COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT Room 400, City Hall Philadelphia, Pennsylvania Thursday, March 21, 2024 1:35 p.m. PRESENT: COUNCILMAN MARK SQUILLA, CHAIR COUNCILMAN MICHAEL DRISCOLL COUNCILWOMAN JAMIE GAUTHIER COUNCILMAN JEFFREY YOUNG, JR. ALSO PRESENT:
Good afternoon, everyone. We will be starting the public hearing on the Committee of Commerce and Economic Development. Today is March 21, 2024. All right. I note that the hour has come and a quorum of the Committee is present. To my left is Councilmember Driscoll. To my right is Councilmember Gauthier. Thank you. A quorum of the Committee is present. The hearing is now called to order. This is a public hearing of the Committee on Commerce and Economic Development regarding Resolution No. 240047. Mr. McMonagle, will you please read the title of the resolution.
Resolution No. 23 240047, authorizing the Council Committee on Commerce and Economic Development to hold hearings regarding the Abandoned and Blighted Property Conservatorship Act of Pennsylvania.
Thank you. We will now call the list of people to testify. Before we do that, I'd like to recognize Councilmember Young.
Thank you, Chairman Squilla. As the sponsor of this legislation, I just want to give some opening remarks to the listening public around this particular Act. It came to my attention as an attorney in private practice representing a few property owners who were subject to this Act. Also, was contacted by folks who wanted to pursue and be petitioners in this Act. So I have experience on both sides of it and really wanted to bring to everyone's attention some of the positives that the Act has. We are all for removing blight from our city. I think everyone in this room will be able to agree on that. But there are some, I think for me, fundamental, core and even constitutional issues that I see with the Act, giving that it affects someone's property rights. Act 135 essentially allows a petitioner to divest a property owner of their possession rights of their property, granted the property has to meet certain standards of the Act. However, I just believe that when we are taking possession of property, we are divesting folks of their property rights. There needs to be a little bit more scrutiny placed on those who are seeking to become the possessor of that property. And the way Act 135 is written currently, there is no risk or little risk to a petitioner to file 1 an Act 135 petition. Just to give you all some background on what happens, Act 135 allows neighbors, certain nonprofits, certain municipalities, Land Bank, redevelopment authorities to file petition against a property owner in order to restore and abate blighted conditions on a property. If the court finds that your property meets the standards of the Act, which the court goes through a number of standards, and I'll just read a few so folks have an idea of the standards here, but essentially your property cannot have been on the market for the past year, the property has to be deemed -- it could be deemed a public nuisance by the municipal authority or municipal body, the property -- and then there's also a set of standards that the court has to check to see if your property meets the definition of abandoned and blighted. There's nine standards. You have to only find three of them in order for your property to meet the definition of the Act. And so, it's mostly every vacant property in the City will fall underneath the standard of this Act. It's just the way that this law is written. And once your property is deemed to be abandoned and blighted by the court, the property owner is now liable for all of the costs of the petitioner, every single dime that the petitioner puts out plus interest if they take a loan out, because they are able to take a loan out on your property, and even have a priority lien position on any other liens that you have on your property, right. So it's not only we have the right to take possession of your property, we have the right to take a loan out on your property, in some cases in some communities where the property owner themselves would not even have the ability to take a loan out on their properties. And we have a priority mortgage on your property. And so, once the petitioner or the appointed conservator gets possession, they rehab the properties, bring the properties up to code. And once they go through the process, they then have the ability to ask the court to sell the property. And in some cases that I've seen where the properties have been sold, these properties have been sold with the bells and whistles. These were full gut rehabs of properties with very luxurious finishings. And so, when your property is ordered to be sold, there's a list of priority folks who have to get paid back first. You got the municipalities for any back taxes, lienholders, the conservator gets paid all the fees, all attorneys' fees, all engineering fees, the cost of rehab, plus they get a 7 percent developer's fee.
8 And then after all of that, 9 then the property owner is left 10 with whatever's left over, right. 11 And so, essentially if I have the 12 means, if I understand development, 13 if I understand how property works, 14 I am essentially able to get a 15 property for free as long as I have 16 the means to put up the upfront 17 capital knowing that I'm going to 18 get paid on the backend, because 19 that's what this law allows. It 20 allows you to get paid -- it mandates that you get paid on the backend, so there's no risk for anyone to divest property owners of their property rights. And me personally, I don't think that that's right. Here in America property rights are essential to what being an American is. They are essential to just the core of this country. I mean, our country went to war over property rights. I mean, let's just think about that. So I just wanted to have this hearing to talk about some of the great things that Act 135 can do for communities, but also talk about the harm that it causes on particularly a lot of low-income communities. When we look at Philadelphia as the largest poorest city in the country, naturally we're going to have a lot of impoverished property owners who just need the means to be able to afford to maintain their properties, have the knowledge and understanding of how to maintain their properties. And I believe that it is government's obligation to help folks maintain and build wealth, not provide opportunities for their wealth to be taken away and stripped. And so, with that I just wanted to show a clip of an article 7 from the Philadelphia Inquirer that just talks about the real effects of Act 135 and the effects that it has on communities, on people. This was brought to my attention as a Councilmember on day 1 from some community members in Fishtown. They were asking for any type of help, for anyone to listen to their cause regarding this Act 135. And having an understanding being an attorney, I wanted to heed their call, to be their ear to listen to. Although this body does not have the ability to directly affect the Act, we want folks to have the opportunity to talk about it, to discuss it, so we can figure out how to create some changes that need to be implemented in this Act. Again, the idea, the premise behind this Act, it's great. We all want to see blight remediation. In the legislative findings of the bill, it has some great findings. Basically substandard, deteriorating and abandoned residential and commercial industrial structures are a public safety threat and nuisance and their blighted effect diminishes property values in the communities in which these properties are located. I 100 percent agree with that. But again, it's how we deal with the blight. Make sure that we deal with it in a more equitable manner, make sure that property owners have the access and the tools available to them to rehab their properties, to bring their properties back to productive use and have some say in creating that generational wealth that particularly many have lost because of the conservatorship. So, Mr. Pullin, please show just a few minutes of the clip. )
Yeah. So we're having some technical difficulties with the video. However, this video is publicly available on the Philadelphia Inquirer's website. Essentially what it shows is a Fishtown resident, Ms. Linsey Franklin, and her story regarding Act 135 and how the Fishtown BID filed an Act 135 petition against her family's property essentially as a tool, I'll say, to get the family's attention to try to sell the property. The property, I believe, is under agreement to be sold to a developer, but this property given who you talk to is being sold for less than market value, right. And so, just from my understanding of how some of these deals have worked, folks have been feeling like they are being coerced essentially to sell their properties once they are aware that this petition is being filed. Again, if you go through with the Act 135 conservatorship petition fully, you're liable for percent developers' fees plus 14 all costs, right. And so, as a 15 property owner, you got to make a 16 decision on is it worth that to you 17 to go through this full process or 18 is it worth to you selling the 19 property. 20 And so, in this particular case this family decided that it was worth it to sell the property albeit whatever the value is. But again once these Acts are filed, folks feel like they're not given a choice to sell or to deal with some of the leverage and an arm's length transaction is being taken away once this Act 135 petition has been filed. So with that, Mr. Chair, I just want to hear from those on both sides of this issue to talk about how it affects them personally, talk about how the Act works in reality and to come up with some solutions that we can make and recommendations that we can make to our state partners to figure out how to make this Act more equitable, more fair but also allow us continually to expeditiously remove blight in our communities. Thank you, Mr. Chair.
