Regular Session 2021-2022 House Bill 1896 P.N. 2154

PRINTER'S NO. 2154

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1896

Session of

2021

INTRODUCED BY POLINCHOCK, R. BROWN, CIRESI, HELM AND ROWE,

SEPTEMBER 22, 2021

REFERRED TO COMMITTEE ON URBAN AFFAIRS, SEPTEMBER 22, 2021

AN ACT

Amending Title 68 (Real and Personal Property) of the

Pennsylvania Consolidated Statutes, in real estate

foreclosure, further providing for definitions, for effect of

certification of vacancy and abandonment, for post-sheriff's

sale possessory action, effect of certification of vacancy

and abandonment in action for possession and disposition of

abandoned personal property for applicability, and providing

for private selling officer sales and for conduct of online

sheriff sales.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definition of "purchaser" in section 2303 of

Title 68 of the Pennsylvania Consolidated Statutes is amended to

read:

§ 2303. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Purchaser." Any of the following:

(1) a person that acquires equitable title to a

mortgaged property at a [sheriff's] public sale conducted

pursuant to a foreclosure or similar action and has paid

settlement funds and delivered required documentation to the

sheriff or private selling officer as defined in section 2313

(relating to definitions) to obtain a [sheriff's] deed or the

owner of a property under a recorded [sheriff's] deed to the

property or the person's designee;

(2) the owner of a mortgaged property under a recorded

sheriff's deed or private selling officer deed to the

mortgaged property; or

(3) a person that takes title to a mortgaged property

pursuant to a deed in lieu of foreclosure.

* * *

Section 2. Sections 2306(c) heading and (1), 2307 heading

and (b) introductory paragraph and 2312 of Title 68 are amended

to read:

§ 2306. Effect of certification of vacancy and abandonment.

* * *

(1) If a mortgaged property is certified as vacant and

abandoned, upon the request of a creditor or purchaser, the

sheriff or private selling officer, on receipt of an

accelerated sale fee of $500, shall schedule a sale of the

mortgaged property to be conducted no later than 60 days

following the filing of the writ of execution and the

[sheriff's] deed must be recorded no later than 30 days

following the sale. A private selling officer sale shall be

conducted in accordance with Subchapter C (relating to

private selling officer sales).

* * *

20210HB1896PN2154 - 2 -

§ 2307. [Post-sheriff's] Post-foreclosure sale possessory

action, effect of certification of vacancy and

abandonment in action for possession and disposition

of abandoned personal property.

* * *

(b) Removal of personal property by purchaser.--If the

former owner fails to remove personal property from mortgaged

property certified as vacant and abandoned after delivery of a

[sheriff's] deed or a deed in lieu of foreclosure, concurrent

with the filing of an action for possession or at any time after

the action is filed, the purchaser may remove the remaining

personal property of the former owner in the following manner:

* * *

§ 2312. Applicability.

This subchapter shall apply to the extent provided under

sections 2310 (relating to sheriff's commission) [and], 2311

(relating to limitation on creditor's attorney fees), 2318

(relating to private selling officer commission) and 2320

(relating to conduct of online sheriff sales) and shall not be

limited to mortgaged properties certified as vacant and

abandoned under Subchapter A (relating to vacant and abandoned

property).

Section 3. Chapter 23 is amended by adding subchapters to

read:

SUBCHAPTER C

PRIVATE SELLING OFFICER SALES

Sec.

2313. Definitions.

2314. Private selling officer appointment.

2315. Conduct of sale.

20210HB1896PN2154 - 3 -

2316. Registration to bid on property sale.

2317. Duties of purchaser.

2318. Private selling officer commission.

§ 2313. Definitions.

The following words and phrases when used in this subchapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Bidder." A person who participates in a sale of mortgaged

property at a public sale conducted according to a foreclosure

or similar action by placing a bid through a private selling

officer.

