(765 ILCS 415/0.01) (from Ch. 148, par. 80)
Sec. 0.01. Short title. This Act may be cited as the Land Trustee as Creditor Act.
(Source: P.A. 86-1324.)
(765 ILCS 415/1) (from Ch. 148, par. 81)
Sec. 1. (a) The General Assembly finds:
(1) For a number of years, the State of Illinois has recognized a real estate trust commonly known as a "land trust";
(2) This legislature has recognized the existence of land trusts and provided for disclosure to appropriate parties of the owners of the beneficial interests of said land trusts;
(3) Disclosure was required by this legislature in particular instances because the legislature recognized that the direction and control of the real estate was in the hands of the beneficiaries because the trustee acted solely as holder of the legal title and was subject at all times to the direction and control of the beneficiaries;
(4) Because the beneficiaries of land trusts retain the power of direction and control of the trust property, such beneficiaries will frequently select a financial institution as trustee simply because that institution will be asked by the beneficiaries to extend credit to the trust or to the beneficiaries secured by their interest in the trust;
(5) Recently, this accepted practice of a creditor lending money to itself as trustee or to the beneficiaries upon the security of an interest in the land trust of which it is trustee, has been scrutinized by the Illinois Supreme Court.
(b) It is the purpose of this Act to codify the accepted practice of a creditor lending to the trustee of a land trust or the beneficiaries thereof upon the security of trust property or their interest in the trust, even though the creditor and the trustee are the same, and to foster and encourage the availability of financing for owners and developers of real estate.
(Source: P.A. 82-891.)
(765 ILCS 415/2) (from Ch. 148, par. 82)
Sec. 2. If a debt is secured by a security interest in a beneficial interest in a land trust or by a mortgage on land trust property, neither the validity or enforceability of the debt, security interest or mortgage nor the rights, remedies, powers and duties of the creditor with respect to the debt or the security shall be affected by the fact that the creditor and the trustee are the same person, and the creditor may extend credit, obtain such security interest or mortgage, and acquire and deal with the property comprising the security as though the creditor were not the trustee. The terms "land trust" and "beneficial interest" shall mean the following:
(a) "Land trust" means any express agreement or arrangement whereof a use, confidence or trust is declared of any land, or of any charge upon land, for the use or benefit of any beneficiary, under which the title to real property, both legal and equitable, is held by a trustee, subject only to the execution of the trust, which may be enforced by the beneficiaries who have the exclusive right to manage and control the real estate, to have possession thereof, to receive the net proceeds from the rental, sale, hypothecation or other disposition thereof, and under which the interest of the beneficiary is personal property only.
(b) "Beneficial interest" means any interest, regardless of how small or minimal such interest may be, in a land trust, held by a trustee for the benefit of beneficiaries of such land trust.
(Source: P.A. 82-891.)
(765 ILCS 415/3) (from Ch. 148, par. 83)
Sec. 3. The fact that a trustee of a land trust is or becomes a secured or unsecured creditor of the land trust, the beneficiaries of the land trust, or a third party whose debt to such creditor is guaranteed by a beneficiary of the land trust, shall not be a breach of, and shall not be deemed evidence of a breach of, any fiduciary duty owed by said trustee to the beneficiaries.
(Source: P.A. 82-891.)
(765 ILCS 415/4) (from Ch. 148, par. 84)
Sec. 4. This Act applies to all security interests in a beneficial interest in land trusts and all mortgages on land trust property and to all debts secured thereby, whether arising before, on, or after the effective date of this Act.
(Source: P.A. 82-891.)