Statutes > Illinois Statutes > CHAPTER 735 CIVIL PROCEDURE > 735 ILCS 5/ Code of Civil Procedure. > Part 17 - Possession During Foreclosure

Part 17 - Possession During Foreclosure


      (735 ILCS 5/Art. XV Pt. 17 heading)
Part 17. Possession During Foreclosure

    (735 ILCS 5/15‑1701)(from Ch. 110, par. 15‑1701)
    Sec. 15‑1701. Right to possession.
    (a) General. The provisions of this Article shall govern the right to possession of the mortgaged real estate during foreclosure. Possession under this Article includes physical possession of the mortgaged real estate to the same extent to which the mortgagor, absent the foreclosure, would have been entitled to physical possession. For the purposes of Part 17, real estate is residential real estate only if it is residential real estate at the time the foreclosure is commenced.
    (b) Pre‑Judgment. Prior to the entry of a judgment of foreclosure:
        (1) In the case of residential real estate, the
    mortgagor shall be entitled to possession of the real estate except if (i) the mortgagee shall object and show good cause, (ii) the mortgagee is so authorized by the terms of the mortgage or other written instrument, and (iii) the court is satisfied that there is a reasonable probability that the mortgagee will prevail on a final hearing of the cause, the court shall upon request place the mortgagee in possession. If the residential real estate consists of more than one dwelling unit, then for the purpose of this Part residential real estate shall mean only that dwelling unit or units occupied by persons described in clauses (i), (ii) and (iii) of Section 15‑1219.
        (2) In all other cases, if (i) the mortgagee is so
    authorized by the terms of the mortgage or other written instrument, and (ii) the court is satisfied that there is a reasonable probability that the mortgagee will prevail on a final hearing of the cause, the mortgagee shall upon request be placed in possession of the real estate, except that if the mortgagor shall object and show good cause, the court shall allow the mortgagor to remain in possession.
    (c) Judgment Through 30 Days After Sale Confirmation. After the entry of a judgment of foreclosure and through the 30th day after a foreclosure sale is confirmed:
        (1) Subsection (b) of Section 15‑1701 shall be
    applicable, regardless of the provisions of the mortgage or other instrument, except that after a sale pursuant to the judgment the holder of the certificate of sale (or, if none, the purchaser at the sale) shall have the mortgagee's right to be placed in possession, with all rights and duties of a mortgagee in possession under this Article.
        (2) Notwithstanding paragraph (1) of subsection (b)
    and paragraph (1) of subsection (c) of Section 15‑1701, upon request of the mortgagee, a mortgagor of residential real estate shall not be allowed to remain in possession between the expiration of the redemption period and through the 30th day after sale confirmation unless (i) the mortgagor pays to the mortgagee or such holder or purchaser, whichever is applicable, monthly the lesser of the interest due under the mortgage calculated at the mortgage rate of interest applicable as if no default had occurred or the fair rental value of the real estate, or (ii) the mortgagor otherwise shows good cause. Any amounts paid by the mortgagor pursuant to this subsection shall be credited against the amounts due from the mortgagor.
    (d) After 30 Days After Sale Confirmation. The holder of the certificate of sale or deed issued pursuant to that certificate or, if no certificate or deed was issued, the purchaser, except to the extent the holder or purchaser may consent otherwise, shall be entitled to possession of the mortgaged real estate, as of the date 30 days after the order confirming the sale is entered, against those parties to the foreclosure whose interests the court has ordered terminated, without further notice to any party, further order of the court, or resort to proceedings under any other statute other than this Article. This right to possession shall be limited by the provisions governing entering and enforcing orders of possession under subsection (g) of Section 15‑1508. If the holder or purchaser determines that there are occupants of the mortgaged real estate who have not been made parties to the foreclosure and had their interests terminated therein, the holder or purchaser may bring a proceeding under subsection (h) of this Section or under Article 9 of this Code to terminate the rights of possession of any such occupants. The holder or purchaser shall not be entitled to proceed against any such occupant under Article 9 of this Code until after 30 days after the order confirming the sale is entered.
    (e) Termination of Leases. A lease of all or any part of the mortgaged real estate shall not be terminated automatically solely by virtue of the entry into possession by (i) a mortgagee or receiver prior to the entry of an order confirming the sale, (ii) the holder of the certificate of sale, (iii) the holder of the deed issued pursuant to that certificate, or (iv) if no certificate or deed was issued, the purchaser at the sale.
