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91_SB0749
LRB9103048DJcd
1 AN ACT to amend the Illinois Business Brokers Act of 1995
2 by changing Sections 10-105 and 10-115.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Business Brokers Act of 1995 is
6 amended by changing Sections 10-105 and 10-115 as follows:
7 (815 ILCS 307/10-105)
8 Sec. 10-105. Scope of the Act. This Act shall apply
9 only when the person engaged or sought to be engaged as by
10 the business broker is domiciled in this State or when the
11 company or business sought to be sold has its principal place
12 of business in this State. Notwithstanding any other
13 provision of this Section, a lien on property arising under
14 Section 10-115 is enforceable only against tangible property
15 located in this State.
16 (Source: P.A. 90-70, eff. 7-8-97.)
17 (815 ILCS 307/10-115)
18 Sec. 10-115. Business broker lien.
19 (a) Any business broker shall have a lien upon the
20 tangible assets of a business located in this State that is
21 the subject of a business broker's written contract and the
22 proceeds from the sale of such business in the amount due to
23 that the broker under the written contract is due.
24 (b) The lien shall be available to the business broker
25 named in the instrument signed by the owner of an interest in
26 the assets seller or purchaser. The lien arising under this
27 Act shall be in addition to any other rights that a business
28 broker may have.
29 (c) The lien under this Act shall attach upon the
30 business broker being otherwise entitled to a fee or
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1 commission under a written contract instrument signed by the
2 seller or its purchaser or the seller or purchaser's duly
3 authorized agent, as applicable, if, before the actual
4 conveyance or transfer of the business assets or property
5 with respect to which the business broker is claiming a
6 lien, the business broker files a notice of lien (i) in the
7 recorder's office of the county in which the real property is
8 located, as to real property, and (ii) in the Office of the
9 Secretary of State, as to tangible personal property.
10 (d) When payment to a business broker is due in
11 installments, a portion of which is due only after the
12 conveyance or transfer of the tangible assets business, any
13 claim for lien for those payments due after the transfer or
14 conveyance may be filed at any time subsequent to the
15 transfer or conveyance of the tangible assets business and
16 prior to the date on which the payment is due but shall only
17 be effective as a lien against the tangible assets business
18 or proceeds to the extent moneys are still owed to the
19 transferor by the transferee. The lien shall attach as of the
20 filing of the notice of lien and not relate back to the date
21 of the written agreement.
22 (e) If a business broker has a written agreement with a
23 prospective purchaser or seller, then the lien shall attach
24 upon the prospective purchaser or seller that is purchasing,
25 selling, or otherwise accepting a conveyance or transfer of
26 the real property or tangible personal property business and
27 the filing of a notice of lien pursuant to subsection (c) by
28 the business broker in the Office of the Secretary of State
29 within 90 days after the transfer to the purchaser purchase,
30 sale, or other conveyance or transfer of the business that is
31 the subject of the written agreement with the business broker
32 receipt of any consideration by the seller of the business
2 that is the subject of the written agreement with the
3 business broker.
4 (f) The business broker shall, within 10 days after
5 filing its notice of lien, mail a copy of the notice of lien
6 to the owner of the property business by depositing it in the
7 United States mail, registered or certified mail, with return
8 receipt requested, or personally serve a copy of the notice
9 served on the owner of record or his agent. If the lien is
10 filed within 10 days prior to closing, the business broker is
11 not required to mail or personally serve a copy of the notice
12 of lien. Mailing of the copy of the notice of lien is
13 effective if mailed to the address of the business that is
14 the subject of the notice of lien, or to such other address
15 as the seller or purchaser has provided to the business
16 broker in writing and signed by the seller or purchaser.
17 Mailing of the copy of the notice of claim for lien is
18 effective if mailed to the seller at the address of the
19 business that is the subject of the notice of lien or to
20 another address that the seller or purchaser has provided in
21 writing to the business broker when deposited in a United
22 States mailbox with postage prepaid. The broker's lien shall
23 be unenforceable if mailing of the copy of the notice of lien
24 does not occur at the time and in the manner required by this
25 Act.
26 (g) A business broker may bring suit to enforce a lien
27 in the circuit court (i) in the county where the real
28 property headquarters of the business being sold is located,
29 as to real property, or (ii) as to tangible personal
30 property, either in the county where the personal property
31 is located or where the principal office of the owner of the
32 personal property, or the owner's residence, is located
33 where the purchaser resides (or maintains its headquarters)
34 if the lien is being filed against the purchaser, or where
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1 the seller resides (or maintains its headquarters) if the
2 lien is filed against the seller, by filing a complaint and
3 sworn affidavit that the lien has been filed.
