OMBUDSPERSON MGT RECEIVERSHIP

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB3307

Introduced 2/18/2025, by Rep. Kelly M. Cassidy

SYNOPSIS AS INTRODUCED:

735 ILCS 5/15-1704

from Ch. 110, par. 15-1704

Amends the Mortgage Foreclosure Law of the Code of Civil Procedure.
Requires receivers of mortgaged real estate to use reasonable efforts to
make repairs and improvements as necessary to comply with building,
housing, or other similar codes that necessary for the safety,
accessibility, and habitability of residential real estate. Creates the
Residential Real Estate Ombudsperson Program of which the purpose is to
ensure that tenants of residential real estate in receivership continue to
have safe, habitable, and accessible homes throughout the receivership
process and to facilitate communication between tenants, the receiver, and
the court. Requires that in courts in counties of 50,000 or more residents
must establish such a program, and in courts in counties of less than
50,000 residents may establish such a program. Provides for the powers of
the Ombudsperson to include, but not be limited to, (i) taking,
investigating, and making recommendations and reports of complaints of
inadequate performance receivership duties relating to matters that may
adversely affect the health, safety, welfare, or rights of tenants; (ii)
entering the property under receivership at a reasonable time and with
reasonable notice to the receiver or receiver's manager; (iii)
communicating privately with tenants who consent to that communication;
(iv) encouraging the facilitation of communication between receivers,
tenants, and the court; (v) making recommendations to receivers regarding
building conditions and court practices; (vi) submitting reports to the
court regarding the status of the residential real estate, the
receivership relationship, the use of the Ombudsperson services; and (vii)
making recommendations to the court to improve the receivership
relationship. Requires the Ombudsperson within 60 days of appointment to
send a notice of contact information of the Ombudsperson to all known
dwelling occupants of residential real estate through by posting a written
notice on unit doors and in common areas. Effective January 1, 2026.
LRB104 10531 JRC 20607 b

A BILL FOR

HB3307
LRB104 10531 JRC 20607 b
1

AN ACT concerning civil law.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Code of Civil Procedure is amended by
5
changing Section 15-1704 as follows:

6

(735 ILCS 5/15-1704)

(from Ch. 110, par. 15-1704)
7

Sec. 15-1704.
Receivers.
8

(a) Receiver. Notwithstanding the provisions of
9
subsections (b), (c) and (d) of Section 15-1701, and except as
10
provided in Section 15-1702, upon request of any party and a
11
showing of good cause, the court shall appoint a receiver for
12
the mortgaged real estate.
13

(b) Powers. A receiver appointed pursuant to this Article
14
shall have possession of the mortgaged real estate and other
15
property subject to the mortgage during the foreclosure, shall
16
have full power and authority to operate, manage and conserve
17
such property, and shall have all the usual powers of
18
receivers in like cases. Without limiting the foregoing, a
19
receiver shall have the power and authority to:
20

(1) secure tenants and execute leases for the real
21

estate, the duration and terms of which are reasonable and
22

customary for the type of use involved, and such leases
23

shall have the same priority as if made by the owner of the

HB3307
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LRB104 10531 JRC 20607 b
1

real estate; but, unless approved by the Court, the
2

receiver shall not execute oil, gas or other mineral
3

leases, or (even if otherwise allowed by law) leases
4

extending beyond the time of the receiver's possession;
5

provided, however, with respect to residential real estate
6

leased by the receiver, nothing in this Section shall
7

affect the legal rights of any lessee with respect to the
8

safety
,

and
habitability
, and accessibility
of the
9

residential real estate;
10

(2) collect the rents, issues and profits from the
11

mortgaged real estate;
12

(3) insure the mortgaged real estate against loss by
13

fire or other casualty;
14

(4) employ counsel, custodians, janitors and other
15

help; and
16

(5) pay taxes which may have been or may be levied
17

against the mortgaged real estate.
18

(c) Duties. A receiver appointed pursuant to this Article
19
must manage the mortgaged real estate as would a prudent
20
person, taking into account the effect of the receiver's
21
management on the interest of the mortgagor. A receiver may,
22
without an order of the court, delegate managerial functions
23
to a person in the business of managing real estate of the kind
24
involved who is financially responsible, not related to the
25
mortgagee or receiver and prudently selected. However, the
26
receiver shall remain responsible to the mortgagor or other