Thank you, Councilmember. Appreciate you, and this hearing will be I think great information for all of us. Mr. McMonagle, can you please read the first panel to testify.
Yes. Can we please have Michael Gail -- Gall, I'm sorry. (Witness approached Witness table.)
Thank you, Michael. And just state your name for the record and then you can proceed with your testimony.
Absolutely. My name is Michael A. Gall with the Department of Planning and Development.
My name is Michael A. Gall with the Department of Planning and Development. Good afternoon, members of the Commerce and Economic Development Committee hearing. I am Michael A. Gall, Senior Legislative Planner with the Philadelphia City Planning Commission. I am here to testify on Resolution No. 240047, introduced into City Council on February 1, 2024 by Councilmembers Young, Gilmore Richardson, Bass, Gauthier, Harrity, Phillips, O'Rourke, Driscoll, Landau, Brooks, Ahmad and Council President Johnson. The Abandoned and Blighted Property Conservatorship Act known as Act 135 was originally enacted by the Commonwealth in 2008 as a tool to help rehabilitate vacant, abandoned and blighted property by allowing nonprofit entities and individuals to petition a court to act as conservators. In October 2014, the General Assembly amended the Act to further incentivize its use by extending conservatorship to additional parties. The amendment provided a framework for the payment of repair costs and developer fees, shortened the time frame for the court to hold initial hearings and allowed the bundling of properties into one petition for conservatorship. While the Act is still a valuable tool to place neglected properties into productive reuse, the changes to the law have led to some unintended consequences, especially in Philadelphia. The 2014 amendment has caused a proliferation of petitions particularly from a few parties. The change has created incentives for repeat petitioners and its new fee structure and reduced notification times are disproportionately impacting Asian- American and Black property owners in Philadelphia. We understand that an amendment being circulated at the state level is attempting to address several of the issues that impacted the proper use of this program on publicly-held land. We support the adoption of commonsense legislative remedies to relieve the encumbrance on these agencies. We also support further amendments to the Commonwealth law as well as direct City actions to reduce impacts on low-income homeowners. The City offers several programs to assist low-income property owners with the often daunting task of coming into compliance with health and maintenance codes, such as its Basic Systems Repair Program, the Restore, Repair, Renew Program and the Adaptive Modifications Program. We would hope that these are seen as the first course of action to prevent the deterioration of properties before they get to Act 135 actions. And in cases where rehabilitation by property owners cannot be encouraged or supported by any other means, Act 135 is an opportunity for citizens, organizations and local governments to deal with severe cases of property decay and neglect that can have a blighting effect on local communities. The Department of Planning and Development is ready to work with Council Offices to ensure commonsense adjustments are recommended to address the issues with Act 135 without preventing its benefit as a community tool to address blight. I'll be happy to answer any of your questions at this time.
Thank you. Thank you so much for your testimony. How many Act 135 conservatorships happen in Philadelphia?
One moment. I have it in front of me. 577 petitions were filed since the enaction of the Act.
But you've seen more recently than you did, I guess, back -- how many were this year? Do we know how many --
Okay. And out of that, you said most of these are filed in underserved communities. So is it by zip code or is it by --
So the numbers I have in front of me is that Black residents own 35.6 percent of the homes in Philadelphia County but account for 42.7 percent of respondents. Asian-American residents own 7.2 percent of homes in Philadelphia County and account for 11.8 percent of Act 135 respondents. 32.8 percent came from a census block group that the Reinvestment Fund notes as at risk for displacement. And approximately 26.6 percent of addresses subjected to an Act 135 petition came from a census block group that the Reinvestment denotes as at elevated risk for displacement.
percent of 18 addresses are at elevated risk and 19 another 32.8 are at risk, so 20 different levels of risk from the 21 Reinvestment Fund. 22
So in that case these have to meet the threshold of the Act 135 in order to be -- they're petitioned and they have met the threshold?
Yes, exactly. These are successful filed petitions that the court accepts.
And what would you suggest as an amendment to this state legislation in order to give notice or to be able to prepare folks for the petitioner in a conservatorship?
We do not have a fully fleshed-out set of recommendations, but we are willing to work with Council Offices to explore those ideas.
Yes. Thank you, Mr. Gall, for your testimony. I do know since you are the lone administrative representative here so I do have a couple of questions. Particularly do you know if the City has ever attempted to file an Act 135 petition against a property owner?
Do you know if the City has ever tried to intervene as a lienholder in an Act 135 petition?
Yeah. I mean, I think you -- the Land Bank is authorized as an agency that has the ability to file Act 135 petitions. Are you aware if the Land Bank chooses to in the future exercise its power to file Act 135 petitions?
I can't speak on behalf of the Land Bank. I don't know whether they have any plans for that or not.
Do you have data on the number of vacant properties that are adjacent to current City-owned properties?
We could get that information to you. That would have to be something our department would look into.
Thank you. Are you -- I mean, I guess you're the only City representative here. I have questions for L&I but L&I is not here as well or someone that L&I's portfolio falls under. But just for the record, I just want to note that L&I plays a large role in Act 135 petitions. They are our code agency that files complaints against properties that are considered to be blighted, nuisance, code enforcement violations of such. So they play a huge role in determining if a property even meets the standard for Act 135. And so, I just would love to hear what L&I has to say regarding their role in blight remediation in the City. But I don't have any further questions for Mr. Gall.
Thank you. Thank you, Councilmember. Real quick, Mr. Gall. Do you know how many of these petitions were filed against people who applied for BSR, Basic System Repairs?
I do not have that information, but we can gather that for you, Chair.
Okay. Maybe some of those questions that were provided by Mr. Young, if you could provide them to the Chair when you have some of those answers. Councilmember Gauthier.
Thank you, Mr. Chair. And I apologize if -- I'm not sure if this question was asked earlier, but do we have a record of how many of these petitions were filed against people who are living in their properties?
No, we do not have that information. To my knowledge, that is one of the criteria, that the structure is uninhabited.
I mean, we definitely in my District have had petitions filed against people who are actually living in their properties, which is one of the issues.
Okay. No, I do not have that information at this time. We can try to look for that for you.
From my understanding if the property is not vacant, then a petition can't be actively or a judge would not -- that property does not fall under the Act if the property is not vacant.
I do not misunderstand. We've had petitions filed on properties that constituents are living in, which is traumatic and harassing for the constituents. So I just don't know -- I know that because we've helped constituents in my District with that issue. I don't know if the City is tracking that. That's what I'm asking.
All right. Thank you so much. Are there any other questions for this witness?
I do. So one big issue I think with the vacancies is tangled title. And you mentioned a lot of programs that the City has, the Basic Systems Repair; Restore, Repair, Renew. But again, most of these properties are vacant properties that folks may or may not have equitable title to. Sometimes it is a property that they have inherited and they haven't gone through the appropriate process. And that's an impediment to get service through BSRP; Restore, Repair, Renew and et cetera. And again, if the properties are vacant, then these properties are not deemed to someone's primary residential home where they can then qualify for these programs. So are you aware if the City is willing to loosen up some of those restrictions if a property owner is willing to attest or sign sworn affidavits stating that once these repairs are complete, that this will be their primary residence for an X amount of time?
