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 4(b) and (d)(1) of the act <-are amended 
27and the section is amended by adding a subsection to read:

28Section 4. Initiation of action.

29* * *

<-30(b) Contents.--The petition submitted to the court shall

1include a sworn statement that, to the best of the petitioner's
2knowledge, the property meets the conditions for conservatorship
3set forth in section 5(d) and to the extent available to the
4petitioner after reasonable efforts to obtain such information:

5(1) A copy of any citation charging the owner with being
6in violation of municipal code requirements or declaring the
7building to be a public nuisance.

8(2) A recommendation as to which person or entity should
9be appointed conservator.

10(3) A preliminary plan with initial cost estimates for
11rehabilitation of the building to bring it into compliance
12with all municipal codes and duly adopted plans for the area
13in which the building is located and anticipated funding
14sources.

15(4) A schedule of mortgages, liens and other
16encumbrances on the property.

17* * *

18(d) Notification of owner, political subdivisions and
19lienholders.--

20(1) Upon filing the petition with the court, the
21petitioner shall notify the current owner of the property,
22all political subdivisions in which the property is located, 
23all municipal authorities known to have provided service to 
24the property and all lienholders of the filing by registered
25or certified mail to the last known address of each and by
26posting a copy of the notice on the building.

27* * *

28(e) Adjacent properties.--The petition may include one or
29more adjacent properties in a single action if:

30(1) the property that is the primary subject of the

1action is owned by the same owner as the adjacent property;
2and

3(2) the properties are or were used for a single or
4interrelated function.

5Section 3. Section 5(a), <-(c), (d), (e), (f) and (g) of the
6act are amended to read:

7Section 5. Appointment of conservator.

8(a) General rule.--The court shall act upon a petition
9submitted by holding a hearing within [120] 60 days of receipt
10of the petition and by rendering a decision no later than 30
11days after completion of the hearing.

12* * *

<-13(c) Hearing.--At the hearing, any party in interest shall be
14permitted to present evidence to support or contest the
15petition, including, but not limited to, the schedule of 
16encumbrances.

17(d) Conditions for conservatorship.--If a petition is filed
18under section 4, the court may appoint a conservator if all of
19the following apply as of the date of filing:

20(1) The building has not been legally occupied for at
21least the previous 12 months.

22(2) [The building has not been actively marketed during
23the 60 days prior to the date of the petition.] The owner 
24fails to present compelling evidence that he has <-actively 
25marketed the property during the preceding 60-day period and 
26made a good faith effort<-, during the preceding 60-day period, 
27to sell the property at a price which reflects the 
28circumstances and market conditions.

29(3) The [building] property is not subject to [an
30existing] a pending foreclosure action[.] by an individual or
 

1nongovernmental entity.

2(4) The current owner fails to present sufficient
3evidence that he has acquired the property within the
4preceding six months. The evidence shall not include
5instances where the prior owner is a member of the immediate
6family of the current owner, unless the transfer of title
7results from the death of the prior owner, or where the
8current or prior owner is a corporation, partnership or other
9entity in which either owner or the immediate family of
10either owner has an interest in excess of 5%.

11(5) The court finds at least three of the following:

12(i) The building or physical structure is a public
13nuisance.

14(ii) The building is in need of substantial
15rehabilitation and no rehabilitation has taken place
16during the previous 12 months.

17(iii) The building is unfit for human habitation,
18occupancy or use.

19(iv) The condition and vacancy of the building
20materially increase the risk of fire to the building and
21to adjacent properties.

22(v) The building is subject to unauthorized entry
23leading to potential health and safety hazards and one of
24the following applies:

25(A) The owner has failed to take reasonable and
26necessary measures to secure the building.

27(B) The municipality has secured the building in
28order to prevent such hazards after the owner has
29failed to do so.

30(vi) The property is an attractive nuisance to

1children, including, but not limited to, the presence of
2abandoned wells, shafts, basements, excavations and
3unsafe structures.

4(vii) The presence of vermin or the accumulation of
5debris, uncut vegetation or physical deterioration of the
6structure or grounds has created potential health and
7safety hazards and the owner has failed to take
8reasonable and necessary measures to remove the hazards.

9(viii) The dilapidated appearance or other condition
10of the building negatively affects the economic well-
11being of residents and businesses in close proximity to
12the building, including decreases in property value and
13loss of business, and the owner has failed to take
14reasonable and necessary measures to remedy appearance or
15the condition.

16(ix) The property is an attractive nuisance for
17illicit purposes, including prostitution, drug use and
18vagrancy.

19(e) Appointment.--

20(1) If the court determines after a hearing that the
21property has met the conditions of subsection (d), the court
22may appoint a conservator<-, certify the schedule of 
23encumbrances and grant such other relief as may be just and
24appropriate. <-The certification shall be binding with respect 
25to all mortgages, liens and encumbrances, including municipal 
26liens, arising or attaching to the property prior to the date 
27of the petition.

28(2) The court shall give first consideration for
29appointment as conservator to the most senior nongovernmental
30lienholder on the property.

1(3) In the event the senior lienholder is found to be
2not competent or declines the appointment, the court may
3appoint a nonprofit corporation or other competent entity. If
4the property is located in a city of the first class, the
5nonprofit corporation or entity must be located in the city
6and must have participated in a project within a [one-mile] 
7five-mile radius of the location of the property. In
8appointing a conservator, the court shall:

9(i) consider any recommendations contained in the
10petition or otherwise presented by a party in interest;
11and

12(ii) give preference to the appointment of a
13nonprofit corporation or governmental unit over an
14individual.

