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| PRIOR PRINTER'S NO. 1886 | PRINTER'S NO. 2004 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY GREENLEAF, BOSCOLA, EARLL, PILEGGI, BROWNE AND FERLO, JANUARY 9, 2012 |
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| AS AMENDED ON SECOND CONSIDERATION, MARCH 12, 2012 |
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| AN ACT |
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1 | Amending Title 42 (Judiciary and Judicial Procedure) of the |
2 | Pennsylvania Consolidated Statutes, further providing for six |
3 | months limitation and for deficiency judgments. |
4 | The General Assembly of the Commonwealth of Pennsylvania |
5 | hereby enacts as follows: |
6 | Section 1. Sections 5522(b)(2) and (6) and 8103(a), (b), (c) |
7 | (3) and (5), (e), (f.1), (f.2) and (g) of Title 42 of the |
8 | Pennsylvania Consolidated Statutes, amended or added by the act |
9 | of November 24, 2004 (P.L.1243, No.152), amendment declared |
10 | unconstitutional, 5 A.3d 353 (Pa. Superior 2010), stay granted |
11 | retroactively to September 8, 2010 (Pa. Superior 2010), limited |
12 | petition for allowance of appeal granted, 937 MAL 2010 (Pa. |
13 | 2011), are reenacted to read: |
14 | § 5522. Six months limitation. |
15 | * * * |
16 | (b) Commencement of action required.--The following actions |
17 | and proceedings must be commenced within six months: |
18 | * * * |
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1 | (2) A petition for the establishment of a deficiency |
2 | judgment following execution and delivery of the sheriff's |
3 | deed for the property sold in connection with the execution |
4 | proceedings referenced in the provisions of section 8103(a) |
5 | (relating to deficiency judgments). |
6 | * * * |
7 | (6) A petition for redetermination of fair market value |
8 | pursuant to section 8103(f.1)(4) following execution and |
9 | delivery of the sheriff's deed for the property sold in |
10 | connection with the execution proceedings referenced under |
11 | section 8103. |
12 | § 8103. Deficiency judgments. |
13 | (a) General rule.--Whenever any real property is sold, |
14 | directly or indirectly, to the judgment creditor in execution |
15 | proceedings and the price for which such property has been sold |
16 | is not sufficient to satisfy the amount of the judgment, |
17 | interest and costs and the judgment creditor seeks to collect |
18 | the balance due on said judgment, interest and costs, the |
19 | judgment creditor shall petition the court to fix the fair |
20 | market value of the real property sold. The petition shall be |
21 | filed as a supplementary proceeding in the matter in which the |
22 | judgment was entered. If the judgment was transferred from the |
23 | county in which it was entered to the county where the execution |
24 | sale was held, the judgment shall be deemed entered in the |
25 | county in which the sale took place. |
26 | (b) Effect of failure to give notice.--Any debtor and any |
27 | owner of the property affected thereby, who is neither named in |
28 | the petition nor served with a copy thereof or notice of the |
29 | filing thereof as prescribed by general rule, shall be deemed to |
30 | be discharged from all personal liability to the judgment |
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1 | creditor on the debt, interest and costs, but any such failure |
2 | to name such person in the petition or to serve the petition or |
3 | notice of the filing thereof shall not prevent proceedings |
4 | against any respondent named and served. |
5 | (c) Action on petition.-- |
6 | * * * |
7 | (3) If an answer is filed alleging as the fair market |
8 | value an amount in excess of the fair market value of the |
9 | property as averred in the petition, the judgment creditor |
10 | may agree to accept as the fair market value of the property |
11 | the value set up in the answer and in such case may file a |
12 | stipulation releasing the debtors and the owners of the |
13 | property affected thereby, from personal liability to the |
14 | judgment creditor to the extent of the fair market value as |
15 | averred in the answer, less the amount of any prior liens, |
16 | costs, taxes and municipal claims not discharged by the sale, |
17 | and also less the amount of any such items paid at |
18 | distribution on the sale. |
19 | * * * |
20 | (5) After the hearing, if any, and the determination by |
21 | the court under paragraph (1), (2) or (4) of the fair market |
22 | value of the property sold, then, except as otherwise |
23 | provided in subsection (f), the debtor shall be released and |
24 | discharged of such liability to the judgment creditor to the |
25 | extent of the fair market value of said property determined |
26 | by the court, less the amount of all prior liens, costs, |
27 | taxes and municipal claims not discharged by the sale, and |
28 | also less the amount of any such items paid at the |
29 | distribution on the sale, and shall also be released and |
30 | discharged of such liability to the extent of any amount by |
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1 | which the sale price, less such prior liens, costs, taxes and |
2 | municipal claims, exceeds the fair market value as agreed to |
3 | by the judgment creditor or fixed and determined by the court |
4 | as provided in this subsection, and thereupon the judgment |
5 | creditor may proceed by appropriate proceedings to collect |
6 | the balance of the debt. |
7 | * * * |
8 | (e) Waiver of benefit of section prohibited.--Any agreement |
9 | made by any debtor at any time, either before or after or at the |
10 | time of incurring any obligation, to waive the benefits of this |
11 | section or to release any obligee from compliance with the |
12 | provisions hereof shall be void. |
13 | * * * |
14 | (f.1) Collateral located in more than one county.-- |
15 | (1) If the real property collateral is located in more |
16 | than one county in this Commonwealth, a judgment creditor may |
17 | elect not to file a valuation petition in the court in each |
18 | of such counties as provided under subsection (a) and shall |
19 | not be subject to the penalties for failure to file the |
20 | petition under subsection (d) if the judgment creditor is a |
21 | nonconsumer judgment creditor and the provisions of |
22 | paragraphs (2) and (3) are satisfied. |
23 | (2) The judgment creditor shall petition the deficiency |
24 | court to determine and fix the fair market value of all of |
