15-1703.Mortgagee in Possession.

Article XV. Mortgage Foreclosure · Part 17. Possession During Foreclosure · Last amended 2013 · Last verified July 20, 2026

In one sentenceSpells out a mortgagee-in-possession's powers and its duty to identify and notify residential occupants within 21 days of taking over, with a specific notice format and a rule that failing to notify blocks collecting rent or evicting for nonpayment until proper notice goes out.

Full Text of 735 ILCS 5/15-1703

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(a) Powers and Duties. A mortgagee placed in possession of the real estate pursuant to Section 15-1701 or Section 15-1702 shall have:

(1) such power and authority with respect to the real estate and other property subject to the mortgage, including the right to receive the rents, issues and profits thereof, as may have been conferred upon the mortgagee by the terms of the mortgage or other written instrument authorizing the taking of possession;

(2) all other rights and privileges of a mortgagee in possession under law not inconsistent herewith; and

(3) the same powers, duties and liabilities as a receiver appointed for the real estate in accordance with this Article. If an order placing a mortgagee in possession is modified, revoked or set aside, the mortgagee shall not be liable for any damages to the extent such damages arise solely out of the fact that the mortgagor was removed from possession or that the mortgagee was placed in possession. (a-5) Notice to occupants.

(1) Following the order placing the mortgagee in possession of the mortgaged real estate, but no later than 21 days after the entry of such order, the mortgagee in possession shall make a good faith effort to ascertain the identities and addresses of all occupants of dwelling units of the mortgaged real estate.

(2) Following the order placing the mortgagee in possession of the mortgaged real estate, but no later than 21 days after the entry of such order, the mortgagee in possession shall notify all known occupants of dwelling units of the mortgaged real estate that the mortgagee has taken possession of the mortgaged real estate. The notice shall be in writing and shall:

(i) identify the occupant being served by the name known to the mortgagee in possession;

(ii) inform the occupant that the mortgaged real estate at which the dwelling unit is located is the subject of a foreclosure action and that control of the mortgaged real estate has changed;

(iii) provide the name, address, and telephone number of the individual or entity whom occupants may contact with concerns about the mortgaged real estate or to request repairs of that property;

(iv) include the following language, or language that is substantially similar: "This is NOT a notice to vacate the premises. You may wish to contact a lawyer or your local legal aid or housing counseling agency to discuss any rights that you may have.";

(v) include the name of the case, the case number, and the court where the foreclosure action is pending; and

(vi) provide instructions on the method of payment of future rent, if applicable. (3) The written notice required by item (2) of this subsection (a-5) shall be served by delivering a copy thereof to the known occupant, or by leaving the same with some person of the age of 13 years or upwards, who is residing on or in possession of the premises; or by sending a copy of the notice to the known occupant by first-class mail, addressed to the occupant by the name known to the mortgagee in possession. (4) In the event that a mortgagee in possession ascertains the identity and address of an occupant of a dwelling unit of the mortgaged real estate more than 21 days after being placed in possession of the mortgaged real estate pursuant to Section 15-1703, the mortgagee in possession shall provide the notice required by item (2) of this subsection (a-5) within 7 days of ascertaining the identity and address of the occupant. (5)(i) A mortgagee in possession who fails to comply with items (1), (2), (3), and (4) of this subsection (a-5) may not collect any rent due and owing from a known occupant, or terminate a known occupant's tenancy for non-payment of such rent, until the mortgagee in possession has served the notice described in item (2) of this subsection (a-5) upon the known occupant. After providing such notice, the mortgagee in possession may collect any and all rent otherwise due and owing the mortgagee in possession from the known occupant and may terminate the known occupant's tenancy for non-payment of such rent if the mortgagee in possession otherwise has such right to terminate. (ii) An occupant who previously paid rent for the current rental period to the mortgagor, or other entity with the authority to operate, manage, and conserve the mortgaged real estate at the time of payment, shall not be held liable for that rent by the mortgagee in possession, and the occupant's tenancy shall not be terminated for non-payment of rent for that rental period. (6) Within 21 days of the order placing the mortgagee in possession of the mortgaged real estate, the mortgagee in possession shall post a written notice on the primary entrance of each dwelling unit subject to the foreclosure action that informs the occupants that the mortgagee in possession is now operating and managing the mortgaged real estate. This notice shall:

