§ 2401 — Recording and release of lien

A. The lien created by Section 2400 shall be invalid only as to any innocent purchaser for value of stock in trade of any employer in the usual course of such employer's business, and shall be invalid as to any innocent purchaser for value of any of the other assets to which such lien has attached, unless, with respect to liens created prior to January 1, 2020, notice thereof has been filed by the Director in the office of the recorder of the county within which the property subject to the lien is situated or, with respect to liens created on or after January 1, 2020, notice has been filed in the Lien Registry as provided by Section 2401.1. The Director may, in his discretion, for good cause shown, issue a certificate of withdrawal of notice of lien filed against any employer, which certificate shall be recorded in the same manner as herein provided for the recording of notice of liens. Such withdrawal of notice of lien shall invalidate such lien as against any person acquiring any of such employer's property or any interest therein, subsequent to the recordation of the withdrawal of notice of lien, but shall not otherwise affect the validity of such lien, nor shall it prevent the Director from re-recording notice of such lien. In the event notice of such lien is re-recorded, such notice shall be effective as against third persons only as of the date of such re-recordation. Recording a lien in the Lien Registry which had previously been recorded by the Director with a county recorder of deeds shall not constitute a re-recordation of that lien and does not change the original filing date of such lien. B. The recorder of each county shall procure at the expense of the county a file labeled "Unemployment Compensation Contribution Lien Notice" and an index book labeled "Unemployment Compensation Contribution Lien Index." When a notice of any such lien is presented to him for filing, he shall file it in numerical order in the file and shall enter it alphabetically in the index. The entry shall show the name and last known business address of the employer named in the notice, the serial number of the notice, the date and hour of filing, and the amount of contribution, interest and penalty thereon due and unpaid. When a certificate of complete or partial release of such lien issued by the Director is presented for filing in the office of the recorder where a notice of lien was filed, the recorder shall permanently attach the certificate of release to the notice of lien and shall enter the certificate of release and the date in the Unemployment Compensation Contribution Lien Index on the line where the notice of lien is entered. C. The Director shall have the power to issue a certificate of partial release of any part of the property subject to the lien if he shall find that the fair market value of that part of such property remaining subject to the lien is at least equal to the amount of all prior liens upon such property plus double the amount of the liability for contributions, interest and penalties thereon remaining unsatisfied. D. Where the amount of or the liability for the payment of any contribution, interest or penalty is contested by any employing unit against whose property a lien has attached, and the determination of the Director with reference to such contribution has not become final, the Director may issue a certificate of release of lien upon the furnishing of bond by such employing unit in 125% the amount of the sum of such contribution, interest and penalty, for which lien is claimed, with good and sufficient surety to be approved by the Director conditioned upon the prompt payment of such contribution, together with interest and penalty thereon, by such employing unit to the Director immediately upon the decision of the Director in respect to the liability for such contribution, interest and penalty becoming final. E. When a lien filed by the Director before January 1, 2020 has been satisfied, the Department shall issue a release to the person, or his or her agent, against whom the lien was obtained and such release shall contain in legible letters a statement as follows: FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL BE FILED WITH THE RECORDER OR THE REGISTRAR OF TITLES, IN WHOSE OFFICE, THE LIEN WAS FILED. E-1. When a lien filed by the Director in the Lien Registry has been satisfied, the Department shall permanently attach a certificate of complete or partial release, as the case may be, in the Lien Registry and provide notice of the release to the person, or his or her agent, against whom the lien was obtained. F. The Director may, by rule, require, as a condition of withdrawing, releasing, or partially releasing a lien recorded pursuant to this Section, that the employer reimburse the Department for any recording fees paid with respect to the lien.

Legislative History

(Source: P.A. 101-423, eff. 1-1-20 .)