- Official section
- Illinois IV.E.3: Mine Subsidence
- Broker weight
- Part of 25% of the Illinois state portion
- Expected scored items
- The current PSI broker outline assigns 10 of 40 state items to Disclosures
Illinois mine disclosure exam guide
Illinois mine subsidence disclosure
The statute asks a narrower question than most students expect: was a mine-subsidence insurance claim paid to this transferor for this property? If yes, put every paid claim in writing, deliver it to both the transferee and lender when the transfer agreement is made, and make it part of a written agreement.
Last updated: August 1, 2026
What does current Illinois authority require?
Short answer: Illinois requires a transferor to disclose in writing all mine-subsidence insurance claims paid to the transferor for the real property. The disclosure goes to the transferee and lender at the time the agreement to transfer is made and becomes part of a written agreement. The Act covers more than ordinary home sales, including certain deeds, mortgages, leases exceeding 40 years with options, and Illinois land-trust assignments. A waiver must be written and signed by both the transferee and lender. Failure or a knowingly false disclosure can expose the transferor to each recipient's actual damages incurred within five years after transfer.
This guide applies 765 ILCS 95, the Illinois Residential Real Property Disclosure Report, and related Illinois agency materials through August 1, 2026. It separates statutory transaction disclosure from mine mapping, engineering, insurance underwriting, claim adjustment, and legal advice for a specific transfer.
Where is this tested on the Illinois outline?
- Topic
- Statutory mine subsidence
- What to know
- Lateral ground movement, vertical ground movement, direct structural damage, collapse, man-made underground mine, coal mine, clay mine, limestone mine, fluorspar mine, pit, sag, undermined land, and structural condition
- Best exam move
- Use the statutory cause-and-damage definition rather than calling every crack or soil movement mine subsidence.
- Topic
- Excluded ground movement causes
- What to know
- Earthquake, landslide, volcanic eruption, soil conditions, soil erosion, soil freezing, soil thawing, improperly compacted soil, construction defect, tree root, shrub root, storm drain, sewer drain, rapid transit tunnel, settlement, and differential movement
- Best exam move
- When the facts identify a listed nonmine cause, do not force the event into the Mine Subsidence Disclosure Act's definition.
- Topic
- Covered transfer categories
- What to know
- Deed, other instrument, conveyance of interest, lease exceeding 40 years, exercisable options, assignment, power of direction, more than 25% beneficial interest, Illinois land trust, mortgage, collateral assignment, and real property
- Best exam move
- Do not limit transfer to a conventional purchase deed; mortgages and specified land-trust interests are expressly included.
- Topic
- Excluded transfer categories
- What to know
- Confirming deed, correcting deed, modifying deed, supplemental deed, trust document, no additional consideration, tax deed, release of secured property, deed of partition, foreclosure conveyance, easement, mineral interest, oil interest, gas interest, and statutory exclusion
- Best exam move
- Match every fact to the exclusion, especially the no-additional-consideration condition for corrective documents.
- Topic
- Transferor
- What to know
- Seller, grantor, mortgagor, lessor, assignor of collateral assignment, assignor of more than 25% beneficial interest, Illinois land trust, trustee transfer, beneficial-interest owner, responsible discloser, and multiple transferors
- Best exam move
- Identify the statutory transferor rather than assuming only a residential home seller can owe the duty.
- Topic
- Transferee and lender
- What to know
- Buyer, mortgagee, grantee, lessee, collateral-assignment assignee, more-than-25% beneficial-interest assignee, lender, secured funds, real-property interest, collateral assignment, separate recipient, and receipt
- Best exam move
- List the transferee and lender separately so a financed transaction does not lose its second recipient.
- Topic
- Disclosure content
- What to know
- All insurance claims, claim paid, paid to transferor, mine subsidence, real property, advance payment, partial payment, settlement payment, insurer, claim number, date, amount, property identity, supporting record, complete disclosure, and accurate statement
- Best exam move
- The text says all claims paid, so do not disclose only the largest or most recent payment.
