Illinois

Illinois at a Glance

1. Mechanics' Lien Rules

Plain English

An Illinois mechanic's lien is measured from the date of the contract for the improvement, which can be before any work is visible. Against an earlier mortgage, though, the lienor wins only on the value its work added; the prior mortgage keeps the land value as of the contract date. A contractor must record a claim for lien within 4 months after completion to bind buyers and lenders who come along; against the owner it has 2 years. Subcontractors must give the owner a 90-day notice. An owner can force the issue with a written demand: the claimant then has 30 days to sue or loses the lien. Illinois also lets an owner or other interested party petition the circuit court to substitute a surety bond of 175% of the claim for the property.

Key Rules

Who has a lien and when (770 ILCS 60/1). Contractors who improve land under a contract with the owner (or someone the owner authorized or knowingly permitted) have a lien. The statute says the lien attaches as of the date of the contract (60/1(a)).

Recording (60/7). To bind other creditors, incumbrancers, and purchasers, the contractor must sue or record a verified claim for lien within 4 months after completion (or the last extra work). Against the owner, the claim may be recorded within 2 years after completion. For an owner-occupied single-family residence, the contractor must give the owner written notice within 10 days after recording (60/7(d)).

Suit (60/9). Suit must be brought within 2 years after completion.

Subcontractors (60/24). Written notice to the owner of record (and the lender, if known) within 90 days after completion, by certified or registered mail, tracked delivery, or personal service.

Priority (60/16). Previous encumbrances are preferred only to the extent of the value of the land at the time of the contract; lien creditors are preferred as to the value of the later improvements.

Demand to sue (60/34). On the owner's written demand, the claimant must sue within 30 days or the lien is forfeited.

Bond (60/38.1). An owner or other applicant may petition the circuit court to substitute an eligible surety bond of 175% of the claim (from a surety rated at least A by A.M. Best). If the court approves, it orders the bond substituted for the property, and the order and bond are recorded (60/38.1(e), (g)).

Practice Points

1. Use the 4-month window. If work finished within the past 4 months (or isn't finished), a lien can still bind your buyer or lender. Get owner's and contractor's affidavits, sworn statements, and waivers.
2. Construction escrow. In Illinois, construction loans commonly close through a title company construction escrow with sworn contractor's statements and waivers for each draw. Follow the company's construction-escrow requirements.
3. Older claims: a claim of lien more than 2 years past completion, with no suit pending, is likely unenforceable. Search the court docket.
4. Bonding over at 175% requires a court order. Confirm the bond is an eligible surety bond under § 38.1 and that the order and bond are recorded.

Citations

• 770 ILCS 60/1 (lien created): https://www.ilga.gov/documents/legislation/ilcs/documents/077000600K1.htm
• 770 ILCS 60/7 (claim for lien; 4 months; 2 years): https://www.ilga.gov/documents/legislation/ilcs/documents/077000600K7.htm
• 770 ILCS 60/9 (suit within 2 years): https://www.ilga.gov/documents/legislation/ilcs/documents/077000600K9.htm
• 770 ILCS 60/16 (priority over prior encumbrances): https://www.ilga.gov/documents/legislation/ilcs/documents/077000600K16.htm
• 770 ILCS 60/24 (subcontractor notice): https://www.ilga.gov/documents/legislation/ilcs/documents/077000600K24.htm
• 770 ILCS 60/34 (demand to sue): https://www.ilga.gov/documents/legislation/ilcs/documents/077000600K34.htm
• 770 ILCS 60/38.1 (bond substitution): https://www.ilga.gov/documents/legislation/ilcs/documents/077000600K38.1.htm

2. Execution and Notarization Requirements for Recording

Plain English

Illinois deeds and mortgages are acknowledged before a notary (or another listed officer) and recorded with the county recorder; in Cook County that is the Cook County Clerk's Recordings Division. Under Illinois's recording act, an unrecorded deed or mortgage is void against creditors and later purchasers without notice until it is recorded, so actual notice and possession matter (see EquityBuild in the cases). Illinois notaries can perform remote and electronic notarizations under the Notary Public Act. Chicago deals carry four transfer taxes: city, CTA, county, and state taxes total $6.00 per $500. The city also requires a water full payment certificate before a deed can be recorded.

