Insights

Over the past several years, abandoned residential properties have become a significant problem in American cities. The City of Chicago attempted to address this problem by requiring mortgagees to register abandoned residential properties and to maintain liability insurance prior to a completed foreclosure.¹  The ordinance requires mortgagees to "take possession" and secure an abandoned property before possession is awarded by the court.  This creates potential litigation risks to mortgagees.

On February 8, 2013, the State of Illinois enacted legislation to clarify potential issues caused by the City of Chicago ordinance.  The law became effective June 1, 2013.²  The law expressly permits the court to expedite the judgment and sale of abandoned residential property.  Upon motion, supported by an affidavit stating the property meets the definition of abandoned residential property,³ the court must expedite the judgment and sale of the property.⁴  The motion can be brought at any time but if it is filed after the time to answer the complaint has passed, the motion must be heard within fifteen days after it is filed.⁵  Additionally, the mortgagee must post notices at the property fourteen days prior to the hearing on the motion and fourteen days prior to the hearing to confirm the foreclosure sale.  The notices must be in substantially the same form as provided in the statute and must be mailed to the last known address of the mortgagor.⁶

If the court finds the property is "abandoned residential property" the redemption period will expire thirty days after the entry of the judgment of foreclosure and sale.⁷  Once the foreclosure sale is confirmed, any personal property remaining is deemed abandoned and may be disposed of by the holder of the certificate of sale.⁸  The court may not grant the motion if the mortgagor, an unknown owner, owner or lawful occupant appears and objects to the finding of abandonment.⁹

Under this new law, the foreclosure process for abandoned residential properties could be reduced to ninety days.  Cook County has added additional foreclosure calendars specifically for vacant and abandoned properties to help expedite their resolution.
 

¹ Chicago, IL., Code Title 13, Ch. 12 § 126
² 735 ILCS 5/15-1505.8
³ See 735 ILCS 5/15-1200.5 for the definition of abandoned residential property
⁴ 735 ILCS 5/15-1505.8(a)(e)
⁵ 735 ILCS 5/15-1505.8 (d)
⁶ 735 ILCS 5/15-1505.8(d)
⁷ 735 ILCS 5/15-1505.8(f)
⁸ 735 ILCS 5/15-1505.8(k)
⁹ 735 ILCS 5/15-1505.8(g)