"Private selling officer." A person or entity licensed in

this Commonwealth as both an auctioneer in accordance with the

act of December 22, 1983 (P.L.327, No.85), known as the

Auctioneer Licensing and Trading Assistant Registration Act, and

as a real estate broker, brokerage or salesperson in accordance

with Chapter 5 of the act of February 19, 1980 (P.L.15, No.9),

known as the Real Estate Licensing and Registration Act.

"Purchaser." Any of the following:

(1) a person that acquires equitable title to a

mortgaged property at a public sale conducted according to a

foreclosure or similar action and has paid settlement funds

and delivered required documentation to the private selling

officer to obtain a deed or the owner of a property under a

recorded deed to the property or the person's designee;

(2) the owner of a mortgaged property under a recorded

deed to the mortgaged property; or

(3) a person that takes title to a mortgaged property

according to a deed in lieu of foreclosure.

"Sale." A public foreclosure auction of a mortgaged premises

20210HB1896PN2154 - 4 -

under this chapter, whether online or in person.

"SOC2 report." A report generated from an audit conducted by

an authorized certified public accountant organization that

evaluates an information system relevant to security,

availability, processing integrity, confidentiality and privacy

in regards to common controls specified in Statement on

Standards for Attestation Engagements No. 18 as produced and

published by the American Institute of Certified Public

Accountants Auditing Standards Board.

§ 2314. Private selling officer appointment.

(a) Praecipe to be filed.--A creditor may file a praecipe

with the court for an order authorizing a specified private

selling officer to conduct the sale of a mortgaged premises

under this chapter. The appointment of a private selling officer

shall be available for all sales and not limited to vacant or

abandoned property. The praecipe appointing the private selling

officer shall include the name, address and email address of the

private selling officer to be appointed.

(b) Denial of appointment.--The court may not deny the use

of the private selling officer specified within the praecipe

without good and reasonable cause.

§ 2315. Conduct of sale.

A private selling officer authorized to conduct a foreclosure

sale of real estate may do so in accordance with the following

provisions and requirements:

(1) The private selling officer may conduct the sale of

the real estate online, at a physical location in the county

as permitted by law, or both, at the discretion of the

private selling officer. The praecipe for appointment of the

private selling officer must state the manner in which the

20210HB1896PN2154 - 5 -

sale will be conducted.

(2) The private selling officer must take reasonable

steps to market the public auction of the real estate. If the

auction occurs online, the auction shall be open for

competitive bidding for a minimum of two hours.

(3) An officer, employee or independent contractor of

the private selling officer shall be prohibited from

participating in the sale as a purchaser, provided, however,

that the private selling officer may enter bids on behalf of

a bidder.

(4) The following apply:

(i) A creditor that obtains an appointment of a

specified private selling officer to sell the real estate

at a public auction under this section may instruct the

private selling officer to stay, continue, postpone or

adjourn the sale of the real estate one or more times,

provided, however, that all rescheduled sale dates must

occur within 130 days of the initial sale date as

provided in Pa.R.C.P. No.3129.3 (relating to postponement

of sale, new notice, failure of plaintiff to attend

sale).

(ii) Upon receiving the instruction, the private

selling officer shall stay, continue, postpone or adjourn

the sale of the real estate by making a public

announcement. If the sale is at a physical location, the

public announcement shall be made at the sale and include

the date, time and place of the rescheduled sale of the

real estate. If the sale is online, the public

announcement shall be made on the auction website and

include the date of the rescheduled sale of real estate.

20210HB1896PN2154 - 6 -

Each public announcement shall be deemed to meet the

requirements in Pa.R.C.P. No.3129.3.

(iii) If the sale of the real estate is stayed,

continued, postponed or adjourned as described in

subparagraph (i), all prior bids made on the real estate

shall be void.

(5) If the auction occurs online, the following shall

apply:

(i) The private selling officer shall provide a

method by which a bidder may receive feedback during the

bidding process to indicate where the bidder's current

bid is in relation to the highest bid.

(ii) All bidders who register to participate in the

online sale must have their identity verified through an

ID verification process.

