Public Act 094-0411
 		





HB0947 Enrolled
LRB094 06720 DRH 36819 b






    AN ACT concerning transportation.

 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:


 
    Section 5. The Illinois Vehicle Code is amended  by changing 
Section 3-114 as follows:
 



    (625 ILCS 5/3-114)  (from Ch. 95 1/2, par. 3-114)



    Sec. 3-114. Transfer by operation of law. 

    (a) If the interest of an owner in a vehicle passes to 
another other
than by voluntary transfer, the transferee shall, 
except as provided in
paragraph (b), promptly mail or deliver 
within 20 days to the
Secretary of State the last certificate 
of title, if available, proof of
the transfer, and his 
application for a new certificate in the form the
Secretary of 
State prescribes. It shall be unlawful for any person
having 
possession of a certificate of title for a motor vehicle,

semi-trailer, or house car by reason of his having a lien or 
encumbrance
on such vehicle, to fail or refuse to deliver such 
certificate to the
owner, upon the satisfaction or discharge of 
the lien or encumbrance,
indicated upon such certificate of 
title.

    (b) If the interest of an owner in a vehicle passes to 
another under
the provisions of the Small Estates provisions of 
the Probate Act of 1975 the
transferee shall promptly mail or 
deliver to the Secretary of State, within 120
days, the last 
certificate of title, if available, the documentation required

under the provisions of the Probate Act of 1975, and an 
application for
certificate of title. The Small Estate 
Affidavit form shall be furnished by the
Secretary of State. 
The transfer may be to the transferee or to the nominee of
the 
transferee.

    (c) If the interest of an owner in a vehicle passes to 
another under
other provisions of the Probate Act of 1975, as 
amended, and the transfer is
made by a representative or 
guardian, such transferee shall promptly mail or
deliver to the 
Secretary of State, the last certificate of title, if 
available,
and a certified copy of the letters of office or 
guardianship, and an
application for certificate of title. Such 
application shall be made before the
estate is closed. The 
transfer may be to the transferee or to the nominee of
the 
transferee.

    (d) If the interest of an owner in joint tenancy passes to 
the other
joint tenant with survivorship rights as provided by 
law, the transferee
shall promptly mail or deliver to the 
Secretary of State, the last
certificate of title, if 
available, proof of death of the one joint
tenant and 
survivorship of the surviving joint tenant, and an
application 
for certificate of title. Such application shall be made
within 
120 days after the death of the joint tenant. The transfer may

be to the transferee or to the nominee of the transferee.

    (e) The Secretary of State shall transfer a decedent's 
vehicle title to
any legatee, representative or heir of the 
decedent who submits to the
Secretary a death certificate and 
an affidavit by an attorney at law on the
letterhead stationery  
of the attorney at law stating the facts of the
transfer.

    (f) Repossession with assignment of title.  In all cases 
wherein a
lienholder has repossessed a vehicle by other
than 
judicial process and holds it for resale under a security 
agreement, and
the owner of record has executed an assignment 
of the existing certificate of
title after default, the 
lienholder may proceed to sell or otherwise dispose of
the 
vehicle
as authorized under the Uniform Commercial Code.  Upon 
selling the vehicle to
another person, the lienholder need not 
send the certificate of title to the
Secretary of State, but 
shall promptly and within 20 days mail or deliver to
the 
purchaser
as transferee the existing certificate of title for 
the repossessed vehicle,
reflecting the release of the 
lienholder's security interest in the vehicle.
The application 
for a certificate of title made by the
purchaser shall comply 
with subsection (a) of Section 3-104 and be accompanied
by the 
existing certificate of title for the repossessed vehicle.
The 
lienholder shall execute the assignment and warranty of title 
showing the
name and address of the purchaser in the spaces 
provided therefor on the
certificate of title or as the 
Secretary of State prescribes.  The lienholder
shall complete 
the assignment of title in the certificate of title to reflect

the transfer of the vehicle to the lienholder and also a 
reassignment to
reflect the transfer from the lienholder to the 
purchaser.  For this purpose,
the lienholder is specifically 
authorized
to complete and execute
the space reserved in the 
certificate of title for a dealer reassignment,

notwithstanding that the lienholder is not a licensed dealer.  
Nothing herein
shall be construed to mean that the lienholder 
is taking title to the
repossessed vehicle for purposes of 
liability for retailer occupation, vehicle
use, or other tax 
with respect to the proceeds from the repossession sale.