I can't speak to the willingness of the City Administration to act on that, but we are definitely willing to work with Council Offices to make any changes to the program that you deem necessary for being able to address those sort of actions.
Thank you. And Council will be willing to work with you and the Administration as we go through this hearing to make recommendations to our state colleagues on what they believe would be helpful to make this a better legislation. So thank you for your testimony.
Can we please have Raymond Johnson, Desarrie McDuffie and Erdis Hennigan. (Witnesses approached Witness table.)
Ray, if you want to just state your name for the record and then proceed with your testimony.
My name is Raymond Johnson. I am the owner of Lurube Development, a small Black family-owned real estate development company I started with my late father. In 1999 I began living in the Historic Black Doctor's Row and I was buying property there, restoring them as a way of paying homage to the area's demonstration of Black excellence that preceded me. I'm a craftsman. I approach my work with great attention to detail and artistry. Not only do I hire and work with experienced professionals, I also make sure I involve people in the community.
Hold on, Ray. Can you pull the mic down closer to you?
Okay. When I purchased 1700 Christian Street, I had a vision and plans for this historic corner property and I started restoring it with my own money. While I was in the process of restoring 1700 Christian Street, this property formerly owned by one of the first Black undertakers in Philadelphia, Mr. William Bill 3 Allmond in 1913, I was targeted by not one but two baseless Act 135 petitions. Act 135 is for abandoned and blighted properties. This property was not abandoned or blighted. In fact, I had complied with City Code that predated Act 135, Act 90. And I was performing work far beyond what was required. This was clear to the judge who swiftly ruled in my favor on the first Act 135 petition filed by Scioli Turco because they did not meet the burden of proof, the lis pendens was lifted. Scioli and Turco filed their second petition to take my property not even six months later. I sent some pictures in, but we'll get to that. While I was being subjected to the second petition, again I followed the law, took all the necessary steps to secure my property. In fact, I had bank money ready to go. I was approved for $440,000 in construction loan from Valley Green/Univest Bank to finish this restoration of property. However, when Scioli Turco filed their second petition as with every petition, a lis pendens was automatically placed on the property. I could not get access to the money approved so I can continue the restoration until this was lifted. I was placed in a catch 22. I was forced to negotiate and pay Scioli Turco to lift this lis pendens on the property that I owned and was already restoring. By the end, I spent out of pocket over 60,000 in legal fees fighting off the petitions. My bank was significantly or pardon me, my bank loan was significantly impacted by this petition and it cost me additional legal fees, tens of thousands of dollars more to fight off a chain of predatory and deceptive practices within the loan process that included bank sales and assignment of my note and a fraudulent transfer of the deed to my property despite the judge's orders not once, not twice, but three times. But for the predatory Act 135 petition, this would not have occurred. I'm still fighting justice. Like I said in the beginning, this property was not abandoned. This property was not blighted. And I asked myself the question, was stealing the intent behind Act 135. I lived and labored through this hard part of ownership of economic development in this area. I build equity and intergenerational wealth in my property. And once it started to look like something attractive, here comes the petitioners, the petitions and the steal. So my suggestion, and I have a few: First and foremost, let's make a motion for a moratorium so we can realign ourselves, so we can have a reset button, so we can examine. I'm open for questions.
Thank you for your testimony. If you could stay there and then as soon as Erdis is finished, we'll ask questions to both of you if that's okay. Erdis, if you can just state your name for the record and then proceed.
Yes. Good morning, Council. I stand before you today to shed light on a person --
Yes. I stand before you today to shed light on a personal ordeal that has tested me in ways I never imagined. It concerns the conservatorship law Act 135 and its profound impact on my life. While my battle with breast cancer now in remission initially seemed like the greatest challenge, Act 135 emerged as a greater obstacle, imposing emotional, mental, physical and financial strains exceeding those of my chemotherapy treatment. It all began in 2018 when a developer approached me about selling our family home, a place steeped in history located in the historical neighborhood of Lancaster Avenue since my parents acquired it in the 1940s. Despite my firm refusal, the situation escalated when my brother who lived in the house fell ill. Accusations were held against him by the developer leading to his forced commitment to a mental facility after being diagnosed with Stage 4 lung cancer. Amidst to chaos, I faced constant harassment regarding my property. Despite my desire to preserve our family's legacy by renovating it for my children, I became ensnared in accusations of fraudulent transfer. As the last living heir entrusted with handling my brother's affairs, the property rightfully belonged to me. The developers' relentless pursuit dragged us through the legal system for five grueling years involving court appearances related to the conservatorship mostly conducted via Zoom due to the pandemic. Despite COVID-19 hindering the rehabilitation process, relief was denied under these circumstances. Additionally, it's worth noting that the developer was outside of jurisdiction residing outside of Philadelphia. Today I urge you to recognize the human toll of Act 135, affecting not only my family but countless others facing similar injustices. I've had to depart from a career I held for years and I'm now on disability due to issues caused by this greed-driven legislation. While I retain my property, it's bittersweet. The developer walked away with a settlement of $29,000 with $18,000 allocated to attorney fees. Moreover I had to provide a $50,000 bond, a burden I was not expected to bear. Despite not being granted conservatorship, the developer profited from ill-gotten gains. This law is unjust and must be rectified. Thank you for allowing me to share my story with you today.
Thank you so much. And hearing those stories, it's really understanding why this bill needs to be looked at and adjusted.
Okay. If you want to show them, somebody will come over and pick up pictures that we will submit to the record.
All right. Thank you. Right behind you. And I know one of the suggestions was to put a moratorium on there. What other suggestion would you -- yes?
Well, I think one of the things that we should consider -- ready?
Well, one of the things I would think as far as solutions could be to eliminate the immediate placement of lis pendens. Lis pendens, what does that do? It puts a claim on your property and encumbrance you to the claim. It gives the petitioner control. It puts the petitioner in a primary position of control, control over years of equity in your property. The property owner loses control immediately. The petitioner is given more power than the property owner and even if and/or when the claims are justified, the lis pendens has to be either satisfied or withdrawn. That's one thing. Obviously there's many conversations on the percent commission clearly is beyond that. Just compensation -- if, in fact, there's going to be some property (inaudible) have to be liquidated. Well, I mean just compensation should be the law I would think. There is no just compensation in this particular process. Why? Because these guys come in, they don't pay for it. I heard the gentleman, the Councilman earlier, very little, if any, risk is being beared. They strip all the equity. You understand, that people are deemed nothing. I don't think that's fair. I think also another idea I think was coming from other folk was notice, notice that there is a problem, there's some violations, could you address them. This was something that was done in Act 90. Act 135 said too slow, okay. And obviously those are some of the five things that I think --
Real quick too. Percent -- what time of notice? Is it a 60-day notice?
Councilman, I don't know because I haven't looked at it. But I do know when I was cited with Act 90, man, they gave me 60, 90 days, 120, depending on the level of restoration or violations that had to be addressed.
-- that that Act -- a notice that Act 135 may be used on your property --
No, no, no. 25 They gave you notice that you are now in an area that's up and coming. This is what they call an emerging market at that time. And so, they would say this property is not, you know, is blighted. They consider -- that's the language they use, a blight act. So they say you need to address it, here, here, the easements, the doors, et cetera. They laid out the criteria. So they gave you time to address it. As a matter of fact -- it's so incredible. I resolved it. I satisfied all violations. That's Licenses and -- all violations on this property. This is back in 2010, 2011. Before I can pay the little check $750, I was cited with Act 135. Okay. So what happened, it was an informa -- this was a data dump. Someone said, okay, this is a blighted property. You satisfied 90. We know you was on the list. Here comes Scioli Turco, Joe Palmer. I don't know this guy from a can of paint. And the aggressive, unlawful, egregious behavior. I have the receipts.