(iii) Notwithstanding any other provision of law to

the contrary, the private selling officer may not charge

a fee for members of the public to view properties for

sale online or to place a bid on a property for sale

online. The private selling officer, in its discretion,

may require the deposit as provided in section 2317(c)(1)

(relating to duties of purchaser) to be paid prior to

bidding on a property.

(6) All bid information and participant financial data

is deemed property of the private selling officer.

(7) A private selling officer that sells real estate

under this chapter that is advertised under Pa.R.C.P.

No.3129.2 (relating to notice of sale, handbills, written

notice and publication) may advertise a subsequent sale by a

method that the private selling officer finds suitable, which

20210HB1896PN2154 - 7 -

may include online advertisement instead of print. The

advertisement of a subsequent sale shall be deemed to meet

the notice requirement in Pa.R.C.P. No.3129.2.

(8) Notwithstanding any other provision of law to the

contrary, no fee, including a buyer's premium, may be charged

to a purchaser at the sale of real estate in addition to the

winning bid amount.

(9) The private selling officer who conducts a sale

under this section may do any of the following:

(i) Hire a title insurance agent licensed under

section 722 of the act of May 17, 1921 (P.L.682, No.284),

known as The Insurance Company Law of 1921, or a title

insurance company authorized to do business under Article

VII of The Insurance Company Law of 1921 to assist the

private selling officer in performing administrative

services.

(ii) Execute to the purchaser, or to the purchaser's

legal representatives, a deed of conveyance of the real

estate sold.

(iii) Record on behalf of the purchaser the deed

conveying title to the real estate sold, notwithstanding

that the deed may not actually have been delivered to the

purchaser prior to its recording.

(10) By placing a bid at a sale conducted according to

this section, a purchaser appoints the private selling

officer who conducts the sale as agent of the purchaser for

the sole purpose of accepting delivery of the deed.

(11) The fee charged by the title agent or title

insurance company for services provided under paragraph (9)

(i) and (iii) shall be assessed as costs in the case and

20210HB1896PN2154 - 8 -

shall be reasonable. Fees less than or equal to $500 shall be

presumed to be reasonable. Fees exceeding $500 shall be paid

only if authorized by a court order.

(12) An online platform utilized by the private selling

officer to conduct a sale online shall maintain satisfactory

internal controls and shall obtain an annual SOC2 report to

ensure the platform meets certain performance and security

requirements, with the ability to test and report on the

design effectiveness (Type I) and operating effectiveness

(Type II) of the platform's controls. Upon the request of the

court, evidence of satisfactory internal controls specified

in this section shall be provided.

§ 2316. Registration to bid on property sale.

(a) Registration form.--A private selling officer may

require persons seeking to bid to complete a registration form

that includes information relevant to the objective of enabling

the private selling officer to identify the bidder, contact the

bidder and complete the sale of the property. If the property is

sold online, the private selling officer shall require persons

seeking to bid to register online with the website as a

condition of being authorized to bid.

(b) Attorneys.--If an attorney or a law firm that represents

the plaintiff or a party to the action bids on property in a

representative capacity, the attorney or law firm:

(1) may submit the bid directly to the private selling

officer to be bid during the auction; or

(2) may register as the representative of the plaintiff

or party, either as an individual or entity.

individual, the information required under subsection (a) shall

20210HB1896PN2154 - 9 -

include the individual's name, email address, telephone number,

name of entity being represented, if applicable, and, if

applicable, additional information required for identity

verification in accordance with section 2315(5)(ii) (relating to

conduct of sale).

§ 2317. Duties of purchaser.

(a) Submission of information to private selling officer.--

The purchaser of lands and tenements taken in execution shall

submit to the private selling officer who makes the sale the

following information:

(1) If the purchaser is an individual, the individual's

name, mailing address, which may not be a post office box,

email address and other information requested by the private

selling officer in order to comply with section 2316

(relating to registration to bid on property sale).

(2) If the purchaser is an entity, the entity's legal

name, trade name if different from its legal name, state and

date of formation, mailing address, the name of an individual

contact person for the entity and an email address and

telephone number for that individual.

