Illinois Compiled Statutes 55 ILCS 5/3-5010.5 – Fraud referral and review
Current as of: 2024 | Check for updates
|
Other versions
(a) Legislative findings. The General Assembly finds that property fraud, including fraudulent filings intended to cloud or fraudulently transfer title to property by recording false or altered documents and deeds, is a rapidly growing problem throughout the State. In order to combat the increase in the number of these filings, a recorder may establish a process to review and refer documents suspected to be fraudulent.
(b) Definitions. The terms “recording” and “filing” are used interchangeably in this Section.
(c) Establishment and use of a fraud referral and review process. A recorder who establishes a fraud referral and review process under the provisions of this Section may use it to review deeds and instruments and refer any of them to an administrative law judge for review pursuant to subsection (g) of this Section that cause the recorder to reasonably believe that the filing may be fraudulent, unlawfully altered, or intended to unlawfully cloud or transfer the title of any real property. The recorder may enter into an intergovernmental agreement with local law enforcement officials for the purposes of this referral and review. A recorder may request that the Secretary of the Department of Financial and Professional Regulation assist in reviewing possible fraudulent filings. Upon request, the Secretary, or the Secretary’s designee, shall assist in identifying the validity of filings. The recorder shall notify the Secretary when a document suspected to be fraudulent is discovered.
In counties with a population of less than 3 million, a recorder shall provide public notice 90 days before the establishment of the fraud referral and review process. The notice shall include a statement of the recorder’s intent to create a fraud referral and review process and shall be published in a newspaper of general circulation in the county and, if feasible, posted on the recorder’s website and at the recorder’s office or offices.
In determining whether to refer a document to an administrative law judge for review, a recorder may take into consideration any of the following factors:
(1) whether the owner of the property or owner’s
(b) Definitions. The terms “recording” and “filing” are used interchangeably in this Section.
Terms Used In Illinois Compiled Statutes 55 ILCS 5/3-5010.5
- Attorney-in-fact: A person who, acting as an agent, is given written authorization by another person to transact business for him (her) out of court.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Fraud: Intentional deception resulting in injury to another.
- Grantor: The person who establishes a trust and places property into it.
- individual: shall include every infant member of the species homo sapiens who is born alive at any stage of development. See Illinois Compiled Statutes 5 ILCS 70/1.36
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
- Probable cause: A reasonable ground for belief that the offender violated a specific law.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
- United States: may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14
(c) Establishment and use of a fraud referral and review process. A recorder who establishes a fraud referral and review process under the provisions of this Section may use it to review deeds and instruments and refer any of them to an administrative law judge for review pursuant to subsection (g) of this Section that cause the recorder to reasonably believe that the filing may be fraudulent, unlawfully altered, or intended to unlawfully cloud or transfer the title of any real property. The recorder may enter into an intergovernmental agreement with local law enforcement officials for the purposes of this referral and review. A recorder may request that the Secretary of the Department of Financial and Professional Regulation assist in reviewing possible fraudulent filings. Upon request, the Secretary, or the Secretary’s designee, shall assist in identifying the validity of filings. The recorder shall notify the Secretary when a document suspected to be fraudulent is discovered.
In counties with a population of less than 3 million, a recorder shall provide public notice 90 days before the establishment of the fraud referral and review process. The notice shall include a statement of the recorder’s intent to create a fraud referral and review process and shall be published in a newspaper of general circulation in the county and, if feasible, posted on the recorder’s website and at the recorder’s office or offices.
