Bill Text: IL SB3037 | 2017-2018 | 100th General Assembly | Introduced

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Bill Title: Amends the Real Estate License Act of 2000. Removes specified caps for recovery from the Real Estate Recovery Fund and provides that the caps shall be decided by rule. Provides that the Department of Financial and Professional Regulation may expend moneys from the Fund to procure and pay the premium for a bond, insurance, or other indemnity product in amounts to be determined by the Department in order to compensate an aggrieved person for all or part of his or her loss of money due to a violation of the Act or to fund a program of self-insurance in order to compensate an aggrieved person for all or part of his or her loss of money due to a violation of the Act. Removes provisions permitting an aggrieved party to seek a post-judgment order from the Fund and makes related changes. Replaces references to an aggrieved party seeking a judgment to recover from the Fund with references to an aggrieved party filing a claim to recover from the Fund, and makes similar changes. Makes other changes to provisions concerning collection from the Fund. Repeals a provision concerning the Department's power to defend against actions for collection from the Fund. Effective January 1, 2019.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2019-01-09 - Session Sine Die [SB3037 Detail]

Download: Illinois-2017-SB3037-Introduced.html

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100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB3037 Introduced 2/15/2018, by Sen. Chuck Weaver SYNOPSIS AS INTRODUCED:
225 ILCS 454/20-85
225 ILCS 454/20-90
225 ILCS 454/20-100
225 ILCS 454/20-95 rep.
Amends the Real Estate License Act of 2000. Removes specified caps for recovery from the Real Estate Recovery Fund and provides that the caps shall be decided by rule. Provides that the Department of Financial and Professional Regulation may expend moneys from the Fund to procure and pay the premium for a bond, insurance, or other indemnity product in amounts to be determined by the Department in order to compensate an aggrieved person for all or part of his or her loss of money due to a violation of the Act or to fund a program of self-insurance in order to compensate an aggrieved person for all or part of his or her loss of money due to a violation of the Act. Removes provisions permitting an aggrieved party to seek a post-judgment order from the Fund and makes related changes. Replaces references to an aggrieved party seeking a judgment to recover from the Fund with references to an aggrieved party filing a claim to recover from the Fund, and makes similar changes. Makes other changes to provisions concerning collection from the Fund. Repeals a provision concerning the Department's power to defend against actions for collection from the Fund. Effective January 1, 2019.
LRB100 16110 SMS 31229 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
SB3037 LRB100 16110 SMS 31229 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Real Estate License Act of 2000 is amended
by changing Sections 20-85, 20-90, and 20-100 as follows:
(225 ILCS 454/20-85)
(Section scheduled to be repealed on January 1, 2020)
Sec. 20-85. Recovery from Real Estate Recovery Fund.
(a) The Department shall maintain a Real Estate Recovery
Fund from which any person aggrieved by an act, representation,
transaction, or conduct of a licensee or unlicensed employee of
a licensee that is in violation of this Act or the rules
promulgated pursuant thereto, constitutes embezzlement of
money or property, or results in money or property being
unlawfully obtained from any person by false pretenses,
artifice, trickery, or forgery or by reason of any fraud,
misrepresentation, discrimination, or deceit by or on the part
of any such licensee or the unlicensed employee of a licensee
and that results in a loss of actual cash money, as opposed to
losses in market value, may recover. The aggrieved person may
recover, by a post-judgment order of the circuit court of the
county where the violation occurred in a proceeding described
in Section 20-90 of this Act, an amount of not more than that

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established by rule $25,000 from the Fund for damages sustained
by the act, representation, transaction, or conduct. No ,
together with costs of suit and attorney's fees incurred in
connection therewith of not to exceed 15% of the amount of the
recovery ordered paid from the Fund. However, no person may
recover from the Fund unless the court finds that the person
suffered a loss resulting from intentional misconduct. The
post-judgment order shall not include interest on the judgment.
The maximum liability against the Fund arising out of any one
act shall be as provided by rule in this Section, and the
post-judgment order shall spread the award equitably among all
co-owners or otherwise aggrieved persons, if any. The maximum
liability against the Fund arising out of the activities of any
one licensee or one unlicensed employee of a licensee, since
January 1, 1974, shall be as provided by rule $100,000. Nothing
in this Section shall be construed to authorize recovery from
the Fund unless the loss of the aggrieved person results from
an act or omission of a licensee under this Act who was at the
time of the act or omission acting in such capacity or was
apparently acting in such capacity or their unlicensed employee
and unless the aggrieved person has obtained a valid judgment
and post-judgment order of the court as provided for in Section
20-90 of this Act.
(b) The Department may expend moneys from the Fund to
procure and pay the premium for a bond, insurance, or other
indemnity product in amounts to be determined by the Department

