Daniel C. Conlon, firstname.lastname@example.org, (412) 594-3951
Pennsylvania’s 2008 Abandoned and Blighted Property Conservatorship Act, 68 P.S. §§ 1101 et seq. (the “Conservatorship Act”) is an anti-blight tool for restoring neglected properties to productive use and consequently increasing real estate values in a community.
As Solicitor to various municipalities, I am often asked questions by the public about how the Conservatorship Act works. This article covers frequently asked questions about the Conservatorship Act.
Q: What is a Conservatorship?
A: Generally, it is when a Court authorizes a person to have legal control over another person, property, building, corporation, etc., to guard, protect, and preserve such person, corporation, or thing. Pennsylvania’s 2008 Abandoned and Blighted Property Conservatorship Act, 68 P.S. §§ 1101 et seq. (the “Conservatorship Act”) relates specifically to real estate.
Q: Can a court authorize a Conservatorship for a blighted structure?
A: Yes. The Conservatorship allows a Common Pleas judge to appoint a conservator to take charge of a blighted property to bring it into compliance with local codes (“Conservator”).
Q: When can a Court appoint a Conservator?
A: Upon a petition by a “party in interest” (“Petitioner”). A “party in interest” is a person or corporation that has a direct and immediate interest in the blighted building and could be:
1. the property owner,
2. lien holder,
3. resident or business owner within 2,000 ft. of the building,
4. a nonprofit corporation, or
5. a municipality or school district in which the building is located
Q: When does a blighted property quality for Conservatorship?
A: There are five basic requirements that must all be met for a property to qualify for conservatorship:
1. the property was not legally occupied for the last 12 months;
2. the property was not for sale during the prior 60 days;
3. a mortgagee/bank is not foreclosing on the property;
4. the current owner has owned the property for at least 6 months, and
5. the property is blighted, a public nuisance, subject to code violations, etc.
Q: How many blighted property conditions must be present for a Court to grant a petition for Conservatorship?
A: At least three of the nine blighted conditions in the Conservatorship Act must be present for a Court to grant a petition for a Conservatorship.
 68 P.S. § 1105(d)(5); see also Tolo Properties LLC v. Jones, 256 A.3d 497 (Pa. Commw. Ct. 2021).
Q: Can a Petitioner seek a Conservatorship for a vacant lot?
A: Not in every case. The blighted property must meet the definition of a “building” in accordance with the Conservatorship Act. A “building” is either a physical building or a vacant lot where a building once stood but was demolished. Thus, a Petitioner may not seek a petition for a vacant lot unless there used to be a building on the vacant lot.
 68 P.S. § 1103 (West 2014); see also Tolo Properties LLC v. Jones, 256 A.3d 497 (Pa. Commw. Ct. 2021).
Q: Does someone who petitions for a conservatorship over a blighted property also become the Conservator?
A: It depends. A Petitioner could nominate itself to be the Conservator. The Petitioner may also recommend a third-party to be the Conservator.
Q: Who can become a Conservator for a blighted structure?
A: A person or entity, including a municipality, that has experience rehabilitating residential, commercial, or industrial buildings and has the ability to provide or obtain the necessary financing for such rehabilitation. A court will give priority to a senior mortgagee on the property, if any. Next, it will consider a nonprofit corporation. Lastly, a court will consider a for-profit entity.
Q: Where does a Petitioner file a Conservatorship action?
A: Petitions can be filed in the Court of Common Pleas where the subject property is located.
Q: What does it cost to file a Petition for Conservatorship?
A: A Petitioner should order a title search for the property, which generally costs around $200.00. Allegheny Co. charges $170.55 to file a petition. After the petition is filed, the Petitioner must also record a lien against the property, which costs $135.75. A Petitioner should also budget for legal fees to prepare the petition and costs to develop a preliminary construction plan (the “Preliminary Plan”) to remediate the property.
Q: What information must a Petitioner include in its Petition for Conservatorship?
A: Information and documentation necessary to satisfy the five basic requirements for a Conservatorship (see above). This may include a title report, a schedule of mortgages, liens and other encumbrances on the property, copies of municipal code citations, photos of the blighted property, a Preliminary Plan that has the initial cost estimate for rehabbing the structure, building plans for the structure, and anticipated funding sources.
