PRIOR PRINTER'S NO. 1193 PRINTER'S NO. 3560
No. 1022 Session of 1977
INTRODUCED BY MESSRS. REED, BROWN, ZITTERMAN, ZELLER AND
LAUGHLIN, APRIL 27, 1977
AS REPORTED FROM COMMITTEE ON INSURANCE, HOUSE OF
REPRESENTATIVES, AS AMENDED, SEPTEMBER 11, 1978
AN ACT
1 Providing for the powers and duties of owners of buildings <--
2 damaged or destroyed by fire and prescribing penalties.
3 ESTABLISHING THE DUTIES AND RESPONSIBILITIES OF OWNERS OF <--
4 CERTAIN PROPERTY DAMAGES OR DESTROYED BY FIRE AND PRESCRIBING
5 PENALTIES, CREATING CERTAIN LIENS AND PRIORITY IN INSURANCE
6 PROCEEDS IN FAVOR OF CITIES OF THE FIRST, SECOND, SECOND A
7 AND THIRD CLASS, REGULATING THE DISBURSEMENT OF INSURANCE
8 PROCEEDS OF THE INSURED, AND PROVIDING FOR DIRECT PAYMENT AND
9 DISTRIBUTION OF INSURANCE PROCEEDS TO CITIES OF THE FIRST,
10 SECOND, SECOND A AND THIRD CLASS UNDER CERTAIN TERMS AND
11 CONDITIONS.
12 The General Assembly of the Commonwealth of Pennsylvania
13 hereby enacts as follows:
14 Section 1. Restoration of building from insurance proceeds. <--
15 The owner of a building damaged or destroyed by fire shall
16 use as much of the payment received under a fire insurance
17 policy covering losses as is necessary to restore the building
18 in accordance with the provisions of applicable building, health
19 or safety codes.
20 Section 2. Actions other than restoration.
21 In lieu of restoration, the owner of a damaged or destroyed
22 building may board up or seal the windows and doors of the
1 building if permissible under applicable municipal housing,
2 health or safety codes. He may demolish the building and, within
3 a reasonable time after the loss, convey the land on which the
4 building was situated.
5 Section 3. Responsibility of new owner.
6 This act shall not excuse a new owner from complying with
7 housing, health and safety codes covering the building in which
8 the fire occurred.
9 Section 4. Penalty.
10 A person who violates a provision of this act is guilty of a
11 summary offense and shall, upon conviction, be sentenced to pay
12 a fine not exceeding $1,000 or to undergo imprisonment for not
13 more than one year, or both.