In determining whether to refer a document to an administrative law judge for review, a recorder may take into consideration any of the following factors:
(1) whether the owner of the property or owner’s
|
designated representative has reported to the recorder that another individual is attempting or has attempted to record a fraudulent deed or other instrument upon the property;
|
(2) whether a law enforcement official has contacted
|
the recorder indicating that the law enforcement official has probable cause to suspect title or recording fraud;
|
(3) whether the filer’s name has a copyright
|
attached to it or the property owner’s name has nonstandard punctuation attached to it;
|
(4) whether the documents assert fines that do not
|
exist or have no basis under current law or that require payment in gold or silver;
|
(5) whether the documents are maritime liens, or
|
liens under the Federal Maritime Lien Act or the Preferred Ship Mortgage Act, or not authorized by the United States Coast Guard;
|
(6) whether the documents are land patents not
|
authorized and certified by the United States Department of the Interior Bureau of Land Management;
|
(7) whether the documents are representing that the
|
subject of the lien is releasing itself from a lien held by another entity, with no apparent cooperation or authorization provided by the lienholder;
|
(8) whether the documents are protesting or
|
disputing a foreclosure proceeding that are not filed within the foreclosure suit and with the court presiding over the matter;
|
(9) whether the documents are Uniform Commercial Code
|
filings referencing birth certificates or other private records that are not in compliance with § 9-501 of the Uniform Commercial Code;
|
(10) whether the documents are re-recording deeds to
|
re-notarize or attach notary certification if prior notarization already appears unaltered on the document of record;
|
(11) whether the documents are asserting diplomatic
|
credentials or immunity, non-United States citizenship, or independence from the laws of the United States;
|
(12) whether the documents are claims that a bank
|
cannot hold title after a foreclosure;
|
(13) whether the documents are deeds not properly
|
signed by the last legal owner of record or the owner’s court-appointed representative or attorney-in-fact under a power of attorney;
|
(14) whether the documents are manipulated or
|
altered federal or State legal or court forms that release a lien;
|
(15) whether a document is not related to a valid
|
existing or potential adverse transaction, existing lien, or judgment of a court of competent jurisdiction;
|
(16) a document that is not related to a valid
|
existing or potential commercial or financial transaction, existing agricultural or other lien, or judgment of a court of competent jurisdiction;
|
(17) whether the document is filed with the intent to
|
harass or defraud the person identified in the record or any other person;
|
(18) whether the document is filed with the intent to
|
harass or defraud any member of a governmental office, including, but not limited to, the recorder’s office, local government offices, the State of Illinois, or the Federal government; and
|
(19) whether the documents are previous court
|
determinations, including a previous determination by a court of competent jurisdiction that a particular document is fraudulent, invalid, or forged.
|
(d) Determinations. If a recorder determines, after review by legal staff and counsel, that a deed or instrument that is recorded in the grantor‘s index or the grantee’s index may be fraudulent, unlawfully altered, or intended to unlawfully cloud or transfer the title of any real property, the recorder shall refer the deed or instrument to an administrative law judge for review pursuant to subsection (g) of this Section. The recorder shall record a Notice of Referral in the grantor’s index or the grantee’s index identifying the document, corresponding document number in question, and the date of referral. The recorder shall also notify the parties set forth in subsection (e) of this Section. The recorder may, at the recorder’s discretion, notify law enforcement officials regarding a filing determined to be fraudulent, unlawfully altered, or intended to unlawfully cloud or transfer the title of any real property.
(e) Notice. The recorder shall use county property tax records to identify and provide notice to the last owner of record by telephone, if available, and certified mail both when: (1) a deed or instrument has been referred for review and determination; and (2) a final determination has been made regarding the deed or instrument. Notice, by mail, shall also be sent to the physical address of the property associated with the deed or instrument.
(f) Administrative decision. The recorder’s decision to add a Notice of Referral and refer a document for review is a final administrative decision that is subject to review by the circuit court of the county where the real property is located under the Administrative Review Law. The standard of review by the circuit court shall be de novo.
(g) Referral and review process. Prior to referral, the recorder shall notify the last owner of record of the document or documents suspected to be fraudulent. The person, entity, or legal representative thereof shall confirm in writing the person’s, entity’s, or legal representative’s belief that a document or documents are suspected to be fraudulent and may request that the recorder refer the case for review. Upon request, the recorder shall bring a case to its county department of administrative hearings and, within 10 business days after receipt, an administrative law judge shall schedule a hearing to occur no later than 30 days after receiving the referral. The referral and case shall clearly identify the person, persons, or entity believed to be the last true owner of record as the petitioner. Notice of the hearing shall be provided by the administrative law judge to the filer, or the party represented by the filer, of the suspected fraudulent document, the legal representative of the recorder of deeds who referred the case, and the last owner of record, as identified in the referral.
If clear and convincing evidence shows the document in question to be fraudulent, the administrative law judge shall rule the document to be fraudulent and forward the judgment to all the parties identified in this subsection. Upon receiving notice of the judgment of fraud, the recorder shall, within 5 business days, record a new document that includes a copy of the judgment in front of the Notice of Referral that shall clearly state that the document in question has been found to be fraudulent and shall not be considered to affect the chain of title of the property in any way.
If the administrative law judge finds the document to be legitimate, the recorder shall, within 5 business days after receiving notice, record a copy of the judgment.
