Construction Law

(Burke, D-Evergreen Park; Mulroe, D-Chicago) does three things in response to the LaSalle Bank National Association vs. Cypress Creek opinion. (1) Requires that the owner or interested person’s demand for suit to be commenced or answered within 30 days must contain this language in at least 10-point, boldface type: “Failure to respond to this notice within 30 days after receipt, as required by Section 34 of the Mechanics Lien Act, shall result in the forfeiture of the referenced lien.” (2) Defines a “lien creditor” as someone who does work or furnishes material under this Act. A lien creditor is preferred over other encumbrances except that previous encumbrances are preferred only to the extent of the value of the land at the time the contract was made for the improvements, and each lien creditor is preferred to the value of all later improvements regardless of whether the lien creditor provided those improvements. (3) If the sale proceeds are insufficient to satisfy claims of both prior encumbrances and lien creditors, the sale proceeds are to be distributed as follows. (a) Any previous encumbrance has a paramount lien in the portion of the proceeds attributable to the value of the land at the time of making of the contract for improvements. (b) Any lien creditors have a paramount lien in the portion of the proceeds attributable to all later improvements made to the property. (4) It has an immediate effective date. House Bill 3636 is in the House awaiting concurrence on Senate Amendment No. 2.

(Harmon, D-Oak Park; Zalewski, D-Chicago) conforms Article 9 of the Uniform Commercial Code to the 2010 amendments as proposed by the Uniform Law Commission. (See the June Illinois Bar Journal article by Michelle Nijm that discusses this bill in more detail.) Effective July 1, 2013.

(Althoff, R-Crystal Lake; Tyron, R-Crystal Lake) requires work to be done or materials furnished within three years for residential property and five years for any other kind of property. Senate Bill 3792 sunsets on January 1, 2016; at which time the limitation then reverts to three years for any kind of property at that time. Effective January 1, 2013.

(McAsey, D-Lockport; Collins, D-Chicago) creates the Radon Resistant Construction Act. It requires all new residential construction include passive radon resistant construction. "New residential construction" is any original construction of a single-family home or a dwelling containing two or fewer apartments, condominiums, or townhouse. "Passive radon resistant construction" includes an installed pipe that relies solely on the convective flow of air upward for soil-gas depressurization and may consist of multiple pipes routed through conditioned space from below the foundation to the roof above. Effective June 1, 2013.

(Williams, D-Chicago; Haine, D-Alton) makes three changes to citations and body attachments. (1) It requires a citation to be served by personal service or abode service as provided in Supreme Court Rule 105 attaching a copy of the statutory Income and Asset Form created by this bill. (2) It prohibits a payment order from being issued against a person unless the form was served on the debtor, the debtor has an opportunity to assert exemptions, and the payments are from nonexempt sources. (3) No order of body attachment or other civil order for incarceration may be issued for a respondent on a charge of indirect civil contempt unless the respondent has first had an opportunity to appear in court to answer after personal service or abode service of notice as provided in Section 2-203. It exempts enforcement for a violation of a municipal ordinance. (See the June Illinois Bar Journal article by Adam W. Lasker that discusses this bill in more detail.) Effective July 25, 2012.

(Zalewski, D-Chicago; Harmon, D-Oak Park) amends the Secured Transactions Article of the Uniform Commercial Code. It prohibits a person from filing or cause to be filed a false record that the person knows or reasonably should know is (1) not authorized or permitted under specified provisions; (2) not related to a valid existing or potential commercial or financial transaction, an existing agricultural or other lien, or a judgment of a court of competent jurisdiction; and (3) filed with the intent to harass or defraud the person identified as debtor in the record or any other person. Creates criminal and civil penalties and administrative relief from the Secretary of State. Exempts records filed by a regulated financial institution or its representative. Effective July 20, 2012.

(Yarbrough, D-Maywood; Althoff, R-Crystal Lake) allows recorders in counties of less than 500,000 inhabitants to electronically store recorded documents. They can do so now only if authorized by the county board. Effective July 6, 2012.