Amendments to Abandoned and Blighted Property Conservatorship Act

Pennsylvania recently enacted Act 157 of 2014 amending the Abandoned and Blighted Property Conservatorship Act (Act 135 of 2008).  The amendments modify the process for filing a Petition for Conservatorship of an Abandoned or Blighted Property.

A building not legally occupied for at least twelve (12) months may be placed into conservatorship upon filing of a petition, unless the owner presents compelling evidence that he has actively marketed the property during the preceding sixty (60) day period and made a good-faith effort to sell the property at a price which reflects the circumstances of market conditions.

The Act sets forth nine (9) criteria to be evaluated by a court when determining that a property qualifies for conservatorship.  In order for an owner to avoid conservatorship, they must either:  1) remedy any code violations or the nuisance or emergency conditions; or 2) sell the property subject to the conservatorship.  The owner must also now reimburse the petitioner for all costs incurred by the petitioner in preparing and filing the petition for conservatorship, including a newly-established conservator or developer fee. The Amendment also now provides that a conservator may apply to the court for priority lien status of any borrowed funds that will be used to rehabilitate the property. The amendments also reduced the time in which a conservator must hold a property prior to making application to the Court for subsequent sale of the property from six (6) months to three (3) months.  Finally, the amendments add a provision that allows a conservator to recoup costs incurred in preparing and filing a Petition for Conservatorship ahead of other liens such as mortgages and judgment liens that would otherwise be senior to the conservator’s claim for costs.

Although still somewhat complicated and time-consuming, the amendments to the Abandoned and Blighted Property Conservatorship Act make the process more appealing to potential conservators or developers.  The amendment should make rehabilitation of abandoned and blighted properties more attractive for investors and municipal governments.

If you have any questions regarding this update, or any other municipal law matters, please contact Andrew Miller, amiller@mpl-law.com, or Christian Miller, cmiller@mpl-law.com, by email or phone at (717) 845-1524.