(765 ILCS 101/10-15)
Sec. 10-15. Interests, liens, and encumbrances; alternative assurances.
(a) Excluding any encumbrance placed against the purchaser's timeshare interest securing the purchaser's payment of purchase-money financing for such purchase, the developer shall not be entitled to the release of any funds escrowed under subsection (c) of Section 5-15 with respect to each timeshare interest and any other property or rights to property appurtenant to the timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, until the developer has provided satisfactory evidence to the Department of one of the following:
(1) The timeshare interest together with any other
property or rights to property appurtenant to the timeshare interest, including any amenities represented to the purchaser as being part of the timeshare plan, are free and clear of any of the claims of the developer, any owner of the underlying fee, a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights.
(2) The developer, any owner of the underlying fee,
a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has recorded a subordination and notice to creditors document in the appropriate public records of the jurisdiction in which the timeshare interest is located. The subordination document shall expressly and effectively provide that the interest holder's right, lien, or encumbrance shall not adversely affect, and shall be subordinate to, the rights of the owners of the timeshare interests in the timeshare plan regardless of the date of purchase, from and after the effective date of the subordination document.
(3) The developer, any owner of the underlying fee,
a mortgagee, judgment creditor, or other lienor, or any other person having an interest in or lien or encumbrance against the timeshare interest or appurtenant property or property rights, including any amenities represented to the purchaser as being part of the timeshare plan, has transferred the subject accommodations or amenities or all use rights therein to a nonprofit organization or owners' association to be held for the use and benefit of the owners of the timeshare plan, which entity shall act as a fiduciary to the purchasers, provided that the developer has transferred control of such entity to the owners or does not exercise its voting rights in such entity with respect to the subject accommodations or amenities. Prior to the transfer, any lien or other encumbrance against the accommodation or facility shall be made subject to a subordination and notice to creditors instrument pursuant to paragraph (2).
(4) Alternative arrangements have been made which
are adequate to protect the rights of the purchasers of the timeshare interests and approved by the Department.
(b) Nothing in this Section shall prevent a developer from accessing any escrow funds if the developer has complied with subsection (c) of Section 5-15.
(Source: P.A. 96-738, eff. 8-25-09.)
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Last modified: February 18, 2015