Thank you. Thank you very much. I'll go to Councilmember Gauthier.
Thank you, Mr. Chair. I wanted to thank both of you for sharing your testimony. I'm really sorry that you had to go through such harrowing experiences and I also appreciate, Mr. Johnson, all of the recommendations that you issued. I specifically wanted to address Ms. Erdis. I know that my office has been working with you around this issue and I'm really glad that you fought to keep your property because that's your right. You deserve ownership of your property, but this never should have happened, particularly because you were doing everything in the right way. You were trying to untangle the title. You were trying to make repairs to the property. And so, in this instance this was definitely used in a very predatory manner and I think it's shameful. We should not allow for people in our communities who are already dealing with a host of issues, whether that may be health or just struggling to get by every day to be preyed upon in this manner just because they live in a neighborhood that someone has deemed as desirable and profitable for them. So I'm really sorry that that happened to you and that you had to experience that on top of your health challenges.
I just wanted to ask if someone is out of jurisdiction how did that court case continue to go on because the second court hearing he was deemed out of jurisdiction? We went on for court appearances. How is 5 that fair when he does not live in 6 the City of Philadelphia? 7
Yeah. 8 So I'm not aware of your court case 9 specifically, but the law does 10 allow for -- if he owns property 11 anywhere within your vicinity, then 12 he's able to be recognized as a 13 party of interest. 14
As long 16 as he owns property within I believe it's 2,000 feet, they're considered to be parties of interest and may have the ability to file the Act 135 petition.
Because as I mentioned, this started in 2018. He started accusing my brother of things. Not to mention they were friends before all this even started. My brother became ill. He passed away. Before he passed away, I had to get everything in order so that was the first court we went to. The judge -- he tried to say I fraudulently transferred the deed. The judge said, no, I had to put my brother's affairs in order. He wanted my brother to sell me the property for what it was worth, not the dollar transfer. So he said I committed fraud. Well, if I did, everybody in the City of Philadelphia did because people do dollar transfers with their family all the time. So the judge said, no. He did, however, win a $50,000 lawsuit against my brother for defamation of character. But at the time I owned the property so my brother passed away, so he couldn't get anything that way. So here he comes, the next thing he did was file a conservatorship because of the first court thing. I was in court with him from 2018 until last year 2023. First, it was my brother's case but my brother was no longer here. He passed. So I had to take over all of that. And then he filed the conservatorship during COVID so I wasn't even -- I know it was, you know. I had filed for funding which I was approved for like December 2019. My brother died July 2019. I even went to Germantown to learn how to do the rehabs and everything, Jumpstart Germantown, even took those classes because I didn't really know what I was doing but they explained everything to me. So 2019 my brother died July. I was approved for funding like December. And then 2020 COVID hit so all the funding stopped. So at this point he files the year of COVID for this conservatorship because he didn't win the first case like he wanted to. So that's predatory to me. That's what I'm talking about. This is awful what I had to go through. It is absolutely awful. And I'm not blaming any of the attorneys on either side that they're on. They have a job to do. But this Act right here, something has to be done about it.
I did want to just address the comment about the sort of geographic. One of our concerns is the geographic radius related to the Act. So currently someone can file a petition on a property within a multiple-mile radius. And we think that also invites speculation. That also invites predatory behavior and it also sort of works against the original intent of Act 135, which is to have people who live in a community be able to revitalize that community. So I definitely think that's one area of the Act that needs to be looked at.
I think the bond also needs to be looked at. Who has $50,000 to just put down on a bond? Thank God for my family and friends because I don't know how I would have did it. But I don't just have $50,000 I can put on a bond just to keep my property.
That's not right. I don't think that's fair. I was making over $100,000 a year. Now, I'm out on disability. But I still have to pay the $29,000 which I'm going have to go on a payment plan. That attorney still deserves to be paid and I have to pay the -- forgive me. The developer, I still have to pay the developer. But now I'm out on disability. This is crazy.
I think what you shared, what both of you have shared are some of the most striking examples of why we need change here. So thank you so much.
Yes. And just for the record, I just want to note once an Act 135 petition is filed, a lis pendens is essentially given to you as a right to be placed on a property. And so, what a lis pendens is essentially a term for pending litigation in Latin. It lets the world know that there is litigation involving your property. And so, if you're trying to get any financing, if you're trying to sell the property, it becomes an encumbrance on your property that makes it more difficult for you to move out with those transactions. So it puts the world on notice that essentially this property is subject to litigation and no one's going to really do business with you or transact business with you regarding your property as long as it is pending in litigation. So that's something that places another burden on the property owner. And as the witness testified to a bond, the language in the Code says the court shall make the petitioner pay a bond essentially, right. And a bond is whatever the cost of rehab would be, you have to place that money in bond if you are appointed or you are granted what's called conditional relief to rehab the properties yourself. So that's another financial burden that's being placed on the petitioner, the owner of this property, again with little to no financial burden on the folks who filed these petitions.
Pardon me. Before we conclude, I think what we're talking about is the abuse.
We understand procedurally some of the characteristics of that. And on the surface it's a really good Act. I have written former Councilperson Petri in reference to this back in 2015, 2016. It is the abuse. It is the bad actors. These are the folks that are creating straw corporations. These are the folk that are like insider trading. These are the folks that are influencing and affecting Licenses & Inspections. Okay. I got the receipts. How can you have a property where you approve permits and then when someone get assigned a mortgage, I know my time, and now they're magically rescinded. So this is just the first. It is the abuse. It is the corruption that people are having issues with. And so, those are the things we got to look at. But those are the bad actors, so how do we make them accountable.
I agree. It's about the abuse, right, the abuse of Act 135. I don't perceive any of us as saying that it's all bad. In fact, I've seen it used in a positive way, right. In particular, there was a house on Walton Street in Southwest Philadelphia in my District that was abandoned and there were drug sales happening at this property, there were shootings connected to this property. The neighbors on the block reached out to me. I did everything I could for almost a year to bring the police together with the neighbors, to bring L&I to the table to see what we could do to shut this activity down and put this property back into productive use for these neighbors. We couldn't do it. We couldn't do it. Tax sales weren't happening. There was log jam in the court so all of our L&I citations weren't able to move forward in the courts. And the neighbors, they worked with Scioli Turco to file a petition and they were able to get this property and put it back into productive use and now that activity has ceased. So that was a very positive example, and that was an example of where Act 135 was like the only tool available to us to make that block safe again. But what you described and what Ms. Erdis described is not. It's very predatory. And that's the Act's activity that we have to strike out.
In response to that, Councilwoman, we're talking about the disproportionate -- I can cite some cases where they did the right thing, you understand, they did everything to letter. But I can assure you that the abuse far outweighs the good.
My property is worth $1.45 million. I'm fighting now. I'm fighting now. Meaning that it was fraudulently transferred.
Not fraudulently transferred very important against judge's orders.
Absolutely. This being used to steal wealth from Black and Brown people is absolutely what we have to stop, right. That's not a productive use and that wasn't the original intent.
