1Amending the act of November 26, 2008 (P.L.1672, No.135),
2entitled "An act providing for court-appointed conservators
3to bring residential, commercial and industrial buildings
4into municipal code compliance when owners fail to comply,"
5further providing for definitions, for initiation of action,
6for appointment of conservator, for powers and duties of
7conservator<-, for incurring indebtedness and for sale of
8property.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. The definitions of "building," "costs of
12rehabilitation," "nonprofit corporation," and "party in
13interest" in section 3 of the act of November 26, 2008 (P.L.
141672, No. 135), known as the Abandoned and Blighted Property
15Conservatorship Act, are amended and the section is amended by
16adding definitions to read:

17Section 3. Definitions.

18The following words and phrases when used in this act shall
19have the meanings given to them in this section unless the

1context clearly indicates otherwise:

2"Abandoned property." Any property that meets the
3requirements of conditions of conservatorship as provided in
4section 5(d).

5* * *

6"Building." A residential, commercial or industrial building
7or structure and the land appurtenant thereto, including a 
8vacant lot on which a building has been demolished.

9* * *

10"Costs of rehabilitation." Costs and expenses for
11construction, stabilization, rehabilitation, maintenance and
12operation or demolition, including reasonable nonconstruction
13costs associated with the project, including, but not limited
14to, environmental remediation, architectural, engineering and
15legal fees and costs, permits, financing fees and a developer's
16fee [consistent with the standards for developers' fees
17established by the Pennsylvania Housing Finance Agency].

18* * *

19"Developer's fee." A fee equal to the greatest of the
20following:

21(1) an amount equal to $2,500, adjusted upward by 2%
22each year;

23(2) a 20% markup of the costs and expenses for
24construction, stabilization, rehabilitation, maintenance and
25operation or demolition as described in the proposed
26conservator's plan and any subsequent plan approved by the
27court; or

28(3) twenty percent of the sale price of the property.

29* * *

30"Nonprofit corporation." A nonprofit corporation that has,

1as one of its purposes remediation of blight, community
2development activities, including economic development, historic
3preservation or the promotion or enhancement of affordable
4housing opportunities.

5* * *

6"Party in interest." A person or entity who has a direct and
7immediate interest in a residential, commercial or industrial
8building, including:

9(1) The owner.

10(2) A lienholder and other secured creditor of the
11owner.

12(3) A resident or business owner within [500] 2,000 feet
13of the building.

14(4) A nonprofit corporation, including a redevelopment
15authority, which:

16(i) except as set forth in subparagraph (ii), is
17located in the municipality where the building is
18located; and

19(ii) for a building located in a city of the first
20class, is located in the city and has participated in a
21project within a [one-mile] five-mile radius of the
22location of the building.

23(5) A municipality or school district in which the
24building is located.

25* * *

26Section 2. Section 4 of the act is amended by adding a
27subsection to read:

28Section 4. Initiation of action.

29* * *

30(e) Adjacent properties.--The petition may include one or

1more adjacent properties in a single action if:

2(1) the property that is the primary subject of the
3action is owned by the same owner as the adjacent property;
4and

5(2) the properties are or were used for a single or
6interrelated function.

7Section 3. Section 5(a), (d), (e), (f) and (g) of the act
8are amended to read:

9Section 5. Appointment of conservator.

10(a) General rule.--The court shall act upon a petition
11submitted by holding a hearing within [120] 60 days of receipt
12of the petition and by rendering a decision no later than 30
13days after completion of the hearing.

14* * *

15(d) Conditions for conservatorship.--If a petition is filed
16under section 4, the court may appoint a conservator if all of
17the following apply as of the date of filing:

18(1) The building has not been legally occupied for at
19least the previous 12 months.

20(2) <-[The building has not been actively marketed during
21the 60 days prior to the date of the petition<-[.] or has been 
22actively marketed for more than six months without a 
23competitive, market-driven price reduction. If the property 
24is actively marketed, the owner of the building shall provide 
25the court with a copy of the active real estate listing as 
26well as a notarized affidavit containing dates the property 
27was shown and details about any offers placed by potential 
28buyers. The court shall consider whether the listing is a 
29credible attempt to sell the property to a responsible owner 
30or an attempt to thwart the proposed conservatorship.<-.] The
 

1owner fails to present compelling evidence that he has made a 
2good faith effort, during the preceding 60-day period, to 
3sell the property at a price which reflects the circumstances 
4and market conditions.

5(3) The [building] property is not subject to <-[an
6existing] a pending foreclosure action[.] <-For the purposes of 
7this paragraph, foreclosure does not include properties 
8subject to civil action by a governmental entity for taxes or 
9liens, and any enforcement action may be stayed at the 
10discretion of the court. <-by an individual or nongovernmental 
11entity.

