[Ord. 2009-02, 5/4/2009, § I]
This Part shall be known and may be cited as the "Lower Mount
Bethel Township Fire Insurance Escrow Ordinance."
[Ord. 2009-02, 5/4/2009, § II]
1.
Certificate Required. No insurance company, association or exchange
(hereinafter "insurer") doing business in the Commonwealth of Pennsylvania
shall pay a claim of a named insured for fire damage to any structure
located within Lower Mount Bethel Township ("Lower Mount Bethel Township"
or "Township") where the amount recoverable for the fire loss to the
structure under all policies exceeds $7,500, unless the insurer receives
a certificate from the Township Tax Collector, third-party collector
(defined below) and/or Township Treasurer, as applicable, pursuant
to the terms of this Part and unless there is compliance with the
procedures set forth herein. The request for a certificate shall be
provided to both the Tax Collector and Treasurer and shall be accompanied
by such fees as may be established by the Township from time to time.
When a delinquent account has been forwarded to the Township's
third-party collector, the Tax Collector and Treasurer, as applicable,
shall promptly forward the certification request to the third-party
collector.
2.
Determination of Delinquency of Municipal Claims and/or Municipal
Expenses.
A.
The Tax Collector, third-party collector and Treasurer, as applicable,
shall furnish the Insurer with one of the two certificates outlined
below. The certificate shall be provided to the insurer within 14
business days of the receipt of a written request from the named insured.
The written request must include the tax parcel ID number of the property,
the name and address of the insurer and the date agreed upon by the
insurer and named insured as the date of the insurer's receipt
of a loss report of the claim filed by the named insured.
(1)
MUNICIPAL CLAIMS
MUNICIPAL EXPENSES
Definitions.
Delinquent taxes, assessments, penalties or user charges
against the property.
Costs incurred by the Township for the removal, repair or
security of a building or other structure on the property.
(2)
Responsibility for Reporting of Municipal Claims. At the time
of the adoption of this Part, the Township Tax Collector collects
taxes and assessments. The Township Treasurer collects user fees,
such as streetlights, refuse collection, etc. The party responsible
for collecting the different charges which collectively constitute
municipal claims may be changed from time to time by the Township
and applicable law. For purposes of this Part and the certifications
required to be given hereunder, the party then responsible for collection
of the charges shall provide the certificate relative only to those
charges that the party is responsible to collect.
(3)
No Outstanding Municipal Claims or Municipal Expenses.
(a)
Tax Collector. Upon receipt of the certificate request, the
Tax Collector shall determine if any municipal claims for delinquent
taxes, assessments, interest and penalties exist as of the date of
the request. If, as of the date specified in the written request,
there are no municipal claims for delinquent taxes, assessments, interest
and penalties and there are no delinquent accounts that have been
forwarded to the third-party collector, then the Tax Collector shall
provide a certificate to the Insurer stating that there are no municipal
claims for delinquent taxes, assessments, interest and penalties outstanding
relative to the property.
(b)
Treasurer. Upon receipt of the certificate request, the Treasurer
shall determine if any municipal expenses and/or municipal claims
for user fees, such as streetlight fees, refuse collection fees, etc.,
interest and penalties exist as of the date of the request. If, as
of the date specified in the written request, there are no municipal
expenses or municipal claims for user fees, such as streetlight fees,
refuse collection fees, etc., interest and penalties and there are
no delinquent accounts that have been forwarded to the third-party
collector, then the Treasurer shall provide a certificate to the insurer
stating that there are no municipal expenses and municipal claims
for user fees, such as streetlight fees, refuse collection fees, etc.,
interest and penalties outstanding relative to the property.
(c)
Notification. In the discretion of the Township, the Tax Collector's
and the Treasurer's initial response may be a verbal notification,
provided that the Tax Collector and Treasurer confirm the verbal notification
in writing.
(4)
Outstanding Municipal Claims or Municipal Expenses.
(a)
Tax Collector. Upon receipt of the certificate request, the
Tax Collector shall determine if any municipal claims for delinquent
taxes, assessments, interest and penalties exist as of the date of
the request, If, as of the date specified in the written request,
there are municipal claims for delinquent taxes, assessments, interest
and penalties which have not yet been forwarded to the third-party
collector, then the Township Tax Collector shall immediately render
a certificate and bill for such amounts to the Insurer, specifying
the nature and amount of such municipal claims for delinquent taxes,
assessments, interest and penalties. If, as of the date specified
in the written request, there are municipal claims for delinquent
taxes, assessments, interest and penalties that have been forwarded
to the third-party collector, then the Tax Collector shall promptly
forward the certificate request to the third-party collector to provide
the response.
