AN ACT

 

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 and for sale of property.

8The General Assembly of the Commonwealth of Pennsylvania
9hereby enacts as follows:

10Section 1. The definitions of "building," "costs of
11rehabilitation," "nonprofit corporation," and "party in
12interest" in section 3 of the act of November 26, 2008 (P.L.
131672, No. 135), known as the Abandoned and Blighted Property
14Conservatorship Act, are amended and the section is amended by
15adding definitions to read:

16Section 3. Definitions.

17The following words and phrases when used in this act shall
18have the meanings given to them in this section unless the
19context clearly indicates otherwise:

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

4* * *

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

8* * *

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

17* * *

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

20(1) an amount equal to $2,500, adjusted upward by 2%
21each year;

22(2) a 20% markup of the costs and expenses for
23construction, stabilization, rehabilitation, maintenance and
24operation or demolition as described in the proposed
25conservator's plan and any subsequent plan approved by the
26court; or

27(3) twenty percent of the sale price of the property.

28* * *

29"Nonprofit corporation." A nonprofit corporation that has,
30as one of its purposes remediation of blight, community

1development activities, including economic development, historic
2preservation or the promotion or enhancement of affordable
3housing opportunities.

4* * *

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

8(1) The owner.

9(2) A lienholder and other secured creditor of the
10owner.

11(3) A resident or business owner within [500] 2,000 feet
12of the building.

13(4) A nonprofit corporation, including a redevelopment
14authority, which:

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

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

22(5) A municipality or school district in which the
23building is located.

24* * *

25Section 2. Section 4 of the act is amended by adding a
26subsection to read:

27Section 4. Initiation of action.

28* * *

29(e) Adjacent properties.--The petition may include one or
30more adjacent properties in a single action if:

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

4(2) the properties are or were used for a single or
5interrelated function.

6Section 3. Section 5(a), (d), (e), (f) and (g) of the act
7are amended to read:

8Section 5. Appointment of conservator.

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

13* * *

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

17(1) The building has not been legally occupied for at
18least the previous 12 months.

19(2) The building has not been actively marketed during
20the 60 days prior to the date of the petition[.] or has been 
21actively marketed for more than six months without a 
22competitive, market-driven price reduction. If the property 
23is actively marketed, the owner of the building shall provide 
24the court with a copy of the active real estate listing as 
25well as a notarized affidavit containing dates the property 
26was shown and details about any offers placed by potential 
27buyers. The court shall consider whether the listing is a 
28credible attempt to sell the property to a responsible owner 
29or an attempt to thwart the proposed conservatorship.

30(3) The building is not subject to an existing

1foreclosure action. For the purposes of this paragraph, 
2foreclosure does not include properties subject to civil 
3action by a governmental entity for taxes or liens, and any 
4enforcement action may be stayed at the discretion of the 
5court.

6(4) The current owner fails to present sufficient
7evidence that he has acquired the property within the
8preceding six months. The evidence shall not include
9instances where the prior owner is a member of the immediate
10family of the current owner, unless the transfer of title
11results from the death of the prior owner, or where the
12current or prior owner is a corporation, partnership or other
13entity in which either owner or the immediate family of
14either owner has an interest in excess of 5%.

15(5) The court finds at least three of the following:

16(i) The building or physical structure is a public
17nuisance.

18(ii) The building is in need of substantial
19rehabilitation and no rehabilitation has taken place
20during the previous 12 months.

21(iii) The building is unfit for human habitation,
22occupancy or, if the property is zoned commercial, use.

23(iv) The condition and vacancy of the building
24materially increase the risk of fire to the building and
25to adjacent properties.

26(v) The building is subject to unauthorized entry
27leading to potential health and safety hazards and one of
28the following applies:

29(A) The owner has failed to take reasonable and
30necessary measures to secure the building.

1(B) The municipality has secured the building in
2order to prevent such hazards after the owner has
3failed to do so.

4(vi) The property is an attractive nuisance to
5children, including, but not limited to, the presence of
6abandoned wells, shafts, basements, excavations and
7unsafe structures.

8(vii) The presence of vermin or the accumulation of
9debris, uncut vegetation or physical deterioration of the
10structure or grounds has created potential health and
11safety hazards and the owner has failed to take
12reasonable and necessary measures to remove the hazards.