Yes. And I just want to echo the sentiments of my colleague. In your sentiments as well, it's the abuse that is causing issues which has brought this to my attention. I represented a client where for some reason he gets his taxes at his address, but for some reason L&I notices go to the property, right, why is that. He had no idea that the property had official code violations against it because they were sending it to the property where he does not live. But he gets his taxes where he lives. He gets other notifications from the City where he lives. And so, I just think that it's important to bring L&I into this conversation which is why I was hoping they would be able to testify today to talk about how they provide notification to property owners about certain violations and things like that. So it is the abuse that we are trying to eradicate. But we want to make sure that folks -- because the abuse is what is draining the equity from our property so we want to make sure that we get rid of this abuse.
Just -- and I know I've taken far too much time, but we're talking about Licenses and Inspections that's been weaponized. That would be a more appropriate way how it is done. I've taken far too much time right now, but I have the receipts. I know weaponization when I see it. Okay. So we're talking about that. And I understand we got some -- it's a very dysfunctional kind of organization over there and we're trying to get that back in some kind of order, but until then they're being exploited and weaponized. That's a couple things.
Thank you. I really appreciate your testimony today. You said some insight to a lot of things.
Can we please have Pilla Parker and Shane Randall. (Witnesses approached Witness table.)
Good morning. My name is Pilla Parker representing Elizabeth Cox, my grandmother who owned the property. All right. I'm pleased to provide additional context and information regarding our experiences with Act 135 and the petitioning nonprofit organization. Before sharing our testimony, we would like to sincerely thank Penn Law Center for their efforts and Powelton Village Civic Association for all their support, particularly Deb McCarty. The articles published by The Inquirer provide a summary of varying experiences and the disparity demonstrated regarding race and ethnicity. The articles were well- written but they failed to adequately share our experiences with Scioli Turco, particularly the attorney and the staff of the organization. Additionally, the articles failed to address the lack of oversight and support from public officials, particularly support for Philadelphia's elderly community. And I shared some articles, artifacts. But attached are a series of emails between myself and Rick Vanderslice, the attorney representing the organization. The emails provide an overview of our experiences. Additionally, you will see several public officials, including Assistant District Attorney were contacted along with the Councilmember's office. No one responded to my emails or voicemails left. Concerns were not addressed. The emails shared in the following bullets further support our claim that the organization and similar organizations are simply property predators who are thirsty for high-value historic properties owned for generations by African American families in the name of urban renewal. The family not only questions the merits of the law but also questions the practices of the organization that start to steal the family home. We also questioned the nonprofit status of the organization and the parent organization. Is the parent organization tasked with assisting people or simply a fraudulently- formed nonprofit to claim the wealth of the community it's tasked to support. Please note the following in our experiences: On December 24, 2022 we had a devastating fire in the family. The entire house was destroyed by fire except for the first floor and the basement. Three months later I received an email -- I live in Maryland. I received a petition via mail that was sent to me addressed to the unknown heirs of 3802 Effie Fox Way, Upper Marlboro, Maryland where I reside. No name was provided. No 16 additional information is included in the addressee portion of the letter. It was only by the grace of God that I opened the letter. To me, an example of fraudulent deceptive practices. Upon review of the letter, the documentation submitted to the courts and the petition there's no evidence that the home was legally vacated for over months. So I received the letter, and it said to the heir of 3802 Effie Fox, no addressee, nothing listed. My grandmother had to relocate to live with me in Maryland because the home was under remodeling, renovation. Aside from the written claim, no evidence was submitted to justify this condition in their petition. Several of the images presented in the petition were taken within two weeks of the fire as noted by the Christmas decorations I see on sidewalks and the lack of boarded-up windows. The documentation submitted for L&I clearly indicates blight, but it also states December 24, 2022 as the date which is the date of the devastating fire. The petition was received March 2023, so within three months. Although highly inappropriate and (inaudible), the organization requested evidence that the home was in remediation, restoration. It was provided. What's most alarming is that we had to justify that the home was not vacant prior to the fire, but that this organization can simply state in their petition that a public search was completed without evidence. And we spent resources to combat the property predators.
Further evidence of fraudulent and predatory practices, especially on the elderly. Although evidence was provided to the attorney as noted in the supporting evidence shared, he was not willing to withdraw the petition. He only withdrew the petition once he spoke to the president of Powelton Village Civic Association Deb McCarty. The evidence, insurance claims, et cetera were not enough. He relied on the word of a community ally who knew the family and not on my word or the evidence provided. One could question the systematic racism from the example alone. The attorney discussed the case freely without my permission, agreed to waive the petition only after discussion with the community ally who happens to be Caucasian. Our written evidence and images were not enough. The attorney indicated that I needed to have our attorney respond to him. An experience reminiscent of the days gone by when African Americans' freedom and community standing need to be vouched for by a benevolent person of European descent. A public search shows Warren Cox, who's my uncle, also lived at the residence along with Elizabeth Cox, my grandmother. In the documentation submitted to the court, there is no evidence aside from statements that a public search was actually committed. A simple knock on the neighbor's door and contact with the Historical Society would have informed them that the home was occupied. This is further evidence that this organization had no interest in truths or facts that two family members lived there, my grandmother and uncle. Mail was delivered to the home until January 2023 as documented by the forwarding address. All utilities were up-to- date. There were no liens on the property. Insurance was maintained and property taxes were paid in full. No neighbors were contacted despite the comments made by Joe Palmer. As an active member of the community for 70 years, they would have confirmed the occupancy of my family, not to mention that the Daily Newspaper, the Philadelphia Inquirer was regularly distributed there. Who's paying for the delivery of a newspaper for a year in a vacant home? What's most alarming is that we have to justify that the home once again was not vacant prior to the fire, but this organization can simply state in their petition that a public search was done and completed without evidence and we have to spend resources to combat the predators. They also said my uncle was a squatter. As I mentioned, a simple knock on doors would indicate that he was not. Further evidence of fraudulent predatory practices, especially on the elderly. There is no coincidence that the Philadelphia Historical Commission designated the property as historic in the release of its March 13, 2023 Philadelphia Register of Historic Places. A week or so later the petition was filed. There are plenty of homes across the City that Scioli Turco doesn't appear interested in restoring. Please note the lis pendens is dated March 23, 2022 not '23, which shows there's really no 9 oversight in terms of documentation submitted. In November 2023 the organization changed its name. If it's doing such great work, why the name change. Recommendations: Better oversight is needed and financial resources to address the blight; better oversight and review of documentation. We question the true process to really review the documentation submitted to confirm blight is actually in place and that this organization has submitted the appropriate documentation. Also, community arbitration before court. There should be a way to discuss the concerns before having to spend time, resources to combat it in a court. Support for elderly homeowners. It's just by the grace of God I looked at the message. She did not receive any documentation. It was mailed to me without name, without context and I searched Google, right. I Googled it, but how many 98-year-olds can do Google, right. Then more responsive body of public officials.
Thank you. We'll wait for questions and comments until you're done testifying. Please state your name for the record and proceed.