- Topic
- Trigger that is not enough by itself
- What to know
- Mine map, undermined property, possible risk, nearby mine, prior owner claim, unpaid claim, denied claim, suspected crack, insurance offer, insurance waiver, no structure damage, unconfirmed movement, and no payment to current transferor
- Best exam move
- Test whether a claim was actually paid to this transferor for this property before invoking Section 3's exact content rule.
- Topic
- Agreement timing
- What to know
- At time agreement made, transfer agreement, written agreement, part of agreement, contract formation, offer, acceptance, mortgage, lease execution, land-trust assignment, closing, recording, after closing, and transaction chronology
- Best exam move
- Place the written claim disclosure at agreement formation, not after the parties are already bound or the deed records.
- Topic
- Written waiver
- What to know
- Waiver of time, waiver of disclosure, writing, transferee signature, lender signature, informed decision, oral statement, contract clause, no lender, attorney review, and preserved file
- Best exam move
- A valid statutory waiver uses the specified form and signers; the broker should not improvise legal language.
- Topic
- Actual-damages remedy
- What to know
- Failure to disclose, knowingly false disclosure, transferee, lender, separate recovery, civil action, actual damages, causation, incurred within five years, date of transfer, fixed penalty, punitive assumption, evidence, and counsel
- Best exam move
- Use the statute's actual-damages language and do not convert its five-year phrase into an invented automatic payment or filing deadline.
- Topic
- Residential seller-report overlap
- What to know
- Aware, mine subsidence, underground pit, settlement, sliding, upheaval, earth-stability defect, premises, actual knowledge, explanation, material defect, one to four units, condominium, cooperative, manufactured real property, before sales contract, and supplement
- Best exam move
- The general report's earth-stability item is broader and knowledge-based, while Section 3 is paid-claim based and names a lender.
- Topic
- Mine mapping and due diligence
- What to know
- IDNR, Abandoned Mined Lands Reclamation Division, Illinois State Geological Survey, recorded mine map, missing map, undermined acreage, pit subsidence, sag subsidence, site investigation, structural engineer, insurer, title records, repair invoices, and ground movement
- Best exam move
- Use maps and professionals for risk investigation without presenting a map as proof that a claim was paid or future movement will occur.
- Topic
- Insurance distinction
- What to know
- Mine-subsidence coverage, separate premium, written waiver, significant exposure county, requested coverage, insurer, Illinois Mine Subsidence Insurance Fund, homeowner policy, claim adjustment, paid claim, future insurability, deductible, and policy terms
- Best exam move
- Insurance availability and policy coverage are related to the risk but separate from the transferor's transaction disclosure.
- Topic
- Broker role
- What to know
- Ask transferor, gather claim documents, notify lender path, contract attachment, delivery proof, transaction file, actual knowledge, latent material adverse physical fact, seller instruction, confidentiality, attorney referral, engineer referral, insurance referral, and no guarantee
- Best exam move
- Coordinate the factual record and required recipients while sending legal, structural, geological, and coverage conclusions to qualified professionals.
The CLAIMS method
- Classify the event. Decide whether the deed, mortgage, long lease, or land-trust event is a statutory transfer and check exclusions.
- Locate the parties. Identify every transferor, transferee, and lender under the Act's definitions.
- Ask about payments. Determine whether any mine-subsidence insurance claim was paid to this transferor for this real property.
- Include every claim. Put all paid claims in a complete written disclosure and make it part of a written transfer agreement.
- Meet the timing. Deliver when the agreement to transfer is made, not at a later closing or recording event.
- Separate the layers. Address the residential seller report, broker duty, maps, structural review, and insurance work independently.
- Question
- What must be disclosed?
- Statutory answer
- All mine-subsidence insurance claims paid to transferor for property
- Exam caution
- Not merely mine location
- Question
- Who sends?
