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| Public Act 103-0993 | ||||
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AN ACT concerning business. | ||||
Be it enacted by the People of the State of Illinois, | ||||
represented in the General Assembly: | ||||
Section 1. Short title. This Act may be cited as the | ||||
Prohibition of Unfair Service Agreements Act. | ||||
Section 5. Purpose. The General Assembly declares that it | ||||
is the purpose of this Act: | ||||
(1) to prohibit the use of service agreements that are | ||||
unfair to an owner of residential real estate or to | ||||
persons who may become owners of that real estate in the | ||||
future; | ||||
(2) to prohibit the recording of unfair service | ||||
agreements so that the public records will not be clouded | ||||
by them and future owners will not be put to the burden of | ||||
bringing suits to remove them from their chains of title; | ||||
and | ||||
(3) to provide remedies for owners who are | ||||
inconvenienced or damaged by the recording of unfair | ||||
service agreements. | ||||
Section 10. Definitions. As used in this Act: | ||||
"Person" means a natural person, partnership, association, | ||||
cooperative, corporation, trust, or other legal entity. | ||||
"Recording" means presenting a document to a county | ||
recorder for official placement in the public land records. | ||
"Residential real estate" means real property located in | ||
this State that is used primarily for personal, family, or | ||
household purposes and is improved by one to 4 dwelling units. | ||
"Service agreement" means a contract under which a person | ||
agrees to provide services in connection with the maintenance | ||
of or purchase or sale of residential real estate. | ||
"Service provider" means an individual or entity that | ||
provides services to a person. | ||
Section 15. Characteristics of unfair service agreements. | ||
(a) A service agreement is unfair under this Act if any | ||
part of the service subject to the agreement is not to be | ||
performed within one year after the service agreement is | ||
entered into and the service agreement has any of the | ||
following characteristics: | ||
(1) the service agreement purports to run with the | ||
land or to be binding on future owners of interests in the | ||
real property; | ||
(2) the service agreement allows for assignment of the | ||
right to provide service without notice to and consent of | ||
the owner of residential real estate; or | ||
(3) the service agreement purports to create a lien, | ||
encumbrance, or other real property security interest. | ||
(b) This Act does not apply to: | ||
(1) a home warranty or similar product that covers the | ||
cost of maintenance of a major home system, including | ||
plumbing, heating, ventilation, air conditioning, or | ||
electrical wiring, for a fixed period; | ||
(2) an insurance contract; | ||
(3) an option or right of refusal to purchase the | ||
residential real estate; | ||
(4) a declaration created in the formation of a common | ||
interest community or an amendment to the declaration; | ||
(5) a maintenance or repair agreement entered into by | ||
a homeowners' association in a common interest community; | ||
(6) a mortgage loan or a commitment to make or receive | ||
a mortgage loan; | ||
(7) a security agreement under the Uniform Commercial | ||
Code relating to the sale or rental of personal property | ||
or fixtures; or | ||
(8) water, sewer, electrical, telephone, cable, or | ||
other utility service providers. | ||
(c) This Act shall not impair rights and remedies granted | ||
under the Mechanics Lien Act. | ||
Section 20. Unfair service agreements unenforceable. If a | ||
service agreement is unfair under this Act it is unenforceable | ||
and shall not create a contractual obligation. | ||
Section 25. Deceptive business practice. Entering into an | ||
unfair service agreement with a consumer constitutes an | ||
unlawful practice under the Consumer Fraud and Deceptive | ||
Business Practices Act. All remedies, penalties, and authority | ||
granted to the Attorney General by the Consumer Fraud and | ||
Deceptive Business Practices Act shall be available to the | ||
Attorney General for the enforcement of this Act. | ||
Section 30. Recording prohibited. | ||
(a) No person shall knowingly record or knowingly cause to | ||
be recorded an unfair service agreement or a notice or | ||
memorandum of the unfair service agreement. | ||
(b) Notwithstanding any law to the contrary, a county | ||
recorder may refuse to accept for recordation an unfair | ||
service agreement. | ||
(c) If an unfair service agreement is recorded, it shall | ||
not provide actual or constructive notice against a bona fide | ||
purchaser or creditor. | ||
Section 35. Remedies. If an unfair service agreement or a | ||
notice or memorandum of the unfair service agreement is | ||
recorded, any person with an interest in the real property | ||
that is the subject of that agreement may apply to a court in | ||
the county where the recording exists to record a court order | ||
declaring the agreement unenforceable and that person may | ||
recover actual damages, costs, and attorney's fees as may be | ||
proven against the service provider who recorded the | ||
agreement. | ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law. | ||