Back to News

Blighted Properties Law Now in Effect Welcomed by Lenders

Published on

December 20, 2018

Pennsylvania’s Vacant and Abandoned Real Estate Foreclosure Act is now in effect after Gov. Tom Wolfe signed the new law in June.

The law is aimed at tackling the eyesore of blighted properties, but it also serves as a win for mortgage servicers and lenders since in many counties the act will permit abandoned properties to get to a foreclosure sale much more quickly.

The new law is similar to one passed in Maryland in 2017.

The provisions of the act begin once a creditor starts foreclosure action and has reason to believe a property is vacant or abandoned. Creditors may seek to certify the vacancy through the courts or by employing a municipal code officer. The court process entails filing an affidavit provided by the creditor, a code enforcement officer or any competent adult with knowledge of the condition of the property, such as a property inspector. The claim must include photographic evidence proving the claimed abandonment. The filed affidavit, along with a “Rule to Show Cause,” is served upon the foreclosure defendant. If the defendant files a response certifying under oath that the property is not vacant or abandoned, the court sets a hearing and will make a final determination. If the defendant does not respond, the property may be certified vacant by default.

Creditors seeking to avoid any court delay in certifying the property vacant may also consider employing a municipal code officer. If retained by the creditor, a code enforcement officer will inspect the property and provide a report certifying its status as vacant and abandoned. The officer’s report is sent to the property owner with a notice that the owner must seek a hearing to refute the vacancy determination, or the determination will be final.

Upon certification that the property is vacant, the foreclosure process becomes expedited. Vacant properties are excused from all county foreclosure diversion programs, eliminating months of delay in many counties. Service of all documents subsequent to initial process can be completed by first class mail to an address specified by the defendant, or if no address is specified by first class mail and posting on the vacant property. Once judgment is entered and a writ of execution is filed, sheriffs must schedule certified vacant properties within 60 days upon payment of an acceleration fee by the creditor. Creditors can also exercise a limited right to possession while foreclosing to maintain the property and to remedy any possible code violations. It is expected that the act could save creditors anywhere from 90 to 180 days in getting a vacant property to sale in some counties.

In addition to tackling vacant properties, the act addresses sheriff’s commissions on real property sales and creditor attorney fees. Sheriff commissions – commonly called poundage – will no longer be collected unless the property is sold at a sheriff sale. As for creditor attorney fees, reasonable and actually incurred attorney fees can be assessed to the defendant in cases with properties subject to the provisions of Act 6 of 1974. Now, those fees are presumed reasonable if they conform to the fee schedules promulgated by Fannie Mae, Freddie Mac, the U.S. Department of Housing and Urban Development or the U.S. Department of Veterans Affairs. For more information on residential mortgage foreclosures in Pennsylvania and the Vacant and Abandoned Real Estate Foreclosure Act, please contact me or anyone in the Barley Snyder Finance & Creditors’ Rights Practice Group.

Related News

View More News
February 23, 2024

Barley Snyder 2023 Year In Review

Check out what the professionals of Barley Snyder have been up to in 2023 a...

Learn More
Press Release
January 29, 2024

Barley Snyder Attorney John Quain Named Chair-Elect of the Dauphin County Bar Association’s Young Lawyers Section

For Immediate Release Lancaster, Pa. – Barley Snyder is pleased to announ...

Learn More
Press Release
January 22, 2024

Barley Snyder Partner Jeff Lobach Named to CPBJ Icon Honors List

For Immediate Release York, Pa. – Barley Snyder is pleased to announce Ce...

Learn More

Other Upcoming Events

View All Upcoming Events
12:00 pm
6:00 pm

LendiCon 2024

Learn More
8:00 am
5:00 pm

41st Annual Employment Law Seminar

Learn More

Get in Touch

Our attorneys, paralegals and staff look forward to hearing from you. Please reach out to let us know how we can help.

Get In Touch
Super Lawyers
Best Law Firms US News
Best Lawyers