Public Act 98-0099 (IL)
Public Act 98-99 (HB 2832); Effective Date: July 19, 2013
Statutes Amended: 55 ILCS 5/3-5010.5 (New)
The purpose of this new law is expressly stated in the beginning of the statute: “[I]n order to combat the increase in the number of [fraudulent] filings ... including [those] intended to cloud or fraudulently transfer title to property by recording false or altered documents and deeds.” 55 ILCS 5/3-5010.5(a). The law applies to filings provided to a recorder on and after July 19, 2013, and is scheduled to be repealed on June 1, 2018. 55 ILCS 5/3-5010.5(j)–(k).
The crux of this legislation lies in the establishment of a “fraud referral and review process,” made available for the recorder to review and refer documents suspected to be fraudulent. 55 ILCS 5/3-5010.5(c).
The fraud referral and review process allows the recorder who reasonably believes that filings are fraudulent to review the suspect documents and refer them to an administrative law judge (ALJ) for review. Id. The recorder can also enter into an intergovernmental agreement with law enforcement officers to refer the case to them. Id. In reviewing the documents, the recorder can seek assistance from the Secretary of the Department of Financial and Professional Regulation. Id. In a county with a population of less than 3 million, the recorder is required to notify the public 90 days before the establishment of the fraud referral and review process. Id.
The statute lists a total of 19 factors that the recorder may consider in determining whether a filing can be fraudulent. 55 ILCS 5/3-5010.5(c)(1)–(19). These factors include whether the recorder received a report that a person other than the true owner is attempting to fraudulently file a document upon the property, whether a law enforcement officer has a probable cause to suspect fraud, whether a filer’s name is copyrighted, etc. Id. If determined to be suspect of fraud based on these and other factors enumerated, the recorder is required to refer the case to the ALJ for review and to record a Notice of Referral. 55 ILCS 5/3-5010.5(d). The Notice of Referral must identify the suspected document, the document number, and the date of referral. Id. The recorder’s decision to make a referral and add the Notice of Referral is a final administrative decision, which is subject to review by the circuit court of the county where the underlying property is located. 55 ILCS 5/3-5010.5(f). It is up to the recorder’s discretion whether the case needs to be referred to law enforcement officers. 55 ILCS 5/3-5010.5(d).
Before referring the case to the ALJ, the recorder must notify the last owner of record. 55 ILCS 5/3-5010.5(e), (g). A legal representative of the recorder must confirm in writing as to his belief in fraud committed in the filing, and may request a referral. 55 ILCS 5/3-5010.5(g). If requested, the recorder must bring the case for an administrative hearing. Id. The ALJ has ten days to respond by scheduling the hearing within 30 days after receipt. Id. The case must clearly identify the last owner of record as petitioner. Id. The ALJ must provide the notice of hearing to the filer of the suspect documents, the legal representative of the recorder, and the last owner of record. Id.
The findings of fraud by the ALJ must be made by clear and convincing evidence. Id. If the ALJ finds that the filings are fraudulent, the recorder must record the judgment within five business days and clearly state that the chain of title is not affected by the fraudulent filings. Id. If found legitimate, the judgment to that effect also needs to be recorded within five business days. Id. The administrative decision is not binding as to a State’s Attorney or sheriff who wishes to commence a criminal investigation on the case. Id. Any party affected by the review and referral process is free to exercise a private right to commence a separate action. Id. The administrative review process created under this statute is not mandatory as to a person who had fraudulent documents filed against his or her property. Id.
With respect to any duty performed by the recorder or his or her employees or agents under this statute, no personal liability is imposed on them for any error or omission, except in the case of willful or wanton conduct. 55 ILCS 5/3-5010.5(i). The statute additionally states that no liability is imposed on them in the referral or review of a document or failure to do so. Id.
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