Conservatorship Pennsylvanias Abandoned and Blighted Property - - PowerPoint PPT Presentation

Conservatorship

Pennsylvania’s Abandoned and Blighted Property Conservatorship Act Presented By : Kendall Pelling & Andrew M. Menchyk, Jr.

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

705 Chislett Str

2017 2014 2016 2007 2011 Blight Advances. Neighbors Suffer. Public Inaction. Who can Intervene? Conservatorship: Taking Private Risk. Solving a Public Problem.

Property criteria for Conservatorship

• “Building”: Structure and the land appurtenant thereto, including a Vacant lot
• n which a building has been demolished.
• For conservatorship a property must meet all of the following criteria:
• Not legally occupied for the last 12 months
• Owner fails to present compelling evidence that they have marketed for sale in the prior 60 days with a good

faith effort to sell the property at a price which reflects the circumstances and market conditions.

• Not subject to a pending foreclosure action by an individual or nongovermental entity.
• Owner fails to provide evidence that they have acquired the property within 6 months
• A property must also meet at least three of the criteria below:
• Public Nuisance as characterized by an appropriate official or the court
• The building is in need of substantial renovation and No renovation has taken place during the previous 12

months

• Unfit for human occupation or use
• Vacancy of the building creates a Fire risk
• Subject to unauthorized entry (owner has not secured or Municipality has secured)
• Attractive nuisance to children - creating unsafe conditions)
• Unkempt exterior creating health and safety hazards ( tall grass, garbage, vermin, evidence of structural

issues)

• Negative economic impact on surrounding properties, see statute for detail.
• Attractive nuisance for illicit purposes (prostitution, drug use and vagrancy)

Property Criteria for Conservatorship

Eligible Conservators

• Senior non-governmental lien holders

– “the court shall give first consideration…”

• Non-Profits

– Located in the municipality of the propert – Special restrictions for Philadelphia

• Governmental units
• Individual citizens (neighbors)

– Within 2000 feet – Non-profits & governmental units have priority

Interested parties

Who gets notice:

• Owners
• mortgage holders
• Lien holders
• Public bodies
• Municipal authorities who provide services

Pre-filing process

• Research the property and attempt contacting any listed
• wners
• Explore voluntary sale options
• Order a title search and document the condition of the

property, bearing in mind conservatorship criteria

• Note and explore all mortgages and liens associated with

the property

• Compose a plan for the property (rehab options,

financing, final use etc.)

• Review documents with your attorney and give

permission to move forward on filing

Legal Process

• File a petition that claims the property meets the

statue providing previously complied documentation as support

• File a Lis Pendens
• Notify interested parties by serving the petition
• Recommend a possible conservator
• Get a hearing date
• Hold the Hearing establishing
• Conservator’s experience and capacity to fulfill

the duties

• Conservatorship Plan (can be done at a

subsequent hearing)

• Financial capability to implement the plan

Further Legal Steps

• motion for financing (if needed)

– Priority lienholder status for new conservatorship lender

• File conservator’s lien
• Petition to sell the property free and clear
• Termination of the conservatorship

Financing Conservatorship

Potential Sources of Funds

• Cash
• Organizational line of credit

(Not related to the property)

• Conservatorship loans

– Can be placed once a conservator has been appointed

Conservatorship Loans

• Existing lenders with an

interest in the property must be given the first opportunity to provide financing.

• Petition for priority lien status
• Order of Court grants priority

lien status for the new lender

• Title policy
• Draws for Renovation
• Approach to public sector liens

Attorneys for the taxing bodies: Defending the public interest

Prioritized public goals 1. Eliminate blight and hazards that pose a risk to neighbors and the public 2. Ensure the property is appropriately redeveloped: Eliminating physical and economic harm 3. Return to tax paying productive re-use 4. Minimize the burden on public agencies who have limited staff and budgets to solve overwhelming blight problems. Blight is expensive to mange and

• solve. Frees resources for other properties.

5. Achieve public purposes: Affordable housing, Community revitalization, etc 6. Recover delinquent taxes and fees, if possible Public sector attorneys should be expected to present arguments to the judge and question conservators to ensure that public goals are met and pubic interests are protected.

(see Section 1102 for legislative purpose)

Public Benefits

Major & Immediate Major & quick Long Term Immediate Long Term Minor & Short Term

• We serve our clients in all areas of the law including litigation, business law, municipal law, family

law, real estate, estate and tax planning, and many general law practice areas.

• Introductions:

Andrew M. Menchyk, Jr.

• Background:

Partner at the law firm of Stepanian & Menchyk in Butler, Pennsylvania, 2010-2011, 2013-2014 recognized by Pennsylvania Super Lawyers Magazine as a Pennsylvania Super Lawyer "Rising Star" in the area of real estate.

• Education:

Juris Doctor, University of Pittsburgh School of Law BA Political Science - University of West Virginia

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

• Abandoned and Blighted Property Conservatorship Act
• Process overview
• Advantages over previously existing legal tools
• When can it be used?

What is Conservatorship?

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

• Nature of and Background
• Completed Actions

Butler County Conservatorship Actions

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

Challenges

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

• Applying New legislation
• Service of process issues
• Timing issues
• Modifying plans for abatement

Lessons Learned

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

• Importance of due diligence and planning
• Length of conservatorship process
• Funding a conservatorship action
• Conservatorship can be a viable, useful tool for addressing blight

Northumberland County Conservatorship Actions

• Nature of and Background
• History and status of pending actions

Northumberland County Coal Twp.-Independence Street Before After

Northumberland County Coal Twp.-Cypress Street Before After

Northumberland County Coal Twp.-Lynn Street Before After

Northumberland County Coal Twp.-Chestnut & Bay Street Before Before

Northumberland County Coal Twp.-Chestnut & Bay Street After

Northumberland County Shamokin-Mulberry Street Before After

Northumberland County Shamokin-2nd Street Before After

• Have a plan for the property
• Funding the conservatorship
• Plan for disposition of the property

Quick Action Guidelines and Best Practices

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

THANK YOU FOR YOUR TIME, ATTENTION, AND CONSIDERATION!

Conservatorship

222 S. Main Street Butler, PA 16001 724-285-1717

Stepanian & Menchyk, LLP

ATTORNEYS AND COUNSELORS AT LAW

Saints Peter and Paul Church