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Traditionally, in Pennsylvania, an agreement of sale between seller and buyer “seals the deal” for the purchase of real estate. However, a prospective seller may also choose to have the buyer take possession of the property and “pay as he goes,” i.e. enter into an installment purchase agreement for the real estate. The core of such an agreement is the seller’s retention of actual title to the property (subject to the buyer’s right to possess it if there is no default under the agreement), until the installment payments toward the purchase price are all paid by the buyer. Afterward, the seller conveys legal title to the property to the buyer.

Once fairly common in central PA, installment purchase agreements today can be found in all areas of the Commonwealth, including the Philadelphia area.

The problem comes when one of these agreements goes into default (usually for non-payment of installments). Because the seller remains in title, it’s not like he has a mortgage he can foreclose on and obtain the property at sheriff’s sale. The answer lies in the Pennsylvania Installment Land Contract Law (“PILCL”), 68 Pa. C.S. sec. 902 et seq. 

Under the PILCL, different remedies are available to the seller seeking relief on a defaulted installment purchase agreement. In addition, the statutory scheme does not rule out other possible relief available under Pennsylvania law, such as filing a quiet title action. If you are a seller of real estate under an installment purchase agreement in default, contact Stark & Stark for expert enforcement of your rights.

In Pennsylvania, mortgages on real estate aren’t always held by banks or mortgage companies. Individuals who sell real estate sometimes “take back paper” from their buyers to, in effect, finance the purchase price. The “paper taken back” from the buyer frequently includes a mortgage on the real estate which is satisfied when the buyer pays back the purchase price of the real estate to the seller.

Like “institutional” mortgages, privately-held mortgages can go into default if mortgage payments are not made. The preferred remedy would be the same as any bank or mortgage company would have—foreclosure of the mortgage and sheriff’s sale of the real estate. However, while banks and mortgage companies may have counsel with whom they deal on a regular basis for their foreclosure work, individuals holding mortgages may find themselves not knowing how to proceed when payments stop coming.

At Stark & Stark, we assist both lenders and private mortgage holders with foreclosures in all counties of Pennsylvania. If you are a private mortgage holder with a mortgage in default, contact us for expert guidance through the foreclosure process.

If one is above a certain age, one may remember a “Saturday Night Live” sketch called “The Thing That Wouldn’t Leave”, about a comically boring and obtuse houseguest who, ignoring all hints from the homeowners, wouldn’t budge.

A houseguest is one thing, but what if this horror movie involves someone who is actually living in real estate one owns, not paying any rent and not bound to any lease…in other words, a squatter?  Unfortunately in Pennsylvania, there really is something to the saying that possession is nine-tenths of the law.  Once a squatter moves in, it’s not easy to get he/she out. 

Let’s start with what one CAN’T generally do.   One can’t simply call the police and ask the police to escort the squatter out.  The police will explain that the matter is a civil matter and they only deal with criminal matters.  The police will further advise that one obtain counsel and “go through the courts” to get the squatter out.

Translating from policespeak,  “going through the courts” means filing an ejectment action against the squatter and/or any other occupants of the real estate.  This type of lawsuit, often popularly known as an eviction, ultimately seeks the issuance of a writ of possession (a document issued by the court empowering the county sheriff to remove the squatter, by force if necessary, and deliver possession of the real estate back to the owner).  Depending on the county, the process may take some time, but it is in any case better than simply watching and waiting while a squatter ties up the sale or rental of real estate.

At Stark & Stark, we can institute and proceed with ejectment actions in any county of Pennsylvania, and also assist with taking action toward getting any personal property left behind by a squatter disposed of, without liability to the owner of the real estate.

The old Woody Guthrie song emphatically proclaiming “this land is your land, this land is my land” could well have its roots in the concept of a prescriptive easement in Pennsylvania. As recently explained in a Bucks County Court of Common Pleas case, Slice & Hook Enterprise v. McGonigal, 87 Bucks Co. L. Rep. 321, 329 (2014), a prescriptive easement exists when one establishes a right to use another’s land for some purpose, through “open, notorious, continuous, uninterrupted, adverse and hostile use” (although not inconsistent with the landowner’s use of the property), for twenty-one (21) years.

If that sounds an awful lot like the standards for adverse possession of real estate to you, you’re not hearing things. Indeed, the only real difference between classic adverse possession and a prescriptive easement is that adverse possession, if successful, gets one fee simple title to the land in question. On the other hand, a prescriptive easement is merely a right, less than absolute fee simple title, to use land which is owned by someone else.

Prescriptive easements can be extremely difficult to prove. However, for the owner of a landlocked property who finds that for the past thirty years he has had to drive across his neighbor’s real estate (without the neighbor’s agreement) to get to the highway to go to work, a prescriptive easement may be necessary.