12(4) The current owner fails to present sufficient
13evidence that he has acquired the property within the
14preceding six months. The evidence shall not include
15instances where the prior owner is a member of the immediate
16family of the current owner, unless the transfer of title
17results from the death of the prior owner, or where the
18current or prior owner is a corporation, partnership or other
19entity in which either owner or the immediate family of
20either owner has an interest in excess of 5%.

21(5) The court finds at least three of the following:

22(i) The building or physical structure is a public
23nuisance.

24(ii) The building is in need of substantial
25rehabilitation and no rehabilitation has taken place
26during the previous 12 months.

27(iii) The building is unfit for human habitation,
28occupancy or<-, if the property is zoned commercial, use.

29(iv) The condition and vacancy of the building
30materially increase the risk of fire to the building and

1to adjacent properties.

2(v) The building is subject to unauthorized entry
3leading to potential health and safety hazards and one of
4the following applies:

5(A) The owner has failed to take reasonable and
6necessary measures to secure the building.

7(B) The municipality has secured the building in
8order to prevent such hazards after the owner has
9failed to do so.

10(vi) The property is an attractive nuisance to
11children, including, but not limited to, the presence of
12abandoned wells, shafts, basements, excavations and
13unsafe structures.

14(vii) The presence of vermin or the accumulation of
15debris, uncut vegetation or physical deterioration of the
16structure or grounds has created potential health and
17safety hazards and the owner has failed to take
18reasonable and necessary measures to remove the hazards.

19(viii) The dilapidated appearance or other condition
20of the building negatively affects the economic well-
21being of residents and businesses in close proximity to
22the building, including decreases in property value and
23loss of business, and the owner has failed to take
24reasonable and necessary measures to remedy appearance or
25the condition.

26(ix) The property is an attractive nuisance for
27illicit purposes, including prostitution, drug use and
28vagrancy.

29(e) Appointment.--

30(1) If the court determines after a hearing that the

1property has met the conditions of subsection (d), the court
2may appoint a conservator and grant such other relief as may
3be just and appropriate.

4(2) The court shall give first consideration for
5appointment as conservator to the most senior <-nongovernmental 
6lienholder on the property.

7(3) In the event the senior lienholder is found to be
8not competent or declines the appointment, the court may
9appoint a nonprofit corporation or other competent entity. If
10the property is located in a city of the first class, the
11nonprofit corporation or entity must be located in the city
12and must have participated in a project within a [one-mile] 
13five-mile radius of the location of the property. In
14appointing a conservator, the court shall:

15(i) consider any recommendations contained in the
16petition or otherwise presented by a party in interest;
17and

18(ii) give preference to the appointment of a
19nonprofit corporation or governmental unit over an
20individual.

21(f) Conditional relief.--

22(1) If the court finds after a hearing that the
23conditions for conservatorship set forth in subsection (d)
24have been established, but the owner represents that the
25conditions, violations or nuisance or emergency condition
26will be abated in a reasonable period, the court may allow
27the owner to proceed to remedy the conditions.

28(2) If the conditions set forth in paragraph (1) have
29been satisfied, the court shall enter an order providing
30that, in the event that the violations or nuisance or

1emergency conditions are not abated by the owner by a
2specific date or that other specified remedial activities
3have not occurred by a specific date or dates, an order
4granting the relief requested in the petition shall be
5entered.

6(3) The court [may] shall also require the owner to post
7a bond in the amount of the repair costs estimated in the
8petition as a condition to retaining possession of the
9building.

10(4) <-After a petition is filed, if the court proceeds
11pursuant to paragraph (1) or subsection (e)(2), or the owner
12contracts to sell the property, the costs of conservatorship
13shall be paid to the petitioner or conservator upon a prima
14facie finding that the conditions for conservatorship are
15satisfied. <-A contract for sale entered into subsequent to the
16filing of a petition for conservatorship shall be subject to
17court approval and to reimbursement of costs incurred by the
18petitioner in preparing and filing the petition in accordance
19with the requirements of section 4.

20(g) Conservator's lien.--The conservator may file a lien
21against the property in an amount based on the costs incurred
22during the conservatorship, including, but not limited to, costs 
23of rehabilitation, attorney fees and court costs. The lien 
24amount may be adjusted from time to time.

25* * *

26Section 4. Section 6(a)(4) and (14) and <-(b)(4) (c)(1) and 
27(5) of the act are amended <-and the section is amended by adding 
28a subsection to read:

29Section 6. Powers and duties of conservator.