14 Section 5. Effective date.
15 This act shall take effect in 60 days.
16 SECTION 1. RESTORATION OF REAL PROPERTY FROM INSURANCE <--
17 PROCEEDS.
18 (A) THE OWNER, MORTGAGEE OR INSURED PARTY OF ANY REAL
19 PROPERTY AS DESCRIBED IN SECTION 7 DAMAGED OR DESTROYED BY FIRE
20 SHALL USE AS MUCH OF THE PAYMENT RECEIVED UNDER A POLICY
21 PROVIDING FIRE INSURANCE COVERING LOSSES AS IS NECESSARY TO
22 RESTORE OR REPLACE IN WHOLE OR IN PART THE PROPERTY IN
23 ACCORDANCE WITH THE PROVISIONS OF APPLICABLE BUILDING, HOUSING,
24 HEALTH, FIRE AND SAFETY CODES.
25 (B) IN LIEU OF RESTORATION, THE OWNER, MORTGAGEE OR INSURED
26 PARTY OF A DAMAGED OR DESTROYED STRUCTURE MAY USE SUCH PROCEEDS
27 TO BOARD UP OR SEAL THE WINDOWS AND DOORS OF THE STRUCTURE AS
28 PERMISSIBLE UNDER APPLICABLE MUNICIPAL BUILDING, HOUSING,
29 HEALTH, FIRE AND SAFETY CODES OR SUCH PERSON MAY DEMOLISH THE
30 STRUCTURE.
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1 (C) THIS ACT SHALL NOT EXCUSE A NEW OWNER FROM COMPLYING
2 WITH BUILDING, HOUSING, HEALTH, FIRE AND SAFETY CODES COVERING
3 THE STRUCTURE IN WHICH THE FIRE OCCURRED.
4 SECTION 2. LIENS AND PRIORITY IN INSURANCE PROCEEDS IN FAVOR
5 OF CITIES.
6 NOTWITHSTANDING ANY OTHER PROVISION OF LAW OF THIS
7 COMMONWEALTH, A LIEN IS HEREBY CREATED IN FAVOR OF THE CITY UPON
8 INSURANCE PROCEEDS FOR THE FOLLOWING: DELINQUENT REAL PROPERTY
9 TAXES, MUNICIPAL ASSESSMENTS, WATER AND SEWER CHARGES, MUNICIPAL
10 CLAIMS, LIENS AND ENCUMBRANCES, AND FOR ALL COSTS INCURRED BY
11 THE CITY IN RELATION TO THE REAL PROPERTY INSURED INCLUDING BUT
12 NOT LIMITED TO THE COST OF ABATING ANY NUISANCE PUBLIC OR
13 PRIVATE CREATED BY THE COVERED PERIL, AND OF INSPECTING,
14 REPAIRING, DEMOLISHING, REMOVING OR OTHERWISE DISPOSING OF ANY
15 PROPERTY DAMAGED BY A COVERED PERIL. THE LIEN OF ANY CITY
16 ARISING UNDER THE PROVISIONS OF THIS ACT SHALL HAVE PRIORITY
17 OVER THE CLAIM OF ANY INSURED OWNER, MORTGAGEE, ASSIGNEE OR
18 OTHER INTERESTED PARTY EXCEPT WHERE OTHERWISE PROVIDED BY THE
19 LAWS OF THE UNITED STATES.
20 SECTION 3. PAYMENT OF INSURANCE PROCEEDS.
21 (A) IT SHALL BE UNLAWFUL FOR ANY INSURANCE COMPANY
22 AUTHORIZED UNDER THE ACT OF MAY 17, 1921 (P.L.682, NO.284),
23 KNOWN AS "THE INSURANCE COMPANY LAW OF 1921," TO ISSUE INSURANCE
24 POLICIES PROVIDING FIRE INSURANCE COVERAGE IN THIS COMMONWEALTH