(b) Attorneys.--An attorney or a law firm that represents a

purchaser may submit the information required under subsection

(a)(1) in a representative capacity, either as an individual or

entity.

(1) The purchaser at the sale shall pay a 20% deposit

immediately upon the conclusion of the sale or within the

time period designated in writing by the private selling

officer, whichever is longer, in the event that the deposit

was not required prior to bidding. The form of the receipt of

20210HB1896PN2154 - 10 -

funds is at the discretion of the private selling officer

conducting the sale. The remaining balance shall be due to

the private selling officer within a reasonable time period

imposed by the private selling officer, which time period may

not exceed 30 days.

(2) If the purchaser fails to pay the required deposit,

the purchaser shall be in default and the private selling

officer shall immediately void the sale and proceed further

with the resale of the premises without the necessity of

adjourning the sale, without renotification of other parties

to the foreclosure and without the republication of sales

notice. Upon resale, the defaulting bidder shall be liable to

the creditor for any additional costs incurred by the default

including any difference between the amount bid by the

defaulting bidder and the amount generated for the creditor

at the resale.

(d) Penalty.--

(1) The court, upon notice and motion of the private

selling officer who makes the sale or of an interested party,

may impose a penalty on the purchaser of lands and tenements

who fails to pay within 30 days of the confirmation of the

sale the balance due on the purchase price of the lands and

tenements by:

(i) forfeiting the sale of the lands and tenements

and returning any deposit paid in connection with the

sale of the lands and tenements;

(ii) forfeiting any deposit paid in connection with

the sale of the lands and tenements, as for contempt; or

(iii) such other manner as the court considers

appropriate.

20210HB1896PN2154 - 11 -

(2) Upon motion, the court may order the return of any

remaining portion of the deposit of the purchaser, less the

costs of a subsequent sale and any other remedy the court

considers appropriate.

(3) An order for contempt for failure of the purchaser

to pay voids the confirmation of sale and transfer.

§ 2318. Private selling officer commission.

(a) Amount permitted.--The fee charged by the private

selling officer and all costs incurred by the private selling

officer shall be assessed as costs in the case not to exceed

$500. To the extent the fees and costs described in this section

exceed $500, the excess amount may not be included in the

calculation of any deficiency judgment, but rather may be paid

by the creditor or from the creditor's portion of the proceeds

of the sale, if approved by the creditor.

(b) Itemized report of expenses.--The private selling

officer shall file with the court that issued the order of sale

an itemized report of all expenses of a sale conducted under

this subchapter and all fees charged by the private selling

officer which shall be assessed as costs in the case, including

for marketing the real estate or conducting the sale of the real

estate, and any fee charged by the title agent or title

insurance company for administrative services, if applicable,

and title, escrow and closing services as permitted by this

subchapter.

fees of the recorder chargeable by the prothonotary or the

recorder relating to consummation of real estate executions,

including, but not limited to, the recording of the deed to the

recorder of the county in which the property is situated.

20210HB1896PN2154 - 12 -

SUBCHAPTER D

CONDUCT OF ONLINE SHERIFF SALES

Sec.

2319. Definitions.

2320. Conduct of online sheriff sales.

2321. Registration to bid on property sale.

2322. Duties of purchaser.

§ 2319. Definitions.

The following words and phrases when used in this subchapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Bidder." A person who participates in a sale of mortgaged

property at a public sale conducted pursuant to a foreclosure or

similar action by placing a bid through the sheriff or private

selling officer.

"Online auction platform." An online auction website that

meets the requirements of this subchapter and is operated by a

person or entity licensed in this Commonwealth as both an

auctioneer in accordance with the act of December 22, 1983

(P.L.327, No.85), known as the Auctioneer Licensing and Trading

Assistant Registration Act, and as a real estate broker,

brokerage or salesperson in accordance with Chapter 5 of the act

of February 19, 1980 (P.L.15, No.9), known as the Real Estate

Licensing and Registration Act.

