[Ord. 2017-03, 12/19/2017]
The Borough Council of Mifflinburg Borough has adopted an ordinance establishing Chapter 1, Administration and Government, Part 9, Fire Insurance Proceeds Escrow, of the Code of Ordinances for the Borough of Mifflinburg for the purpose of establishing an escrow account that fire insurance proceeds must be deposited into in accordance with the requirements of 40 P.S. § 638. The purpose of the escrow account is to ensure that fire-damaged properties are brought into compliance with property maintenance and building codes of the Borough of Mifflinburg.
[Ord. 2017-03, 12/19/2017]
The Borough Treasurer or such other official designated is hereby
appointed as a designated officer who is authorized to carry out all
responsibilities and duties stated herein.
[Ord. 2017-03, 12/19/2017]
No insurance company, association or exchange (hereinafter the
"insuring agent") doing business in the Commonwealth of Pennsylvania
shall pay a claim or a named insured for fire damage to a structure
located within the Borough of Mifflinburg (hereinafter the "Borough")
where the amount recoverable for the fire loss to the structure under
all policies exceeds $7,500 unless the insuring agent is furnished
with a certificate pursuant to 40 P.S. 638(b), by the Borough Treasurer
and unless there is compliance with 40 P.S. § 638(c) and
(d).
[Ord. 2017-03, 12/19/2017]
1.
The Borough Treasurer shall, upon the written request of the named
insured specifying the tax description of the property, name and address
of the insuring agent and the date agreed upon by the insuring agent
and the named insured as the date of the receipt of a loss report
of the claim, furnish the insuring agent either of the following within
14 working days of the request:
A.
A certificate to the effect that, as of the date specified in the
request, there are no delinquent taxes, assessments, penalties or
user charges against the property and that, as of the date of the
Borough Treasurer's certificate or verbal notification, no municipal
entity has certified any amount as total costs incurred by the municipal
entity for the removal, repair or securing of a building or other
structure on the property; or
B.
A certificate and bill showing the amount of delinquent taxes, assessments,
penalties and user charges against the property as of the date specified
in the request that have not been paid as of the date of the certificate
and also showing, as of the date of the Borough Treasurer's certificate,
the amount of the total costs, if any, certified to the Borough Treasurer
that have been incurred by a municipal entity for the removal, repair
or securing of a building or other structure on the property. For
the purposes of this subclause, the Borough shall certify to the Borough
Treasurer the total amount, if any, of such costs. A tax, assessment,
penalty or user charge becomes delinquent at the time and on the date
a lien could otherwise have been filed against the property by the
municipal entity under applicable law.
2.
Action on Receipt.
A.
Upon the receipt of a certificate pursuant to Subsection 1A, the insuring agent shall pay the claim of the named insured in accordance with the policy terms unless the loss agreed to between the named insured and the insuring agent equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the building or other structure. In the case of such a loss, the insured property owner and the municipal entity shall follow the procedures set forth in Subsections 3 and 4 of this section.
B.
Upon the receipt of a certificate and bill pursuant to Subsection
1B, the insuring agent shall return the bill to the Borough Treasurer
and transfer to the Borough Treasurer an amount from the insurance
proceeds necessary to pay the taxes, assessments, penalties, charges
and costs as shown on the bill. The Borough shall receive the amount
and apply or credit it to payment of the items shown in the bill.
3.
When the loss agreed to between the named insured and the insuring
agent equals or exceeds 60% of the aggregate limits of liability on
all fire policies covering the building or other structure, the insurance
agent shall transfer from the insurance proceeds to the Borough Treasurer
in the aggregate $2,000 for each $15,000 and each fraction of that
amount of a claim, or, if at the time of a loss report the named insured
has submitted a contractor's signed estimate of the costs of
removing, repairing or securing the building or other structure in
an amount less than the amount calculated under the foregoing transfer
formula, the insuring agent shall transfer from the insurance proceeds
the amount specified in the estimate. The transfer of proceeds shall
be on a pro rata basis by the insuring agent insuring the building
or other structure. Policy proceeds remaining after the transfer to
the Borough shall be disbursed in accordance with the policy terms.
The named insured may submit a contractor's signed estimate of
the costs of removing, repairing or securing the building or other
structure after the transfer, and the Borough Treasurer shall return
the amount of the fund in excess of the estimate to the named insured
if the Borough has not commenced to remove, repair or secure the building
or other structure.
4.
Upon receipt of proceeds by the Borough as authorized by this section, the Borough Treasurer shall place the proceeds in a separate fund to be used solely as security against the total cost of removing, repairing or securing incurred by the Borough. When transferring the funds as required in § 1-904, Subsection 3, of this section, an insuring agent shall provide the Borough with the name and address of the named insured, whereupon the Borough shall contact the named insured, certify that the proceeds have been received by the Borough and notify the named insured that the procedures under this subsection shall be followed. The funds shall be returned to the named insured when repairs, removal or securing of the building or other structure have been completed and the required proof received by the Borough Treasurer if the Borough has not incurred any costs for repairs, removal or securing. If the Borough has incurred costs for repairs, removal or securing of the building or other structure, the costs shall be paid from the fund, and, if excess funds remain, the Borough shall transfer the remaining funds to the named insured. Nothing in this section shall be construed to limit the ability of a Borough to recover any deficiency. Further, nothing in this subsection shall be construed to prohibit the Borough and the named insured from entering into an agreement that permits the transfer of funds to the named insured if some other reasonable disposition of the damaged property has been negotiated.
[Ord. 2017-03, 12/19/2017]
The Borough of Mifflinburg may by resolution adopt procedures
and regulations to implement this Part and may by resolution fix reasonable
fees to be charged for municipal activities or services provided pursuant
to this Part, including, but not limited to, issuance of certificates
and bills, performances of inspections, opening separate fund accounts
and legal fees.
[Ord. 2017-03, 12/19/2017]
Any owner of property, any named insured or any insuring agent
who violates any provision of this Part, 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.