    (f) Other Statutes; Instruments. The provisions of this Article providing for possession of mortgaged real estate shall supersede any other inconsistent statutory provisions. In particular, and without limitation, whenever a receiver is sought to be appointed in any action in which a foreclosure is also pending, a receiver shall be appointed only in accordance with this Article. Except as may be authorized by this Article, no mortgage or other instrument may modify or supersede the provisions of this Article.
    (g) Certain Leases. Leases of the mortgaged real estate entered into by a mortgagee in possession or a receiver and approved by the court in a foreclosure shall be binding on all parties, including the mortgagor after redemption, the purchaser at a sale pursuant to a judgment of foreclosure and any person acquiring an interest in the mortgaged real estate after entry of a judgment of foreclosure in accordance with Sections 15‑1402 and 15‑1403.
    (h) Proceedings Against Certain Occupants.
        (1) The mortgagee‑in‑possession of the mortgaged real
    estate under Section 15‑1703, a receiver appointed under Section 15‑1704, a holder of the certificate of sale or deed, or the purchaser may, at any time during the pendency of the foreclosure and up to 90 days after the date of the order confirming the sale, file a supplemental petition for possession against a person not personally named as a party to the foreclosure. The supplemental petition for possession shall name each such occupant against whom possession is sought and state the facts upon which the claim for relief is premised.
        (2) The petitioner shall serve upon each named
    occupant the petition, a notice of hearing on the petition, and, if any, a copy of the certificate of sale or deed. The proceeding for the termination of such occupant's possessory interest, including service of the notice of the hearing and the petition, shall in all respects comport with the requirements of Article 9 of this Code, except as otherwise specified in this Section. The hearing shall be no less than 21 days from the date of service of the notice.
        (3) The supplemental petition shall be heard as part
    of the foreclosure proceeding and without the payment of additional filing fees. An order for possession obtained under this Section shall name each occupant whose interest has been terminated, shall recite that it is only effective as to the occupant so named and those holding under them, and shall be enforceable for no more than 120 days after its entry, except that the 120‑day period may be extended to the extent and in the manner provided in Section 9‑117 of Article 9 and except as provided in item (4) of this subsection (h).
        (4) In a case of foreclosure where the occupant is
    current on his or her rent, or where timely written notice of to whom and where the rent is to be paid has not been provided to the occupant, or where the occupant has made good‑faith efforts to make rental payments in order to keep current, any order of possession must allow the occupant to retain possession of the property covered in his or her rental agreement (i) for 120 days following the notice of the hearing on the supplemental petition that has been properly served upon the occupant, or (ii) through the duration of his or her lease, whichever is shorter, provided that if the duration of his or her lease is less than 30 days from the date of the order, the order shall allow the occupant to retain possession for 30 days from the date of the order. A mortgagee in possession, receiver, holder of a certificate of sale or deed, or purchaser at the judicial sale, who asserts that the occupant is not current in rent, shall file an affidavit to that effect in the supplemental petition proceeding. If the occupant has been given timely written notice of to whom and where the rent is to be paid, this item (4) shall only apply if the occupant continues to pay his or her rent in full during the 120‑day period or has made good‑faith efforts to pay the rent in full during that period. No mortgagee‑in‑possession, receiver or holder of a certificate of sale or deed, or purchaser who fails to file a supplemental petition under this subsection during the pendency of a mortgage foreclosure shall file a forcible entry and detainer action against an occupant of the mortgaged real estate until 90 days after a notice of intent to file such action has been properly served upon the occupant.
        (5) The court records relating to a supplemental
    petition for possession filed under this subsection (h) against an occupant who is entitled to notice under item (4) of this subsection (h), or relating to a forcible entry and detainer action brought against an occupant who would have lawful possession of the premises but for the foreclosure of a mortgage on the property, shall be ordered sealed and shall not be disclosed to any person, other than a law enforcement officer or any other representative of a governmental entity, except upon further order of the court.
(Source: P.A. 95‑262, eff. 1‑1‑08; 95‑933, eff. 8‑26‑08; 96‑60, eff. 7‑23‑09; 96‑111, eff. 10‑29‑09; 96‑1000, eff. 7‑2‑10.)

    (735 ILCS 5/15‑1702) (from Ch. 110, par. 15‑1702)
    Sec. 15‑1702. Specific Rules of Possession. (a) Mortgagee's Rights. No mortgagee shall be required to take possession of the mortgaged real estate, whether upon application made by any other party or otherwise. Whenever a mortgagee entitled to possession so requests, the court shall appoint a receiver. The failure of a mortgagee to request possession or appointment of a receiver shall not preclude a mortgagee otherwise entitled to possession from making such a request at any future time. The appointment of a receiver shall not preclude a mortgagee from thereafter seeking to exercise such mortgagee's right to be placed in possession.