- Statutory answer
- Transferor
- Exam caution
- Definition includes more than seller
- Question
- Who receives?
- Statutory answer
- Transferee and lender
- Exam caution
- Do not omit lender
- Question
- When?
- Statutory answer
- At time transfer agreement is made
- Exam caution
- Not a closing-only task
- Question
- Where if agreement is written?
- Statutory answer
- Part of written agreement
- Exam caution
- Keep in contract file
- Question
- What lease is a transfer?
- Statutory answer
- Term exceeding 40 years after options
- Exam caution
- Ordinary short lease does not fit
- Question
- What land-trust assignment?
- Statutory answer
- More than 25% beneficial interest or collateral assignment
- Exam caution
- Threshold and interest type matter
- Question
- How can requirement be waived?
- Statutory answer
- Written waiver signed by transferee and lender
- Exam caution
- Oral waiver is insufficient
- Question
- What remedy language?
- Statutory answer
- Each recipient may recover actual damages incurred within five years
- Exam caution
- No automatic fixed recovery
Which Illinois distinctions matter most?
- Terms
- Undermined land vs. mine subsidence
- Difference
- Undermined means a man-made underground mine exists below all or part of the surface. Mine subsidence requires qualifying ground movement that directly damages a structure and results from mine collapse.
- Question cue
- Mine beneath land versus damaging collapse movement.
- Terms
- Mine map vs. paid claim
- Difference
- A mine map concerns subsurface location. Section 3 requires disclosure of insurance claims paid to the transferor for mine subsidence on the property.
- Question cue
- Risk evidence versus statutory payment fact.
- Terms
- Claim made vs. claim paid
- Difference
- A reported, pending, denied, or withdrawn claim is not the same as an insurance claim paid to the transferor. The statute's exact disclosure content uses paid claims.
- Question cue
- Application for benefits versus payment received.
- Terms
- Current transferor's claim vs. prior owner's claim
- Difference
- Section 3 speaks of claims paid to the transferor. A known prior-owner event may still matter under the seller report, broker duties, contract, or common law, but it is a different statutory fact.
- Question cue
- Who received the payment.
- Terms
- Transferee vs. lender
- Difference
- The transferee acquires the statutory interest and may include a buyer, mortgagee, grantee, lessee, or qualifying assignee. The lender advances funds secured by the defined property or land-trust interest. Both are named recipients.
- Question cue
- Property recipient plus financing recipient.
- Terms
- Ordinary lease vs. covered long lease
- Difference
- A lease is a statutory transfer only if its term exceeds 40 years after counting all options that may be exercised. A typical one-year residential lease does not fit that clause.
- Question cue
- More than 40 years with options.
- Terms
- Corrective deed vs. new conveyance
- Difference
- A document that confirms, corrects, modifies, or supplements a prior recorded instrument without additional consideration is excluded. A new conveyance of an interest by deed is generally included.
- Question cue
- Administrative correction versus fresh transfer.
- Terms
- Disclosure vs. waiver
- Difference
- Disclosure reports all paid claims in writing. A waiver gives up disclosure or its timing only through a writing signed by the transferee and lender.
- Question cue
- Supply the facts versus relinquish the statutory step.
- Terms
- Mine Subsidence Disclosure Act vs. seller report
- Difference
- The Mine Subsidence Disclosure Act applies to defined real-property transfers and paid claims. The residential report applies to covered home sales and asks about actual awareness of several earth-stability conditions.
- Question cue
- Paid claim and broad transfer versus known condition and covered home sale.
- Terms
- Mine-subsidence damage vs. ordinary settlement
- Difference
- Mine subsidence must result from collapse of a man-made underground mine. Soil conditions, improper compaction, construction defects, roots, and other listed causes are excluded from that definition.
- Question cue
- Cause controls the legal label.
- Terms
- Insurance coverage vs. disclosure
- Difference
- Coverage concerns whether and how an insurer pays a future or existing loss. Disclosure tells the recipients about claims already paid to the transferor in the defined transfer.
