§ 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."; (v) include the name of the case, the case number, and the court where the foreclosure action is pending; and (vi) provide instructions on the method of payment of future rent, if applicable. (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."; (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; and (iv) provide instructions on the method of payment of future rent, if applicable. (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 IX 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.

Legislative History

(Source: P.A. 98-514, eff. 11-19-13.)