(i) inform occupant that the dwelling unit is the subject of a foreclosure action and that control of the mortgaged real estate has changed;

(ii) include the following language: "This is NOT a notice to vacate the premises.";

(iii) provide the name, address, and telephone number of the individual or entity whom occupants may contact with concerns about the mortgaged real estate or to request repairs of the property; and

(iv) provide instructions on the method of payment of future rent, if applicable. (7)(i) The provisions of item (5) of this subsection (a-5) shall be the exclusive remedy for the failure of a mortgagee in possession to provide notice to a known occupant under this Section. (ii) This Section shall not abrogate any right that a mortgagee in possession may have to possession of the mortgaged real estate and to maintain a proceeding against an occupant of a dwelling unit for possession under Article IX of this Code or subsection (h) of Section 15-1701. (b) Fees and Expenses. A mortgagee in possession shall not be entitled to any fees for so acting, but shall be entitled to reimbursement for reasonable costs, expenses and third party management fees incurred in connection with such possession.

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Plain-English Summary

A mortgagee placed in possession gets the powers the mortgage itself grants, whatever other rights a mortgagee in possession has under the law, and the same powers, duties, and liabilities as a court-appointed receiver under this Article. If a court later modifies, revokes, or sets aside the order that placed the mortgagee in possession, the mortgagee isn't liable for damages that flow only from the mortgagor having been removed or the mortgagee having taken over.

Subsection (a-5) adds occupant-notice duties aimed at residential tenants caught in the middle of a foreclosure. Within 21 days of the possession order, the mortgagee must make a good-faith effort to find out who lives in each dwelling unit and mail or deliver each of them a written notice — one that identifies the occupant, explains that the property is in foreclosure and control has changed, gives contact information for repair requests, states plainly that this is NOT a notice to vacate, lists the case name, number, and court, and gives rent-payment instructions. The mortgagee must also post a similar notice on each unit's front door within that same 21 days. If an occupant surfaces later, the notice must go out within 7 days of learning who that occupant is.

The consequence for skipping this step is concrete: the mortgagee can't collect rent from a known occupant or terminate that occupant's tenancy for nonpayment until proper notice is served. And an occupant who already paid the current period's rent to the mortgagor (or whoever was managing the property before the mortgagee took over) doesn't owe that rent again and can't be evicted over it. This notice requirement is the exclusive remedy for a missed notice — it doesn't otherwise limit the mortgagee's right to seek possession from occupants through an Article IX eviction or under Section 15-1701(h).

Beyond these duties, a mortgagee in possession collects no fee for acting in that role, though it can recover reasonable costs, expenses, and third-party management fees.

Frequently Asked Questions

How soon must a mortgagee in possession identify and notify tenants?

Within 21 days of the order placing it in possession, using a good-faith effort to find each occupant and serving the written notice this section requires.

What must the written notice to occupants say?

It must identify the occupant, explain that the property is in foreclosure and control has changed, give contact information for repairs, state that it is not a notice to vacate, list the case name, number, and court, and give rent-payment instructions.

Can a mortgagee in possession collect rent if it never sent the required notice?

No. It can't collect rent from a known occupant or terminate that occupant's tenancy for nonpayment until it serves the notice this section requires.

Does an occupant owe rent twice if they already paid the mortgagor?

No. An occupant who paid the current period's rent to the mortgagor, or whoever managed the property before, isn't liable to the mortgagee for that period and can't be evicted over it.

Is a mortgagee in possession paid for taking on that role?

No fee for acting as mortgagee in possession, but it can recover reasonable costs, expenses, and third-party management fees.

Amendment History

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

Source & verification. Section text and amendment history are reproduced verbatim from the Illinois Compiled Statutes, published by the Illinois Compiled Statutes, Illinois General Assembly / Legislative Reference Bureau. Last verified July 20, 2026. · Official source

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