Key Rules

• Recording act (765 ILCS 5/30). Recordable instruments take effect against creditors and subsequent purchasers without notice only from the time of filing for record.
• Acknowledgment (765 ILCS 5/20). Lists the officers who can take acknowledgments in and outside Illinois.
• Remote notarization (5 ILCS 312/6-102.5). Allowed under Secretary of State rules, effective June 5, 2023. The signer must attest to being physically located in Illinois, and the session must be recorded and kept for 3 years. Electronic notarization: 5 ILCS 312 Art. VI-A.
• State transfer tax (35 ILCS 200/31-10). $0.50 per $500. Counties may add $0.25 per $500 (55 ILCS 5/5-1031), and Cook County does.
• Chicago (Mun. Code 3-33-030). City Real Property Transfer Tax $3.75 per $500 plus the CTA portion of $1.50 per $500, a flat $5.25 per $500 total; in general the buyer pays the $3.75 and the seller pays the $1.50 (City Department of Finance).
• Chicago water certificate. A Full Payment Certificate from the city Department of Finance (utility charges paid) is required to get the city transfer stamps needed to record the deed, whether the transfer is taxable or exempt. The application fee is $50 for taxable transfers.
• Predatory Lending Database (765 ILCS 77/70). Certain residential mortgages in the program counties (Cook, Kane, Peoria and Will) must have the database's certificate of compliance or exemption attached (§ 70(a-5), (g)).

Practice Points

1. Cook County: confirm stamps, water certificate, and PLD certificate before recording. Missing items mean a rejected or delayed recording.
2. Possession and inquiry notice. The recording act protects only creditors and purchasers without notice (765 ILCS 5/30), and Illinois law charges buyers and lenders with what diligent inquiry would reveal (SEC v. Duff, No. 24-2254 (7th Cir. Dec. 4, 2025), the EquityBuild receivership). Check who is in possession and ask for payoffs when a property was recently bought.
3. Land trusts (Land Trust Beneficial Interest Disclosure Act, 765 ILCS 405; Land Trust Recordation and Transfer Tax Act, 765 ILCS 420). Get a trustee's deed and a letter of direction, and check the trust agreement for authority.
4. Remote notarizations: confirm the notary was commissioned in Illinois and followed the remote rules.

Citations

• 765 ILCS 5/30 (recording act): https://www.ilga.gov/documents/legislation/ilcs/documents/076500050K30.htm
• 765 ILCS 5/20 (acknowledgments): https://www.ilga.gov/documents/legislation/ilcs/documents/076500050K20.htm
• 5 ILCS 312/6-102.5 (remote notarization): https://www.ilga.gov/documents/legislation/ilcs/documents/000503120K6-102.5.htm
• 35 ILCS 200/31-10 (state transfer tax): https://www.ilga.gov/documents/legislation/ilcs/documents/003502000K31-10.htm
• 55 ILCS 5/5-1031 (county transfer tax): https://www.ilga.gov/documents/legislation/ilcs/documents/005500050K5-1031.htm
• Chicago Municipal Code § 3-33-030 (Chicago transfer tax): https://www.chicago.gov/city/en/depts/fin/supp_info/revenue/tax_list/real_property_transfertax.html
• Chicago Full Payment Certificates: https://www.chicago.gov/city/en/depts/fin/supp_info/utility-billing/full-payment-certificates.html
• 765 ILCS 77/70 (predatory lending database): https://www.ilga.gov/documents/legislation/ilcs/documents/076500770K70.htm
• 765 ILCS 405 and 765 ILCS 420 (land trusts): https://www.ilga.gov/documents/legislation/ilcs/documents/076504200K1.htm

3. Securing Future Advances

Plain English

Illinois's foreclosure law (735 ILCS 5/15-1302) says a mortgage secures future advances with priority from recording, but as against later purchasers and judgment creditors, advances made more than 18 months after recording are a lien only from the date of the advance, unless they fall into an exception. The rule doesn't affect mechanics' liens. The main exceptions are obligatory advances, revolving credit loans, reverse mortgages, interest, and protective advances (taxes, insurance, preservation). Separately, the Banking Act (205 ILCS 5/5d) lets banks make revolving credit mortgages that secure advances made within 20 years, up to a stated maximum, with priority over all later liens and encumbrances, including statutory liens, except taxes and assessments.