Delivery of the existing certificate of title to the purchaser 
shall be deemed
disclosure to the purchaser of the owner of the 
vehicle.

    (f-5) Repossession without assignment of title.  Subject to 
subsection (f-30), in
In all cases wherein a
lienholder has 
repossessed a vehicle
by other than judicial process and holds 
it for resale under a security
agreement,
and the owner of 
record has not executed an assignment of the existing

certificate of title,
the lienholder shall comply with the 
following provisions:


        (1) Prior to sale, the lienholder shall deliver or mail 
    to the owner at
the owner's last known address and to any 
    other lienholder of record, a notice
of redemption
setting 
    forth the following information: (i) the name of the owner 
    of record
and in bold type at or near the top of the notice 
    a statement that the owner's
vehicle was repossessed on a 
    specified date for failure to make payments on the
loan (or 
    other reason), (ii) a
description of the vehicle subject to 
    the lien sufficient to identify it, (iii)
the right of the 
    owner to redeem the vehicle, (iv) the lienholder's intent 
    to
sell or otherwise dispose of the vehicle after the 
    expiration of 21 days from
the date of mailing or delivery 
    of the notice, and (v) the name, address, and
telephone 
    number of the lienholder from
whom information may be

    obtained concerning the amount due to redeem the vehicle 
    and from whom
the vehicle may be redeemed under
Section 
    9-623 of the Uniform Commercial Code.  At the
lienholder's 
    option, the
information required to be set forth in this 
    notice of redemption
may be made a part of or accompany the 
    notification of sale or other
disposition
required under 
    Section 9-611 of the
Uniform
Commercial Code, but none of 
    the information required by this notice shall
be construed 
    to impose any requirement under Article 9 of the Uniform

    Commercial Code.


        (2) With respect to the repossession of a vehicle used 
    primarily for
personal, family, or household purposes, the 
    lienholder shall also deliver or
mail to the owner at the 
    owner's last known address an affidavit
of defense.  The 
    affidavit of defense shall accompany the notice of

    redemption
required in subdivision (f-5)(1) of
this 
    Section. The affidavit of defense shall (i) identify the 
    lienholder,
owner, and the
vehicle; (ii) provide space for 
    the owner to state the defense claimed by the
owner; and 
    (iii) include an acknowledgment by the owner that the owner 
    may be
liable to the lienholder for fees, charges, and 
    costs incurred by the
lienholder in establishing the 
    insufficiency or invalidity of the owner's
defense.  To stop 
    the transfer of title, the affidavit of defense must be

    received by the
lienholder no later than 21 days after the 
    date of mailing or delivery of the
notice required in 
    subdivision (f-5)(1) of this Section. If the lienholder

    receives the affidavit from the owner in a timely manner, 
    the lienholder must
apply to a court of competent 
    jurisdiction to determine if the lienholder is
entitled to 
    possession of the vehicle.


        (3) Upon selling the vehicle to another person, the 
    lienholder need not
send the certificate of title to the 
    Secretary of State, but shall
promptly and within 20 days 
    mail or deliver to the purchaser as transferee (i)
the 
    existing
certificate of title for the repossessed vehicle, 
    reflecting the release of the
lienholder's security 
    interest in the vehicle; and (ii) an affidavit of

    repossession made by or on behalf of the lienholder which 
    provides the
following information: that the vehicle was 
    repossessed, a description of the
vehicle sufficient to 
    identify it, whether the vehicle has been damaged in
excess 
    of 33 1/3% of its fair market value as required under 
    subdivision (b)(3)
of Section 3-117.1, that the owner and 
    any other lienholder of record were
given the notice 
    required in subdivision (f-5)(1) of this Section,
that the 
    owner of record was given the affidavit of defense required 
    in
subdivision (f-5)(2) of this Section,
that the interest 
    of the owner was lawfully terminated or sold pursuant to 
    the
terms of the security agreement, and the purchaser's 
    name and address.
If the vehicle is damaged in excess of 33 
    1/3% of its fair market value, the
lienholder shall make 
    application for a salvage certificate under Section

    3-117.1 and transfer the vehicle to a person eligible to 
    receive assignments of
salvage certificates identified in 
    Section 3-118.