HB3307
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LRB104 10531 JRC 20607 b
1
persons for the acts or omissions of such management agent.
2
When fees are paid to such a management agent, the receiver's
3
fees may be adjusted to the extent the court deems
4
appropriate. In managing the mortgaged real estate and other
5
property subject to the mortgage, a receiver or receiver's
6
delegate, to the extent the receiver receives sufficient
7
receipts from the mortgaged real estate, such other property
8
or other sources, except to the extent ordered otherwise by
9
the court:
10

(1) shall maintain the existing casualty and liability
11

insurance required in accordance with the mortgage or
12

applicable to the real estate and other property subject
13

to the mortgage at the time the receiver took possession;
14

(2) shall use reasonable efforts to maintain the real
15

estate and other property subject to the mortgage in at
16

least as good condition as existed at the time the
17

receiver took possession, excepting reasonable wear and
18

tear and damage by any casualty
, and shall use reasonable
19

efforts to make repairs and improvements as necessary to
20

comply with building, housing, or other similar codes
21

necessary for the safety, accessibility, and habitability
22

of residential real estate
;
23

(2.5) shall accept all rental payments from an
24

occupant of the mortgaged property, and any payments from
25

a third party or any rental assistance program in support
26

of an occupant's housing;

HB3307
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LRB104 10531 JRC 20607 b
1

(3) shall apply receipts to payment of ordinary
2

operating expenses, including royalties, rents and other
3

expenses of management;
4

(4) shall pay any shared or common expense assessments
5

due to any association of owners of interests in real
6

estate to the extent that such assessments are or may
7

become a lien against the mortgaged real estate;
8

(5) may pay the amounts due under any mortgage if the
9

mortgagee thereof is not a party in the foreclosure;
10

(6) may carry such additional casualty and liability
11

insurance as is reasonably available and reasonable as to
12

amounts and risks covered;
13

(7) may make other repairs and improvements necessary
14

to comply with building, housing, and other similar codes
15

or with existing contractual obligations affecting the
16

mortgaged real estate;
17

(8) may hold receipts as reserves reasonably required
18

for the foregoing purposes; and
19

(9) may take such other actions as may be reasonably
20

necessary to conserve the mortgaged real estate and other
21

property subject to the mortgage, or as otherwise
22

authorized by the court.
23

(d) Allocation of Receipts. Receipts received from
24
operation of the real estate and other property subject to the
25
mortgage by the receiver shall be applied in the following
26
order of priority.

HB3307
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LRB104 10531 JRC 20607 b
1

(1) to reimbursement of the receiver for all
2

reasonable costs and expenses incurred by the receiver or
3

the receiver's delegates;
4

(2) to payment of insurance premiums authorized in
5

paragraph (1) of subsection (c) of Section 15-1704;
6

(3) to payment of the receiver's delegates of any
7

reasonable management fees for managing real estate of the
8

type involved;
9

(4) to payment of receiver's fees allowed by the
10

court;
11

(5) to payment of expenses authorized in paragraphs
12

(2), (3) and (4) of subsection (c) of Section 15-1704;
13

(6) to payment of amounts authorized in paragraph (5)
14

of subsection (c) of Section 15-1704;
15

(7) to payment of expenses authorized in paragraphs
16

(6) and (7) of subsection (c) of Section 15-1704; and
17

(8) the balance, if any, shall be held or disbursed as
18

ordered by the court.
19

(e) Non-Liability for Allocations. A receiver shall in no
20
event be liable to any person for the allocation of, or failure
21
to allocate, receipts to possible expenditures within the same
22
priority category.
23

(f) Notice to occupants.
24

(1) Following an order appointing a receiver pursuant
25

to Section 15-1704, but no later than 21 days after the
26

entry of such order, the appointed receiver shall make a

HB3307
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LRB104 10531 JRC 20607 b
1

good faith effort to ascertain the identities and
2

addresses of all occupants of dwelling units of the
3

mortgaged real estate.
4

(2) Following an order appointing a receiver pursuant
5

to Section 15-1704, but no later than 21 days after the
6

entry of such order, the appointed receiver shall notify
7

all known occupants of dwelling units of the mortgaged
8

real estate that the receiver has been appointed receiver
9

of the mortgaged real estate. Such notice shall be in
10

writing and shall:
11

(i) identify the occupant being served by the name
12

known to the receiver;
13

(ii) inform the occupant that the mortgaged real
14

estate at which the dwelling unit is located is the
15

subject of a foreclosure action and that control of
16

the mortgaged real estate has changed;
17

(iii) provide the name, address, and telephone
18

number of the individual or entity whom occupants may
19

contact with concerns about the mortgaged real estate
20

or to request repairs of that property;
21

(iv) include the following language, or language
22

that is substantially similar: "This is NOT a notice
23

to vacate the premises. You may wish to contact a
24

lawyer or your local legal aid or housing counseling
25

agency to discuss any rights that you may have.";
26

(v) include the name of the case, the case number,

HB3307
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LRB104 10531 JRC 20607 b
1