At Stark & Stark, we can initiate and proceed with the litigation necessary to request the establishment of a prescriptive easement, assuming the proposed use of land meets the criteria referenced above.

Often, when purchasing or selling real estate in Pennsylvania, an examination of the title to such real estate discloses the presence of old mortgages or judgments (frequently in the name of a previous owner(s)). Although such old liens have most likely long been paid off in full, if the appropriate satisfaction documentation is not recorded with the county recorder of deeds or filed with the county prothonotary, such liens can remain of record long after the mortgagor/judgment debtor has sold the real estate, creating clouds on title for years to come. Adding to the difficulty of dealing with such liens is that frequently the holders of the old mortgages or judgments are defunct or cannot be found, thereby lessening the possibility that they will voluntarily remove their liens when asked to do so by a subsequent owner. Also, due to the passage of time, and even if the old “lienors” can be located, it may be difficult for a subsequent owner to obtain evidence of payoff of the old lien(s) to provide, so that the lienors will be convinced to satisfy their liens. Pennsylvania recognizes a presumption of payment of a mortgage twenty years after the final payment was due, but this presumption cannot be automatically relied on to assume an old mortgage is no longer a title cloud…the presumption may be rebutted with contrary evidence.

A quiet title action filed against the holder(s) of an old mortgage or judgment may be the only recourse a subsequent owner has to clear up these clouds on his/her title. At Stark & Stark, we have the experience and knowledge required to file and prosecute such actions, and obtain and record the requisite court order(s) that result in the satisfaction of such old mortgages or judgments.

In the case of B.N. Excavating v. PBC Hollow-A, the Pennsylvania Superior Court held that it is not always  necessary to show that a structure has been erected in order for a mechanics lien to be filed in Pennsylvania.   Rather, the majority of the Court ruled that where land excavation is an integral part of the overall construction plan for a building, a mechanics lien could possibly be filed for that work, even where no structure has been built.   The en banc panel noted that the seminal case of Sampson-Miller Associated Companies v. Landmark Realty Co. does not stand for the proposition that a mechanics lien can never be filed if a structure has not been erected.  

The dissenting judges in B.N. Excavating noted that there was never any allegation that a structure was ever erected.  Therefore, in their opinion, a mechanics lien cannot be filed as no structure exists.   The majority of the en banc panel stated that the B.N Excavating ruling does not stand for the proposition that a mechanics lien can be filed against land which has no correlation to the construction of a permanent structure.  However, where land excavation is an integral component of the overall development of a structure, a mechanics lien can attach to the land, even without the construction of a permanent structure.

The B.N. Excavating case is a tremendous victory for land excavators and potentially other subcontractors.   In a difficult economic environment, there is a great potential for subcontractors to perform work on projects in which a permanent structure is never ultimately erected.  

In the case of In Re Appeal of Chester County Outdoor, LLC, the applicant, Chester County Outdoor LLC (“CCO”), desired to erect a billboard on certain property in Penn Township. CCO filed a challenge to the validity of Penn Township’s Zoning Ordinance pursuant to Section 916.1 of the Municipalities Planning Code, alleging that that Section 1800G of the Ordinance excluded billboards.  Section 1800G stated that no sign could be erected in the Township except one for a business or merchandise for sale on the same premises as the billboard. 

At the hearing before the Zoning Hearing Board (“Board”), CCO withdrew the site plan that was attached to its application.  Thereafter, the Board confirmed at the hearing that the only issue before it related to the validity of Section 1800G.  The Board then agreed with CCO and ruled that Section 180OG was invalid as it excluded billboards.  It did not address whether CCO was entitled to site specific relief.

CCO appealed the Board’s decision stating that it was entitled to site specific relief.  The Common Pleas Court affirmed the Board’s decision and ruled that CCO lacked standing to appeal the Board’s decision.

The Commonwealth Court affirmed, noting that CCO was not an aggrieved party.  It held that the only issue before the Board was whether Section 1800G was invalid.  The Board ruled in favor of CCO on that issue, and therefore CCO was not aggrieved.  The Court also stated that the Board never held that CCO is not entitled to site specific relief, despite the fact that the Board noted that CCO would not be entitled to the particular site specific relief in its application (as it needed a dimensional setback).  The Court held that this portion of the Board’s decision was dictum and it was merely informing CCO what it would need to change on its plans if it requested site specific relief.  Thus, while Section 1800G was declared invalid, the applicant was unable to obtain site specific relief.  

The Pennsylvania Senate approved legislation on Tuesday, May 24, 2011 that would require contractors and subcontractors to verify legal employment status for all employees working on public building projects.

Senate Bill 637, which passed 47-7, makes use of the federal E-Verify system, operated by the Department of Homeland Security, mandatory to confirm that all employees are eligible to work in the U.S.