Q: Must a Petitioner notify anyone of the filing of a Petition for Conservatorship?
A: Yes. The Petitioner must notify the property owner, all taxing authorities, and all lienholders. Notice must be by certified mail to the last known address of each and by posting a copy of the notice at the property.
Q: What happens when the property owner does not live at the blighted property and does not pick up the certified mail?
A: Notice can be sent by ordinary mail if the certified mail is returned with a note from the post office that the recipient refused to accept the mail. When notice is sent by ordinary mail, it is presumed received if it is not returned to sender in 30 days. However, if the certified mail is returned “unclaimed,” the notice must be personally served.
Q: How many blighted properties can be included in one petition?
A: The Commonwealth Court decided that one petition is required for each property. However, if two blighted properties are next to each other and are owned by the same person, a Court may allow a Petitioner to file one petition for both.
 In re Conservatorship Proceeding In Rem by Germantown Conservancy, Inc., 995 A.2d 451, 464 (Pa. Commw. Ct.. 2010).
Q: How long does it take for a Court to appoint a Conservator?
A: A judge may schedule a hearing within 60 days of its receipt of a Conservatorship petition. Courts have held that a judge has discretion to schedule a hearing beyond 60 days. However, the Conservatorship Act requires a judge to act upon an applicant’s petition and appoint a Conservator no later than 30 days from the hearing date.
Q: Can the owner of a property challenge a Petition for Conservatorship?
A: Yes. If the owner challenges a Conservatorship petition and presents a plan to abate the blighted conditions on the property, the Court may give the owner a reasonable amount of time to remedy the conditions (“Conditional Relief”). However, if the Court gives the owner time, it must also require the owner to post a bond for the repair costs estimated in Petitioner’s Preliminary Plan.
Q: Does a Petitioner get paid if the owners sells (or remediates) a property after a Conservator Petition is filed?
A: Yes. If the blighted property in Petitioner’s petition is sold (or fixed) after a petition for Conservatorship is filed, the owner must pay the Petitioner for its costs to file the petition plus a Conservator’s Fee (defined below). For example, a Court granted Petitioner a $2,500 Conservatorship fee and $25,000 in attorney’s fees and costs even though the owner remediated the blighted property.
 Greene St. Friends Sch. v. Bateman, 264 A.3d 825 (Pa. Commw. Ct.. 2021).
Q: Can a Conservator do whatever it thinks necessary to remediate the blighted property?
A: No. A hearing on a Conservator’s final plan to remediate a property (“Final Plan”) must occur within 120 days of the appointment of a Conservator. Also, a Conservator has 90 days from its appointment to access the property and prepare a Final Plan to submit to the Court.
Q: What must a Conservator include in its Final Plan?
A: A Final Plan should have more details than the Preliminary Plan (mentioned above). The Final Plan must include a cost estimate, a financing plan, and either a description of the work to be done for the rehabilitation of the building or, if rehabilitation is not feasible, a proposal for the demolition of the property. If the Final Plan is approved by the Court, the Conservator is required to file a full accounting of all income and expenses until the Final Plan is completed.
Q: Can a Conservator file a lien against a blighted property for its costs to implement a Final Plan?
A: Yes. A Conservator can request that a judge authorize a conservator lien (“Conservator Lien”) (adjustable from time-to-time) for the estimated cost to implement a Final Plan. This lien may include attorney fees and court costs. The cost incurred by the Conservator, when secured by a lien, will supersede any existing non-governmental liens.
Q: Can a Court terminate a Conservatorship if the Conservator fails to file status reports on a plan?
A: Possibly. A Court has discretion to terminate a Conservatorship upon a showing that the Conservator has failed to fulfill his duties under the Conservatorship. The Court may terminate a Conservatorship if it finds that the failure to file status reports results in such an abandonment of one’s duties, that it constitutes grounds for termination.
 68 P.S. § 1110(4) (West 2009); see also Walsh v. Isabella, 258 A.3d 1163 (Pa. Commw. Ct. 2021).
Q: How often must a Conservator file status reports?
