Township of Union, PA
Berks County
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[HISTORY: Adopted by the Board of Supervisors of the Township of Union as indicated in article histories. Amendments noted where applicable.]
[Adopted 9-19-2011 by Ord. No. 2011-06]
No insurance company, association or exchange (hereinafter the "insurer") doing business in the Commonwealth of Pennsylvania shall pay a claim of a named insured for fire damage to a structure located within the Township where the amount recoverable for the fire loss to the structure under all policies exceeds $7,500 unless the insurer is furnished by the Township's Treasurer with a certificate pursuant to the Fire Insurance Escrow Act and unless there is compliance with the procedure set forth in the Act. [Note: Act 93 of 1994. See 40 P.S. § 638.]
A. 
Where there are delinquent taxes, assessments, penalties or user charges against the property damaged by fire ("municipal claims") or there are expenses which the Township has incurred as costs for the removal, repair or securing of a building or other structure on the property (collectively, "municipal expenses"), the Treasurer, or other person designated, of the Township shall immediately render a bill for such municipal claims and municipal expenses.
B. 
Upon written request of the named insured specifying the tax description of the property, the name and address of the insurer and the date of receipt by the insurer of a loss report of the claim, the Treasurer shall furnish, within 14 working days after the request, to the insurer, a certificate (or at the Treasurer's discretion an oral notification confirmed in writing) either:
(1) 
Stating that there are no unpaid municipal claims or municipal expenses against the property.
(2) 
Specifying the nature and amount of such municipal claims or municipal expenses, accompanied by a statement for such amounts. Taxes, assessments, penalties and user charges shall be deemed delinquent for this purpose if a lien could have been filed for such claims under applicable law.
C. 
Upon receipt of a certificate and bill pursuant to Subsection B(2), the insurer shall transfer to the Township Treasurer an amount from the insurance proceeds sufficient to pay such sums prior to making payment to the named insured, subject to the provisions of § 116-3 hereof.
When all municipal claims and municipal expenses have been paid pursuant to § 116-2, or where the Treasurer has issued a certificate described in § 116-2B(1) indicating that there are no municipal claims or municipal expenses against the property, the insurer shall pay the claim of the named insured; provided, however, that if the loss agreed upon by the named insured and the insurer equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the building or structure, the following procedures must be followed:
A. 
The insurer shall transfer, from the insurance proceeds to the Township Treasurer, in the aggregate, $2,000 for each $15,000 of such claim or fraction thereof.
B. 
If at the time a loss report is submitted by the insured, such insured has submitted to the insurer, with a copy to the Township, a contractor's signed estimate of the costs of removing, repairing or securing the building or other structure in an amount less than the amount calculated under the foregoing formula, the insurer shall transfer to the Township Treasurer, from the insurance proceeds, the amount specified in the estimate. If there is more than one insurer, the transfer of proceeds shall be on a pro rata basis by all insurers insuring the building or other structure.
C. 
Upon receipt of the above-described portion of the insurance proceeds, the Township Treasurer shall do the following:
(1) 
Place the proceeds in a separate fund to be used solely as security against the total municipal expenses anticipated by the Township to be required in removing, repairing or securing the building or structure. Such expenses shall include, without limitation, all engineering, legal or administrative fees and costs incurred by the Township in connection with such removal, repair or securing or any proceedings related thereto.
(2) 
Mail to the named insured, at the address received from the insurer, a notice that the proceeds have been received by the Township and that the procedures enacted herein shall be followed.
(3) 
After the transfer of the proceeds into the separate fund, the named insured may submit to the Township a contractor's signed estimate of the costs of removing, repairing or securing the building or other structure, and proceed with the work, provided that the Township has not commenced to remove, repair or secure the building or other structure, in which case the Township will complete the work and deduct the municipal expenses incurred from such separate fund.
(4) 
Pay as reimbursement to the Township general fund, the amount of the municipal expenses incurred and paid by the Township.
(5) 
Pay the remaining balance in the separate fund (without interest) to the named insured upon receipt of a certificate issued by the Code Enforcement Officer of the Township (or other applicable official of the Township) that the repair, removal or securing of the building or other structure has been completed in accordance with all applicable ordinances, codes and regulations of the Township.
D. 
Nothing in this article shall be construed to limit the ability of the Township to recover any deficiency in the amount of municipal claims or municipal expenses recoverable pursuant to this article or recoverable under any other state law, or other ordinance, or to insurance proceeds, by an action at law or equity to enforce the ordinances, codes and regulations of the Township or to enter into an agreement with the named insured with regard to such other disposition of the proceeds as the Township may deem reasonable.
Any owner of property, any named insured or insurer who violates the provisions of this article or who shall fail to comply with any of the requirements hereof shall be subject to the penalties set forth in Chapter 1, Article III, General Penalty.