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Commercial Foreclosure Toolkit (PA)
Practical Law Toolkit w-028-9389 (Approx. 6 pages)
Commercial Foreclosure Toolkit (PA)
by Practical Law Real Estate
| Maintained • Pennsylvania |
A list of resources to help lenders, borrowers, and their counsel navigate the commercial foreclosure process in Pennsylvania. This Toolkit contains links to guidance documents and standard forms for use at all stages of a commercial foreclosure action.
Mortgage lenders foreclose in Pennsylvania by bringing an action in court (judicial foreclosure). Certain requirements (particularly pre-foreclosure responsibilities) differ depending on the type of real property securing the loan. The resources in this Toolkit apply generally to mortgages covering commercial property. For a collection of materials on residential foreclosures in Pennsylvania, see Residential Foreclosure Toolkit (PA).
Although each case has its nuances, most Pennsylvania commercial foreclosures follow the same basic workflow. The key steps include:
- Gathering and reviewing the mortgage, promissory note, and other loan documents.
- Conducting a title search to:
- confirm the mortgage is recorded and whether any assignments are required; and
- identify and evaluate any other encumbrances against the property.
- Inspecting the property to determine whether it qualifies for expedited foreclosure proceedings under the Vacant and Abandoned Real Estate Foreclosure Act (68 Pa. C.S.A. §§ 2301 to 2308).
- Filing and serving a foreclosure complaint with all necessary attachments.
- Obtaining a foreclosure judgment typically through:
- a praecipe (request) for entry of default judgment if the borrower fails to respond to the complaint after notice; or
- a motion for summary judgment if the borrower's answer does not effectively contest any material facts.
- Executing on the foreclosure judgment by selling the property at a sheriff's sale, including:
- applying for a writ of execution and assembling a writ package for the sheriff's office; and
- serving a notice of sale and confirming its proper posting and publication by the sheriff.
- When feasible, seeking a deficiency judgment through a petition to fix fair market value if the sale proceeds are insufficient to satisfy the judgment amount.
The lender must complete these steps in compliance with:
- The Pennsylvania Rules of Civil Procedure governing mortgage foreclosure actions (Pa.R.Civ.P. 1141-1150 and 3180-3183).
- Relevant Pennsylvania foreclosure case law.
- The local court rules and sheriff's sale procedures for the county where the property is located.
This Toolkit contains links to continuously maintained Practice Notes, Standard Documents, and other resources to assist counsel in understanding and managing Pennsylvania's commercial mortgage foreclosure process.