- Question cue
- Risk financing versus transaction information.
- Terms
- Broker knowledge vs. geological conclusion
- Difference
- A broker can know that a claim payment or engineer report exists. Determining subsurface conditions, cause of cracks, remaining movement, repair adequacy, or insurability belongs to qualified professionals.
- Question cue
- Transmit known record, do not diagnose earth movement.
How does the Illinois rule apply?
The seller received a partial payment
Scenario: An insurer paid the seller an advance on a mine-subsidence claim, but final repair costs remain disputed. The seller says disclosure can wait until the claim closes.
- The statute asks for all insurance claims paid to the transferor, not only claims with a final settlement.
- A payment has already occurred, and the disclosure is due when the transfer agreement is made.
Answer: Disclose the paid claim accurately at agreement time and refer questions about wording or the open claim to the parties' attorneys and insurer.
The map shows a mine but no claim exists
Scenario: IDNR mapping suggests an old coal mine lies below part of the parcel. The transferor has never made or received payment on a mine-subsidence claim.
- The mine-location fact may support due diligence and may affect other disclosures if known conditions exist.
- It does not equal an insurance claim paid to the transferor, which is the precise Section 3 content trigger.
Answer: Do not invent a paid claim, but handle the known map and any physical facts through every other applicable duty.
The buyer received notice but the lender did not
Scenario: A seller attaches the paid-claim statement to a separate buyer email. A mortgage lender finances the purchase but never receives the disclosure.
- Section 3 names both the transferee and lender.
- A buyer-only email also raises whether the disclosure became part of the written transfer agreement.
Answer: Complete the statutory delivery to both recipients and include it in the written agreement.
A 35-year lease has a 10-year option
Scenario: The parties sign a 35-year lease with an option that could extend the term by 10 more years.
- The lease definition counts options that may be exercised.
- The possible 45-year term exceeds 40 years and therefore fits the transfer category.
Answer: Treat the lease as a statutory transfer and analyze any paid-claim disclosure.
A buyer alone signs a waiver
Scenario: The financed buyer signs a contract line waiving mine-subsidence disclosure, but the lender does not sign.
- The Act requires a disclosure or timing waiver to be written.
- It also requires signatures from the transferee and lender.
Answer: The buyer-only waiver does not match the statutory signature requirement.
The seller report says no after a paid claim
Scenario: A residential seller received a mine-subsidence payment and also marks no on the general seller report's earth-stability item.
- The paid claim must be disclosed under the Mine Subsidence Disclosure Act.
- The inconsistent seller-report answer should be investigated and corrected from the seller's actual knowledge rather than repeated by the broker.
Answer: Do not let one form conceal the other. Escalate the inconsistency, make the paid-claim disclosure, and follow the separate seller-report and licensee duties.
Where do candidates misread the Illinois rule?
- Trap
- Every property above a mine has a paid claim to disclose.
- Correction
- Mine location and an insurance payment to the transferor are different facts.
- Trap
- Only current visible damage matters.
- Correction
- The Act asks for all claims paid to the transferor, even if repairs were later made or no crack is visible today.
- Trap
- A pending or denied claim is the same as a paid claim.
- Correction
- Section 3's exact content is insurance claims paid to the transferor.
- Trap
- The disclosure goes only to the homebuyer.
- Correction
- The statutory recipients are the transferee and lender.
- Trap
- Mine-subsidence disclosure is only for one-to-four-unit homes.
- Correction
- The Act covers defined real-property transfers and is not limited by the seller report's residential scope.
- Trap
- Every lease is a transfer under this Act.
- Correction
- The lease term must exceed 40 years after considering all exercisable options.
- Trap
- A 25% land-trust assignment meets the more-than-25% rule.
- Correction
- The beneficial-interest assignment category uses more than 25%, not 25% exactly.
- Trap
- The disclosure can wait for the deed recording.