25 TO PAY ANY CLAIM ON A POLICY INCLUDING ANY POLICY WRITTEN
26 PURSUANT TO THE PROVISIONS OF THE ACT OF JULY 31, 1968 (P.L.738,
27 NO.233), KNOWN AS "THE PENNSYLVANIA FAIR PLAN ACT," COVERING A
28 DWELLING OR STRUCTURE WHICH IS VACANT OR ANY CLAIM EXCEEDING
29 $5,000 ON ANY OTHER POLICY ISSUED BY SUCH COMPANY FOR FIRE
30 DAMAGE TO ANY REAL PROPERTY LOCATED IN THIS COMMONWEALTH UNTIL
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1 THE INSURED SUBMITS TO THE INSURANCE COMPANY, ON FORMS AND IN
2 THE MANNER PRESCRIBED BY THE INSURANCE COMMISSIONER, PROOF THAT
3 ALL DELINQUENT TAXES, ASSESSMENTS, CHARGES, CLAIMS, LIENS,
4 ENCUMBRANCES AND COSTS AS ENUMERATED IN SECTION 2 HAS BEEN PAID.
5 (B) THE FAILURE ON THE PART OF THE INSURED PROPERTY OWNER TO
6 PAY IN FULL ANY ITEM ENUMERATED IN SECTION 2 SHALL REQUIRE THE
7 INSURANCE COMPANY TO WITHHOLD PAYMENT OF THE PROCEEDS OTHERWISE
8 DUE UNDER THE POLICY TO THE INSURED PROPERTY OWNER, MORTGAGEE,
9 ASSIGNEE OR OTHER INTERESTED PARTY UNTIL ALL SUCH TAXES,
10 ASSESSMENTS, CHARGES, CLAIMS, LIENS, ENCUMBRANCES AND COSTS AS
11 ENUMERATED IN SECTION 2 HAVE BEEN PAID.
12 (C) THE INSURANCE COMPANY SHALL PAY DIRECTLY TO THE CITY ANY
13 AMOUNT SHOWN AS OUTSTANDING ON THE FORMS PRESCRIBED BY SECTION
14 3(A) AND SHALL DEDUCT THE AMOUNT THEREOF FROM THE PROCEEDS
15 OTHERWISE PAYABLE TO THE INSURED. THE INSURED SHALL APPLY THE
16 BALANCE OF ANY INSURANCE PROCEEDS PAID TO HIM TO RESTORATION OF
17 THE PROPERTY AS REQUIRED BY SUBSECTIONS (A),(B) AND (C) OF
18 SECTION 1. A RELEASE OF THE CITY'S LIEN FOR THE ITEMS ENUMERATED
19 IN SECTION 2 MAY BE SECURED BY THE INSURED BY:
20 (1) FULL PAYMENT OF ALL DELINQUENT TAXES, ASSESSMENTS,
21 CHARGES, CLAIMS, LIENS, ENCUMBRANCES AND COSTS AS ENUMERATED
22 IN SECTION 2; OR
23 (2) ENTRY INTO AN AGREEMENT, WHICH SHALL BE BINDING AND
24 ENFORCEABLE AT LAW, WITH THE CITY IN WHICH THE INSURED AGREES
25 TO APPLY A PORTION OR ALL OF THE PROCEEDS OF ANY INSURANCE
26 POLICY TO THE DEMOLITION OR REPAIR, REHABILITATION,
27 RESTORATION AND MAINTENANCE OF THE PROPERTY, TO BRING THE
28 PROPERTY INTO COMPLIANCE WITH ALL APPLICABLE MUNICIPAL CODES,
29 AND TO PAY ALL DELINQUENT MUNICIPAL CLAIMS AND LIENS, UNDER
30 SUCH TERMS AND CONDITIONS AS THE CITY IN ITS SOLE DISCRETION
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1 DETERMINES TO IMPOSE.
