HARRISBURG – A new law in Pennsylvania is intended to make demolishing
blighted properties much easier than in the past.
Gov. Tom Wolf, on Nov. 4, signed
Senate Bill 486, amending the Recorder of Deeds Fee Law. The new law authorizes each county to charge a fee, up to $15, for each deed and mortgage recorded in the county. The funds
generated by this fee are reported to be used solely for the demolition of
blighted properties within the county where the deed and mortgage are recorded.
Reed Smith attorneys Dusty Kirk and Brittney
Wozniak recently wrote “blighted residential and commercial properties are a
major impediment to rehabilitation and redevelopment efforts in cities and
towns through Pennsylvania.”
Kirk added in an interview: "A lot of municipalities wanted to get (the properties) renovated
and back on the tax roll, but some of the
owners couldn’t be found or they had passed away; or there wasn’t a clear line
of who would be responsible.”
Each community already has transfer tax fees and usually,
throughout most of Pennsylvania, one percent goes to the school district and the
city and one percent goes to the state. According to Kirk, in Philadelphia
and Pittsburgh it’s four percent.
There are supporters and critics of the bill. Supporters argue that there’s a lack of
funding to support the rehabilitation of the properties. Critics argue that instead of homeowners and
buyers being individually responsible for paying the bill, the entire affected
community should contribute.
"People are objecting to it because they’re saying if you
sell your property, there’s already a transfer tax,” Kirk said. “Now there’s an additional $15
that’s going to go to this county. I think
the law reads that it’s up to $15, so a county can say they’re going to
pass $10 or $5, but I can’t imagine they won’t do the $15 fee.”
Kirk said initially, real estate groups were among those opposed
to the new fee.
"I think initially that the real estate groups were opposed to
it, but in Pennsylvania, transfer tax is split between the purchaser and the
seller,” Kirk said. “So it’s like adding
$7.50 to each side. In the end, I think
they thought ‘this really isn’t worth our time fighting about.’”
The surplus of blighted properties weighs in on a number of
factors, including people losing their jobs or otherwise not being able to afford the
upkeep of their property.
"I think that if you think about a community that had a lot of
people who were employed with the steel industry and then they lost their jobs,
you’ll see that some of them were able to recover, while some were not,” Kirk
"Many were also older communities and some [of the owners] were
elderly and on fixed incomes. So they don’t have the ability to
put money into properties. Many might
move to assisted living facilities and the house is just left there.”
In addition to Senate Bill 486, Wolf also signed
House Bill 1437, which amended the Municipal Code and Ordinance Compliance Act,
now giving property owners only one year after a purchase date to remedy code
violations. Before the amendment,
property owners had 18 months.
If property owners do not meet the requirements needed
within the time period, it could result in the demolition of property that is
in violation of the code at the purchaser’s expense.
No Pennsylvania county has yet imposed the recording fee
authorized by Senate Bill 486.