        (4) The application for a certificate of title made by 
    the purchaser shall
comply with subsection (a) of Section 
    3-104 and be accompanied by the affidavit
of repossession 
    furnished by the lienholder and the existing certificate of

    title for the repossessed vehicle.
The lienholder shall 
    execute the assignment and warranty of title showing the

    name and address of the purchaser in the spaces provided 
    therefor on the
certificate of title or as the Secretary of 
    State prescribes.  The lienholder
shall complete the 
    assignment of title in the certificate of title to reflect

    the transfer of the vehicle to the lienholder and also a 
    reassignment to
reflect the transfer from the lienholder to 
    the purchaser.  For this purpose,
the lienholder is 
    specifically authorized to execute the assignment on 
    behalf
of the owner as seller if the owner has not done so 
    and to complete and execute
the space reserved in the 
    certificate of title for a dealer reassignment,

    notwithstanding that the lienholder is not a licensed 
    dealer.  Nothing herein
shall be construed to mean that the 
    lienholder is taking title to the
repossessed vehicle for 
    purposes of liability for retailer occupation, vehicle

    use, or other tax with respect to the proceeds from the 
    repossession sale.
Delivery of the existing certificate of 
    title to the purchaser shall be deemed
disclosure to the 
    purchaser of the owner of the vehicle.
In the event the 
    lienholder does not hold
the certificate of title for the 
    repossessed vehicle, the lienholder shall
make application 
    for and may obtain a new certificate of title in the name 
    of
the lienholder upon furnishing information satisfactory 
    to the Secretary of
State.  Upon receiving the new 
    certificate of title, the lienholder may proceed
with the 
    sale described in subdivision (f-5)(3), except that upon 
    selling the
vehicle the lienholder shall promptly and 
    within 20 days mail or deliver to the
purchaser the new 
    certificate of title reflecting the assignment and 
    transfer
of title to the purchaser.


        (5) Neither the lienholder nor the owner shall file 
    with the Office of
the Secretary of State the notice of 
    redemption or affidavit of defense
 described in 
    subdivisions (f-5)(1) and (f-5)(2) of this Section. The 
    Office of
the Secretary of State shall not determine the 
    merits of an owner's affidavit
of defense, nor consider any 
    allegations or assertions regarding the validity
or 
    invalidity of a lienholder's claim to the vehicle or an 
    owner's asserted
defenses to the repossession action.

    (f-7) Notice of reinstatement in certain cases.


        (1) Subject to subsection (f-30), if
If, at the time of 
    repossession by a lienholder that is seeking to
transfer 
    title pursuant to subsection (f-5), the owner has paid an 
    amount equal
to 30% or more of the deferred payment price 
    or total of payments due, the
owner may, within 21 days of 
    the date of repossession, reinstate the contract
or loan 
    agreement and recover the vehicle from the lienholder by 
    tendering in a
lump sum (i) the total of all unpaid 
    amounts, including any unpaid delinquency
or deferral 
    charges due at the date of reinstatement, without 
    acceleration; and
(ii) performance necessary to cure any 
    default other than nonpayment of the
amounts due; and (iii)

    all reasonable costs and fees incurred by the lienholder in 
    retaking, holding,
and preparing the vehicle for 
    disposition and in arranging for the sale of the
vehicle.  
    Reasonable costs and fees incurred by the lienholder 
    include without
limitation repossession and storage 
    expenses and, if authorized by the contract
or loan 
    agreement, reasonable attorneys' fees and collection 
    agency charges.


        (2) Tender of payment and performance pursuant to this 
    limited right of
reinstatement restores to the owner his 
    rights under the contract or loan
agreement as though no 
    default had occurred.  The owner has the right to
reinstate 
    the contract or loan agreement and recover the vehicle from 
    the
lienholder only once under this subsection.  The 
    lienholder may, in the
lienholder's sole discretion, 
    extend the period during which the owner may
reinstate the 
    contract or loan agreement and recover the vehicle beyond 
    the 21
days allowed under this subsection, and the 
    extension shall not subject the
lienholder to liability to 
    the owner under the laws of this State.