2 SECTION 4. NOTIFICATION TO INSURANCE COMPANY.
3 (A) THE CITY SHALL PROCESS THE FORMS REQUIRED TO BE
4 SUBMITTED BY THE INSURED TO THE INSURANCE COMPANY UNDER THIS ACT
5 WITHIN FIVE BUSINESS DAYS OF PRESENTATION BY THE INSURED TO THE
6 CITY. FAILURE OF THE CITY TO PROCESS ANY REQUIRED FORM WITHIN
7 FIVE BUSINESS DAYS SHALL RESULT IN A 1% DEDUCTION PER DAY IN THE
8 AMOUNT DUE TO THE CITY UNDER THE PROVISIONS OF THIS ACT.
9 (B) THE INSURED SHALL SUBMIT COMPLETED FORMS FROM THE CITY
10 TO THE INSURANCE COMPANY WITHIN 15 DAYS OF THE DATE THE FORM IS
11 RETURNED BY THE CITY TO THE INSURED. IN THE EVENT THAT AN
12 AGREEMENT HAS BEEN ENTERED INTO PURSUANT TO SECTION 3(C)(2), THE
13 INSURED SHALL SUBMIT SAID AGREEMENT TO THE INSURANCE COMPANY
14 WITHIN 15 DAYS OF ITS EXECUTION. UPON RECEIPT OF THE COMPLETED
15 REQUIRED FORMS OR EXECUTED AGREEMENT, THE INSURANCE COMPANY MAY
16 RELEASE TO THE INSURED, IN A MANNER CONSISTENT WITH THE
17 INFORMATION SHOWN ON THE SUBMITTED COMPLETED FORMS OR WITH THE
18 TERMS OF ANY AGREEMENT, WHICHEVER IS APPLICABLE, INSURANCE
19 PROCEEDS PAYABLE UNDER ANY POLICY OF INSURANCE.
20 (C) IF THE INSURED FAILS TO SUBMIT THE FORMS COMPLETED BY
21 THE CITY, OR ANY AGREEMENT ENTERED INTO WITH THE CITY, TO THE
22 INSURANCE COMPANY WITHIN THE 15 DAY TIME PERIOD PRESCRIBED IN
23 SECTION 4(B), THE CITY MAY SUBMIT A CLAIM IN ITS OWN BEHALF FOR
24 ALL DELINQUENT TAXES, ASSESSMENTS, CHARGES, CLAIMS, LIENS,
25 ENCUMBRANCES AND COSTS AS ENUMERATED IN SECTION 2, WHICH SHALL
26 BE PAID IN FULL TO THE CITY BY THE INSURANCE COMPANY OUT OF THE
27 INSURANCE PROCEEDS OTHERWISE PAYABLE TO THE INSURED.
28 (D) AN INSURANCE COMPANY SHALL NOT BE LIABLE TO ANY INSURED
29 OWNER, MORTGAGEE, ASSIGNEE, OR OTHER INTERESTED PARTY FOR
30 AMOUNTS DISBURSED TO A MUNICIPALITY IN ACCORDANCE WITH THE
19770H1022B3560 - 5 -
1 PROVISIONS OF THIS ACT, NOR TO A MUNICIPALITY FOR AMOUNTS NOT
2 DISBURSED TO A MUNICIPALITY BASED UPON COMPLETED FORMS OR
3 AGREEMENTS AS PRESCRIBED IN SECTION 3(A) INDICATING THE
4 NONEXISTENCE OF ANY DELINQUENT TAXES, ASSESSMENTS, CHARGES,
5 CLAIMS, LIENS, ENCUMBRANCES AND COSTS AS ENUMERATED IN SECTION
6 2. AN INSURANCE COMPANY SHALL NOT BE HELD LIABLE FOR THE RELEASE
7 OF ANY INFORMATION REQUIRED TO BE RELEASED UNDER THIS ACT.
8 SECTION 5. DISCLOSURE BY INSURANCE COMPANY.
9 EVERY INSURANCE COMPANY SUBJECT TO THE PROVISIONS OF THIS ACT
10 SHALL NOTIFY ITS INSUREDS OF THE PROVISIONS OF THIS ACT UPON
11 ISSUANCE OR RENEWAL OF POLICIES PROVIDING FIRE INSURANCE.
12 SECTION 6. PENALTIES.
13 ANY INSURED WHO FAILS TO COMPLY WITH SECTION 1 IS GUILTY OF A
14 SUMMARY OFFENSE AND SHALL, UPON CONVICTION, BE SENTENCED TO PAY
15 A FINE NOT EXCEEDING $1,000 OR TO UNDERGO IMPRISONMENT FOR NOT
16 MORE THAN ONE YEAR, OR BOTH.
17 SECTION 7. APPLICATION.
18 THE PROVISIONS OF THIS ACT SHALL BE APPLICABLE TO ALL
19 UNOCCUPIED DWELLINGS OR STRUCTURES, ALL RESIDENTIAL PROPERTY
20 EXCEPT SINGLE FAMILY OWNER OCCUPIED DWELLINGS, AND ALL
21 COMMERCIAL AND INDUSTRIAL PROPERTIES LOCATED WITHIN CITIES OF
22 THE FIRST, SECOND, SECOND A AND THIRD CLASS OF THE COMMONWEALTH
23 OF PENNSYLVANIA.
24 SECTION 8. RULES AND REGULATIONS.
25 THE INSURANCE COMMISSIONER SHALL PROMULGATE SUCH RULES AND
26 REGULATIONS AS ARE DEEMED NECESSARY FOR THE EFFECTIVE
27 IMPLEMENTATION AND OPERATION OF THIS ACT.
28 SECTION 9. EFFECTIVE DATE.
29 THIS ACT SHALL TAKE EFFECT IN 180 DAYS AND SHALL APPLY TO ALL
30 POLICIES OF INSURANCE AS THEY ARE ISSUED, WRITTEN OR RENEWED
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1 SUBSEQUENT TO SUCH EFFECTIVE DATE.
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