Using Conservatorship to Reclaim Properties: Case Studies
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1 Housing Alliance of Pennsylvania Using Conservatorship to Reclaim Properties: Case Studies Act 135 of 2008 June 10, 2011
2 What is conservatorship? Conservatorship is the court appointment of a third party guardian to take care of a property when the owner is absent or refuses to act. Conservatorship is a powerful tool that enables communities to take control of vacant, blighted property.
3 How does it start? A petitioner files in Common Pleas Court owner lienholder resident or business owner w/in 500 ft nonprofit located in municipality the municipality or school district Petitioner notifies the owner and lienholders Petitioner shows that the property is eligible and files a preliminary plan
4 What properties are eligible? Applies to residential, commercial, and industrial ALL must apply: Not legally occupied for 12 months Not marketed for 60 days No foreclosure action Current owner longer than 6 months Owner not on active duty military service PLUS three (3): A public nuisance Needs substantial rehab and none done in past 12 months Unfit for occupancy Increases risk of fire Subject to entry and dangerous Attractive nuisance Health or safety hazard Decreases property values or business activity Illicit Activities
5 Who can be conservator? In order of preference in the law: senior lienholder nonprofit corporation, including RDA governmental unit individual or other competent entity
6 What can the conservator do? Rehab or demolish the property Obtain financing Obtain insurance and enter into contracts Petition to sell the property The owner may regain possession by reimbursing all costs If owner does not, property may be sold free and clear
7 Where can I get more information? The Conservatorship Clearinghouse on the Housing Alliance website: Cindy Daley, Policy Director cindy@housingalliancepa.org
8 Act 135 Conservatorship Case Studies in Philadelphia R I C H A R D L. V A N D E R S L I C E, P. C S N Y D E R A V E N U E P H I L A D E L P H I A, P A
9 Palmer v. Scioli Turco V.F.W. Post 593 Plaintiff Plaintiff Joel Palmer Neighbor within 500 feet of property As crow flies Member of Neighborhood Watch Other projects in the neighborhood
10 Palmer v. Scioli Turco V.F.W. Post 593 Target Property
11 Palmer v. Scioli Turco V.F.W. Post 593 Target Property
12 Palmer v. Scioli Turco V.F.W. Post 593 Defendant Trustees for Scioli Turco V.F.W. Post 593 Scioli Turco Post had charter revoked in 2004 by PA Department of U.S. V.F.W. By Charter all property reverted to Adjutant of PA Department Adjutant did not want anything to do with the property
13 Palmer v. Scioli Turco V.F.W. Post 593 ISSUES Service all trustees deceased Attorney General (beneficial trust) Philadelphia General Order All actions filed in Civil Trial Division Enhanced pleading requirements Photos Plans Certification for CDC s 501(c)(3) Form Pleadings and Certification
14 Palmer v. Scioli Turco V.F.W. Post 593 Issues -General Order One month after filing In re: Germantown Conservancy No C.D (Comm. Ct. 2009) Relaxed pleading requirements Suggested that matters where Orphan s Court would normally have jurisdiction should be filed in that Court Required petition to transfer
15 Palmer v. Scioli Turco V.F.W. Post 593 Issues Attorney General Under Act 135, notice to AG was required Case transferred to the Orphans Court Hearing scheduled and settlement reached with V.F.W. AG notified three days prior to hearing that the state objected to our agreement Property required to benefit a charitable purpose
16 Palmer v. Scioli Turco V.F.W. Post 593 Resolution Settlement Agreement Rehabilitating premises Out sale proceeds split between parties Deduction of Conservatorship costs and fees Deduction of liens and taxes
17 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA Conservatorship Pennsylvania s Abandoned and Blighted Property Conservatorship Act Presented By : Andrew M. Menchyk, Jr., Esquire
18 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 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., Esquire Background: Partner at the law firm of Stepanian & Muscatello in Butler, Pennsylvania, 2010 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
19 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA (Presentation Scope) The handling of legal issues depends on the unique facts of each case, circumstance and applicable law. This program is not intended to provide specific legal advice on any particular matter, but is designed to give general information which we hope will be of interest to you.
20 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA What is Conservatorship? Abandoned and Blighted Property Conservatorship Act Process overview Advantages over previously existing legal tools When can it be used?
21 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA Butler County Conservatorship Actions Nature of and Background Discontinued Actions History and status of pending actions
22 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA Challenges Applying New legislation Service of process issues Timing issues Modifying plans for abatement
23 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA 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
24 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA Quick Action Guidelines and Best Practices Have a plan for the property Funding the conservatorship Plan for disposition of the property
25 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA Conservatorship THANK YOU FOR YOUR TIME, ATTENTION, AND CONSIDERATION!
26 Stepanian & Muscatello, LLP ATTORNEYS AND COUNSELORS AT LAW 222 S. Main Street Butler, PA Any Questions? Presented By : Andrew M. Menchyk, Jr., Esquire andrew.menchyk@stepanianmuscatello.com
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