Possessory Liens\land-lord liens that can trump the lessors' right to equipment - Issue 2

In all cases of distress for rent, the landlord, by himself or herself, his or her agent or attorney, may seize for rent any personal property of his or her tenant that may be found in the county where such tenant resides, and in no case shall the property of any other person, although the same may be found on the premises, be liable to seizure for rent due from such tenant. (735 ILCS 5/9-301) Upon the filing of such copy of distress warrant and inventory, the clerk shall issue a summons against the party against whom the distress warrant has been issued, returnable as summons in other civil cases. (735 ILCS 5/9-303) The action shall thereafter proceed in the same manner as in case of attachment before the court. (735 ILCS 5/9-305) Every landlord shall have a lien upon the crops grown or growing upon the demised premises for the rent thereof, whether the same is payable wholly or in part in money or specific articles of property or products of the premises, or labor, and also for the faithful performance of the terms of the lease. (735 ILCS 5/9-316)

"Yes, a lessor's lien can be junior to that of a lessee's landlord in certain circumstances given Illinois law grants a landlord a common law lien on a tenant's property for the non-payment of rent as described below. Pursuant to 735 ILCS 5/9-301, a landlord has the right to seize any personal property of a delinquent tenant that may be found in the county where such tenant resides for the purposes of holding it as security for the rent due or obtaining payment of the outstanding rent from the proceeds of a sale of the property so long as such personal property is actually the property of the delinquent tenant and is not subject to an express statutory exemption from seizure. 735 ILCS 5/9-301. This lien must be perfected by the filing of a distress warrant and inventory with the clerk of the circuit court. *Southwest Bank of St. Louis v. Poulokefalos*, 931 N.E.2d 285, 291 (Ill. App. Ct. 2010) (*citing* 735 ILCS 5/9-302 and *First State Bank of Maple Park v. DeKalb Bank*, 530 N.E.2d 544 (Ill. App. Ct. 1988)). The clerk will then issue a summons against the delinquent tenant, which will be handled similarly as a summons in other civil cases and the case will otherwise proceed similarly to a case of an attachment before the court. 735 ILCS 5/9-303 and 305. Further, pursuant to 735 ILCS 5/9-316, landlords have a lien on the crops grown upon its premises for rent on the property and for faithful performance of the relevant lease and such lien attaches once the crops are planted without the need for further perfection methods. 735 ILCS 5/9-316; *see First State Bank of Maple Park v. De Kalb Bank*, 175 Ill.App.3d 812, 815, 125 Ill.Dec. 386, 530 N.E.2d 544 (1988).

As between a landlord's lien described above and a lien filed and perfected pursuant to the UCC, lien priorities are governed by non-UCC principles, which generally means a perfected lien filed first has priority. *Southwest Bank*, 931 N.E.2d at 292 (*citing First State Bank*, 175 Ill.App.3d at 815–16 (holding a secured party's security interest perfected by a UCC financing statement, which was filed before a landlord seized the property pursuant to a distress warrant had priority)). However, the UCC lien filing obviously must be sufficient to perfect the secured party's security interest. *See Southwest Bank*, 931 N.E.2d at 292 (holding that while a secured party's security interest over a tenant's property that was perfected pursuant to a UCC financing statement was superior to a landlord's lien over such property, the secured party did not have a perfected security interest in the fixtures located on the landlord's property given it failed to make a fixture filing that was required in the county in which the fixtures were located and, as such, the landlord's lien had priority as it related to the fixtures)."