Illinois Governor Blagojevich signed 2005 IL SB 0075 into law on July 5, 2005. Beginning August 1, 2005, this law requires that Illinois County Recorders collect a Rental Housing Support Program Fund state surcharge in the amount of $10.00 with the recording of all real estate-related documents executed or signed on or after August 1, 2005. A "real estate-related document" includes any recorded document that affects an interest in real property (e.g., deeds, easements, leases, mortgages and other liens), excluding documents solely related to an easement for a public utility or any documents from a state agency, unit of local government, federal government or school district.

The surcharge will fund the Rental Housing Support Program Fund, which was established to assist in addressing the need for rental housing. For the Informational Bulletin issued by the IL Department of Revenue regarding this surcharge, click here.

There is some confusion as to the effective date of this new law. 2005 IL SB 0075 provided for an effective date of July 1, 2005. However, the Governor signed the bill into law on July 5, 2005. New Illinois laws are generally effective on the date the Governor signs a bill into law or on the date stated in the bill. Regardless, it appears that the law will be implemented on August 1, 2005, as Illinois County Recorders must begin collecting the rental-housing surcharge on this date.

On its face, the surcharge appears to be a fee prescribed by law for the purpose of perfecting a security interest, and as such is not a finance charge based on the exclusion provided in Regulation Z Section 226.4(e)(1). The official staff commentary to that section provides in part that "[t]he various charges described in §226.4(e)(1)...may be totaled and disclosed as an aggregate sum, or they may be itemized by the specific fees and taxes imposed." So, a creditor appears to have some leeway to either include the surcharge as part of a single recording or filing fee or to separately itemize it.

Melanie A. Feliciano is Assistant General Counsel of Document Systems, Inc. and a member of its Compliance Department.