associate, or successor in interest of such
person, partnership or corporation, that receives or demands
rent for the subsidized housing.
    (e) "Assisted housing" or "assisted housing development"
means a rental housing development, or a mixed use development
that includes rental housing, that receives government
assistance under any of the following programs:
        (1) New construction, substantial rehabilitation,
    moderate rehabilitation, property disposition and loan
    management set-aside programs, or any other program
    providing project-based rental assistance, under Section 8
    of the United States Housing Act of 1937, as amended.
        (2) The Below-Market-Interest-Rate Program under
    Section 221(d)(3) of the National Housing Act.
        (3) Section 236 of the National Housing Act.
        (4) Section 202 of the National Housing Act.
        (5) Programs for rent supplement assistance under
    Section 101 of the Housing and Urban Development Act of
    1965, as amended.
        (6) Programs under Section 514 or 515 of the Housing
    Act of 1949.
        (7) Section 42 of the Internal Revenue Code.
    "Subsidized housing" means any housing or unit of housing
    financed by a loan or mortgage insured or held by HUD as
    follows:
    (1) insured or held by HUD under Section 221(d)(3) of the
National Housing Act and assisted under Section 101 of the
Housing and Urban Development Act of 1965 or Section 8 of the
United States Housing Act of 1937;
    (2) insured or held by HUD and bears interest at a rate
determined under the proviso of Section 221(d)(3) of the
National Housing Act;
    (3) insured, assisted or held by HUD under Section 236 of
the National Housing Act;
    (4) insured or held by HUD under Section 514 or 515 of the
Housing Act of 1949; or
    (5) held by HUD and formerly insured under a program listed
in this subsection (e).
    (f) "Tenant" means a tenant, subtenant, lessee, sublessee
or other person entitled to possession, occupancy or benefits
of a rental unit within the assisted subsidized housing.
    (g) "Tenant Association" means an association, corporation
or other organization that represents at least a majority of
the tenants in the assisted subsidized housing building.
    (h) "Prepayment" means the payment in full or refinancing
of the federally insured or federally held mortgage
indebtedness prior to its original maturity date, or the
voluntary cancellation of mortgage insurance, on an assisted
housing development described in paragraph (2), (3), or (4) of
subsection (e) that would have the effect of removing the
affordability restrictions applicable to the assisted housing
development under the programs described in paragraph (2), (3),
or (4) of subsection (e).
    (i) "Termination" means:
        (1) the expiration or early termination of an assisted
    housing development's participation in a federal subsidy
    program for assisted housing described in paragraph (1) of
    subsection (e), or
        (2) the expiration or early termination of an assisted
    housing development's affordability restrictions described
    in Section 42(g) of the Internal Revenue Code for assisted
    housing described in paragraph (7) of subsection (e), when
    that event results in an increase in tenant rents, a change
    in the form of subsidy from project-based to tenant-based,
    or a change in use of the assisted housing development to a
    use other than rental housing.
    (j) "Affected public entities" means: the mayor of the city
in which the assisted housing development is located or, if the
development is located in an unincorporated area, the
chairperson of the county board; the public housing authority
in whose jurisdiction the assisted housing development is
located, if any; and IHDA.
    (k) "Affordability restrictions" means limits on rents
that owners may charge for occupancy of a rental unit in
assisted housing and limits on tenant income for persons or
families seeking to qualify as tenants in assisted housing.
(Source: P.A. 86-810.)
 
    (310 ILCS 60/4)  (from Ch. 67 1/2, par. 1154)
    Sec. 4. Notice of intent to sell.
    (a) An owner may not sell or otherwise dispose of assisted
subsidized housing, complete prepayment, or complete a
termination unless, not less than 12 6 months before the
prepayment, termination, sale, or disposal, the owner submits
to all tenants of the assisted subsidized housing and to all
affected public entities IHDA a notice of intent to complete
prepayment, complete termination, sell, or otherwise dispose
of the property.
    (a-5) Every notice required under subsection (a) must
include the address of the assisted housing, characteristics of
the property including the number of units, and the names and
addresses of the owners. The notice must also include the date
on which the owner intends to sell, lease, complete prepayment,
complete termination, or otherwise dispose of the property, as
well as a detailed list of affordability restrictions
applicable to the property. IHDA shall adopt rules concerning
the content, format, delivery, and publication of such notices.
    (b) Within 60 days after the date of the owner's notice
pursuant to subsection (a), the tenants may notify the owner
that they have formed a Tenant Association meeting the
requirements of this Act and shall designate the name of its
representative or representatives in the notice. The Tenant
Association may enter into an agreement with a not-for-profit
corporation or private purchaser in which the not-for-profit
corporation or private purchaser agrees to represent the
residents and maintain the development in a manner that
preserves the housing development's existing affordability
restrictions or that would qualify the housing development as
affordable housing as defined in the Illinois Affordable
Housing Act. The agreement must set forth the minimum length of
time that the affordability restrictions will be in effect. The
Tenant Association and individual tenants in the assisted
housing shall each have the right to bring an action for
specific performance or other injunctive relief for
enforcement of the agreement, and the agreement must contain
provisions to this effect along with such other remedies for
breach as the Tenant Association and the not-for-profit
corporation or private purchaser may agree. Once such an
agreement is entered into, the not-for-profit corporation or
private purchaser shall assume all rights and responsibilities
attributed to the Tenant Association under this Act.
(Source: P.A. 86-810; 86-1352.)
 
