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Deficiency judgments - 42 Pa. Cons. Stat. § 8103

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     § 8103.  Deficiency judgments.
        (a)  General rule.--Whenever any real property is sold,
     directly or indirectly, to the judgment creditor in execution
     proceedings and the price for which such property has been sold
     is not sufficient to satisfy the amount of the judgment,
     interest and costs and the judgment creditor seeks to collect
     the balance due on said judgment, interest and costs, the
     judgment creditor shall petition the court to fix the fair
     market value of the real property sold. The petition shall be
     filed as a supplementary proceeding in the matter in which the
     judgment was entered. If the judgment was transferred from the
     county in which it was entered to the county where the execution
     sale was held, the judgment shall be deemed entered in the
     county in which the sale took place.
        (b)  Effect of failure to give notice.--Any debtor and any
     owner of the property affected thereby, who is neither named in
     the petition nor served with a copy thereof or notice of the
     filing thereof as prescribed by general rule, shall be deemed to
     be discharged from all personal liability to the judgment
     creditor on the debt, interest and costs, but any such failure
     to name such person in the petition or to serve the petition or
     notice of the filing thereof shall not prevent proceedings
     against any respondent named and served.
        (c)  Action on petition.--
            (1)  If no answer is filed within the time prescribed by
        general rule, or if an answer is filed which does not
        controvert the allegation of the fair market value of the
        property as averred in the petition, the court shall
        determine and fix as the fair market value of the property
        sold the amount thereof alleged in the petition to be the
        fair market value.
            (2)  If an answer is filed controverting the averment in
        the petition as to the fair market value of the property, but
        no testimony is produced at the hearing supporting such
        denial of the fair market value, the court shall determine
        and fix as the fair market value of the property sold the
        amount thereof alleged in the petition to be the fair market
        value.
            (3)  If an answer is filed alleging as the fair market
        value an amount in excess of the fair market value of the
        property as averred in the petition, the judgment creditor
        may agree to accept as the fair market value of the property
        the value set up in the answer and in such case may file a
        stipulation releasing the debtors and the owners of the
        property affected thereby, from personal liability to the
        judgment creditor to the extent of the fair market value as
        averred in the answer, less the amount of any prior liens,
        costs, taxes and municipal claims not discharged by the sale,
        and also less the amount of any such items paid at
        distribution on the sale.
            (4)  If an answer is filed and testimony produced setting
        forth that the fair market value of the property is more than
        the value stated in the petition, the court shall hear
        evidence of and determine and fix the fair market value of
        the property sold.
            (5)  After the hearing, if any, and the determination by
        the court under paragraph (1), (2) or (4) of the fair market
        value of the property sold, then, except as otherwise
        provided in subsection (f), the debtor shall be released and
        discharged of such liability to the judgment creditor to the
        extent of the fair market value of said property determined
        by the court, less the amount of all prior liens, costs,
        taxes and municipal claims not discharged by the sale, and
        also less the amount of any such items paid at the
        distribution on the sale, and shall also be released and
        discharged of such liability to the extent of any amount by
        which the sale price, less such prior liens, costs, taxes and
        municipal claims, exceeds the fair market value as agreed to
        by the judgment creditor or fixed and determined by the court
        as provided in this subsection, and thereupon the judgment
        creditor may proceed by appropriate proceedings to collect
        the balance of the debt.
        (d)  Action in absence of petition.--If the judgment creditor
     shall fail to present a petition to fix the fair market value of
     the real property sold within the time after the sale of such
     real property provided by section 5522 (relating to six months
     limitation), the debtor, obligor, guarantor or any other person
     liable directly or indirectly to the judgment creditor for the
     payment of the debt, or any person interested in any real estate
     which would, except for the provisions of this section, be bound
     by the judgment, may file a petition, as a supplementary
     proceeding in the matter in which the judgment was entered, in
     the court having jurisdiction, setting forth the fact of the
     sale, and that no petition has been filed within the time
     limited by section 5522 to fix the fair market value of the
     property sold, whereupon the court, after notice as prescribed
     by general rule, and being satisfied of such facts, shall direct
     the clerk to mark the judgment satisfied, released and
     discharged.
        (e)  Waiver of benefit of section prohibited.--Any agreement
     made by any debtor at any time, either before or after or at the
     time of incurring any obligation, to waive the benefits of this
     section or to release any obligee from compliance with the
     provisions hereof shall be void.
        (f)  Certain special allocations.--Notwithstanding the
     provisions of subsection (c)(5), if the judgment creditor is a
     nonconsumer judgment creditor and:
            (1)  if the judgment has been entered with respect to a
        partial recourse obligation, the fair market value of the
        property determined as provided in subsection (c) will be
        applied first to discharge, as provided in subsection (c)(5),
        all liability for the nonrecourse portion of the obligation
        before any portion of such value is applied to discharge any
        liability for the recourse portion of the obligation; and
            (2)  if the judgment has been entered with respect to an
        obligation of which only a portion is guaranteed, the fair
        market value of the property determined as provided in
        subsection (c) will be applied first to discharge, as
        provided in subsection (c), all liability for the portion of
        the obligation which is not guaranteed before any portion of
        such value is applied to discharge any liability for the
        portion of such obligation which is guaranteed.