Key Rules

• Foreclosure Law (735 ILCS 5/15-1302). As to later purchasers and judgment creditors, money advanced more than 18 months after recording is a lien only from the time advanced (§ 15-1302(a)). Exceptions keep priority from recording: advances under a binding commitment stated in the mortgage, reverse mortgage advances, revolving credit advances, accrued interest, and protective advances (§ 15-1302(b)). Mechanics' liens are not affected.
• Revolving credit (205 ILCS 5/5d). A bank's revolving credit mortgage may secure obligatory or optional advances made within 20 years from its date, as if made at execution, up to a maximum principal stated in the mortgage (plus interest and tax/insurance disbursements). It is valid from recording as to third persons without actual notice and has priority over all later liens and encumbrances, including statutory liens, except taxes and assessments.
• Construction loans. Mechanics' liens can come ahead of later construction advances to the extent of the value of the improvement (770 ILCS 60/16). See section 1.

Practice Points

1. Read the mortgage. It should state that it secures future advances and the maximum amount.
2. Advances after 18 months: for non-revolving, non-obligatory loans, run a date-down and check for intervening liens before each late advance.
3. HELOC payoffs: get a signed freeze/close letter with the payoff and track the release.

Citations

• 735 ILCS 5/15-1302 (future advances): https://www.ilga.gov/documents/legislation/ilcs/documents/073500050K15-1302.htm
• 205 ILCS 5/5d (revolving credit mortgages): https://www.ilga.gov/documents/legislation/ilcs/documents/020500050K5d.htm

4. Subdivision Statutes and Regulations

Plain English

The Plat Act (765 ILCS 205) requires a surveyed plat when an owner divides land into two or more parts, any of which is less than 5 acres, for sale or development, unless an exemption applies. Common exemptions include parcels of 5 acres or more not involving new streets or easements of access, conveyances between owners of adjoining land, and certain one-time divisions (§ 1(b)). Municipalities and counties also have their own subdivision ordinances.

Key Rules

• Plat required (765 ILCS 205/1(a)). Plat needed for divisions into 2+ parts, any under 5 acres, unless one of the 10 exemptions in § 1(b) applies. Counties may lower the 5-acre minimum to no less than 2 acres.
• Local approval. Municipal plat approval and extraterritorial jurisdiction up to 1.5 miles beyond city limits.

Practice Points

1. Splitting a lot? Confirm the Plat Act exemption or a recorded plat.
2. Check the legal description against the recorded plat. Chicago's older subdivisions are often described by block and lot in a named subdivision.
3. Condominiums must comply with the Condominium Property Act. Check the declaration and plat.

Citations

• 765 ILCS 205/1 (Plat Act): https://www.ilga.gov/documents/legislation/ilcs/documents/076502050K1.htm

5. Title Premium Rates

Plain English

Illinois title premiums are not set or approved by the state. The Title Insurance Act says nothing in it gives the Department of Financial and Professional Regulation authority to fix fees. That makes Illinois an open-rate state where each company sets its own rates. What the Act does regulate is conduct: referral fees and kickbacks are prohibited (a Class A misdemeanor), title companies acting as escrow agent on residential deals must issue closing protection letters, good funds rules apply to large deposits, affiliated businesses need disclosure, and buyers have the right to choose their title company.

