"Land trust" means any trust arrangement under which the legal and equitable title to real estate is held by a trustee, the interest of the beneficiary of the trust is personal property and the beneficiary or any person designated in writing by the beneficiary has (i) the exclusive power to direct or control the trustee in dealing with the title to the trust property, (ii) the exclusive control of the management, operation, renting and selling of the trust property and (iii) the exclusive right to the earnings, avails and proceeds of the trust property.
15-1205.Land Trust.
Article XV. Mortgage Foreclosure · Part 12. Definitions · Not amended since adoption on record · Last verified July 20, 2026
In one sentenceThis section defines “land trust” as an arrangement where a trustee holds legal and equitable title while the beneficiary keeps a personal-property interest and exclusive control over direction, management, and proceeds.
Full Text of 735 ILCS 5/15-1205
Plain-English Summary
Section 15-1205 defines land trust by its structural features rather than by name. In a land trust, a trustee holds legal and equitable title to the real estate, while the beneficiary's interest in the trust is personal property rather than an interest in the real estate itself.
The beneficiary, or anyone the beneficiary designates in writing, must hold three exclusive powers: the exclusive power to direct or control the trustee's dealings with title to the trust property, exclusive control over managing, operating, renting, and selling the trust property, and the exclusive right to the earnings, avails, and proceeds of the trust property. Those three features distinguish a land trust from an ordinary trust holding real estate, and they explain why Section 15-1209 treats the trustee, not the beneficiary, as the mortgagor when a land trust trustee signs a mortgage.
Frequently Asked Questions
What makes an arrangement a land trust under Article XV?
A trustee holding legal and equitable title to real estate while the beneficiary's interest is personal property, combined with the beneficiary holding exclusive direction, management, and proceeds rights over the trust property.
Is the land trust beneficiary's interest real property or personal property?
Personal property, according to this definition.
Who directs the trustee under a land trust?
The beneficiary, or any person the beneficiary designates in writing, has the exclusive power to direct or control the trustee's dealings with the title.
Why does this distinction matter in foreclosure?
It affects who is deemed the mortgagor and how the beneficial interest can be pledged as a collateral assignment of beneficial interest under Section 15-1202.
Who is deemed the mortgagor when a land trust trustee signs the mortgage?
Section 15-1209 makes the trustee, not the beneficiary or beneficiaries, the mortgagor in that situation.
Amendment History
(Source: P.A. 84-1462.)
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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