        (f.1)  Collateral located in more than one county.--
            (1)  If the real property collateral is located in more
        than one county in this Commonwealth, a judgment creditor may
        elect not to file a valuation petition in the court in each
        of such counties as provided under subsection (a) and shall
        not be subject to the penalties for failure to file the
        petition under subsection (d) if the judgment creditor is a
        nonconsumer judgment creditor and the provisions of
        paragraphs (2) and (3) are satisfied.
            (2)  The judgment creditor shall petition the deficiency
        court to determine and fix the fair market value of all of
        the real property collateral as provided under subsection
        (c)(1), (2), (3) and (4). The value shall be determined on a
        parcel-by-parcel basis, and the amount so fixed for each
        parcel comprising the real property collateral shall be the
        fair market value for the parcel for all purposes under this
        subsection unless redetermined as provided in paragraph (4).
            (3)  The determination of the fair market value of the
        real property collateral by the deficiency court as provided
        in paragraph (2) shall be made before an execution sale is
        held with respect to any of the real property collateral.
            (4)  (i)  If the execution sale of a parcel of real
            property is concluded and the judgment creditor is the
            purchaser of the parcel at the sale, then either the
            judgment creditor or the debtor may file a petition with
            the deficiency court seeking a redetermination of the
            fair market value of the parcel provided the petition is
            filed within the six-month period established under
            section 5522(b)(6).
                (ii)  If the petition is filed in a timely manner,
            the deficiency court shall redetermine the fair market
            value of the parcel in the manner provided in subsection
            (c)(1), (2), (3) and (4). The redetermined value shall be
            the fair market value of the parcel for all purposes
            under this subsection.
                (iii)  The filing of the petition for the
            redetermination shall not limit or affect the judgment
            creditor's ability to execute on the real property
            collateral unless and until the value is redetermined by
            the court. However, where the debtor alleges in its
            petition that an appropriate redetermination of value by
            the court with respect to property that has already been
            sold to the judgment creditor at an execution sale would
            be sufficient to satisfy the judgment in full, the
            deficiency court may issue a stay of further execution
            proceedings pending the court's ruling on the petition
            for redetermination of value.
            (5)  In cases subject to this subsection, the debtor
        shall be released and discharged from liability for the
        payment of the debt in the manner provided in subsection
        (c)(5) to the extent of:
                (i)  the fair market value determined by the
            deficiency court of all real property collateral
            purchased by the judgment creditor in execution
            proceedings on the judgment less the deductible items
            described in subsection (c)(5); and
                (ii)  the amount distributed to the judgment creditor
            as a result of the sale of the real property collateral
            purchased in the proceedings by third parties.
        (f.2)  Foreign collateral.--
            (1)  No deficiency court shall have the power to fix the
        fair market value of real property located outside this
        Commonwealth and may not take into account the value of that
        property in considering whether or not a deficiency exists
        under this section.
            (2)  This section shall not apply to the sale of any real
        property located outside this Commonwealth.
        (g)  Definitions.--As used in this section, the following
     words and phrases shall have the meanings given to them in this
     subsection:
        "Adjusted value."  The assessed value of a parcel of real
     property collateral determined for real estate tax purposes
     times the applicable common level ratio factor published by the
     State Tax Equalization Board.
        "Consumer credit transaction."  A credit transaction in which
     the party to whom credit is offered or extended is a natural
     person and the money, property or services which are the subject
     of the transaction are primarily for personal, family or
     household purposes.
        "Debtor."  A debtor, obligor, guarantor, surety and any other
     person liable directly or indirectly to a judgment creditor for
     the payment of a debt.
        "Deficiency court."  With respect to cases covered by
     subsection (f.1), the court of common pleas located in the
     county where the highest adjusted value land is located.
        "Highest adjusted value land."  The real property collateral
     located in a county that has a higher aggregate adjusted value
     than real property collateral located in any other county.
        "Judgment."  The judgment which was enforced by the execution
     proceedings referred to in subsection (a), whether that judgment
     is a judgment in personam such as a judgment requiring the
     payment of money or a judgment de terris or in rem such as a
     judgment entered in an action of mortgage foreclosure or a
     judgment entered in an action or proceeding upon a mechanic's
     lien, a municipal claim, a tax lien or a charge on land.
        "Judgment creditor."  The holder of the judgment which was
     enforced by the execution proceedings.
        "Nonconsumer judgment creditor."  Any judgment creditor
     except a judgment creditor whose judgment was entered with
     respect to a consumer credit transaction.
        "Nonrecourse portion of the obligation."  The portion as to
     which the judgment creditor's recourse is limited to the
     mortgaged property or other specified assets of the debtor which
     are less than all of such assets.
        "Partial recourse obligation."  An obligation which includes
     both a nonrecourse portion and a recourse portion.
        "Real property collateral."  All of the real property subject
     to a lien securing the obligation evidenced by the judgment and
     located within this Commonwealth.
        "Recourse portion of the obligation."  All of the obligation
     except the nonrecourse portion thereof.
        "Valuation petition."  A petition to fix the fair market
     value of real property sold as required by subsection (a).
     (Dec. 21, 1998, P.L.1082, No.144, eff. imd.; Nov. 24, 2004,
     P.L.1243, No.152, eff. 60 days)

        2004 Amendment.  Act 152 amended subsecs. (a), (b), (c)(3)
     and (5), (e) and (g) and added subsecs. (f.1) and (f.2).
        Cross References.  Section 8103 is referred to in section
     5522 of this title.
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