Key Rules

• No fee setting (215 ILCS 155/19). The Act does not authorize the Department to set fees.
• Referral fees prohibited (155/24). Class A misdemeanor.
• Closing protection letters (155/16.1). A title company or agent may act as escrow agent in a residential transaction (or a non-residential one with less than $2,000,000 on deposit) only if closing protection letters are issued for the buyer or borrower, lender, and seller, with an exception for agents authorized by agency contract, who must issue them on request.
• Good funds (155/26). Disbursements from a fiduciary trust account require good or collected funds when $50,000 or more comes from a single party (155/26(a)).
• Affiliated business disclosure (155/18: written disclosure of a referring producer's financial interest on residential 1-4 unit owner-occupied deals) and buyer's choice of title company (155/18.1).

Practice Points

1. Quote only from the company's Illinois rate schedule for the right county.
2. Issue the CPLs required by § 16.1 on residential deals and keep proof.
3. No referral fees, including to attorneys. This is a criminal statute in Illinois.
4. Endorsements: use only endorsement forms the company has approved for Illinois.

Citations

• 215 ILCS 155/19 (no fee-setting authority): https://www.ilga.gov/documents/legislation/ilcs/documents/021501550K19.htm
• 215 ILCS 155/24 (referral fees): https://www.ilga.gov/documents/legislation/ilcs/documents/021501550K24.htm
• 215 ILCS 155/16.1 (closing protection letters): https://www.ilga.gov/documents/legislation/ilcs/documents/021501550K16.1.htm
• 215 ILCS 155/26 (good funds): https://www.ilga.gov/documents/legislation/ilcs/documents/021501550K26.htm
• 215 ILCS 155/18 (affiliated business disclosure): https://www.ilga.gov/documents/legislation/ilcs/documents/021501550K18.htm
• 215 ILCS 155/18.1 (buyer's choice): https://www.ilga.gov/documents/legislation/ilcs/documents/021501550K18.1.htm

6. Recording Taxes & Fees on Deeds and Mortgages

Plain English

Illinois has a state transfer tax of 50 cents per $500 and a county tax of 25 cents per $500, usually paid by the seller. Home-rule cities can add their own: in Chicago the buyer pays $3.75 per $500 and the seller pays a $1.50 CTA tax. A PTAX-203 declaration is filed with the deed. Illinois has no mortgage tax.

Key Rules

(a) Deed transfer, conveyance or excise tax

• State tax. $0.50 per $500 of value (35 ILCS 200/31-10). The seller pays by custom.
• County tax. $0.25 per $500 where adopted (55 ILCS 5/5-1031), including Cook County.
• Home-rule cities. Chicago: $3.75 per $500 paid by the buyer, plus $1.50 per $500 CTA tax paid by the seller (Chicago Mun. Code 3-33-030).
• Controlling interests. Transfers of a controlling interest in a real estate entity are taxed (35 ILCS 200/31-10; definitions in 31-5).
• PTAX-203. A real estate transfer declaration is required (35 ILCS 200/31-25).

(b) Mortgage, indebtedness or intangible tax

• None found. No Illinois statute imposing a mortgage, indebtedness or intangible tax was found, so future advances, credit lines, refinances and modifications carry only recording fees.

(c) Other recording taxes and fees

• Recording fees are a single predictable fee per document class set by county ordinance (55 ILCS 5/3-5018.2 for first- and second-class counties; 55 ILCS 5/4-12002.3 for third-class counties). The fee includes the $18 Rental Housing Support Program surcharge, and page counts may not change it. Statutory minimums for deeds and mortgages are $31 (first and second class) and $39 (third class).

Practice Points

1. Worked example (Chicago, $400,000): state $400, county $200, Chicago $3,000 (buyer), CTA $1,200 (seller).
2. Suburbs: check the municipal transfer stamp and any water or code-compliance certificate it requires.

Citations

• 35 ILCS 200/31-5, 31-10, 31-25 (Real Estate Transfer Tax Law)
• Chicago Mun. Code 3-33-030
• 55 ILCS 5/3-5018.2 and 4-12002.3 (recording fees): https://www.ilga.gov/documents/legislation/ilcs/documents/005500050K3-5018.2.htm