    (b) Designation of Receivers. Whenever a receiver is to be appointed, the mortgagee shall be entitled to designate the receiver. If the mortgagor or any other party to the foreclosure objects to any such designation or designations and shows good cause, or the court disapproves the designee, the mortgagee in such instance shall be entitled to make another designation.
    (c) Rights of Mortgagee Having Priority. If a mortgagee having priority objects to the proposed possession by a subordinate mortgagee or by a receiver designated by the subordinate mortgagee, upon entry of a finding in accordance with subsection (d) of Section 15‑1702 the court shall instead place that objecting mortgagee in possession or, if a receiver is to be designated in accordance with subsection (b) of Section 15‑1702, allow the designation of the receiver to be made by that objecting mortgagee.
    (d) Removal of Mortgagee in Possession. A mortgagee placed in possession shall not be removed from possession, and no receiver or other mortgagee shall be placed in possession except upon (i) the mortgagee's misconduct, death, legal disability or other inability to act, (ii) appointment of a receiver in accordance with subsection (a) of Section 15‑1704 or (iii) a showing of good cause by a mortgagee having priority. A receiver shall not be removed solely on account of being designated by a mortgagee later determined not to have priority.
    (e) Determination of Priority. If the court is required to determine priority for the purposes of subsection (c) of Section 15‑1702, a new determination shall be made each time a mortgagee is to be placed in possession or a receiver is to be appointed and shall be an interim determination which shall not preclude the court from making a contrary determination later in the foreclosure. If the court subsequently shall make such a contrary determination, a mortgagee in possession or acting receiver shall not be removed except in accordance with Part 17 of this Article.
    (f) Rights to Crops. With respect to any crops growing or to be grown on the mortgaged real estate, the rights of a holder of any obligation secured by a collateral assignment of beneficial interest in a land trust, the rights of a mortgagee in possession, or the rights of a receiver, including rights by virtue of an equitable lien, shall be subject to a security interest properly perfected pursuant to Article 9 of the Uniform Commercial Code, where the holder of a collateral assignment, mortgagee in possession, or receiver becomes entitled to crops by obtaining possession on or after the effective date of this Amendatory Act of 1988.
(Source: P.A. 85‑1427.)

    (735 ILCS 5/15‑1703)(from Ch. 110, par. 15‑1703)
    Sec. 15‑1703. Mortgagee in Possession.
    (a) Powers and Duties. A mortgagee placed in possession of the real estate pursuant to Section 15‑1701 or Section 15‑1702 shall have:
        (1) such power and authority with respect to the real
     estate and other property subject to the mortgage, including the right to receive the rents, issues and profits thereof, as may have been conferred upon the mortgagee by the terms of the mortgage or other written instrument authorizing the taking of possession;
        (2) all other rights and privileges of a mortgagee in
     possession under law not inconsistent herewith; and
        (3) the same powers, duties and liabilities as a
     receiver appointed for the real estate in accordance with this Article. If an order placing a mortgagee in possession is modified, revoked or set aside, the mortgagee shall not be liable for any damages to the extent such damages arise solely out of the fact that the mortgagor was removed from possession or that the mortgagee was placed in possession.
    (a‑5) Notice to occupants.
        (1) Following the order placing the mortgagee in
     possession of the mortgaged real estate, but no later than 21 days after the entry of such order, the mortgagee in possession shall make a good faith effort to ascertain the identities and addresses of all occupants of dwelling units of the mortgaged real estate.
        (2) Following the order placing the mortgagee in
     possession of the mortgaged real estate, but no later than 21 days after the entry of such order, the mortgagee in possession shall notify all known occupants of dwelling units of the mortgaged real estate that the mortgagee has taken possession of the mortgaged real estate. The notice shall be in writing and shall:
            (i) identify the occupant being served by the
         name known to the mortgagee in possession;
            (ii) inform the occupant that the mortgaged real
         estate at which the dwelling unit is located is the subject of a foreclosure action and that control of the mortgaged real estate has changed;
            (iii) provide the name, address, and telephone
         number of the individual or entity whom occupants may contact with concerns about the mortgaged real estate or to request repairs of that property;
            (iv) include the following language, or language
         that is substantially similar: "This is NOT a notice to vacate the premises. You may wish to contact a lawyer or your local legal aid or housing counseling agency to discuss any rights that you may have."; and
            (v) include the name of the case, the case
         number, and the court where the foreclosure action is pending.