- Correction
- It is due when the agreement to transfer is made and belongs in a written agreement.
- Trap
- A spoken waiver is enough.
- Correction
- The waiver must be written and signed by the transferee and lender.
- Trap
- Any crack is statutory mine subsidence.
- Correction
- The definition requires qualifying movement, direct structural damage, and collapse of a man-made underground mine.
- Trap
- The residential seller report replaces Section 3.
- Correction
- The two laws ask different questions, cover different transactions, use different recipients, and can both apply.
- Trap
- Insurance availability proves a claim was paid.
- Correction
- Coverage or an offer of coverage is not evidence of a payment on this property.
- Trap
- The Act awards a fixed penalty whenever a form is late.
- Correction
- Section 4 speaks of actual damages incurred within five years after transfer.
- Trap
- The broker can diagnose subsidence from a wall crack.
- Correction
- The broker handles known facts and records while qualified professionals determine cause, movement, repair, coverage, and legal effect.
Can you apply the rule to a fresh scenario?
These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.
1. What fact does Section 3 of the Illinois Mine Subsidence Disclosure Act expressly require the transferor to disclose?
- Every mine shown anywhere in the county
- All mine-subsidence insurance claims paid to the transferor for the real property
- Only structural repairs costing more than $10,000
- Any rumor about a nearby quarry
Show answer and explanation
Answer: B
The statutory content is all insurance claims paid to the transferor for mine subsidence on the real property.
2. Who must receive the statutory mine-subsidence claim disclosure in a financed transfer?
- Only the county recorder
- Only the listing broker
- The transferee and lender
- Only the insurance producer
Show answer and explanation
Answer: C
Section 3 names both the transferee and lender as recipients.
3. Which lease fits the Act's definition of transfer?
- A one-year lease with a one-year renewal
- A 20-year lease with no option
- A 39-year lease with no option
- A 35-year lease with an exercisable 10-year extension
Show answer and explanation
Answer: D
The lease term exceeds 40 years when every exercisable option is considered.
4. A transferee and lender want to waive the timing requirement. What form must the waiver take?
- An oral agreement at closing
- A writing signed by the transferee and lender
- A listing-broker memo only
- A seller's unsigned email
Show answer and explanation
Answer: B
Section 3(c) requires a written waiver signed by both specified recipients.
5. Which condition is excluded from the Act's definition of mine subsidence?
- Structural damage caused by collapse of a clay mine
- Structural damage caused by collapse of a coal mine
- Ground movement caused by improperly compacted soil
- Structural damage caused by collapse of a limestone mine
Show answer and explanation
Answer: C
Improperly compacted soil is among the listed nonmine causes excluded from the statutory definition.
How should you review this Illinois topic?
- Session
- 1. Define the hazard
- Focus
- Lateral movement, vertical movement, direct damage, structure, man-made mine, excluded causes, and undermined land
- Proof you are ready
- Classify 20 ground-movement scenarios as statutory mine subsidence, excluded cause, or uncertain.
- Session
- 2. Classify transfers
- Focus
- Deed, mortgage, lease exceeding 40 years with options, land-trust assignment, collateral assignment, and excluded instruments
- Proof you are ready
- Resolve 25 transfer scenarios and explain the exact inclusion or exclusion language.
- Session
- 3. Identify parties
- Focus
- Seller, grantor, mortgagor, lessor, assignor, trustee, beneficial owner, buyer, mortgagee, grantee, lessee, assignee, and lender
- Proof you are ready
- Label every transferor, transferee, and lender in 15 transactions.
- Session
- 4. Build the disclosure
- Focus
- All paid claims, current transferor, property identity, written form, agreement time, written agreement, recipient, and waiver signatures
- Proof you are ready
- Audit 15 hypothetical files for content, timing, placement, and recipients.
- Session
- 5. Separate related layers
- Focus
- Seller report, paid claim, known damage, mine map, IDNR, insurer, engineering, repairs, broker knowledge, and actual damages
- Proof you are ready
- Explain why each fact belongs to disclosure, due diligence, insurance, or technical review.
