Update on the Illinois COVID-19 Federal Emergency Rental Assistance Program Act (Public Act 102-0005)

By: Blake A. Strautins, Managing Partner, Pooja Dosi, Associate,
Kathleen Kramer, Director of Operations, and Anthony Porto, Director of Compliance

    On May 17, 2021, the COVID-19 Federal Emergency Rental Assistance Program Act (the “Act”), previously HB 2877, was signed into law by Illinois Governor Pritzker as Public Act 102-00005 and became effective. The relevant provisions of the Act amend the Illinois Code of Civil Procedure by adding two new sections concerning residential foreclosures (735 ILCS 5/15-1513 and 735 ILCS 5/15-1514), amending 735 ILCS 5/9-121 concerning residential evictions, and adding two new sections on residential evictions (735 ILCS 5/9-121.5 and 735 ILCS 5/9-122).

    In sum, §15-1513 states that judicial foreclosure sales shall be stayed until July 31, 2021, and any judicial sale pending as of May 17, 2021 shall be canceled and re-noticed for a date after July 31, 2021. Additionally, no order of possession shall be placed with a sheriff for execution or executed by a sheriff until a date after July 31, 2021 (including orders entered prior to May 17, 2021).

    Lenders and servicers should be aware of the following changes, updates, and clarifications resulting from the Act as they pertain to foreclosures in Illinois:

• Sales can continue to proceed on vacant properties. However, we recommend taking a cautious approach, and only scheduling sales on such cases where the court has made a judicial finding that the subject property is vacant.
• Any previously scheduled sales on occupied properties must be postponed to a date on or after August 2, 2021. Postponed sales must also be re-noticed (including new publication) for the new sale date.
• New sales on occupied properties should not be scheduled for a date before August 2, 2021.
• Sales held on occupied properties between May 17, 2021 and July 31, 2021 should be cancelled or rescinded (up to and including seeking a court order to vacate), depending on local county requirements.
• Sale confirmations for vacant properties may proceed as normal, including seeking immediate possession for the purchaser.
• Sale confirmations for occupied properties may proceed to confirmation if the sale was held before May 17, 2021. However, possession must be extended through the later of July 31, 2021 or 30 days following the entry of sale confirmation.

    The deadlines listed in §15-1514 of the Act have all passed and are not intended to be applied retroactively. Therefore, it appears that these deadlines are moot, unless a court rules otherwise. If that occurs, we will advise accordingly.

    As for the Act’s updates to eviction proceedings, the relevant sections of §9-121 and §9-122 state that for any residential eviction action filed between March 9, 2020 and March 31, 2022, the court file shall be sealed. The Act further provides that, notwithstanding the limited exceptions stated therein, “any person who disseminates a court file sealed under this Section, or the information contained therein, for commercial purposes shall be liable for a civil penalty of $2,000 or twice the actual and consequential damages sustained, whichever is greater, as well as the costs of the action, including reasonable attorney’s fees.”

    Please feel free to reach out to us with any questions or concerns or to further discuss the impact of the Act.