    (310 ILCS 60/5)  (from Ch. 67 1/2, par. 1155)
    Sec. 5. Offer for sale to Tenant Association. Within 60
days after the Tenant Association has complied with the
requirements of Section 4, the owner shall, before selling,
leasing, completing prepayment, completing termination, or
otherwise disposing of the property, provide to the Tenant
Association a bona fide offer for sale of the property which
shall contain the essential terms of the sale, including, at a
minimum, the following: the sales price; the terms of seller
financing, if any, including the amount, the interest rate, and
amortization rate thereof; the terms of assumable financing, if
any, including the amount, the interest rate, and the
amortization rate thereof; and proposed improvements, if any,
to the property to be made by the owner in connection with the
sale.
(Source: P.A. 86-810.)
 
    (310 ILCS 60/6)  (from Ch. 67 1/2, par. 1156)
    Sec. 6. Notice of intent to purchase.
    (a) The Tenant Association shall notify the owner in
writing, within 90 30 days after the receipt of the bona fide
offer of sale, of its intent to purchase the assisted
subsidized housing.
    (b) The owner shall, after receiving a notice pursuant to
subsection (a), comply with any reasonable request to make
documents available to the Tenant Association, during normal
business hours at the owner's principal place of business
within 15 days of receiving such a request, including but not
limited to: a floor plan of the development; itemized lists of
monthly operating expenses, capital expenditures in each of the
2 preceding calendar years and deferred maintenance costs; the
amount of project reserves; utility consumption rates; copies
of financial and physical inspection reports filed with
federal, State or local agencies; the most recent rent roll; a
list of tenants; a list of vacant units; and a statement of the
vacancy rate at the development for each of the 2 preceding
calendar years.
(Source: P.A. 86-810.)
 
    (310 ILCS 60/7)  (from Ch. 67 1/2, par. 1157)
    Sec. 7. Bona fide offer to purchase; contract.
    (a) The Tenant Association shall, within 90 days after it
notifies the owner of its intent to purchase, provide the owner
with a bona fide offer to purchase evidenced by a purchase
contract reflecting a sales price and terms agreed to by the
parties or the sales price and terms determined pursuant to
subsection (b) of this Section and an earnest money deposit
equal to 5% of the bona fide offer to purchase.
    (b) If the parties are unable to agree to a sales price
within the first 60 days of the 90 day period specified in
subsection (a), the sale price of the assisted subsidized
housing shall be based upon its fair market value, based on its
highest and best use, without affordability restrictions, as
determined by 2 independent appraisers qualified to perform
multi-family housing appraisals. One appraiser shall be
selected and paid by the owner and the other shall be selected
and paid by the Tenant Association. If the appraisers fail to
agree upon a fair market value, the owner and the Tenant
Association shall either jointly select and pay a third
appraiser whose appraisal shall be binding, or agree to take an
average of the 2 appraisals. All appraisers shall be MAI
certified. The determination of the sales price pursuant to
this subsection shall be completed within the 90 day period
specified in subsection (a) of this Section.
    (c) The Tenant Association shall agree to close on the sale
within 90 days from the date the parties sign the contract to
purchase.
(Source: P.A. 86-810; 86-1352.)
 
    (310 ILCS 60/8)  (from Ch. 67 1/2, par. 1158)
    Sec. 8. The provisions of this Act shall not apply to any
of the following: a government taking by eminent domain or
negotiated purchase; a forced sale pursuant to a foreclosure;
or a transfer by gift, devise or operation of law; or an
owner's sale or other disposition of assisted housing in a
manner pursuant to which the property after the sale or other
disposition continues to be assisted housing as defined in this
Act.
(Source: P.A. 86-810.)
 
    (310 ILCS 60/10.1)  (from Ch. 67 1/2, par. 1160.1)
    Sec. 10.1. Civil action against owner. The Tenant
Association, or one or more tenants in the assisted subsidized
housing, may bring a civil action against an owner who has
violated this Act. An owner found to have violated any
provision of this Act shall, in addition to any other damages,
pay a civil penalty to each tenant in the assisted subsidized
housing in the amount of $500 per tenant, and shall also pay
the attorney's fees and costs incurred in bringing the action.
(Source: P.A. 86-810; 86-1352)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.