"Purchaser." Any of the following:

(1) a person that acquires equitable title to a

mortgaged property at a public sale conducted pursuant to a

foreclosure or similar action and has paid settlement funds

and delivered required documentation to the private selling

officer to obtain a deed or the owner of a property under a

20210HB1896PN2154 - 13 -

recorded deed to the property or the person's designee;

(2) the owner of a mortgaged property under a recorded

deed to the mortgaged property; or

(3) a person that takes title to a mortgaged property

pursuant to a deed in lieu of foreclosure.

"Sale." A public foreclosure auction of a mortgaged premises

under this chapter, whether online or in person.

"SOC2 report." A report generated from an audit conducted by

an authorized certified public accountant organization that

evaluates an information system relevant to security,

availability, processing integrity, confidentiality and privacy

in regards to common controls specified in Statement on

Standards for Attestation Engagements No. 18 as produced and

published by the American Institute of Certified Public

Accountants Auditing Standards Board.

§ 2320. Conduct of online sheriff sales.

A sheriff authorized to conduct a foreclosure sale of real

estate online may do so, in accordance with the following

provisions and requirements:

(1) The sheriff may elect to conduct the sale of the

real estate online, at a physical location in the county as

permitted by law, or both, at the discretion of the sheriff.

The praecipe must state the manner in which the sale will be

conducted.

(2) The sheriff must conduct the online sale on a

qualifying online auction platform that is adequately

accessible and marketed to the public. The online auction

shall be open for competitive bidding for a minimum of two

hours.

(3) An officer, employee or independent contractor of

20210HB1896PN2154 - 14 -

the online auction platform shall be prohibited from

participating in the sale as a purchaser.

(4) The following apply:

(i) Upon adequate instruction, the sheriff may stay,

continue, postpone or adjourn the sale of the real estate

one or more times, provided, however, that all

rescheduled sale dates shall be within 130 days of the

initial sale date as provided in Pa.R.C.P. No.3129.3

(relating to postponement of sale, new notice and failure

of plaintiff to attend sale).

(ii) Upon receiving this instruction, the sheriff

shall stay, continue, postpone or adjourn the sale of the

real estate by making a public announcement. If the sale

is at a physical location, the announcement shall be made

at the sale and shall include the date, time and place of

the rescheduled sale of the real estate. If the sale is

online, the announcement shall be made on the online

auction platform and shall include the date of the

rescheduled sale of real estate. Each public announcement

shall be deemed to meet the requirements in Pa.R.C.P.

No.3129.3.

(iii) If the sale of the real estate is stayed,

continued, postponed or adjourned as described in

subparagraph (i), all prior bids made on the real estate

shall be void.

(5) If the auction occurs online, the following shall

apply:

(i) The online auction platform utilized by the

sheriff shall provide a method by which a bidder receives

feedback during the bidding process to know where the

20210HB1896PN2154 - 15 -

bidder's current bid is in relation to the highest bid.

(ii) All bidders who register to participate in the

online sale must have their identity verified through an

ID verification process through the online auction

platform.

(iii) Notwithstanding any other provision of law to

the contrary, neither the sheriff nor the online auction

platform may charge a fee for members of the public to

view properties for sale online or place a bid on a

property for sale online. The sheriff, in the sheriff's

discretion, may require the deposit as provided in

section 2322(c)(1) (relating to duties of purchaser) to

be paid prior to bidding on a property.

(6) A sheriff who sells real estate under this chapter

that is advertised under Pa.R.C.P. No.3129.2 (relating to

notice of sale, handbills, written notice and publication)

may advertise a subsequent sale by a method the sheriff finds

suitable, which may include online advertisement instead of

print. The advertisement of a subsequent sale shall be deemed

to meet the notice requirements in Pa.R.C.P. No.3129.2.

(7) Notwithstanding any other provision of law to the

contrary, no fee, including a buyer's premium, may be charged

to a bidder or purchaser at the sale of real estate in

addition to the winning bid amount.

