Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 Conservatorship Pennsylvania’s Abandoned and Blighted Property Conservatorship Act Presented By : Kendall Pelling & Andrew M. Menchyk, Jr.
705 Chislett Str 2017 Blight Advances. Conservatorship: 2016 Neighbors Suffer. Taking Private Risk. 2014 Public Inaction. Solving a Public 2011 Who can Intervene? Problem. 2007
Property criteria for Conservatorship • “Building” : Structure and the land appurtenant thereto, including a Vacant lot on 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 owners • 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 Conservatorship Loans • Cash • Existing lenders with an interest in the property must be • Organizational line of credit given the first opportunity to (Not related to the property) provide financing. • Conservatorship loans • Petition for priority lien status – Can be placed once a • Order of Court grants priority conservator has been appointed 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 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 Prioritized public goals 1. Eliminate blight and hazards that pose a risk to Major & quick neighbors and the public 2. Ensure the property is appropriately redeveloped: Long Term Eliminating physical and economic harm 3. Return to tax paying productive re-use 4. Minimize the burden on public agencies who have Immediate limited staff and budgets to solve overwhelming blight problems. Blight is expensive to mange and Long Term solve. Frees resources for other properties. 5. Achieve public purposes: Affordable housing, Minor & Short Term Community revitalization, etc 6. Recover delinquent taxes and fees, if possible
Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 - 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
Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 What is Conservatorship? Abandoned and Blighted Property Conservatorship Act Process overview Advantages over previously existing legal tools When can it be used?
Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 Butler County Conservatorship Actions Nature of and Background Completed Actions
Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 Challenges Applying New legislation Service of process issues Timing issues Modifying plans for abatement
Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 Lessons Learned 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-2 nd Street Before After
Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 Quick Action Guidelines and Best Practices Have a plan for the property Funding the conservatorship Plan for disposition of the property
Stepanian & Menchyk, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 16001 724-285-1717 Conservatorship THANK YOU FOR YOUR TIME, ATTENTION, AND CONSIDERATION!
Saints Peter and Paul Church
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