30(a) Full powers and duties.--The conservator shall have all

1powers and duties necessary or desirable, from time to time, for
2the efficient operation, management and improvement of the
3building in order to bring it into compliance with all municipal
4building and housing code requirements and to fulfill the
5conservator's responsibilities under this act. Such powers and
6duties shall include, but not be limited to, the power to:

7* * *

8(4) Contract for the repair and maintenance of the
9building. The contracts shall be appropriately documented and
10included in the reports and accounting which the conservator
11is required to submit or file under the provisions of this
12act. The conservator shall make a reasonable effort to
13solicit three bids for contracts valued at more than $25,000, 
14except when the contractor or developer provides or obtains 
15financing for the conservatorship.

16* * *

17(14) Exercise all authority that an owner of the
18building would have to improve, maintain and otherwise manage
19the building, including the extent to which rehabilitation 
20will satisfy the goals of the conservatorship.

<-21(a.1) Reasonable regard from court.--The court shall
22give reasonable regard to the conservator in its
23determination as to the scope of rehabilitation necessary to
24recoup the costs of conservatorship, rehabilitation and
25proposed purchase by a developer.

26(b) Affirmative duty.--While in possession of the building,
27the conservator shall:

28* * *

29(4) Implement the final plan referred to in paragraph
30(3) upon approval by the court. The court may approve the

1final plan at the hearing described in section 5(c).

<-2(c) Hearing on conservator's final plan for abatement.--

3(1) At the time the court appoints a conservator, the 
4conservator may present and the court may approve the final 
5plan for abatement. If no plan is presented at that hearing,
6a hearing date on the conservator's final plan for abatement
7shall be set within 120 days of the appointment.

8* * *

9(5) At the time of the hearing, all parties shall be 
10allowed to comment on the plan, and the court shall take all 
11comments into consideration when assessing the feasibility of 
12the plan and the proposed financing. In making its 
13assessment, the court shall give reasonable regard to the 
14conservator's determination of the scope and necessity of 
15work to be done for the rehabilitation or demolition of the 
16building in approving the final plan and in approving the 
17costs of conservatorship and sale of the property.

18* * *

19Section 5. <-Section Sections 8(b) and (c) and 9(b)(2) and (d)
20of the act are amended to read:

<-21Section 8. Incurring indebtedness.

22* * *

23(b) Liens.--In order to facilitate the borrowing of funds
24for the costs of rehabilitation, the court may grant priority 
25status to a lien [or security interest with priority over all
26other liens with the exception of municipal or other
27governmental liens, provided, however, that prior to granting a
28priority lien, the court has found that] given to secure payment 
29on a debt incurred for purposes authorized under this chapter 
30provided that:

1(1) [The] the conservator sought to obtain the necessary
2financing from the senior, nongovernmental lienholder, but
3the lienholder declined to provide financing for reasonable
4improvements or other costs of rehabilitation on reasonable
5terms[.]; and

6(2) [Lien] lien priority is necessary in order to induce
7another lender to provide financing on reasonable terms.

8[(c) Lien status of rehabilitation expenses.--Should the
9senior lienholder agree to provide financing for the costs of
10rehabilitation, any funds lent to cover the costs shall be
11deemed to be added to the senior lienholder's preexisting first
12lien.]

13* * *

14Section 9. Sale of property.

15* * *

16(b) Sale by conservator.--Upon application of the
17conservator, the court may order the sale of the property if the
18court finds that:

19* * *

20(2) The conservator has been in control of the building
21for more than [six] three months and the owner has not
22successfully petitioned to terminate the conservatorship
23under section 10.

24* * *

25(d) Distribution.--The proceeds of the sale shall be applied
26in accordance with the following priorities to:

27(1) All court costs.

28(2) <-[Municipal] The principal on all State and municipal 
29or other governmental liens then existing and recorded in the 
30judgment and lien index prior to filing of the petition for
 

1conservatorship. <-[Municipal or other governmental liens.] 
2Liens of the Commonwealth, liens for unpaid property taxes 
3and properly recorded municipal liens.

4(3) Costs and expenses of sale.

5(4) Principal and interest on any borrowing or
6incurrence of indebtedness granted priority over existing
7liens and security interest under section 8(b).

8(4.1) Costs incurred by the petitioner in <-requesting the
9court to place the property in conservatorship. <-preparing and
10filing the petition in accordance with the requirements of
11section 4.

12(5) Costs of rehabilitation and any fees and expenses
13incurred by the conservator in connection with the sale or
14the safeguarding of the property for which the lien
15authorized under section (5)(g) was filed.

16(6) Valid liens and security interests in accordance
17with their priority.

18(7) Any unpaid obligations of the conservator.

<-19[(8) Costs incurred by the petitioner in requesting the
20court to place the property in conservatorship.<-]

21(9) The owner.

22* * *

23Section 6. This act shall take effect in 60 days.