        (3) The lienholder shall deliver or mail written notice 
    to the owner at
the
owner's last known address, within 3 
    business days of the date of repossession,
of the owner's 
    right to reinstate the contract or loan agreement and 
    recover
the vehicle pursuant to the limited right of 
    reinstatement described in this
subsection.  At the 
    lienholder's option, the information required to be set

    forth in this notice of reinstatement may be made part of 
    or accompany the
notice of redemption required in 
    subdivision (f-5)(1) of this Section and the
notification 
    of sale or other disposition required under
Section 9-611 
    of the Uniform Commercial Code, but none of the
information

    required by this notice of reinstatement shall be construed 
    to impose any
requirement under Article 9 of the Uniform 
    Commercial Code.


        (4) The reinstatement period, if applicable, and the 
    redemption period
described in subdivision (f-5)(1) of 
    this Section, shall run concurrently if
the information 
    required to be set forth in the notice of reinstatement is 
    part
of or accompanies the notice of redemption.  In any 
    event, the 21 day
redemption period described in 
    subdivision (f-5)(1) of this Section shall
commence on the 
    date of
mailing or delivery to the owner of the information 
    required to be set forth in
the notice of redemption, and 
    the 21 day reinstatement period described in this

    subdivision, if applicable, shall commence on the date of 
    mailing or delivery
to the owner of the information 
    required to be set forth in the notice of
reinstatement.


        (5) The Office of the Secretary of State shall not 
    determine the merits of
an owner's claim of right to 
    reinstatement, nor consider any allegations or
assertions 
    regarding the validity or invalidity of a lienholder's 
    claim to the
vehicle or an owner's asserted right to 
    reinstatement.  Where a lienholder is
subject to licensing 
    and regulatory supervision by the State of Illinois, the

    lienholder shall be subject to all of the powers and 
    authority of the
lienholder's primary State regulator to 
    enforce compliance with the procedures
set forth in this 
    subsection (f-7).

    (f-10) Repossession by judicial process.  In all cases 
wherein a lienholder
has repossessed a vehicle by
judicial

process and holds it for resale under a security agreement, 
order for replevin,
or other court order establishing the 
lienholder's right to possession of the
vehicle, the lienholder 
may proceed to sell or otherwise dispose of the vehicle
as 
authorized under the Uniform Commercial Code or the court 
order. Upon
selling the vehicle to another person, the 
lienholder need not send the
certificate of title to the 
Secretary of State, but shall promptly and within
20 days mail 
or
deliver to the purchaser as transferee (i) the existing 
certificate of title
for the repossessed vehicle reflecting the 
release of the lienholder's security
interest in the vehicle; 
(ii) a certified copy of the court order; and (iii) a
bill of 
sale identifying the new owner's name and address and the year, 
make,
model, and vehicle identification number of the vehicle.

The application for a certificate of title made by the 
purchaser shall comply
with subsection (a) of Section 3-104 and 
be accompanied by the certified copy
of the court order 
furnished by the
lienholder and the existing certificate of 
title for the repossessed vehicle.
The lienholder shall execute 
the assignment and warranty of title showing the
name and 
address of the purchaser in the spaces provided therefor on the

certificate of title or as the Secretary of State prescribes.  
The lienholder
shall complete the assignment of title in the 
certificate of title to reflect
the transfer of the vehicle to 
the lienholder and also a reassignment to
reflect the transfer 
from the lienholder to the purchaser.  For this purpose,
the 
lienholder is specifically authorized to execute the 
assignment on behalf
of the owner as seller if the owner has 
not done so and to complete and execute
the space reserved in 
the certificate of title for a dealer reassignment,

notwithstanding that the lienholder is not a licensed dealer.  
Nothing herein
shall be construed to mean that the lienholder 
is taking title to the
repossessed vehicle for purposes of 
liability for retailer occupation, vehicle
use, or other tax 
with respect to the proceeds from the repossession sale.

Delivery of the existing certificate of title to the purchaser 
shall be deemed
disclosure to the purchaser of the owner of the 
vehicle.
In the event the
lienholder does not hold the 
certificate of title for the repossessed vehicle,
the 
lienholder shall
make application for and may obtain a new 
certificate of title in the name of
the lienholder upon 
furnishing information satisfactory to the Secretary of
State.  
Upon receiving the new certificate of title, the lienholder may 
proceed
with the sale described in this subsection, except that 
upon selling the
vehicle the lienholder shall promptly and 
within 20 days mail or deliver to the
purchaser the new 
certificate of title reflecting the assignment and transfer
of 
title to the purchaser.

