PRINTER'S NO. 2756
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2141
Session of
2024
INTRODUCED BY McANDREW, MADDEN, SANCHEZ, HILL-EVANS, CEPEDA-
FREYTIZ, D. WILLIAMS, GREEN, DELLOSO, STEELE, GIRAL AND KHAN,
MARCH 20, 2024
REFERRED TO COMMITTEE ON COMMERCE, MARCH 20, 2024
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 and 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. Section 2303 of Title 68 of the Pennsylvania
Consolidated Statutes is amended by adding a definition to read:
ยง 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:
* * *
"Affiliate." A person that, directly or indirectly through
one or more intermediaries, controls, is controlled by or is
under common control with a specified judgment creditor or
mortgage servicer.
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* * *
Section 2. Sections 2306(c) heading and (1) and 2312 of
Title 68 are amended to read:
ยง 2306. Effect of certification of vacancy and abandonment.
* * *
(c) Scheduling of [sheriff's] foreclosure sale.--
(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).
* * *
ยง 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 2322
(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 of Title 68 is amended by adding
subchapters to read:
SUBCHAPTER C
PRIVATE SELLING OFFICER SALES
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Sec.
2313. Definitions.
2314. Private selling officer appointment.
2315. Conduct of sale.
2316. Registration to bid on property sale.
2317. Duties of purchaser.
2318. Private selling officer commission.
ยง 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 that participates in a sale of mortgaged
property at a public sale conducted under a foreclosure or
similar action by placing a bid through a private selling
officer.
"Private selling officer." As follows:
(1) 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 the act
of February 19, 1980 (P.L.15, No.9), known as the Real Estate
Licensing and Registration Act.
(2) The term does not include an affiliate or subsidiary
of the plaintiff, mortgage lender or mortgage servicer.
"Purchaser." Any of the following:
(1) A person that acquires equitable title to a
mortgaged property at a public sale conducted under a
foreclosure or similar action and has paid settlement funds
and delivered required documentation to:
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(i) the private selling officer to obtain a deed;
(ii) the owner of a property under a recorded deed
to the property; or
(iii) the person's designee.
(2) The owner of a mortgaged property under a recorded
deed to the mortgaged property.
(3) A person that takes title to a mortgaged property
under 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.
ยง 2314. Private selling officer appointment.
(a) Praecipe to be filed.--A creditor or a party with a
financial interest in the mortgaged premises 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
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without good and reasonable cause.
(c) Responsibility of sheriff.--Other than conducting the
sale, the sheriff shall remain responsible for all other
administrative requirements associated with the foreclosure sale
and shall be entitled to commissions under section 2310
(relating to sheriff's commission) . The private selling officer
and the sheriff shall cooperate as necessary to complete the
responsibilities under this subchapter.
ยง 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 shall conduct the sale
of the real estate and, upon agreement of the sheriff and
private selling officer, shall further assist the sheriff
with administrative matters as necessary to effectuate the
sale.
(2) 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
sale will be conducted.
(3) The private selling officer must take reasonable
steps to market the public auction of the real estate, in
addition to the advertising conducted by the sheriff as
prescribed by Pa.R.C.P. No. 3129.2(d) (relating to notice of
sale, handbills, written notice and publication). If the
auction occurs online, the auction shall be open for
competitive bidding for a minimum of two hours.
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(4) 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.
(5) 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).
(6) 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.
Each public announcement shall be deemed to meet the
requirements in Pa.R.C.P. No. 3129.3.
(7) If the sale of the real estate is stayed, continued,
postponed or adjourned as described in paragraph (5), all
prior bids made on the real estate shall be void.
(8) If the auction occurs online, the following shall
apply:
(i) The private selling officer shall provide a
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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.
(9) All bid information and participant financial data
is deemed property of the private selling officer.
(10) A private selling officer that sells real estate
under this chapter that is advertised under Pa.R.C.P. No.
3129.2 may advertise a subsequent sale by a method that the
private selling officer finds suitable, which 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.
(11) 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.
(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 or
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equivalent in line with industry standards to ensure that 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.
ยง 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.
(c) Individuals.--If the person registering to bid is an
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 section 2315(6) (relating to
conduct of sale).
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ยง 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, 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.
(c) Deposit.--
(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
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.
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(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.
(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
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to pay voids the confirmation of sale and transfer.
ยง 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 provide to the sheriff, and the sheriff 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.
(c) Prothonotary and recorder fees.--The purchaser shall pay
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.
ยง 2319. Exemption from taxation.
Sales conducted online under this subchapter do not
constitute a canned software and are exempt from the imposition
of a sales and use tax under section 202(a) of the act of March
4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.
SUBCHAPTER D
CONDUCT OF ONLINE SHERIFF SALES
Sec.
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2321. Definitions.
2322. Conduct of online sheriff sales.
2323. Registration to bid on property sale.
2324. Duties of purchaser.
ยง 2321. 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 that participates in a sale of mortgaged
property at a public sale conducted under a foreclosure or
similar action by placing a bid through the sheriff or private
selling officer.
"Online auction platform." As follows:
(1) 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.
(2) The term does not include an affiliate or subsidiary
of the plaintiff, mortgage lender or mortgage servicer.
"Purchaser." Any of the following:
(1) a person that acquires equitable title to a
mortgaged property at a public sale conducted under 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
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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
under a deed in lieu of foreclosure.
"Sale." A public foreclosure auction of a mortgaged premises
under this chapter, whether online or in person.
ยง 2322. 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
the online auction platform shall be prohibited from
participating in the sale as a purchaser.
(4) 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, failure of plaintiff to attend sale).
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(5) 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.
(6) If the sale of the real estate is stayed, continued,
postponed or adjourned as described in paragraph (4), all
prior bids made on the real estate shall be void.
(7) If the auction occurs online:
(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
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 2324(c)(1) (relating to duties of purchaser) to
be paid prior to bidding on a property.
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(8) A sheriff who sells real estate under this
subchapter 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.
(9) 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.
(10) 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.
(11) An online auction platform utilized 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.
ยง 2323. 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,
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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.
(c) Individuals.--If the person registering to bid is an
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.
ยง 2324. Duties of purchaser.
(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, address, which may not
be a post office box, email address and other information
requested by the sheriff in order to comply with section 2323
(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
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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.
(c) Deposit.--
(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,
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
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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.
20240HB2141PN2756 - 18 -
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