15(f) Conditional relief.--

16(1) If the court finds after a hearing that the
17conditions for conservatorship set forth in subsection (d)
18have been established, but the owner represents that the
19conditions, violations or nuisance or emergency condition
20will be abated in a reasonable period, the court may allow
21the owner to proceed to remedy the conditions.

22(2) If the conditions set forth in paragraph (1) have
23been satisfied, the court shall enter an order providing
24that, in the event that the violations or nuisance or
25emergency conditions are not abated by the owner by a
26specific date or that other specified remedial activities
27have not occurred by a specific date or dates, an order
28granting the relief requested in the petition shall be
29entered.

30(3) The court [may] shall also require the owner to post

1a bond in the amount of the repair costs estimated in the
2petition as a condition to retaining possession of the
3building.

4(4) <- A contract for sale entered into subsequent to the
5filing of a petition for conservatorship shall be subject to
6court approval and to reimbursement of costs incurred by the
7petitioner in preparing and filing the petition in accordance
8with the requirements of section 4. <-Upon a finding that:

9(1) the petition states conditions for conservatorship;
10or

11(2) the owner elects to either:

12(i) remedy all violations and nuisance or emergency
13conditions; or

14(ii) sell the property subject to the
15conservatorship,

16the owner shall reimburse the petitioner for all costs
17incurred by the petitioner in preparing and filing the
18petition in accordance with the requirements of section 4.

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

24* * *

25Section 4. Section 6(a)(4) and (14) and (c)(1) and (5) of
26the act are amended to read:

27Section 6. Powers and duties of conservator.

28(a) Full powers and duties.--The conservator shall have all
29powers and duties necessary or desirable, from time to time, for
30the efficient operation, management and improvement of the

1building in order to bring it into compliance with all municipal
2building and housing code requirements and to fulfill the
3conservator's responsibilities under this act. Such powers and
4duties shall include, but not be limited to, the power to:

5* * *

6(4) Contract for the repair and maintenance of the
7building. The contracts shall be appropriately documented and
8included in the reports and accounting which the conservator
9is required to submit or file under the provisions of this
10act. The conservator shall make a reasonable effort to
11solicit three bids for contracts valued at more than $25,000, 
12except when the contractor or developer provides or obtains 
13financing for the conservatorship.

14* * *

15(14) Exercise all authority that an owner of the
16building would have to improve, maintain and otherwise manage
17the building, including the extent to which rehabilitation 
18will satisfy the goals of the conservatorship.

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

20(1) At the time the court appoints a conservator, the 
21conservator may present and the court may approve the final 
22plan for abatement. If no plan is presented at that hearing,
23a hearing date on the conservator's final plan for abatement
24shall be set within 120 days of the appointment.

25* * *

26(5) At the time of the hearing, all parties shall be 
27allowed to comment on the plan, and the court shall take all 
28comments into consideration when assessing the feasibility of 
29the plan and the proposed financing. In making its 
30assessment, the court shall give reasonable regard to the
 

1conservator's determination of the scope and necessity of 
2work to be done for the rehabilitation or demolition of the 
3building in approving the final plan and in approving the 
4costs of conservatorship and sale of the property.

5* * *

6Section 5. Sections 8(b) <-and (c) and 9(b)(2) and (d) of the
7act are amended to read:

8Section 8. Incurring indebtedness.

9* * *

10(b) Liens.--In order to facilitate the borrowing of funds
11for the costs of rehabilitation, the court may grant priority 
12status to a lien [or security interest with priority over all
13other liens with the exception of municipal or other
14governmental liens, provided, however, that prior to granting a
15priority lien, the court has found that] given to secure payment 
16on a debt incurred for purposes authorized under this chapter 
17provided that:

18(1) [The] the conservator sought to obtain the necessary
19financing from the senior, nongovernmental lienholder, but
20the lienholder declined to provide financing for reasonable
21improvements or other costs of rehabilitation on reasonable
22terms[.]; and

23(2) [Lien] lien priority is necessary in order to induce
24another lender to provide financing on reasonable terms.

<-25[(c) Lien status of rehabilitation expenses.--Should the
26senior lienholder agree to provide financing for the costs of
27rehabilitation, any funds lent to cover the costs shall be
28deemed to be added to the senior lienholder's preexisting first
29lien.]

30* * *

1Section 9. Sale of property.

2* * *

3(b) Sale by conservator.--Upon application of the
4conservator, the court may order the sale of the property if the
5court finds that:

6* * *

7(2) The conservator has been in control of the building
8for more than [six] three months and the owner has not
9successfully petitioned to terminate the conservatorship
10under section 10.

11* * *

12(d) Distribution.--The proceeds of the sale shall be applied
13in accordance with the following priorities to:

14(1) All court costs.

15(2) [Municipal or other governmental liens.] Liens of 
16the Commonwealth, liens for unpaid property taxes and 
17properly recorded municipal liens.

18(3) Costs and expenses of sale.

19(4) Principal and interest on any borrowing or
20incurrence of indebtedness granted priority over existing
21liens and security interest under section 8(b).

22(4.1) Costs incurred by the petitioner in preparing and
23filing the petition in accordance with the requirements of
24section 4.

25(5) Costs of rehabilitation and any fees and expenses
26incurred by the conservator in connection with the sale or
27the safeguarding of the property for which the lien
28authorized under section (5)(g) was filed.

29(6) Valid liens and security interests in accordance
30with their priority.

1(7) Any unpaid obligations of the conservator.

2[(8) Costs incurred by the petitioner in requesting the
3court to place the property in conservatorship.]

4(9) The owner.

5* * *

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