2010 Pennsylvania Code
Title 68 - REAL AND PERSONAL PROPERTY
Chapter 42 - Creation, Alteration and Termination of Cooperatives
4218 - Rights of secured lenders and secured creditors.

     § 4218.  Rights of secured lenders and secured creditors.
        (a)  Secured lender approval.--The declaration may provide
     that all or a specified number or percentage of secured
     creditors of the association or lenders holding security
     interests encumbering the cooperative interests approve
     specified actions of the proprietary lessees of the association
     as a condition to the effectiveness of those actions, and the
     declaration may provide for procedures that will enable such
     lenders to have their approval rights recognized by the
     executive board, but no requirement for approval may operate to:
            (1)  Deny or delegate control over the general
        administrative affairs of the association by the proprietary
        lessees or the executive board.
            (2)  Prevent the association or the executive board from
        commencing, intervening in or settling any litigation or
        proceeding.
            (3)  Receive and distribute any insurance proceeds except
        pursuant to section 4313 (relating to insurance).
        (b)  Secured lender approval procedures.--If the declaration
     requires mortgagees or beneficiaries of deeds of trust
     encumbering the units to approve specified actions of the
     proprietary lessees or the association as a condition to the
     effectiveness of those actions, then the executive board will
     provide the lender with written notice of the specified action
     proposed to be taken, together with a request for the secured
     lender to approve or disapprove the actions specified. If the
     notice to the secured lender, issued in accordance with the
     procedures set forth in this subsection, states that the secured
     lender will be deemed to have approved the actions specified in
     the written notice if it does not respond to the request within
     45 days and the secured lender does not respond in writing
     within 45 days, then the secured lender will be deemed for all
     purposes to have approved the action specified in the notice.
     Written notice to the secured lender shall be given by
     certified, registered or first-class mail, evidenced by a United
     States Postal Service certificate of mailing, postage prepaid,
     at the address provided by the secured lender or, in the absence
     thereof, at the address of the secured lender endorsed on any
     mortgage or deed of trust of record and at the address to which
     the unit owner mails any periodic payment paid to the secured
     lender. The notice to the secured lender shall include a
     statement of the specified action, a copy of the full text of
     any proposed amendment and a form prepared by the association
     upon which the secured lender may indicate its approval or
     rejection of the specified action or amendment.
     (Nov. 30, 2004, P.L.1499, No.190, eff. 60 days)

        Cross References.  Section 4218 is referred to in section
     4216 of this title.