Pennsylvania Enacts Fast-Track Foreclosure Process for Vacant Properties
Written by: Michael J. Shavel, Esq. and Jill M. Fein, Esq.
New legislation in Pennsylvania provides for an accelerated foreclosure for vacant properties. The Vacant and Abandoned Real Estate Foreclosure Act (the “Act”) which goes into effect on December 19, 2018 enables creditors to expedite the foreclosure process and sheriff’s sale if the property is certified as vacant.
The Act is meant to assist municipalities which are faced with rapidly deteriorating properties that create a health and safety issue in the community. These properties are typically not repaired or restored until a creditor acquires title; therefore the expedited process allows foreclosing creditors to reach the point of sheriff’s sale quicker than the normal track.
Under the Act, once a foreclosure lawsuit is commenced the creditor can choose one of two methods to certify that a property is vacant either through a municipal code officer or through the court system. If the creditor chooses to use a municipal code officer, the officer will inspect the mortgaged property and draft a report certifying that the property is vacant and abandoned. The creditor is responsible for compensating the code officer for the work performed. The report must then be sent to the owner of the property and/or the obligor under the mortgage with a notice that the owner must request a hearing to refute the vacancy determination, and if they fail to do the finding will become final.
A creditor may also use the judicial method to certify that a property is vacant by requiring the owner to evidence to the Court that the property is not abandoned. The judicial method requires that the creditor file an affidavit which can be provided by a code enforcement officer, the creditor or any competent adult with knowledge of the condition of the property (including a property inspector or agent) with photographs showing the condition of the property to evidence the alleged abandonment of the property. This Affidavit and a Rule to Show Cause is then served on the property owner or obligor, who then must respond with a statement under oath certifying that the property is not vacant and abandoned. In the event a property owner or obligor responds, a hearing will be set and a judge will make the final determination.
Once the property is certified as vacant and abandoned, the foreclosure process becomes streamlined and the typical obstacles that a creditor may encounter in moving to a sheriff’s sale are eliminated. The property is not subject to mediation, conciliation, diversion, or any other local program to encourage resolution of owner-occupied residential foreclosures. Eliminating the need for service by the Sheriff all subsequent documents may be served by first class mail to an address specified by the owner, or if no address is specified by first class mail and posting on the property. Most notably, once the property is certified as vacant the sheriff must schedule the property for a sheriff’s sale within 60 days of the filing of the writ of execution and the creditor’s payment of the acceleration fee. Finally, the Act also allows a creditor to exercise a limited right to possession while the foreclosure is pending to maintain the yard and exterior of the property and to remedy any potential health or safety hazards.
The Act provides a welcome relief for creditors navigating the foreclosure process in vacant properties and all but eliminates the delays that can delay a residential foreclosure for months or years. Creditors should start planning to take advantage of this new expedited track now for properties known to be vacant.
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