13(viii) The dilapidated appearance or other condition
14of the building negatively affects the economic well-
15being of residents and businesses in close proximity to
16the building, including decreases in property value and
17loss of business, and the owner has failed to take
18reasonable and necessary measures to remedy appearance or
19the condition.

20(ix) The property is an attractive nuisance for
21illicit purposes, including prostitution, drug use and
22vagrancy.

23(e) Appointment.--

24(1) If the court determines after a hearing that the
25property has met the conditions of subsection (d), the court
26may appoint a conservator and grant such other relief as may
27be just and appropriate.

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

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) After a petition is filed, if the court proceeds
5pursuant to paragraph (1) or subsection (e)(2), or the owner
6contracts to sell the property, the costs of conservatorship
7shall be paid to the petitioner or conservator upon a prima
8facie finding that the conditions for conservatorship are
9satisfied.

10(g) Conservator's lien.--The conservator may file a lien
11against the property in an amount based on the costs incurred
12during the conservatorship, including, but not limited to, costs 
13of rehabilitation, attorney fees and court costs. The lien 
14amount may be adjusted from time to time.

15* * *

16Section 4. Section 6(a)(4) and (14) and (b)(4) of the act
17are amended and the section is amended by adding a subsection to
18read:

19Section 6. Powers and duties of conservator.

20(a) Full powers and duties.--The conservator shall have all
21powers and duties necessary or desirable, from time to time, for
22the efficient operation, management and improvement of the
23building in order to bring it into compliance with all municipal
24building and housing code requirements and to fulfill the
25conservator's responsibilities under this act. Such powers and
26duties shall include, but not be limited to, the power to:

27* * *

28(4) Contract for the repair and maintenance of the
29building. The contracts shall be appropriately documented and
30included in the reports and accounting which the conservator

1is required to submit or file under the provisions of this
2act. The conservator shall make a reasonable effort to
3solicit three bids for contracts valued at more than $25,000, 
4except when the contractor or developer provides or obtains 
5financing for the conservatorship.

6* * *

7(14) Exercise all authority that an owner of the
8building would have to improve, maintain and otherwise manage
9the building, including the extent to which rehabilitation 
10will satisfy the goals of the conservatorship.

11(a.1) Reasonable regard from court.--The court shall
12give reasonable regard to the conservator in its
13determination as to the scope of rehabilitation necessary to
14recoup the costs of conservatorship, rehabilitation and
15proposed purchase by a developer.

16(b) Affirmative duty.--While in possession of the building,
17the conservator shall:

18* * *

19(4) Implement the final plan referred to in paragraph
20(3) upon approval by the court. The court may approve the 
21final plan at the hearing described in section 5(c).

22* * *

23Section 5. Section 9(b)(2) and (d) of the act are amended to
24read:

25Section 9. Sale of property.

26* * *

27(b) Sale by conservator.--Upon application of the
28conservator, the court may order the sale of the property if the
29court finds that:

30* * *

1(2) The conservator has been in control of the building
2for more than [six] three months and the owner has not
3successfully petitioned to terminate the conservatorship
4under section 10.

5* * *

6(d) Distribution.--The proceeds of the sale shall be applied
7in accordance with the following priorities to:

8(1) All court costs.

9(2) [Municipal] The principal on all State and municipal 
10or other governmental liens then existing and recorded in the 
11judgment and lien index prior to filing of the petition for 
12conservatorship.

13(3) Costs and expenses of sale.

14(4) Principal and interest on any borrowing or
15incurrence of indebtedness granted priority over existing
16liens and security interest under section 8(b).

17(4.1) Costs incurred by the petitioner in requesting the
18court to place the property in conservatorship.

19(5) Costs of rehabilitation and any fees and expenses
20incurred by the conservator in connection with the sale or
21the safeguarding of the property for which the lien
22authorized under section (5)(g) was filed.

23(6) Valid liens and security interests in accordance
24with their priority.

25(7) Any unpaid obligations of the conservator.

26(8) Costs incurred by the petitioner in requesting the
27court to place the property in conservatorship.

28(9) The owner.

29* * *

30Section 6. This act shall take effect in 60 days.