A decision by an administrative law judge shall not preclude a State’s attorney or sheriff from proceeding with a criminal investigation or criminal charges. If a county does not have an administrative law judge that specializes in public records, one shall be appointed within 3 months after the effective date of this amendatory Act of the 98th General Assembly, or the original case shall be forwarded to the proper circuit court with jurisdiction.
Nothing in this Section precludes a private right of action by any party with an interest in the property affected by the review and referral, or the filer of the document or documents suspected to be fraudulent. Nothing in this Section requires a person or entity who may have had a fraudulent document or encumbrance filed against the person’s or entity’s property to use the fraud review and referral process or administrative review created by this Section.
(h) Fees. The recorder shall retain any filing fees associated with filing a deed or instrument that is determined to be fraudulent, unlawfully altered, or intended to unlawfully cloud or transfer the title of any real property under this Section.
(i) Liability. Neither a recorder nor any of the recorder’s employees or agents shall be subject to personal liability by reason of any error or omission in the performance of any duty under this Section, except in case of willful or wanton conduct. Neither the recorder nor any of the recorder’s employees shall incur liability for the referral or review, or failure to refer or review, a document or instrument under this Section.
(j) Applicability. This Section applies only to filings provided to the recorder on and after the effective date of this amendatory Act of the 98th General Assembly.
(k) (Blank).
(e) Notice. The recorder shall use county property tax records to identify and provide notice to the last owner of record by telephone, if available, and certified mail both when: (1) a deed or instrument has been referred for review and determination; and (2) a final determination has been made regarding the deed or instrument. Notice, by mail, shall also be sent to the physical address of the property associated with the deed or instrument.
(f) Administrative decision. The recorder’s decision to add a Notice of Referral and refer a document for review is a final administrative decision that is subject to review by the circuit court of the county where the real property is located under the Administrative Review Law. The standard of review by the circuit court shall be de novo.
(g) Referral and review process. Prior to referral, the recorder shall notify the last owner of record of the document or documents suspected to be fraudulent. The person, entity, or legal representative thereof shall confirm in writing the person’s, entity’s, or legal representative’s belief that a document or documents are suspected to be fraudulent and may request that the recorder refer the case for review. Upon request, the recorder shall bring a case to its county department of administrative hearings and, within 10 business days after receipt, an administrative law judge shall schedule a hearing to occur no later than 30 days after receiving the referral. The referral and case shall clearly identify the person, persons, or entity believed to be the last true owner of record as the petitioner. Notice of the hearing shall be provided by the administrative law judge to the filer, or the party represented by the filer, of the suspected fraudulent document, the legal representative of the recorder of deeds who referred the case, and the last owner of record, as identified in the referral.
If clear and convincing evidence shows the document in question to be fraudulent, the administrative law judge shall rule the document to be fraudulent and forward the judgment to all the parties identified in this subsection. Upon receiving notice of the judgment of fraud, the recorder shall, within 5 business days, record a new document that includes a copy of the judgment in front of the Notice of Referral that shall clearly state that the document in question has been found to be fraudulent and shall not be considered to affect the chain of title of the property in any way.
If the administrative law judge finds the document to be legitimate, the recorder shall, within 5 business days after receiving notice, record a copy of the judgment.
A decision by an administrative law judge shall not preclude a State’s attorney or sheriff from proceeding with a criminal investigation or criminal charges. If a county does not have an administrative law judge that specializes in public records, one shall be appointed within 3 months after the effective date of this amendatory Act of the 98th General Assembly, or the original case shall be forwarded to the proper circuit court with jurisdiction.
Nothing in this Section precludes a private right of action by any party with an interest in the property affected by the review and referral, or the filer of the document or documents suspected to be fraudulent. Nothing in this Section requires a person or entity who may have had a fraudulent document or encumbrance filed against the person’s or entity’s property to use the fraud review and referral process or administrative review created by this Section.
(h) Fees. The recorder shall retain any filing fees associated with filing a deed or instrument that is determined to be fraudulent, unlawfully altered, or intended to unlawfully cloud or transfer the title of any real property under this Section.
(i) Liability. Neither a recorder nor any of the recorder’s employees or agents shall be subject to personal liability by reason of any error or omission in the performance of any duty under this Section, except in case of willful or wanton conduct. Neither the recorder nor any of the recorder’s employees shall incur liability for the referral or review, or failure to refer or review, a document or instrument under this Section.
(j) Applicability. This Section applies only to filings provided to the recorder on and after the effective date of this amendatory Act of the 98th General Assembly.
(k) (Blank).