(b)
Treasurer. Upon receipt of the certificate request, the Treasurer
shall determine if any municipal expenses and/or municipal claims
for user fees, such as streetlight fees, refuse collection fees, etc.,
interest and penalties exist as of the date of the request. If, as
of the date specified in the written request, there are municipal
expenses and/or municipal claims for user fees, such as streetlight
fees, refuse collection fees, etc., interest and penalties which have
not yet been forwarded to the third-party collector, then the Treasurer
shall immediately render a certificate and bill for such amounts to
the insurer, specifying the nature and amount of such municipal expenses
and/or municipal claims for user fees, such as streetlight fees, refuse
collection fees, etc., interest and penalties. If, as of the date
specified in the written request, there are municipal expenses and/or
municipal claims for user fees, such as streetlight fees, refuse collection
fees, etc., interest and penalties that have been forwarded to the
third-party collector, then the Treasurer shall promptly forward the
certificate request to the third-party collector to provide the response.
(c)
Third-Party Collector. Upon receipt of the certificate request
from either the Township Tax Collector or the Township Treasurer,
or upon receipt directly from the named insured, the third-party collector
shall determine the outstanding balance of the municipal expenses
and/or municipal claims as of the date of the request. The third-party
collector shall immediately render a certificate and bill for such
amounts to the insurer, specifying the nature and amount of such municipal
expenses and/or municipal claims.
(d)
Notification. At the discretion of the Township, the Tax Collector's,
Treasurer's and third-party collector's initial response
may be a verbal notification, provided that the Tax Collector, Treasurer
and third-party collector, as applicable, confirm the verbal notification
in writing.
(e)
Payment by Insurer. Upon receipt of any certificate issued pursuant
to this Part that states that there are municipal expenses and/or
municipal claims, the insurer shall pay an amount from the insurance
proceeds sufficient to pay the municipal expenses and/or municipal
claims to the party that issued the certificate prior to making any
payment of policy proceeds to the named insured.
(5)
Taxes, assessments, penalties and user charges shall be deemed
delinquent for this purpose on the date that a lien could have been
filed for such claims or expenses under applicable law.
(6)
For purposes of this paragraph, the certification relative to
municipal claims may be given by a third-party collector ("third-party
collector") who has been engaged by the Township for purposes of pursing
collection of delinquent municipal accounts. Pursuant to applicable
law (See 53 P.S. § 7101 et seq., the "Lien Act"), the Township
maintains the right to so engage a third-party collector. Based upon
the express language of 53 P.S. § 7112, the Lien Act does
not repeal or supercede any other law that enables a municipality
to collect delinquent real estate taxes. The Act is a law that also
enables a municipality to collect delinquent real estate taxes. To
give effect to each law, a certificate from the third-party collector
shall be deemed to be a sufficient certification from the Tax Collector
as required by the Act.
B.
Escrow of Fire Insurance Proceeds. When all municipal claims and/or
municipal expenses have been paid or when the Township Tax Collector
and Treasurer have issued a certificate indicating that there are
no municipal claims and/or municipal expenses against the property,
the insurer shall be free to pay the claim of the named insured in
accordance with the insurance policy terms; provided, however, that
if the loss agreed upon by the named insured and the insurer equals
or exceeds 60% of the aggregate limits of liability on all fire policies
covering the building or structure, the following procedures shall
be followed by the insurer and named insured:
(1)
The insurer shall transfer $2,000 for each $15,000 of such claim
or fraction thereof from the insurance proceeds directly to the Township
Treasurer, payable to the Township. As an example, if the claim is
for $65,000, the insurer must transfer the sum of $10,000 to the Township
Treasurer.
(a)
For purposes of determining the sum to be escrowed in the event
of a disagreement over the loss, the following shall apply. To the
extent that the insurer and the named insured agree that the loss
exceeds 60% but disagree on the exact amount of the loss in excess
of 60%, the insurer shall transfer funds to the Township Treasurer
based on the foregoing formula for the lesser percentage of the loss
claimed by the insurer and named insured. By way of example, if the
insurer believes that the loss represents 70% of the aggregate limits
of liability and the named insured believes that the loss represents
90% of the aggregate limits of liability, the insurer shall deposit
funds with the Township Treasurer as if the loss equals 70% of the
aggregate limits of liability. Thereafter, when the insurer and named
insured agree upon the loss, percentage additional funds, if any,
shall be deposited with the Township Treasurer. Based on the foregoing
example, if the insurer and named insured ultimately agree that the
loss represents 80% of the aggregate limits of liability, the insurer
shall increase the escrow deposited with the Township Treasurer to
reflect the parties' agreement on the amount of the loss being
80%.
(2)
If at the time a loss report is submitted by the named insured
to the insurer, the named insured has obtained a contractor's
signed estimate of the cost of removing, replacing or securing the
building or other structure (the "contractor's estimate") and
the contractor's estimate is an amount less than the amount calculated
under the foregoing transfer formula, and the requirements of clause
(a) below have been met, the insurer shall transfer the amount specified
in the contractor's estimate from the insurance proceeds directly
to the Township Treasurer, payable to the Township. If there is more
than one insurer, the transfer of proceeds shall be on a pro-rata
basis by all insurers insuring the building or other structures. The
named insured shall transmit a copy of the contractor's estimate
to the Township at the time of transmittal to the insurer.