- Session
- 6. Apply CLAIMS
- Focus
- Classify, locate parties, ask about payments, include all claims, meet timing, and separate layers
- Proof you are ready
- Score at least 90% on a fresh mine-subsidence set and defend every answer with the exact statutory trigger.
Do not count recognition as mastery. Close the notes and explain the rule, apply it to a new fact pattern, and identify why each distractor fails.
Practice the Illinois rule in context
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Questions students ask about Illinois Mine Subsidence Disclosure
What must be disclosed under the Illinois Mine Subsidence Disclosure Act?
At the time an agreement to transfer real property is made, the transferor must disclose in writing to the transferee and lender all insurance claims paid to the transferor for mine subsidence on that real property.
Who receives an Illinois mine subsidence disclosure?
The Act names both the transferee and the lender. A buyer-only delivery is incomplete when a lender is part of the transaction. The statutory definitions of transferee and transferor also reach certain mortgage, lease, grant, and Illinois land-trust transactions.
When must the mine subsidence disclosure be made?
Disclosure is due at the time the agreement to transfer real property is made. If that agreement is written, the disclosure must be part of the agreement. It is not designed as a closing-day afterthought.
Does a mine map trigger the paid-claim disclosure?
A map showing an underground mine and an insurance claim paid to the transferor are different facts. The specific Section 3 disclosure is triggered by paid mine-subsidence insurance claims. Mine location, known damage, insurance availability, and the general seller report can still matter through other duties.
Does the Mine Subsidence Disclosure Act apply only to homes?
No. The Act speaks in terms of real property and defines transfer broadly. Its scope is not limited to the one-to-four-unit residential property covered by the Illinois Residential Real Property Disclosure Act.
Does a long-term lease count as a transfer under the Act?
Yes, when the lease term exceeds 40 years after considering all options that may be exercised. An ordinary short residential lease does not fit that particular transfer definition merely because it is a lease.
Can the mine subsidence disclosure requirement be waived?
A waiver of the timing requirements or a waiver of disclosure must be in writing and signed by the transferee and lender. An oral waiver or a waiver signed only by the buyer does not match Section 3(c) when a lender is involved.
What happens if the transferor fails to disclose a paid claim?
If the transferor fails to make the required disclosure or knowingly makes a false disclosure, the transferee and lender may each recover actual damages incurred within five years after the transfer. The statute uses actual damages, not an automatic fixed award.
Does the Illinois seller report replace mine subsidence disclosure?
No. The seller report asks about actual awareness of mine subsidence and several other earth-stability conditions. The Mine Subsidence Disclosure Act separately targets paid insurance claims, covers a broader range of transfers, names the lender as a recipient, and uses its own timing.
Are these official PSI Illinois broker exam questions?
No. They are original questions aligned to the Illinois broker outline effective June 24, 2026. Illinois statutes and agency materials were reviewed through August 1, 2026.
Primary sources
- PSI Illinois Candidate Information Booklet dated June 24, 2026
- 765 ILCS 95, current Mine Subsidence Disclosure Act
- 765 ILCS 95/3, disclosure timing, recipients, written agreement, and waiver
- 765 ILCS 77/35, Illinois seller report and earth-stability item
- 215 ILCS 5 Article XXXVIIIA, Mine Subsidence Insurance Article
- Illinois DNR Abandoned Mined Lands mine subsidence guidance
- Illinois Department of Insurance consumer definition of mine-subsidence insurance
- 225 ILCS 454/15-25, Illinois licensee duties to customers
The current official outline controls the tested scope. Statutes, regulations, and official agency materials control when a general study rule and a jurisdiction-specific rule differ.
Editorial status
Checked against primary sources
The Pass Illinois editorial team last checked this guide on August 1, 2026. Every practice question is an original study item, and the source links above let you verify the rules that support the lesson.