Illinois Enacts Fast Track Foreclosure Law for Abandoned Residential Property
February 18, 2013 | Carolyn M. Artus, Esq.
On February 8, 2013, Illinois Governor Pat Quinn signed into law legislation which will reduce the overall foreclosure process for abandoned residential property throughout Illinois to a period of 90 to 180 days. The law becomes effective June 1, 2013.
Abandoned Residential Property Defined
The new law defines abandoned residential property as residential real estate that is not legally occupied and where two or more of the following conditions exist:
(1) Any construction work has been discontinued for at least 6 months and the property is not in habitable condition;
(2) The property has multiple broken or boarded windows or multiple broken window panes;
(3) The property has broken or continually unlocked doors;
(4) The property has been stripped of materials or has had fixtures removed;
(5) Gas, electrical or water services are terminated;
(6) The mortgagor indicates in writing a clear intent to abandon;
(7) Law enforcement receives a report of trespassing, vandalism, or other illegal acts committed at the property within the prior 6 months;
(8) A court or municipality declares the property unfit for occupancy and orders the property to remain vacant;
(9) The police, fire department or code enforcement authority asks that the property be secured and winterized for health and safety reasons;
(10) The property is open and unprotected and in reasonable danger of significant damage due to exposure to the elements, vandalism, or freezing; or
(11) There is other evidence indicating a clear intent to abandon.
Vacant does not necessarily mean abandoned. If vacant property is secure and in substantial compliance with applicable ordinances, codes, regulations, and laws, the property is not considered abandoned for the purposes of this law.
If a lender or its agent determines in good faith that the mortgaged real estate meets the definition of abandoned residential property, then the lender or its agent may enter, secure, and maintain the abandoned residential property without being subject to liability for civil or criminal trespass.
Expedited Foreclosure Process
The new law provides that the lender may file a motion to request an expedited foreclosure based on abandonment at the time that the foreclosure complaint is filed or any time thereafter. The court must give this type of motion priority, and rule on the motion within a specified time period depending on when the motion was filed. The motion must set forth facts demonstrating that the property constitutes abandoned residential property and must be supported by affidavit. If the lender complies with certain notice requirements and the court makes a finding that the mortgaged real estate is abandoned residential property, then the court should grant the motion and proceed immediately to a trial of the foreclosure claim. If the lender prevails, the mortgagor’s right to reinstatement or redemption expires 30 days from the date the court enters the judgment of foreclosure and sale. Upon expiration of the 30 day redemption period, the abandoned residential property shall be sold at judicial sale at the earliest practicable time. The judicial sale is still subject to confirmation by the court.
Additional Filing Fees
The new law will require lenders to pay additional filing fees for foreclosure actions through the end of 2017. The additional fees will be based on a sliding scale depending on how many foreclosures the lender and its affiliates or servicers filed in the preceding calendar year. If it filed more than 175 foreclosures, the additional fee is $500.00 per foreclosure; if it filed between 50 and 175 foreclosures, the additional fee is $250.00 per foreclosure; and if it filed less than 50 foreclosures, the additional fee is $50.00 per foreclosure. The additional fees will be paid into the Foreclosure Prevention Program Fund and the Abandoned Residential Property Municipality Relief Fund. According to the Governor’s Office, these additional fees will provide millions of dollars annually statewide for housing counseling assistance and to local governments to maintain and secure abandoned residential properties.
In order to benefit from this expedited foreclosure process for abandoned residential property, lenders and its affiliates or servicers need to document account files diligently with any evidence that supports a finding of abandonment.