Thank you. My name is Shane Randall. Greetings, City Council. I'm a law-abiding citizen and taxpayer of Philadelphia, born and raised here. I'm a social worker and first responder. I've been a social worker for 20-plus years and I consider myself a person who helps beautify the City through building souls and lives. That's what I was trying to do with my family home, rebuild it and make it beautiful. Then I was served with an Act 135 petition and everything went wrong. 712 South 23rd Street has been in my family since the 1920s. Most recently my mom lived there. It's where she grew up. She moved out, transferred the deed to me. It was going to be my family's dream home. I felt special and honored that I'd be living in the house where my ancestors lived. The house has so much character, history, so many stories. In 2016 I started work. I hired an architect in 2017 and a contractor in 2018. Displayed their permits in the window. In the summer of 2018, I received a call from someone who wanted to purchase my home. I said no. A few months later I received an Act 135 petition and thought it had to be a mistake. The court process was a nightmare. I was painted as an absentee homeowner who didn't care about his own home. My opponent painted my contractors as junkyard dogs that didn't know what they were doing, even though they are well-experienced licensed contractors that came highly recommended. I wondered was I being taken to court because of what I looked like, was it because they were African American. Back then I was a first responder with the Philadelphia Fire Department in Kensington. I didn't have the means to hire a high-powered attorney to fight their three to four attorneys who came to court. Based on what the other side argued, I had to attain a special make-safe inspector from L&I and hire my own engineer. They both said my home wasn't in any danger of collapsing, the neighbor's house wasn't in any danger and I had no structural issues to be concerned about. My home was safe. Even though I had that on record, the judge made Scioli Turco the conservator. You might say to yourself maybe there was another problem, the house needed work. My home sat untouched for almost two years before they started renovations. So much from my home collapsing, being a hazard to the neighbor's home and causing blight to the neighborhood. At the rate they moved, I would have finished my own renovation, built two decks and my family would have been living in my family ancestral home for over a year. I was granted conditional relief so I did all the renovations. They wanted me to stucco the rear of the house. I stucco'd the rear of the house. They wanted me to point the bricks. I pointed the bricks. They wanted me to paint the house. I painted the house. They wanted me to seal the windows. I bought new windows. I went above and beyond to satisfy my conditional relief. I brought pictures for evidence to court. The petitioner pointed out tiny problems with the work. The court believed them, not me. And just like that my conditional relief was revoked. I was devastated. In court my adversaries labeled me as someone with no credibility, no integrity, no honesty, when in fact all along it was them. I lost my job with the City. I was spending thousands of dollars before the petition was brought. I spent thousands of dollars to try to defend the property, make the required repairs. As the years went by and I kept fighting for my ancestral home, I started to feel like I wasn't just fighting a plaintiff. I felt as though they had the whole city behind them and I had no one. These companies taking advantage of regular people is leading to gentrification, displacement and segregation. Why do you want a segregated city? The data is out there that segregated cities do not work. The cities that are segregated are trying to integrate because in the end, it causes more problems. The findings from Penn prove this law is not being used properly.
People are being discriminated against and preyed upon. I appreciate the late Chris Sample and Council President Kenyatta Johnson for their efforts in trying to advocate for me, but more must be done. No one else needs to be a victim of this. You have the power. Please use it and help those of us who unfairly lost their properties because of this law. Thank you for your time.
Thank you. Thank you both for your testimony, Mr. Randall and Ms. Parker. Hearing those concerns really adds to the I think necessity of having our state legislators look at this in a way that could address what we're hearing today. So thank you for that. Councilmember Gauthier.
Yeah. I wanted to thank you both for sharing your testimony as well. I'm really sorry that you had to go through that. Ms. Parker in particular, who your property is in my District, I'm glad we were able to provide you with a letter of support for your hearing, but I'm really sorry that you had to experience all of that. The petition --
With all due respect, no one from your office responded when we requested assistance at the time.
Oh, my Director of Equitable Development said we provided a letter of support for the hearing and we invited you here today or am I missing --
Okay. I'm sorry if we erred in some way. I'm receiving different information, but I'm also sorry that that happened to you in the first place. And I appreciate all of the recommendations that you gave. Thank you so much. We'll definitely take that into account, and I think those are good recommendations for how we should be considering this law moving forward.
And I have to be honest, what's most alarming is that when it was happening, I really did email and contact everyone that we could think of and no one provided any support, no 18 advocacy. Provided documentation to the attorney and the way they approached it was very smug and it was most alarming that this is supposed to be a nonprofit, right. So a nonprofit is tasked with supporting the people that's supposed to serve.
But they're making profit. And the question is what are they doing with the profit, you know. What's the salary. I mean, has anyone reviewed this, looked at the 990 to see exactly how much are they being compensated for all this work. If they really are nonprofit, you're supposed to help with property retention, support, remediation, remodeling. That's what other cities are doing. Other cities are offering grants to elderly homeowners to rebuild, remodel, recognizing that property values and taxes have gone up, but they're not doing it. And I just hope this conversation is not on deaf ears and that you do make a difference and change.
Absolutely. First of all, I do apologize for any miscommunication. I'm really being told something different and we would have wanted to support you in any way that we could in something happening to you that was so unjust. On the other issue of support to residents, we do provide grant support for residents to do critical repairs to their homes. It's a pretty popular City program called Basic Systems Repair, but it does get oversubscribed.
Yeah, but you have to meet a certain economic level. So if you're not disenfranchised, you're not in poverty, you don't qualify for certain support. So as my grandmother who's brilliant, retired from the IRS she doesn't meet some of the guidelines and requirements, so how does she get support. How do someone at 98 years old navigate systems to get support for building -- and it's only because she put my name as next of kin in City Hall on documentation that I'm even, one, able to advocate for her and, two, that they know I existed, right. But how many people who are elderly did not have that mindset to do that. So there are a lot of properties being lost and people don't even know about it because there's no true system in place to support the elderly especially.
Yes. Thank you. I want to thank you both for your testimony and, again, echo the sentiments of my colleague. We're sorry that you had to go through this. As I stated before, I've represented clients trying to protect their properties from Act 135, so I know the emotional toll that it plays on folks, particularly when you feel like you're being taken advantage of and you're being preyed upon. But a question for Mr. Randall. You had permits to renovate your property and was actively in a renovation process and your property was still found to be abandoned and blighted?
That's correct. I had contractors, permits. I had everything that you need to complete a renovation in the City and they were still able to bring the petition up front to court and I still had to hire an attorney and everything to fight it.
Thank you. Just wanted to get that on the record. I do think that one change that we can advocate for in the Act is that if there are active permits of renovation, that it does not meet the standard of the Act because currently I don't believe that's mentioned in the Act now. But that's something that I'll look to advocate for and make some changes to. So thank you for that.
Thanks again for your testimony and advocacy. Mr. McMonagle, can you please read the next panel to testify.
Yes. Can we please have Paul Toner, Michael McIlhenny and Richard Vanderslice. (Witnesses approached Witness table.)
Then we'll bring up Beth Grossman since she's already walking up.
Good morning, Paul. If you want to just start. State your name for the record and then proceed with your testimony.