A: A Conservator must file status reports at least once per year; however, a Conservator may be required to file status reports more frequently if the Court finds it appropriate.
 68 P.S. § 1106 (West 2014).
Q: Must a Conservator fully renovate and sell the property?
A: Not in every case. If, for example, after accessing the blighted structure the Conservator determines it is impossible to fully renovate the building, it could (i) propose a Final Plan that consists of closing, sealing, or demolishing all or parts of the structure, or (ii) petition the Court to terminate the Conservatorship or propose a Final Plan to sell the property to a Court-approved buyer.
Q: Are the requirements for getting a zoning “use variance” easier for a property that is subject to a Conservatorship?
A: Not necessarily. Certain criteria (unnecessary hardship, minimum variance, etc.) must be met for a zoning board to grant a “use variance.” While the blighted and abandoned condition of a property can be considered in determining whether the “unnecessary hardship” requirement for a variance has been satisfied, it is not sufficient to establish an unnecessary hardship.
 53 Pa. Stat. § 10910.2 (West 2022).
See Metal Green Inc. v. City of Philadelphia, 266 A.3d 495, 511 (Pa. 2021) (discussing the “use variance” requirements under the Philadelphia Zoning Code).
Q: Can a conservator lease the property?
A: Yes. With Court approval, a Conservator may lease a property for up to 12 months.
Q: How can a Conservator finance its remediation of a blighted property?
A: There are likely several ways to finance a Conservatorship. However, one method is to borrow money from a bank and use the blighted property as security for the loan. To facilitate this type of loan, a Conservator could ask the Court to grant priority status to the loan that will be used to finance the execution of a Final Plan.
Q: Does a Conservator assume all the owner’s liabilities on a blighted property?
A: No. While a Conservator will have legal control –but not title– over the property, the title owner remains liable for all liabilities on the blighted property.
Q: Does a court-appointed Conservator own the blighted property?
A: No. However, the Conservator may petition the Court to sell the property to itself if the Conservator has been in control of the building for more than three months, and the owner has not successfully petitioned to terminate the Conservatorship. The terms and conditions of the sale also must be acceptable to the Court, and the Conservator must be reasonably likely to maintain the property.
Q: Will a Court allow for a Conservator to sell the property to itself for $1.00?
A: Possibly. A Conservator must seek Court approval to sell a property subject to a Conservatorship. A Court’s decision on a proposed sale price will likely depend on whether the property owner or lienholders (if any) object to the sale price. If an objection is made, the objector has the burden of proving that the property should be sold for a higher price. The Commonwealth Court upheld a Conservator’s petition to sell the property for a lower price than its alleged market value when the objector failed to offer an appraisal showing a higher value.
 City of Bethlehem v. Kanofsky, 2018 WL 1440590 at *2 (Pa. Commw. Ct. 2018).
Q: What if the proceeds from the sale of a conservatorship property are less than the all liabilities on the property?
A: If the proceeds of a Conservator’s sale are insufficient to pay all existing liens, claims, and encumbrances, the proceeds are paid in accordance with the following distribution schedule:
1. court costs,
2. liens of the Commonwealth, liens for unpaid property taxes and municipal liens,
3. costs and expenses of sale
4. principal and interest on borrowing or incurrence of indebtedness granted priority over existing liens and security interest under section 8(g) and costs to prepare and file the petition
5. costs of rehabilitation and fees and expenses incurred in connection with the authorized Conservatorship Lien
6. liens and other security interest in priority order,
7. unpaid obligations of the conservator,
8. the owner.
Q: Can a Court erase a bank mortgage on a Conservatorship property?
A: Yes. Upon petition by the Conservator, all unpaid liens (including a bank mortgage), claims, and encumbrances may be extinguished. As the result of a Conservatorship, a bank’s mortgage may be wiped out when the property is sold at the end of the Conservatorship.
Q: How does a Conservator get paid?
A: A Conservator is paid a Conservator’s Fee after its Court appointment. This fee is the greater of (1) $2,500; (2) a 20% markup of costs of rehabilitation and expenses to implement either a Preliminary or Final Plan; or (3) 20% of the sale price of the property (“Conservator’s Fee”).
For more information, contact Daniel Conlon at email@example.com.
August 05, 2022
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