(a)
For purposes of this Part, the contractor's estimate must
be signed by the contractor and by the named insured to evidence the
named insured's affirmative engagement of the contractor to perform
the work outlined in the contractor's estimate. When a named
insured may provide a contractor's estimate hereunder, the named
insured shall also provide the Township with a signed statement acknowledging
that the contractor's estimate has been returned to the contractor
and that a contract exists by which such contractor is to perform
the work set forth on the estimate.
(4)
Upon receipt of the escrowed proceeds, the Township Treasurer
shall:
(a)
Place the escrowed proceeds in a separate fund to be used solely
as security against or payment for the total municipal expenses anticipated
or incurred by the Township in removing, repairing or securing the
building or structure. The municipal expenses shall include, without
limitation, any engineering, legal and/or administrative costs incurred
by the Township in connection with such removal, repair or securing
the building or structure, or any proceedings related thereto.
(b)
Mail to the named insured at the address received from the named
insured, a certification that the escrowed proceeds have been received
by the Township and a notice that the procedures under this Part shall
be followed.
(c)
After the transfer of the escrowed proceeds to the Township,
if the named insured has not previously provided the Township with
a contractor's estimate, the named insured may submit to the
Township a contractor's estimate and other required documentation,
in which event the Township Treasurer shall, if such estimate is deemed
to be reasonable by the Township Treasurer (in consultation with the
Township Engineer), return to the named insured the amount of the
escrowed proceeds in excess of the contractor's estimate; provided,
however, that if at the time of the submission of the contractor's
estimate, the Township has commenced to remove, repair or secure the
building or other structure, the Township will complete the work and
retain the full amount of the escrowed proceeds until such time as
the work is completed.
(d)
Reimburse the Township general fund for the municipal expenses
incurred by the Township.
(e)
Pay the remaining balance of the escrowed proceeds, without
interest, to the named insured upon receipt of: 1) a certificate issued
by the Township (in consultation with the Township Engineer) that
the repair, removal or securing of the building or other structure
has been completed in accordance with all applicable codes and regulations;
and 2) to the extent allowed by applicable law, a certificate from
the Tax Collector and the Treasurer that there are no municipal claims
which then exist. If any municipal claims exist that have not been
forwarded to the third-party collector, the Tax Collector and/or Treasurer,
as applicable, shall so notify the Treasurer, and the Township Treasurer
shall pay the amount of the municipal claims to whomsoever has provided
the certification. If any municipal claims exist that have been forwarded
to the third-party collector, the Tax Collector and/or Treasurer as
applicable, shall request from the third-party collector, the then-current
outstanding amount owed. Upon receipt of the outstanding amount owed,
the Township Treasurer shall pay the amount of the municipal claims
to the third-party collector. Only after the Treasurer has paid any
then-existing municipal claims shall be the balance of the escrowed
proceeds be released to the named insured.
(5)
Nothing in this section shall be construed to limit the ability
of the Township to recover any deficiency in the amount of municipal
claims and/or municipal expenses by an action at law or in equity
or to limit the ability of the Township to enforce its rules, regulations,
resolutions and/or ordinances or to enter into an agreement with the
named insured with regard to such other disposition of the escrowed
proceeds as may be acceptable to the Township in its sole discretion.
[Ord. 2009-02, 5/4/2009, § III]
Nothing in this Part shall be construed to make an Insurer liable
for any amount in excess of proceeds payable under an insurance policy
or for any other act performed pursuant to this Part, to make the
Township or any public official of the Township an insured under a
policy of insurance or to create an obligation to pay municipal claims
and/or municipal expenses other than as provided in this Part.
[Ord. 2009-02, 5/4/2009, § IV]
An insurer making payment of policy proceeds under this Part
for municipal claims and/or municipal expenses shall have the full
benefit of such payment including all rights of subrogation and of
assignment.
[Ord. 2009-02, 5/4/2009, § V]
This Part shall be liberally construed to accomplish its purposes
to deter the commission of arson and related crimes, to discourage
the abandonment of property, to prevent blight and deterioration,
and to protect the public health, safety and general welfare. Notwithstanding
any provision of the Act to the contrary, the term "Treasurer" when
used in this Part shall mean the Township official responsible for
the Township's general fund and not the official that collects
real property taxes. The individual that collects real property taxes
is referred to as the "Tax Collector" for the purpose of this Part.
[Ord. 2009-02, 5/4/2009, § VI]
The Township Secretary shall transmit a certified copy of this
Part to the Pennsylvania Department of Community and Economic Development
promptly after enactment.
[Ord. 2009-02, 5/4/2009, § VII; as amended by A.O.]
Any owner of property, named insured or Insurer who violates
the provisions of this Part or who shall fail to comply with any of
the requirements hereof shall be sentenced, upon conviction thereof
in an action brought before a magisterial district judge in the manner
provided for the enforcement of summary offenses under the Pennsylvania
Rules of Criminal Procedure, shall be sentenced to pay a fine of not
more than $1,000 plus costs and, in default of payment of said fine
and costs, to a term of imprisonment not to exceed 90 days. Each day
that a violation of this Part continues or each section of this Part
which shall be found to have been violated shall constitute a separate
offense.
