Pennsylvania has an anti-blight law that is not well known among inexperienced real estate investors. The law is a way for communities to remedy neighborhood blight when a property owner refuses to clear blight or has abandoned a property. This conservatorship process is available to certain community organizations and qualified neighbors by filing a petition to take control of blighted property.
If the court grants the petition, the conservator will have the right to take possession of the property, complete repairs and sell it. The former owner could receive some proceeds of the sale, but only after deduction of all fees and expenses including the conservator’s fee, rehabilitation costs and payment of professional services used during the conservatorship process. Investors who purchase blighted property without quickly addressing the blight run the risk of losing the investment.
There are many conditions that qualify as blight under this law known as the Abandoned and Blighted Property Conservatorship Act or Act 135. Some examples include:
- unsafe structural defects
- roof, wall, floor and foundation problems
- attractive nuisances to children
- properties subject to unauthorized entry and the owner failed to secure the building
- properties used for prostitution or drug use
There are a few important exceptions. Act 135 does not apply to properties that have been occupied in the past 12 months (unless occupied by a squatter), properties purchased within the last 6 months and where the property was listed for sale by the owner within the past 60 days.
If a judge grants the petition, the conservator is given broad powers to rehabilitate the property and charge all expenses against a future sale. The conservator can take possession of the property, purchase building materials, complete repairs and renovations, collect outstanding accounts receivable, borrow money against the property, pay for the restoration of utilities and lease the property for up to a one-year term. Professionals engaged for the conservatorship process will also be compensated such as appraisers, lawyers and accountants. The property will most likely be sold at the conclusion of conservatorship. The conservator will be reimbursed for all the above expenses plus a conservator’s fee.
Act 135 is a tool to remedy abandoned properties with serious hazards. But the consequence to the property owner is the loss of the property with potentially no compensation. If a petition is filed against a property owner, the owner must act quickly before the court grants approval of a conservatorship.
As a real estate attorney to property owners, I help resolve legal disputes and avoid costly mistakes. If you know a property owner served with a conservatorship petition, please forward our contact information:
Phone (484) 690-4613
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