and the court where the foreclosure action is pending;
2

and
3

(vi) provide instructions on the method of payment
4

of future rent, if applicable.
5

(3) The written notice required by item (2) of this
6

subsection (f) shall be served by delivering a copy
7

thereof to the known occupant, or by leaving the same with
8

some person of the age of 13 years or upwards, who is
9

residing on or in possession of the premises; or by
10

sending a copy of the notice to the known occupant by
11

first-class mail, addressed to the occupant by the name
12

known to the receiver.
13

(4) In the event that a receiver ascertains the
14

identity and address of an occupant of a dwelling unit of
15

the mortgaged real estate more than 21 days after
16

appointment pursuant to Section 15-1704, the receiver
17

shall provide the notice required by item (2) of this
18

subsection (f) within 7 days of ascertaining the identity
19

and address of the occupant.
20

(5)(i) A receiver who fails to comply with items (1),
21

(2), (3), and (4) of this subsection (f) may not collect
22

any rent due and owing from a known occupant, or terminate
23

a known occupant's tenancy for non-payment of such rent,
24

until the receiver has served the notice described in item
25

(2) of this subsection (f) upon the known occupant. After
26

providing such notice, the receiver may collect any and

HB3307
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LRB104 10531 JRC 20607 b
1

all rent otherwise due and owing the receiver from the
2

known occupant and may terminate the known occupant's
3

tenancy for non-payment of such rent if the receiver
4

otherwise has such right to terminate.
5

(ii) An occupant who previously paid rent for the
6

current rental period to the mortgagor, or other entity
7

with the authority to operate, manage, and conserve the
8

mortgaged real estate at the time of payment, shall not be
9

held liable for that rent by the receiver, and the
10

occupant's tenancy shall not be terminated for non-payment
11

of rent for that rental period.
12

(6) Within 21 days of appointment, the receiver shall
13

post a written notice on the primary entrance of each
14

dwelling unit subject to the foreclosure action that
15

informs occupants that the receiver has been appointed to
16

operate and manage the property. This notice shall:
17

(i) inform occupant that the dwelling unit is the
18

subject of a foreclosure action and that control of
19

the mortgaged real estate has changed;
20

(ii) include the following language: "This is NOT
21

a notice to vacate the premises.";
22

(iii) provide the name, address, and telephone
23

number of the individual or entity whom occupants may
24

contact with concerns about the mortgaged real estate
25

or to request repairs of the property; and
26

(iv) provide instructions on the method of payment

HB3307
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LRB104 10531 JRC 20607 b
1

of future rent, if applicable.
2

(7)(i) The provisions of item (5) of this subsection
3

(f) shall be the exclusive remedy for the failure of a
4

receiver to provide notice to a known occupant under this
5

Section.
6

(ii) This Section shall not abrogate any right that a
7

receiver may have to possession of the mortgaged real
8

estate and to maintain a proceeding against an occupant of
9

a dwelling unit for possession under Article IX of this
10

Code or subsection (h) of Section 15-1701.
11

(g) Increase of rents. Notwithstanding any other provision
12
of this Article, a receiver shall not charge an occupant of the
13
mortgaged real estate a rental amount above that which the
14
occupant had been paying for use and occupancy of the
15
mortgaged real estate prior to the appointment of a receiver
16
without leave of court. The court may allow an increase of rent
17
if, upon motion by the receiver, the court finds by a
18
preponderance of the evidence, that the increase of rent is
19
necessary to operate, manage, and conserve the mortgaged real
20
estate pursuant to this Section. A list of the current rents
21
for each unit in the mortgaged real estate, and a list of the
22
proposed rent increase for each of those units, must be
23
attached to a motion for a rent increase under this subsection
24
(g). All occupants of the mortgaged real estate who may be
25
affected by the motion for a rent increase, if not otherwise
26
entitled to notice, shall be notified in writing of the nature

HB3307
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LRB104 10531 JRC 20607 b
1
of the motion, the date and time of the motion, and the court
2
where the motion will be heard. Such notice shall be by
3
personal service or first-class mail. In the event that the
4
receiver and an occupant of a dwelling unit agree to a rent
5
increase for that dwelling unit, the receiver is excused from
6
the requirements of this subsection (g) as to that dwelling
7
unit. Nothing in this subsection (g) shall alter the terms of
8
any lease agreement.
9