Good afternoon and thank you all for your time. Act 135 is a very important Act for the City of Philadelphia and for the residents of the City of Philadelphia. And before I get into my presentation, I'd first like to acknowledge that the testimony we heard here today is incredibly important for understanding Act 135. The Act does and certainly does impact individuals in a meaningful way and I'm not here to state anything on what I heard in terms of their personal experiences. They weren't my clients. I knew nothing about their cases. They're certainly good people and they had a story to tell. So I'm glad I was able to hear their story today. What I'm here to talk about today is the legal side of Act 135 and I've presented written remarks. They're in the record, and I'm not going to read them verbatim. But I'd like to highlight a couple most salient points. One, there is a really high legal burden for the appointment of a conservator. The court system has a direct involvement in every single Act 135 case from the time a petition is filed through to whether there's an important appointment or there's a dismissal. And today we heard what appeared to be some overreaches of Act 135. And again, I don't know the particulars of those cases, but what was heartening to hear is that the system in some ways seem to have worked. When an action was an overreach, the petitions were dismissed. They weren't successful petitions. And so, as we look at Act 135, you can't ignore the fact that the system is set up for direct court involvement. Some of the most well- respected and distinguished jurists in this City have been tasked with the oversight of Act 135, including two that ascended to the position of President Judge of the Philadelphia Court of Common Pleas. And in terms of the burdens for Act 135, a comment was made earlier that basically every vacant property qualifies for Act 135 and I couldn't disagree more with that statement. In order for a property under the burdens of Act 135, the way the judges here in Philadelphia implement the law and the way the law is implemented throughout the Commonwealth of Pennsylvania, in order for a property to actually be subject to a conservatorship appointment it has to be a dangerous property. We're talking about properties that impose a direct negative impact on the neighbors of those properties. And that is the second part of my remarks today, the neighbors. The neighbors to an abandoned and blighted property are perhaps the ones who have the greatest impact or are greatest impacted by the abandoned and blighted property. For a neighbor who is forced to reside next to a property that's unoccupied, with drug use, that's structurally compromised, in many instances in a state of partial collapse, these neighbors, these citizens, these are all people suffering significant personal losses to themselves, to their family, to their property, to their safety and to their economic well- being. If one were to look at three homes that are all in a row like they are in every neighborhood throughout Philadelphia and you have a property that actually meets the standards for Act 135, it's a dangerous property. It's causing a direct nuisance on its neighbors. There are three stories to tell right there. The person to the left and the person to the right, they're suffering significant economic loss. They're suffering significant safety of their family.
And in many circumstances -- and I invite anyone who wants to understand the process to come to court, to listen to how these cases are actually presented, to read the petitions, but most important to listen to the neighbors who come into court and explain how they can't leave their house, that there's people who are shooting guns next to them, the way it's destroyed their ability to sit out on a stoop on a Tuesday night and hang out with their friends, I mean at the core that's what makes a lot of Philadelphia great is being able to sit there with your friends and your family. And if you have an abandoned blighted property and it actually qualifies under Act 135, you're depriving everyone around you of the chance just to have a basic normal livelihood. So I'm here and I'm happy to answer any questions. But fundamentally, I asked the Council and I know this Committee and especially I know Councilman Young, and I'm glad to see that you've taken this on and that you're putting your energy behind this, but I hope everyone looks at two important things and take into consideration two important things. When they evaluate any Act 135 case, one, it has a high legal burden. Was that burden imposed by the court, did the person whose property was put within a conservatorship, was that haphazard or is that because their property really was dangerous to their neighbors. And I think in terms of the way the Act should be viewed, the Act as an overall Act, and I'm not talking about the bad apples out there. Everybody wants to see the bad apples held to account, but overall the Act is the dangerous property Act. And Act 135 is doing a lot to address dangerous properties in the City of Philadelphia. And with that, I'm happy to answer any questions about this Act.
We'll defer questions until after Mr. Vanderslice speaks. I mean, nobody's opposing what the Act was intended for. I think what we're looking at is how to make it better, so I think that's the goal. But let's have Mr. Vanderslice.
Thank you, Councilman. And thank you, Councilmembers, for the opportunity to speak with you here today about this important Act. If I could, I'd just give a brief history of how I became involved in the Act. A person --
I'm sorry, Councilman. Richard Vanderslice. Someone who's speaking later here today, Ms. Berkman, who I consider a mentor asked me to join a committee to form a general court regulation for implementation of the Act. And the Act appealed to me because I'd spent several years representing the person on the left and the person on the right who had no 23 recourse. People who were next to buildings with fractured walls, water intrusion, bricks falling near children at a school like 1700 Christian Street owned by Lurube --
Well, you can't -- all right. Well, let him speak and we'll ask questions. But you can't -- if we call you back up to let you --
All right. You could do that, but you can't speak from that -- thank you.
Additionally, properties that have fecal matter in the rear of the property, been cited for falling bricks, broken windows, urine strewn towels along the fence line that tenants on either side have had to deal with.
Mr. Vanderslice, I don't want to stop you testifying, but we understand -- nobody's arguing that point.
I think that the important thing that would address a lot of the underlying conditions that cause these properties to become abandoned and blighted would be to pursue and help citizens with tangled title issues. There are already several programs available that could be funded through the volunteers for the Indigent for Philadelphia. Additionally, the former Register of Wills Ms. Gordon as well as Jim Leonard, the current Recorder of Deeds, have initiatives to educate our citizens about all tangled title issues, inheritance issues. A lot of these properties sit for decades with deceased owners. And as you've heard, it's difficult to find those people and try to communicate with them about their properties. Further, I think that the ordinance that was passed that has required LLCs to register, which is also difficult for not only the Department of Licenses and Inspections to find the properties that are causing these problems for the neighbors, to have a greater enforcement of that would be steps in the right direction. Thank you.
Thank you. Beth, are you going to testify or are you just here for support?
Okay. Just state your name for the record and then testify. Then we'll have questions.
My name is Beth Grossman, G-r-o-s-s-m-a-n. And I am Managing Director of Rebuilding Blocks, formerly Scioli Turco, Inc. and the name we rebranded was changed not as a result of this hearing, but we wanted something that gave a hint of what we do and that people could pronounce. So I thank all of you for your time. Just briefly, we are a mission-based nonprofit. We are 501(c)(4), which I joined in February of 2020. We report to a board. People can look at our 990 filings and we're legitimate. Our mission is to help community groups and residents identify abandoned and blighted properties and see what we can do with them if they are appropriate for an Act 135 hearing. And I understand and I commend people for coming in to talk about their experiences. Look, nothing in court is pleasant. People don't want to be there and I understand concerns. But again, as my colleague here testified what cannot be ignored are the sufferings of neighbors because neighbor properties as well, that's their generational wealth. I spent a year as Chief of Staff in the Department of Licenses and Inspections where I really learned a lot about buildings, including those are identified as unsafe or imminently dangerous, and the last thing that anybody wants in Philadelphia is a collapse and neighbors should not be suffering as a result of that. The majority, almost 99 percent of our cases come from referrals from neighborhoods, CDCs, BIDS, elected officials, people reaching out on our website. We do not take all cases because some cases do not qualify, yet some do. But I will make it clear, I know that there may be other nonprofits out there who seem to be using this perhaps in a predatory manner. I don't know very much. I don't engage with them. But I know that we are just strictly mission-based and we are always happy to work with respondents. If there is something that could come to an amicable agreement, we're happy to. I know in the past prior to my coming to what was then Scioli Turco we've worked with property owners to lift lis pendens as well as return any bonds that have been filed so they can get financing for their ability in conditional relief to cure their blight. And I'm always interested in seeing how a statute or an Act can be improved. It's really been quite some time since this has been and perhaps it's time to review it whether in Harrisburg. And it's always -- I think it's fresh. It's always good just like an organization should always review at least once a year its mission statement, its Articles of Incorporation, what it is subject to do. For example, I know the possible diversion program for Act 135. It's very important to me to level the playing field that people understand, respondents understand what this Act is. And if somehow Council would volunteer and come and step up, whether it's to the Bar Association or VIP or some other program, that makes me more comfortable. I don't enjoy having a case with a pro se individual. That's just not what it should be. And I know our court is very cognizant of that. But I am happy to work with City Council. Councilmember Young, I'm glad you brought this to the attention. It's been a pleasure working with you. You saw how we can work collaboratively in certain cases, which I am always happy to do. And I just thank you all for your time.