    (f-15) The Secretary of State shall not issue a certificate 
of title to a
purchaser under subsection (f), (f-5), or (f-10) 
of this Section, unless the
person from whom the vehicle has 
been repossessed by the lienholder is shown to
be the last 
registered owner of the motor vehicle.  The Secretary of State 
may
provide by rule for the standards to be followed by a 
lienholder in assigning
and transferring certificates of title 
with respect to repossessed vehicles.

    (f-20) If applying for a salvage certificate or a junking 
certificate, the lienholder
shall within 20 days make an 
application to the Secretary of State for a salvage certificate 
or a junking certificate, as
set forth in this Code. The 
Secretary of State shall
not issue a salvage
certificate or a 
junking
certificate to such lienholder unless the person from 
whom such vehicle has
been repossessed is shown to be the last 
registered owner of such motor
vehicle and such lienholder 
establishes to the satisfaction of
the Secretary of State that 
he is entitled to such
salvage certificate or junking 
certificate. The Secretary
of State may provide by rule for the 
standards to be followed by
a lienholder in order to obtain a

salvage certificate or junking certificate for a
repossessed 
vehicle.

    (f-25) If the interest of an owner in a mobile home, as 
defined in the
Mobile Home Local Services Tax Act, passes to 
another under the provisions of
the
Mobile Home Local Services 
Tax Enforcement Act, the transferee shall promptly
mail or 
deliver to the Secretary of State (i) the last certificate of 
title, if
available, (ii) a certified copy of the court order 
ordering the transfer of
title, and (iii) an application for 
certificate of title.

    (f-30) Bankruptcy.  If the repossessed vehicle is the 
subject of a bankruptcy proceeding or discharge:

        (1) the lienholder may proceed to sell or otherwise 
    dispose of the vehicle as authorized by the Bankruptcy Code 
    and the Uniform Commercial Code;
        (2) the notice of redemption, affidavit of defense, and 
    notice of reinstatement otherwise required to be sent by 
    the lienholder to the owner of record or other lienholder 
    of record under this Section  are not required to be 
    delivered or mailed;
        (3) the requirement to delay disposition of the vehicle 
    for 21 days, (i) from the mailing or delivery of the notice 
    of redemption under subdivision (f-5)(1) of this Section, 
    (ii) from the mailing or delivery of the affidavit of 
    defense under subdivision (f-5)(2) of this Section,  or 
    (iii) from the date of repossession when the owner is 
    entitled to a notice of reinstatement under subsection 
    (f-7) of this Section, does not apply;
        (4) the affidavit of repossession that is required 
    under subdivision (f-5)(3) shall contain a notation of 
    "bankruptcy" where the affidavit requires the date of the 
    mailing or delivery of the notice of redemption.  The 
    notation of "bankruptcy" means the lienholder makes no 
    sworn representations regarding the mailing or delivery of 
    the notice of redemption or affidavit of defense or   
    lienholder's compliance with the requirements that 
    otherwise apply to the  notices listed in this subsection 
    (f-30), and makes no sworn representation that the 
    lienholder assumes liability or costs for any litigation 
    that may arise from the issuance of a certificate of title 
    based on the excluded representations;
        (5) the right of redemption, the right to assert a 
    defense to the transfer of title, and reinstatement rights 
    under this Section do not apply; and
        (6) references to judicial process and court orders in 
    subsection (f-10) of this Section do not include bankruptcy 
    proceedings or orders.

    (g) A person holding a certificate of title whose interest 
in the
vehicle has been extinguished or transferred other than 
by voluntary
transfer shall mail or deliver the certificate, 
within 20 days
upon request of the Secretary of State. The 
delivery of the certificate
pursuant to the request of the 
Secretary of State does not affect the
rights of the person 
surrendering the certificate, and the action of the
Secretary 
of State in issuing a new certificate of title as provided

herein is not conclusive upon the rights of an owner or 
lienholder named
in the old certificate.

    (h) The Secretary of State may decline to process any 
application
for a transfer of an interest in a vehicle 
hereunder if any fees or
taxes due under this Act from the 
transferor or the transferee have not
been paid upon reasonable 
notice and demand.

    (i) The Secretary of State shall not be held civilly or 
criminally
liable to any person because any purported 
transferor may not have had
the power or authority to make a 
transfer of any interest in any vehicle
or because a 
certificate of title issued in error is subsequently used to

commit a fraudulent act.

(Source: P.A. 91-893, eff. 7-1-01; 92-807, eff. 1-1-03.)