(h) Removal. The court may remove a receiver upon a
10
showing of good cause, in which case a new receiver may be
11
appointed in accordance with subsection (b) of Section 15-1702
12
and subsection (a) of Section 15-1704.
13

(i) Residential Real Estate Ombudsperson Program. The
14
purpose of the Residential Real Estate Ombudsperson Program is
15
to ensure that tenants of residential real estate in
16
receivership continue to have safe, habitable, and accessible
17
homes throughout the receivership process and to facilitate
18
communication between tenants, the receiver, and the court. It
19
is the policy of this State to facilitate availability of
20
residential real estate through effective receivership and to
21
ensure that tenants' rights to safe, habitable, and accessible
22
living is accomplished by providing communication and advocacy
23
services for tenants of residential real estate during the
24
receivership.
25

(1) Residential Real Estate Ombudsperson Program.
26

Courts in counties of 50,000 or more residents shall, and

HB3307
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LRB104 10531 JRC 20607 b
1

courts of other counties may, establish a Residential Real
2

Estate Ombudsperson Program in which a Residential Real
3

Estate Ombudsperson is appointed to effectuate this Act.
4

Courts may establish this program using existing staff or
5

new resources. Courts may include in this program
6

receiverships of residential real estate established by
7

municipal request under Section 11-31-2 of the Illinois
8

Municipal Code.
9

(2) Powers of Residential Real Estate Ombudsperson.
10

Residential Real Estate Ombudspersons are authorized to:
11

(A) outline the rights and abilities for tenants
12

to contact the Ombudsperson program on the court
13

website;
14

(B) display name and public registered agents of
15

all active receivers of residential real estate on the
16

court's website;
17

(C) ensure that contact information of receiver,
18

any receiver-hired management company, as well as
19

emergency maintenance information, is sent to and
20

accessible to all current and future tenants of
21

residential real estate under receivership;
22

(D) take, investigate, and make recommendations
23

and reports of complaints of inadequate performance by
24

a receiver on any matters that may adversely affect
25

the health, safety, welfare, or rights of tenants,
26

whether these complaints are from tenants, tenant

HB3307
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LRB104 10531 JRC 20607 b
1

associations, municipal building departments, or
2

otherwise discovered;
3

(E) enter the property under receivership at a
4

reasonable time with reasonable notice to receiver or
5

receiver's manager;
6

(F) communicate privately with tenants who consent
7

to that communication;
8

(G) encourage the facilitation of communication
9

between receivers, tenants, and the court, including
10

timelines for improvements to building conditions,
11

court hearings, schedules for receiverships, and
12

estimated timelines for the end of the receivership;
13

(H) make recommendations to receivers regarding
14

building conditions and court practices;
15

(I) submit reports to the court regarding the
16

status of the residential real estate, the
17

receivership relationship, the use of the Ombudsperson
18

services, and may include statements from tenants,
19

receivers, municipal officials and employees,
20

witnesses, and managers pertinent to the status of the
21

receivership relationship; and
22

(J) make recommendations to the court to improve
23

the receivership relationship, including but not
24

limited to, a request to discharge a receiver and
25

replace that receiver for good cause as provided in
26

this Section.

HB3307
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LRB104 10531 JRC 20607 b
1

(3) Notice to tenants. Within 60 days of appointment,
2

receivers shall send notice of contact information of an
3

Ombudsperson to all known dwelling occupants by posting a
4

written notice on unit doors and in common areas. The
5

notice may be combined with a notice required in paragraph
6

(2) of subsection (f). This notice shall include the
7

following text:
8

"The responsibilities and powers of receivers of
9

residential real estate in Illinois are outlined in
10

Section 15-1704 of the Mortgage Foreclosure Law and
11

include managing the property on behalf of the [Insert
12

County] Court for the purpose of future sale while
13

protecting tenants' rights to safe, habitable, and
14

accessible dwelling units during the receivership period.
15

The court has established an Ombudsperson program to
16

ensure that receiver is meeting these obligations. If you
17

believe your receiver is not meeting those obligations
18

after a good faith effort to work with the receiver or
19

receiver's management company, you may contact the
20

Ombudsperson.
21

[Contact information for Ombudsperson]".

22
(Source: P.A. 98-514, eff. 11-19-13.)

23

Section 99.
Effective date.
This Act takes effect January
24
1, 2026.

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