        (3) The written notice required by item (2) of this
     subsection (a‑5) shall be served by delivering a copy thereof to the known occupant, or by leaving the same with some person of the age of 13 years or upwards, who is residing on or in possession of the premises; or by sending a copy of the notice to the known occupant by first‑class mail, addressed to the occupant by the name known to the mortgagee in possession.
        (4) In the event that a mortgagee in possession
     ascertains the identity and address of an occupant of a dwelling unit of the mortgaged real estate more than 21 days after being placed in possession of the mortgaged real estate pursuant to Section 15‑1703, the mortgagee in possession shall provide the notice required by item (2) of this subsection (a‑5) within 7 days of ascertaining the identity and address of the occupant.
        (5)(i) A mortgagee in possession who fails to comply
     with items (1), (2), (3), and (4) of this subsection (a‑5) may not collect any rent due and owing from a known occupant, or terminate a known occupant's tenancy for non‑payment of such rent, until the mortgagee in possession has served the notice described in item (2) of this subsection (a‑5) upon the known occupant. After providing such notice, the mortgagee in possession may collect any and all rent otherwise due and owing the mortgagee in possession from the known occupant and may terminate the known occupant's tenancy for non‑payment of such rent if the mortgagee in possession otherwise has such right to terminate.
        (ii) An occupant who previously paid rent for the
     current rental period to the mortgagor, or other entity with the authority to operate, manage, and conserve the mortgaged real estate at the time of payment, shall not be held liable for that rent by the mortgagee in possession, and the occupant's tenancy shall not be terminated for non‑payment of rent for that rental period.
        (6) Within 21 days of the order placing the mortgagee
     in possession of the mortgaged real estate, the mortgagee in possession shall post a written notice on the primary entrance of each dwelling unit subject to the foreclosure action that informs the occupants that the mortgagee in possession is now operating and managing the mortgaged real estate. This notice shall:
            (i) inform occupant that the dwelling unit is the
         subject of a foreclosure action and that control of the mortgaged real estate has changed;
            (ii) include the following language: "This is NOT
         a notice to vacate the premises."; and
            (iii) provide the name, address, and telephone
         number of the individual or entity whom occupants may contact with concerns about the mortgaged real estate or to request repairs of the property.
        (7)(i) The provisions of item (5) of this subsection
     (a‑5) shall be the exclusive remedy for the failure of a mortgagee in possession to provide notice to a known occupant under this Section.
        (ii) This Section shall not abrogate any right that a
     mortgagee in possession may have to possession of the mortgaged real estate and to maintain a proceeding against an occupant of a dwelling unit for possession under Article 9 of this Code or subsection (h) of Section 15‑1701.
    (b) Fees and Expenses. A mortgagee in possession shall not be entitled to any fees for so acting, but shall be entitled to reimbursement for reasonable costs, expenses and third party management fees incurred in connection with such possession.
(Source: P.A. 96‑111, eff. 10‑29‑09.)

    (735 ILCS 5/15‑1704)(from Ch. 110, par. 15‑1704)
    Sec. 15‑1704. Receivers.
    (a) Receiver. Notwithstanding the provisions of subsections (b), (c) and (d) of Section 15‑1701, and except as provided in Section 15‑1702, upon request of any party and a showing of good cause, the court shall appoint a receiver for the mortgaged real estate.
    (b) Powers. A receiver appointed pursuant to this Article shall have possession of the mortgaged real estate and other property subject to the mortgage during the foreclosure, shall have full power and authority to operate, manage and conserve such property, and shall have all the usual powers of receivers in like cases. Without limiting the foregoing, a receiver shall have the power and authority to:
        (1) secure tenants and execute leases for the real
     estate, the duration and terms of which are reasonable and customary for the type of use involved, and such leases shall have the same priority as if made by the owner of the real estate; but, unless approved by the Court, the receiver shall not execute oil, gas or other mineral leases, or (even if otherwise allowed by law) leases extending beyond the time of the receiver's possession; provided, however, with respect to residential real estate leased by the receiver, nothing in this Section shall affect the legal rights of any lessee with respect to the safety and habitability of the residential real estate;
        (2) collect the rents, issues and profits from the
     mortgaged real estate;
        (3) insure the mortgaged real estate against loss by
     fire or other casualty;
        (4) employ counsel, custodians, janitors and other
     help; and
        (5) pay taxes which may have been or may be levied
     against the mortgaged real estate.