Thank you all for your testimony. And I think it was made clear by most members here that we do see a need for Act 135. We've used -- all our Districts have used them for the right reason, for the right cause, so we do see that. But then we also do see the other side where people feel like they've been unfairly taken advantage of. So I mean, our goal here is to hear both sides of the story. But really the goal is to say how can we make this legislation better, how can we make the law better. And you heard about the lis pendens. You were willing to lift the lis pendens, right, the bond issue. Not everybody -- because once you have the leverage, not everybody's willing to do that, right. Now, if there was some notice, and I think we had some ideas of how to improve this notice and notify -- because really the goal is to have the person have the ability to fix it up or if they wanted to sell it ahead of time before it goes to court and have those extra fees, then at least they could jump on that and say, hey, well, you had all the chances you did before. Is that something that you would be interested or would you see to benefit maybe changing the law to allow some of those things to happen that would give the property owner more time to act before a lis pendens or something was set on them?
That's costs. I mean, if somebody fixes it and I'm paying for legal fees to do that and it comes to nothing --
Yes. But notice, we have to find somebody. What if they're not locatable? There have been some instances where we've had to hire a genealogist to find heirs which we do, which is costly. What constitution --
But you're mission-driven. You're mission-driven, right? You're there -- the goal is to --
Oh, I understand that. But the other thing is I also have a fiduciary responsibility to my nonprofit and to my Board. And eventually if we get there, you know, it also has the chance of increasing legal fees. And the other thing is do you do that in cases where there's been no L&I violations? Because to me I can show an L&I violation a notice. Now, I acknowledge that L&I can't inspect every house in the City and County of Philadelphia, and I've come across some that are absolute disasters that L&I has never been there. That's just the way it is. So it's a hazy area that probably needs to be maybe explored with a task force or a group of people to see what we can come up with.
I would agree and I think our state legislators would like to hear that too. Because at the end of the day, there are challenges that we hear, right. And I think the goal here even though we can't physically change the law here, we could advocate for those changes and try to help the people who we believe and even the people who said that they see a benefit to it, right, the people who are involved in this. But at the end of the day, if we could either give them more time and I understand there's costs associated but there's costs associated with any job that you do. And then if it's mission- based, you're doing it because the goal is to end the so-called blight, right. And so, the neighbors on each side and everybody who's dealing with that can get the remedies that they want. But what we're looking for now is suggestions and maybe it's something we put together at the end of this, maybe a little task force to make full recommendations to the state. We just want people from both sides to be able to be a part of that. And I think just to say that, well, it's going to cost a little more money if we do this, I don't know if that's really something that would be against making those changes if it does cost --
Maybe not, but I just have to be realistic about it. Maybe it'll work. Maybe it'll be very effect -- look, we just want to eradicate the blight.
So the way the system is set up now the petition's filed and the property is posted. So if you own a property, the clearest way that you should know that your property is subject to an Act 135 conservatorship is when the big poster goes up on your front door. And so, people who claim that they don't know it's coming up, it means that they're not really at their property or not controlling their property, which tends to be one of the problems of how it becomes an abandoned property. In terms of the statutory process and the regulations here in Philadelphia, so we don't go from petition to appointment hearing. There's a status hearing and there's often two, three, four, five status hearings. And the way the statute's structured, it's a may statute. So at the end of the day, the judge always can just say we're not going to appoint a conservator. But because it's a may statute and because it's an in rem statute and because the judge is sitting in there has a court of equity, it has broad equitable powers. And so, for issues like the bond, issues like the lis pendens, if there is an equitable reason why either of those should be altered during the course of the Act 135 process, the system actually is currently set up to empower a judge to implement that. And so, here in Philadelphia these are really hands-on judges who are reviewing these matters. And going back to what I said in my opening remarks, these are not haphazard appointments. If it gets all the way to the point of an appointment, you have a judge who for a series of hearings will have spoken with the respondent, spoken with the neighbors, understood the legal problems, understand the financial difficulties as to why maybe they aren't able to immediately remediate the property. And the appointment is really a last case scenario for Act 135 hearings.
Thank you. For the record, Mr. Toner and Mr. Vanderslice, legally for service can you describe is this personal service still necessary for Act 135 petitions?
So it depends where the respondent is. If the respondent's outside the City of Philadelphia, service can be affected. By a form of service like FedEx, UPS that requires a personal signature on the package. In the City of Philadelphia, there is a personal service requirement.
Thank you. And it was mentioned that when Act 135 petitions are filed, properties get posted with the petition, correct?
And just from my practice area, I've seen that there are folks that go around the City that purposely look for filings on properties and take them down, right. So once you put them up, you take a picture of it, you satisfy your burden. But I know for a fact because I've seen it that when there are filings on properties, folks that are in the real estate business understand what that means. That means it's some type of litigation regarding a property and they tend to go around and take those down to try to see how they can use that to their advantage.
Yeah. So I think you're talking about the bad apple scenario. And, listen, I think that's the exception, not the rule. I can tell you when we present cases, we present pictures of the property posted. We present pictures of the property close to the hearing. And certainly none of my clients are taking down posters. And so, maybe in terms of recommendations, I mean we really want to go after the bad apples, not the people who are doing and implementing Act 35 in a proper way and ripping down Act 135 poster or a zoning poster or a notice from the City of Philadelphia when they implement a code enforcement action or a tax sale proceeding, that's an act of a bad actor, not someone that's doing things right.
And just for the record, I just wanted to note that the conditions of the properties, Mr. Toner, you stated most of these properties are dangerous. And I think that danger can be subjective in certain places. We do know that certain things have to be a hazard. For example, I'm just going to read off there are nine things that the court has and you need three regarding the physical structure, right, where the building is a public nuisance, the building is in need of substantial rehabilitation and none has taken place during the past 12 months. The building is unfit for human habitation, conditions exist that materially increase the risk of fire to adjacent properties; the building is subject to unauthorized entry; and the owner has failed to take reasonable measures or the municipality has secured it. The property is an attractive nuisance to children. The presence of vermin or accumulation of debris, dilapidated appearance or the property is an attractive nuisance for illicit purposes, including drug use, prostitution, vagrancy, et cetera. To me I think those are subjective, right, because -- and again, I respectfully disagree that I can point to multiple almost any vacant property in this City and find three of those as a condition that will allow it to be considered a factor in determining if that property is abandoned or blighted under the Act. So those subjective standards to me I think is what is creating I think the bad actors to act because it's so subjective.
Well, I think you have two categories. You have petition actions and full conservatorships where the judge has found that three of the six elements have been satisfied. And, listen, we can go back and forth over how dangerous each one of these elements are. But I look at these and with the exception of separate proof that the dilapidated appearance decreases property values, I mean, listen, I think anything that has illicit activity, has an increase in fire potential, is a dangerous nuisance to children, is a nuisance, like these are all objective criteria of a dangerous property. And the judge finds a cumulative number of these elements, cumulatively if your property is an attractive nuisance to children, it creates an increased risk of fire and there's illicit activity going on at the property, there's different ways to peel an apple. But in my world, that's a dangerous property.