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in order to compensate an aggrieved person for all or part of
his or her loss of money as set forth in subsection (a) or to
fund a program of self-insurance in order to compensate an
aggrieved person for all or part of his or her loss of money as
set forth in subsection (a). The Department may cooperate with
an insurance agency, carrier, entity, or provider, or its
agents in the insurance agency, carrier, entity or provider's
investigation, administration, and payment of claims, or to
procure one or more private vendors to administer a program of
self-insurance and to expend moneys from the Fund for any other
purpose necessary to effectuate the purposes of this Section.
The Fund shall not pay attorney's fees or costs incurred or
claimed to have been incurred by an aggrieved person in
connection with a claim against the Fund.
(Source: P.A. 99-227, eff. 8-3-15; 100-534, eff. 9-22-17.)
(225 ILCS 454/20-90)
(Section scheduled to be repealed on January 1, 2020)
Sec. 20-90. Collection from Real Estate Recovery Fund;
procedure.
(a) No claim for payment action for a judgment that
subsequently results in a post-judgment order for collection
from the Real Estate Recovery Fund shall be made started later
than 2 years after the date on which the aggrieved person knew,
or through the use of reasonable diligence should have known,
of the acts or omissions giving rise to a right of recovery

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from the Real Estate Recovery Fund.
(b) When any aggrieved person commences action for a
judgment that may result in collection from the Real Estate
Recovery Fund, the aggrieved person files a claim that may
result in collection from the Real Estate Recovery Fund, the
aggrieved person must identify name as parties defendant to
that action any and all licensees, their employees, or
independent contractors who allegedly committed or are
responsible for acts or omissions giving rise to a right of
recovery from the Real Estate Recovery Fund. Failure to
identify name as parties defendant such licensees, their
employees, or independent contractors shall preclude recovery
from the Real Estate Recovery Fund of any portion of any
judgment received in such an action. These parties defendant
shall also include any corporations, limited liability
companies, partnerships, registered limited liability
partnership, or other business associations licensed under
this Act that may be responsible for acts giving rise to a
right of recovery from the Real Estate Recovery Fund.
(c) (Blank).
(d) (Blank). When any aggrieved person commences action for
a judgment that may result in collection from the Real Estate
Recovery Fund, and the aggrieved person is unable to obtain
legal and proper service upon the parties defendant licensed
under this Act under the provisions of Illinois law concerning
service of process in civil actions, the aggrieved person may

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petition the court where the action to obtain judgment was
begun for an order to allow service of legal process on the
Secretary. Service of process on the Secretary shall be taken
and held in that court to be as valid and binding as if due
service had been made upon the parties defendant licensed under
this Act. In case any process mentioned in this Section is
served upon the Secretary, the Secretary shall forward a copy
of the process by certified mail to the licensee's last address
on record with the Department. Any judgment obtained after
service of process on the Secretary under this Act shall apply
to and be enforceable against the Real Estate Recovery Fund
only. The Department may intervene in and defend any such
action.
(e) (Blank).
(f) The aggrieved person shall give written notice to the
Department within 30 days of the entry of any judgment that is
based on the facts giving rise to a Real Estate Recovery Fund
claim may result in collection from the Real Estate Recovery
Fund. The aggrieved person shall provide the Department with 30
20 days prior written notice of all supplementary proceedings
based on the facts giving rise to the Real Estate Recovery Fund
claim, so as to allow the Department to intervene and
participate in all efforts to collect on the judgment in the
same manner as any party.
(g) When any aggrieved person files a claim recovers a
valid judgment in any court of competent jurisdiction against

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any licensee or an unlicensed employee of any licensee in
accordance with this Section , upon the grounds of fraud,
misrepresentation, discrimination, or deceit, the aggrieved
person shall may, upon the termination of all proceedings,
including review and appeals in connection with the judgment,
file a verified claim in the court in which the judgment was
entered and, upon 30 days' written notice to the Department,
and to the person against whom the judgment was obtained, may
apply to the court for a post-judgment order directing payment
out of the Real Estate Recovery Fund of the amount unpaid upon
the judgment, not including interest on the judgment, and
subject to the limitations stated in Section 20-85 of this Act.
The aggrieved person must set out in that verified claim and
prove at an evidentiary hearing to be held by the court upon
the application that the claim meets all requirements of
Section 20-85 and this Section to be eligible for payment from
the Real Estate Recovery Fund and the aggrieved party shall be
required to show that the aggrieved person:
(1) Is not a spouse of the debtor or debtors or the
personal representative of such spouse.
(2) (Blank). Has complied with all the requirements of
this Section.
(3) Has not recovered any funds arising out of a civil
action based on the facts giving rise to his or her Real
Estate Recovery Fund claim obtained a judgment stating the
amount thereof and the amount owing thereon, not including

