Where pursuant to § 508(B)(l)(i) of Act 98 of 1992, as amended, the municipal treasurer issues a certificate indicating that there are no delinquent taxes, assessments, penalties or user charges against real property and no costs incurred by the municipality for the removal, repair or securing of a building or other structure on the real property, the insuring agent shall pay the claim of the named insured, provided however, that if the loss agreed upon by the named insured and the insuring agent equals or exceeds 60% of the aggregate limits of liability on all fire policies covering the building restructure, the following procedures must be followed.
(A) The insuring agent shall transfer from the insurance proceeds to the designated officer of the borough in the aggregate of $2,000 for each $15,000 of a claim and for each fraction of that amount of a claim, this section to be applied such that if the claim is $15,000 or less, the amount transferred to the borough shall be $2,000.
(B) If at the time of a loss report agreed to between the named insured and the insuring agent, the named insured has submitted a contractor’s signed estimate of the costs of removing, repairing or securing the building or other structure, the insuring agent shall transfer to the borough from the insurance proceeds the amount specified in the estimate.
(C) The transfer of proceeds shall be on pro rata basis by all companies, associations or exchanges insuring the building or other structure.
(D) After the transfer, the named insured may submit a contractor’s signed estimate of the costs of removing, repairing or securing the building or other structure, and the designated officer shall return the amount of the funds transferred to the borough in excess of the estimate to the named insured, if the borough has not commenced to remove, repair or secure the building or other structure.
(E) Upon receipt of proceeds under this section, the borough shall do the following.
(1) The designated officer shall place the proceeds in a separate fund to be used solely as security against the total costs of removing, repairing or securing the building or structure which are incurred by the borough. Such costs shall include, without limitation, any engineering, legal or administrative costs incurred by the borough in connection with such removal, repair or securing of the building or any proceedings related thereto.
(2) It is the obligation of the insuring agent when transferring the proceeds to provide the borough with the name and address of the named insured. Upon receipt of the transferred funds and the name and address of the named insured, the designated officer shall contact the named insured, certify that the proceeds have been received by the borough and notify the named insured that the procedures under this division (E) shall be followed.
(3) When repairs, removal or securing of the building or other structure have been completed in accordance with all applicable regulations and orders of the borough and the required proof of such completion received by the designated officer, and if the borough has not incurred any costs for repairs, removal or securing, the fund shall be returned to the named insured. If the borough has incurred costs for repairs, removal or securing of the building or other structure, the costs shall be paid from the fund and if excess funds remain, the borough shall transfer the remaining funds to the named insured.
(4) To the extent that interest is earned on proceeds held by the borough pursuant to this section, and not returned to the named insured, such interest shall belong the borough. To the extent that proceeds are returned to the named insured, interest earned on such proceeds shall be distributed to the named insured at the time that the proceeds are returned.
(F) Nothing in this section shall be construed to limit the ability of the borough to recover any deficiency. Furthermore, nothing in this section shall be construed to prohibit the borough and the named insured from entering into an agreement that permits the transfer of funds to the named insured of some other reasonable disposition of the damaged property has been negotiated.
(G) The written request for the certificate to the Borough Secretary/Treasurer shall include: the tax description of the property; the name and address of the insurance company association or exchange; and the date agreed upon by the insurance company and insured as to the date of the receipt of a loss report.
(Prior Code, Ch. 1, § 1-803) (Ord. 4-2003, passed 7-7-2003, § III)