(8) A fee charged by the online auction platform on file

shall be assessed as costs in the case and shall be

reasonable. Fees less than or equal to $500 shall be presumed

to be reasonable. Fees exceeding $500 shall be paid only if

authorized by a court order.

(9) An online auction platform utilized to conduct a

20210HB1896PN2154 - 16 -

sale online shall maintain satisfactory internal controls and

shall obtain an annual SOC2 report to ensure the platform

meets certain performance and security requirements, with the

ability to test and report on the design effectiveness (Type

I) and operating effectiveness (Type II) of the platform's

controls. Upon the request of the court, evidence of

satisfactory internal controls specified in this section

shall be provided.

§ 2321. Registration to bid on property sale.

(a) Registration form.--The sheriff may require a

registration form that shall include information relevant to the

objective of enabling the sheriff to identify the bidder,

contact the bidder and complete the sale of the property. If

property is sold online, the sheriff shall require persons

seeking to bid to register online through the online auction

platform as a condition of being authorized to bid.

(b) Attorneys.--If an attorney or a law firm that represents

the plaintiff or a party to the action bids on property in a

representative capacity, the attorney or law firm:

(1) may submit the bid directly to the sheriff to be bid

during the auction; or

(2) may register as the representative of the plaintiff

or party, either as an individual or entity.

individual, the information required under subsection (a) shall

include the individual's name, email address, telephone number,

name of entity being represented, if applicable, and, if

applicable, additional information required for identity

verification in accordance with this subchapter.

§ 2322. Duties of purchaser.

20210HB1896PN2154 - 17 -

(a) Submission of information to sheriff.--The purchaser at

sale shall submit to the sheriff who makes the sale the

following information:

(1) If the purchaser is an individual, the information

shall include the individual's name, mailing address, which

may not be a post office box, email address and other

information requested by the sheriff in order to comply with

section 2321 (relating to registration to bid on property

sale).

(2) If the purchaser is an entity, the information shall

include the entity's legal name, trade name, if different

from its legal name, state and date of formation, mailing

address, the name of an individual contact person for the

entity and an email address and telephone number for that

individual.

(b) Attorneys.--An attorney or a law firm that represents a

purchaser may submit the information required under subsection

(a)(1) in a representative capacity, either as an individual or

entity.

(1) The purchaser at the sale shall pay a 20% deposit

immediately upon the conclusion of the sale or within the

time period designated in writing by the sheriff, whichever

is longer, in the event that the deposit was not required

prior to bidding. The form of the receipt of funds is at the

discretion of the sheriff conducting the sale. The remaining

balance shall be due to the sheriff within a reasonable time

period imposed by the sheriff, which time period may not

exceed 30 days.

(2) If the purchaser fails to pay the required deposit,

20210HB1896PN2154 - 18 -

the purchaser shall be in default and the sheriff shall

immediately void the sale and proceed further with the resale

of the premises without the necessity of adjourning the sale,

without renotification of other parties to the foreclosure

and without the republication of sales notice. Upon resale,

the defaulting bidder shall be liable to the creditor for any

additional costs incurred by the default, including any

difference between the amount bid by the defaulting bidder

and the amount generated for the creditor at the resale.

(d) Penalty.--

(1) The court, upon notice and motion of the sheriff who

makes the sale or of an interested party, may impose a

penalty on the purchaser of lands and tenements who fails to

pay within 30 days of the confirmation of the sale the

balance due on the purchase price of the lands and tenements

by:

(i) forfeiting the sale of the lands and tenements

and returning any deposit paid in connection with the

sale of the lands and tenements;

(ii) forfeiting any deposit paid in connection with

the sale of the lands and tenements, as for contempt; or

(iii) such other manner the court considers

appropriate.

(2) Upon motion, the court may order the return of any

remaining portion of the deposit of the purchaser, less the

costs of a subsequent sale and any other remedy the court

considers appropriate.

(3) An order for contempt for failure of the purchaser

to pay voids the confirmation of sale and transfer.

Section 4. This act shall take effect in 60 days.

20210HB1896PN2154 - 19 -