    (c) Duties. A receiver appointed pursuant to this Article must manage the mortgaged real estate as would a prudent person, taking into account the effect of the receiver's management on the interest of the mortgagor. A receiver may, without an order of the court, delegate managerial functions to a person in the business of managing real estate of the kind involved who is financially responsible, not related to the mortgagee or receiver and prudently selected. However, the receiver shall remain responsible to the mortgagor or other persons for the acts or omissions of such management agent. When fees are paid to such a management agent, the receiver's fees may be adjusted to the extent the court deems appropriate. In managing the mortgaged real estate and other property subject to the mortgage, a receiver or receiver's delegate, to the extent the receiver receives sufficient receipts from the mortgaged real estate, such other property or other sources, except to the extent ordered otherwise by the court:
        (1) shall maintain the existing casualty and
     liability insurance required in accordance with the mortgage or applicable to the real estate and other property subject to the mortgage at the time the receiver took possession;
        (2) shall use reasonable efforts to maintain the real
     estate and other property subject to the mortgage in at least as good condition as existed at the time the receiver took possession, excepting reasonable wear and tear and damage by any casualty;
        (2.5) shall accept all rental payments from an
     occupant of the mortgaged property, and any payments from a third party or any rental assistance program in support of an occupant's housing;
        (3) shall apply receipts to payment of ordinary
     operating expenses, including royalties, rents and other expenses of management;
        (4) shall pay any shared or common expense
     assessments due to any association of owners of interests in real estate to the extent that such assessments are or may become a lien against the mortgaged real estate;
        (5) may pay the amounts due under any mortgage if the
     mortgagee thereof is not a party in the foreclosure;
        (6) may carry such additional casualty and liability
     insurance as is reasonably available and reasonable as to amounts and risks covered;
        (7) may make other repairs and improvements necessary
     to comply with building, housing, and other similar codes or with existing contractual obligations affecting the mortgaged real estate;
        (8) may hold receipts as reserves reasonably required
     for the foregoing purposes; and
        (9) may take such other actions as may be reasonably
     necessary to conserve the mortgaged real estate and other property subject to the mortgage, or as otherwise authorized by the court.
    (d) Allocation of Receipts. Receipts received from operation of the real estate and other property subject to the mortgage by the receiver shall be applied in the following order of priority.
        (1) to reimbursement of the receiver for all
     reasonable costs and expenses incurred by the receiver or the receiver's delegates;
        (2) to payment of insurance premiums authorized in
     paragraph (1) of subsection (c) of Section 15‑1704;
        (3) to payment of the receiver's delegates of any
     reasonable management fees for managing real estate of the type involved;
        (4) to payment of receiver's fees allowed by the
     court;
        (5) to payment of expenses authorized in paragraphs
     (2), (3) and (4) of subsection (c) of Section 15‑1704;
        (6) to payment of amounts authorized in paragraph (5)
     of subsection (c) of Section 15‑1704;
        (7) to payment of expenses authorized in paragraphs
     (6) and (7) of subsection (c) of Section 15‑1704; and
        (8) the balance, if any, shall be held or disbursed
     as ordered by the court.
    (e) Non‑Liability for Allocations. A receiver shall in no event be liable to any person for the allocation of, or failure to allocate, receipts to possible expenditures within the same priority category.
    (f) Notice to occupants.
        (1) Following an order appointing a receiver pursuant
     to Section 15‑1704, but no later than 21 days after the entry of such order, the appointed receiver shall make a good faith effort to ascertain the identities and addresses of all occupants of dwelling units of the mortgaged real estate.
        (2) Following an order appointing a receiver pursuant
     to Section 15‑1704, but no later than 21 days after the entry of such order, the appointed receiver shall notify all known occupants of dwelling units of the mortgaged real estate that the receiver has been appointed receiver of the mortgaged real estate. Such notice shall be in writing and shall:
            (i) identify the occupant being served by the
         name known to the receiver;
            (ii) inform the occupant that the mortgaged real
         estate at which the dwelling unit is located is the subject of a foreclosure action and that control of the mortgaged real estate has changed;
            (iii) provide the name, address, and telephone
         number of the individual or entity whom occupants may contact with concerns about the mortgaged real estate or to request repairs of that property;
            (iv) include the following language, or language
         that is substantially similar: "This is NOT a notice to vacate the premises. You may wish to contact a lawyer or your local legal aid or housing counseling agency to discuss any rights that you may have."; and
            (v) include the name of the case, the case
         number, and the court where the foreclosure action is pending.
        (3) The written notice required by item (2) of this
     subsection (f) shall be served by delivering a copy thereof to the known occupant, or by leaving the same with some person of the age of 13 years or upwards, who is residing on or in possession of the premises; or by sending a copy of the notice to the known occupant by first‑class mail, addressed to the occupant by the name known to the receiver.