4 (h) The person claiming a lien shall, within 2 years
5 after filing the lien, commence proceedings by filing a
6 complaint. Failure to commence proceedings within 2 years
7 after filing the lien shall extinguish the lien. No
8 subsequent notice of lien may be given for the same claim nor
9 may that claim be asserted in any proceedings under this Act.
10 (i) A complaint under this Section shall have attached
11 to it a copy contain a brief statement of the written
12 contract or agreements on which the lien is founded and shall
13 contain, the date when the contract or agreement was made, a
14 description of the services performed, the amount due and
15 unpaid, a description of the tangible assets of the business
16 that is, or the proceeds from sale of which are, subject to
17 the lien, and other facts necessary for a full understanding
18 of the rights of the parties. The plaintiff shall make all
19 interested parties, of whose interest the plaintiff is
20 notified or has knowledge, defendants to the action and shall
21 issue summons and provide service as in other civil actions.
22 When any defendant resides or has gone out of the State, or
23 on inquiry cannot be found, or is concealed within this State
24 so that process cannot be served on that defendant, the
25 plaintiff shall cause a notice to be given to that defendant,
26 or cause a copy of the complaint to be served upon that
27 defendant, in the manner and upon the same conditions as in
28 other civil actions. Failure of the plaintiff to provide
29 proper summons or notice shall be grounds for judgment
30 against the plaintiff with prejudice. Every lien claimed
31 under this Act shall be foreclosed as provided in the
32 Illinois Mortgage Foreclosure Law, if the lien is on real
33 property, or as provided in the Uniform Commercial Code, if
34 the lien is on personal property.
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1 (j) The lien notice shall state the name and address of
2 the claimant, the name of the purchaser or seller whose
3 property or assets are subject to the lien, a description of
4 the real or personal property that is subject to the lien
5 business upon which or upon the proceeds from the sale of
6 which the lien is being claimed, the amount for which the
7 lien is claimed, and the registration number of the business
8 broker. The notice of lien shall recite that the information
9 contained in the notice is true and accurate to the knowledge
10 of the signer signatory. The notice of lien shall be signed
11 by the business broker or by a person authorized to sign on
12 behalf of the business broker and shall be verified.
13 (k) Whenever a claim for lien has been filed with the
14 Office of the Secretary of State or the county recorder's
15 office and a condition occurs that would preclude the
16 business broker from receiving compensation under the terms
17 of the business broker's written agreement, the business
18 broker shall provide to the purchaser of the business, if the
19 lien is filed against the purchaser's assets purchaser, or
20 the seller of the business, if the lien is filed against the
21 seller's assets seller, within 10 days following demand by
22 that party the owner of record, a written release or
23 satisfaction of the lien.
24 (l) Upon written demand of the owner, lienee, or other
25 authorized agent, served on the person claiming the lien
26 requiring suit to be commenced to enforce the lien or answer
27 to be filed in a pending suit, a suit shall be commenced or
28 answer filed within 30 days thereafter, or the lien shall be
29 extinguished. Service may be by registered or certified
30 mail, return receipt requested, or by personal service.
31 (m) If a claim for lien has been filed with the Office
32 of the Secretary of State or the county recorder's office and
33 is paid, or if there is failure to institute a suit to
34 enforce the lien within the time provided by this Act, the
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1 business broker shall acknowledge satisfaction or release of
2 the lien, in writing, on written demand of the purchaser of
3 the business, if the lien is filed against the purchaser, or
4 the seller of the business, if the lien is filed against the
5 seller, within 5 days after payment or expiration of the time
6 in which to file the lien.
7 (n) The cost of proceedings brought under this Act
8 asserting or defending a business broker's claim of lien,
9 including reasonable attorneys' fees, costs, and prejudgment
10 interest interests due to the prevailing party, shall be
11 borne by the nonprevailing party or parties. When more than
12 one party is responsible for costs, fees, and prejudgment
13 interest, the costs, fees, and prejudgment interest shall be
14 equitably apportioned by the court among those responsible
15 parties.
16 (o) Prior recorded liens and mortgages shall have
17 priority over a broker's lien. A prior recorded lien shall
18 include, without limitation, (i) a valid mechanic's lien
19 claim that is recorded subsequent to the broker's notice of
20 lien but which relates back to a date prior to the recording
21 date of the broker's notice of lien and (ii) prior recorded
22 liens securing revolving credit or and future advances under
23 of construction loans as described in Section 15-1302 of the
24 Code of Civil Procedure.
25 (Source: P.A. 90-70, eff. 7-8-97.)