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Tuesday, January 20, 2015

Securing Abandoned Property - "MERS" Certification

Many municipalities are dealing with the problem of abandoned residential property.   Under Illinois law, municipalities have the authority to board up these buildings and place a lien on the property for the cost of doing so, without a court order.  See 65 ILCS 5/11-31-1.01.  However, that same law says that this authority is null and void if the Illinois Department of Financial and Professional Regulation has certified that the “Mortgage Electronic Registration System program” is effectively registering mortgaged residential property in Illinois.  The MERS program is a complex and controversial national system of registering mortgage lenders who are responsible for maintenance of abandoned property.  

The good news for municipalities that want to take advantage of this authority is that the IDFPR has not certified the MERS program.  That means that municipalities do have the authority to board up abandoned buildings without a court order.  The full statute is reprinted below:

  (65 ILCS 5/11-31-1.01)
    Sec. 11-31-1.01. Securing or enclosing abandoned residential property.
    (a) In the case of securing or enclosing an abandoned residential property as defined in Section 11-20-15.1, the municipality may elect to secure or enclose the exterior of a building or the underlying parcel on which it is located under this Section without application to the circuit court, in which case the provisions of Section 11-20-15.1 shall be the exclusive remedy for the recovery of the costs of such activity.
    (b) For the purposes of this Section:
        (1) "Secure" or "securing" means boarding up, closing
off, or locking windows or entrances or otherwise making the interior of a building inaccessible to the general public; and
        (2) "Enclose" or "enclosing" means surrounding part
or all of the abandoned residential property's underlying parcel with a fence or wall or otherwise making part or all of the abandoned residential property's underlying parcel inaccessible to the general public.
    (c) This Section is repealed upon certification by the Secretary of the Illinois Department of Financial and Professional Regulation, after consultation with the United States Department of Housing and Urban Development, that the Mortgage Electronic Registration System program is effectively registering substantially all mortgaged residential properties located in the State of Illinois, is available for access by all municipalities located in the State of Illinois without charge to them, and such registration includes the telephone number for the mortgage servicer.
(Source: P.A. 96-856, eff. 3-1-10.)

Post Authored by Paul Keller, Ancel Glink


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