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interest thereon, at the date of the application.
(4) Has not previously settled or compromised the claim
sought to be filed against the Real Estate Recovery Fund
made all reasonable searches and inquiries to ascertain
whether the judgment debtor or debtors is possessed of real
or personal property or other assets, liable to be sold or
applied in satisfaction of the judgment.
(5) (Blank). By such search has discovered no personal
or real property or other assets liable to be sold or
applied, or has discovered certain of them, describing them
as owned by the judgment debtor or debtors and liable to be
so applied and has taken all necessary action and
proceedings for the realization thereof, and the amount
thereby realized was insufficient to satisfy the judgment,
stating the amount so realized and the balance remaining
due on the judgment after application of the amount
realized.
(6) (Blank). Has diligently pursued all remedies
against all the judgment debtors and all other persons
liable to the aggrieved person in the transaction for which
recovery is sought from the Real Estate Recovery Fund,
including the filing of an adversary action to have the
debts declared non-dischargeable in any bankruptcy
petition matter filed by any judgment debtor or person
liable to the aggrieved person.
The aggrieved person shall also be required to prove the

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amount of attorney's fees sought to be recovered and the
reasonableness of those fees up to the maximum allowed pursuant
to Section 20-85 of this Act.
(h) (Blank). After conducting the evidentiary hearing
required under this Section, the court, in a post-judgment
order directed to the Department, shall indicate whether
requiring payment from the Real Estate Recovery Fund is
appropriate and, if so, the amount it finds to be payable upon
the claim, pursuant to and in accordance with the limitations
contained in Section 20-85 of this Act, if the court is
satisfied, based upon the hearing, of the truth of all matters
required to be shown by the aggrieved person under subsection
(g) of this Section and that the aggrieved person has fully
pursued and exhausted all remedies available for recovering the
amount awarded by the judgment of the court.
(i) Should the Department pay from the Real Estate Recovery
Fund any amount in settlement of a claim or toward satisfaction
of a judgment against any licensee or an unlicensed employee of
a licensee, the licensee's license shall be automatically
revoked upon the issuance of a determination post-judgment
order authorizing payment from the Real Estate Recovery Fund.
No petition for restoration of a license shall be heard until
repayment has been made in full, plus interest at the rate
prescribed in Section 12-109 of the Code of Civil Procedure of
the amount paid from the Real Estate Recovery Fund on their
account, notwithstanding any provision to the contrary in

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Section 2105-15 of the Department of Professional Regulation
Law of the Civil Administrative Code of Illinois. A discharge
in bankruptcy shall not relieve a person from the penalties and
disabilities provided in this subsection (i).
(j) If, at any time, the money deposited in the Real Estate
Recovery Fund is insufficient to satisfy any duly authorized
claim or portion thereof, the Department shall, when sufficient
money has been deposited in the Real Estate Recovery Fund,
satisfy such unpaid claims or portions thereof, in the order
that such claims or portions thereof were originally filed,
plus accumulated interest at the rate prescribed in Section
12-109 of the Code of Civil Procedure, provided that the
amounts do not exceed the limits set forth in rules adopted by
the Department.
(Source: P.A. 96-856, eff. 12-31-09; 97-1002, eff. 8-17-12.)
(225 ILCS 454/20-100)
(Section scheduled to be repealed on January 1, 2020)
Sec. 20-100. Subrogation of the Department to rights of
claimant judgment creditor. When, upon the order of the court,
the Department has paid from the Real Estate Recovery Fund any
sum to a claimant the judgment creditor, the Department shall
be subrogated to all of the rights of the claimant and the
claimant judgment creditor and the judgment creditor shall
assign all rights, title, and interest in the claim judgment to
the Department and any amount and interest so recovered by the

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Department on the judgment shall be deposited in the Real
Estate Recovery Fund.
(Source: P.A. 96-856, eff. 12-31-09.)
(225 ILCS 454/20-95 rep.)
Section 10. The Real Estate License Act of 2000 is amended
by repealing Section 20-95.
Section 99. Effective date. This Act takes effect January
1, 2019.