Employers would be required to submit employment verification statements to the Pennsylvania Department of Labor and Industry prior to beginning work on any public contract.  The Secretary of Labor and Industry will provide the form of the verification.  Additionally, Contractors will be required to provide to the public entity with the verification statement before it can commence work for the public entity.  Any subcontractor will be required to provide a verification statement to the Contractor prior to commencing work on a public building project and the Contractor will provide a verification statement to the public entity for all subcontractors it uses or intends to use on the public building project.  The verification statements will contain a certification signed by the Contractor or Subcontractor, as the case may be, that the information in the verification is true and correct and that submission of false or misleading information shall subjection the person signing the verification to sanctions.

The following constitutes a violation of this provision:

  1. Employment of an employee on a public works project whose eligibility has not been verified through the federal E-Verify system.
  2. Use by a Contractor of a Subcontractor on a public works project prior to the submission by the Subcontractor of a verification statement.
  3. Commencement of work by a Subcontractor on a public works project prior to the submission by the subcontractor of the verification statement.
  4. Making a false statement or misrepresentation in a verification statement.

Penalties for violation of this provision can be a fine, cancellation of the contract and possible debarment or suspension for one year. A Contractor will be immune from sanctions if it in good faith relies upon the federal E-Verify system and was provided with incorrect information.

We will follow this legislation and advise of any amendments and if the Governor signs this legislation into law.

In Pennsylvania, “The Landlord and Tenant Act of 1951” (“The Act”) governs all residential leases entered in Pennsylvania. The Act provides certain terms in the relationship between a landlord and tenant that cannot be waived by the tenant, even where the written lease has provisions contrary to the Act. 

A common issue that arises between landlords and tenants in residential leases governed by the Act is the handling of the tenant’s security deposit at the conclusion of the lease. Residential landlords should be wary of the Act’s remedies for improperly withheld security deposit monies. The Act requires a landlord under a residential lease to provide the now former tenant with a written list of the damages to the premises that the landlord claims are the tenant’s responsibility within 30 days of the termination of the lease.

The list of damages must be accompanied by payment of the difference between the amount claimed for the damages and the amount of the security deposit with interest.  If a landlord fails to provide the written list of damages and repayment of security deposit amounts in excess the amount of damages claimed within the 30 day window, they will be deemed to forfeit the rights to withhold any portion of the security deposit or to sue the tenant for damages to the premises. If the landlord fails to pay the amount of the security deposit for which no claim is made within 30 days of the termination of the lease, the landlord can be held civilly liable for double the amount of the security deposit wrongfully withheld. A tenant’s claim for double the security deposit can be mitigated if the landlord can prove the amount of actual damages done to the premises to the satisfaction of the Court. This procedure may be employed by a tenant regardless of the terms of the written lease agreement or other writing between the landlord and the tenant.

There are three principal types of tenancies related to the ownership of real estate. Perhaps the most popular, and most familiar, is the joint tenancy. If two persons own a property as joint tenants, upon one person’s death, the other person automatically owns all of the interest in the property. There is no limit on the number of persons that can hold property as joint tenants. If a husband and wife own a property together and add their child to the deed, each will own a one-third interest in the property. Upon one of their deaths, the two surviving persons will each own a one-half interest in the property.

In the event that a joint tenancy owner is sued, and a judgment is entered against that owner, the owner’s interest in the property is subject to attachment by the creditor. In addition, any co-owners can bring an action to divide the interest in the property, and attempt to force the other owners to sell their interest.

A tenancy in common is where each owner of the property has an undivided interest in the whole of the property. However, upon the death of any owner, his or her share will pass to his or her decedents by will or by intestacy. Unlike a joint tenancy where each owner owns an equal portion of the property, tenancies in common do not require equal ownership. For example, in a tenancy in common, there could be three owners with one owing 50%, one owning 30% and one owning 20%.

A form of ownership allowed in many states is the tenancy by the entirety. In this type of ownership, only a husband and wife may own the property. The advantage of a tenancy by the entirety is that, in the event that either the husband or wife is sued (individually), a creditor may not take action against the property while it is held jointly by the husband and wife. In addition, neither the husband nor the wife may divide the ownership by deeding his or her interest to another person. Further, in order for a mortgage to be placed on the property, both the husband and wife must sign the loan documentation.

In some states, if there is no tenancy stated, there is a presumption that the owners are tenants in common, and if one person dies, then his or her interest in the property will need to be probated, even if the decedent desired for the property to pass to the surviving co-owner (including the spouse).

As you can see from the above, tenancy should not be taken lightly. We recommend a careful review of all property deeds on a regular basis to ensure that the properties are properly held in accordance with your desires.