25 | the real property collateral as provided under subsection (c) |
26 | (1), (2), (3) and (4). The value shall be determined on a |
27 | parcel-by-parcel basis, and the amount so fixed for each |
28 | parcel comprising the real property collateral shall be the |
29 | fair market value for the parcel for all purposes under this |
30 | subsection unless redetermined as provided in paragraph (4). |
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1 | (3) The determination of the fair market value of the |
2 | real property collateral by the deficiency court as provided |
3 | in paragraph (2) shall be made before an execution sale is |
4 | held with respect to any of the real property collateral. |
5 | (4) (i) If the execution sale of a parcel of real |
6 | property is concluded and the judgment creditor is the |
7 | purchaser of the parcel at the sale, then either the judgment |
8 | creditor or the debtor may file a petition with the |
9 | deficiency court seeking a redetermination of the fair market |
10 | value of the parcel provided the petition is filed within the |
11 | six-month period established under section 5522(b)(6). |
12 | (ii) If the petition is filed in a timely manner, |
13 | the deficiency court shall redetermine the fair market |
14 | value of the parcel in the manner provided in subsection |
15 | (c)(1), (2), (3) and (4). The redetermined value shall be |
16 | the fair market value of the parcel for all purposes |
17 | under this subsection. |
18 | (iii) The filing of the petition for the |
19 | redetermination shall not limit or affect the judgment |
20 | creditor's ability to execute on the real property |
21 | collateral unless and until the value is redetermined by |
22 | the court. However, where the debtor alleges in its |
23 | petition that an appropriate redetermination of value by |
24 | the court with respect to property that has already been |
25 | sold to the judgment creditor at an execution sale would |
26 | be sufficient to satisfy the judgment in full, the |
27 | deficiency court may issue a stay of further execution |
28 | proceedings pending the court's ruling on the petition |
29 | for redetermination of value. |
30 | (5) In cases subject to this subsection, the debtor |
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1 | shall be released and discharged from liability for the |
2 | payment of the debt in the manner provided in subsection (c) |
3 | (5) to the extent of: |
4 | (i) the fair market value determined by the |
5 | deficiency court of all real property collateral |
6 | purchased by the judgment creditor in execution |
7 | proceedings on the judgment less the deductible items |
8 | described in subsection (c)(5); and |
9 | (ii) the amount distributed to the judgment creditor |
10 | as a result of the sale of the real property collateral |
11 | purchased in the proceedings by third parties. |
12 | (f.2) Foreign collateral.-- |
13 | (1) No deficiency court shall have the power to fix the |
14 | fair market value of real property located outside this |
15 | Commonwealth and may not take into account the value of that |
16 | property in considering whether or not a deficiency exists |
17 | under this section. |
18 | (2) This section shall not apply to the sale of any real |
19 | property located outside this Commonwealth. |
20 | (g) Definitions.--As used in this section, the following |
21 | words and phrases shall have the meanings given to them in this |
22 | subsection: |
23 | "Adjusted value." The assessed value of a parcel of real |
24 | property collateral determined for real estate tax purposes |
25 | times the applicable common level ratio factor published by the |
26 | State Tax Equalization Board. |
27 | "Consumer credit transaction." A credit transaction in which |
28 | the party to whom credit is offered or extended is a natural |
29 | person and the money, property or services which are the subject |
30 | of the transaction are primarily for personal, family or |
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1 | household purposes. |
2 | "Debtor." A debtor, obligor, guarantor, surety and any other |
3 | person liable directly or indirectly to a judgment creditor for |
4 | the payment of a debt. |
5 | "Deficiency court." With respect to cases covered by |
6 | subsection (f.1), the court of common pleas located in the |
7 | county where the highest adjusted value land is located. |
8 | "Highest adjusted value land." The real property collateral |
9 | located in a county that has a higher aggregate adjusted value |
10 | than real property collateral located in any other county. |
11 | "Judgment." The judgment which was enforced by the execution |
12 | proceedings referred to in subsection (a), whether that judgment |
13 | is a judgment in personam such as a judgment requiring the |
14 | payment of money or a judgment de terris or in rem such as a |
15 | judgment entered in an action of mortgage foreclosure or a |
16 | judgment entered in an action or proceeding upon a mechanic's |
17 | lien, a municipal claim, a tax lien or a charge on land. |
18 | "Judgment creditor." The holder of the judgment which was |
19 | enforced by the execution proceedings. |
20 | "Nonconsumer judgment creditor." Any judgment creditor |
21 | except a judgment creditor whose judgment was entered with |
22 | respect to a consumer credit transaction. |
23 | "Nonrecourse portion of the obligation." The portion as to |
24 | which the judgment creditor's recourse is limited to the |
25 | mortgaged property or other specified assets of the debtor which |
26 | are less than all of such assets. |
27 | "Partial recourse obligation." An obligation which includes |
28 | both a nonrecourse portion and a recourse portion. |
29 | "Real property collateral." All of the real property subject |
30 | to a lien securing the obligation evidenced by the judgment and |
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1 | located within this Commonwealth. |
2 | "Recourse portion of the obligation." All of the obligation |
3 | except the nonrecourse portion thereof. |
4 | "Valuation petition." A petition to fix the fair market |
5 | value of real property sold as required by subsection (a). |
6 | Section 2. The reenactment of sections 5522(b)(2) and (6) |
7 | and 8103(a), (b), (c)(3) and (5), (e), (f.1), (f.2) and (g) of |
8 | Title 42 of the Pennsylvania Consolidated Statutes shall apply |
9 | retroactively to January 2 23, 2005. | <-- |
10 | Section 3. This act shall take effect immediately. |
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