PRINTER'S NO. 2515
No. 1993 Session of 1999
INTRODUCED BY STEVENSON, TRELLO, HENNESSEY, BARRAR, SAYLOR, McNAUGHTON, PIPPY, BATTISTO, STEIL, YOUNGBLOOD, CLYMER, DALLY AND McILHINNEY, OCTOBER 25, 1999
REFERRED TO COMMITTEE ON URBAN AFFAIRS, OCTOBER 25, 1999
AN ACT 1 Amending Title 68 (Real and Personal Property) of the 2 Pennsylvania Consolidated Statutes, further providing for 3 real estate cooperatives. 4 The General Assembly of the Commonwealth of Pennsylvania 5 hereby enacts as follows: 6 Section 1. Section 4102(b) of Title 68 of the Pennsylvania 7 Consolidated Statutes is amended to read: 8 § 4102. Applicability of subpart. 9 * * * 10 (b) Existing cooperatives.--Except as provided in subsection 11 (c), sections 4106, 4107, 4108 (relating to supplemental general 12 principles of law applicable), 4112 (relating to obligation of 13 good faith), 4202 (relating to unit boundaries), 4203 (relating 14 to construction and validity of declaration and bylaws), 4204 15 (relating to description of units), 4216 (relating to amendment 16 of declaration), 4217 (relating to termination of cooperative 17 ownership), 4219 (relating to master associations), 4220 18 (relating to merger or consolidation of cooperatives),
1 4302(a)(1) through (6), (8), (9) and (11) through (17) (relating 2 to powers of association), 4303 (relating to executive board 3 members and officers), 4307 (relating to upkeep of cooperative), 4 4311 (relating to tort and contract liability), 4313 (relating 5 to insurance), 4314 (relating to assessments for common 6 expenses), 4315 (relating to lien for assessments), 4317 7 (relating to association records), 4319 (relating to termination 8 of cooperative interest), 4409 (relating to resales of 9 cooperative interests) and 4415 (relating to effect of 10 violations on rights of action), and section 4103 (relating to 11 definitions) to the extent necessary in construing any of those 12 sections, apply to all cooperatives created in this Commonwealth 13 before the effective date of this subpart, but those sections 14 apply only with respect to events and circumstances occurring 15 after the effective date of this subpart and do not invalidate 16 existing provisions of the cooperative documents of those 17 cooperatives. By compliance with the requirements of section 18 4201 (relating to creation of cooperative ownership), a 19 cooperative created in this Commonwealth before the effective 20 date of this subpart may be made subject to all of the 21 provisions of this subpart, effective as of the date of 22 recordation of the document or documents specified in section 23 4201, without in any way terminating the cooperative status of 24 the property or in any way affecting any lien or encumbrance on 25 the property, if the terms of such document or documents have 26 been approved by all the persons whose actions would have been 27 required to effect the termination of the cooperative pursuant 28 to [its governing documents in effect at the time such approval 29 is given] section 4217, provided, however, that such action 30 shall not increase the obligations or responsibilities of a 19990H1993B2515 - 2 -
1 declarant, as such and not as a proprietary lessee, without the 2 joinder of the declarant in the document or documents required 3 by section 4201. 4 * * * 5 Section 2. Section 4203 of Title 68 is amended by adding a 6 subsection to read: 7 § 4203. Construction and validity of declaration and bylaws. 8 * * * 9 (e) Interpretation and application of declaration.--The 10 executive board shall have the powers to interpret and apply the 11 declaration and bylaws, and to resolve all conflicts or disputes 12 requiring the interpretation and application of the declaration. 13 The executive board and its members shall have no liability for 14 exercising these powers provided they are exercised in good 15 faith and in the best interest of the association in the manner 16 set forth in section 4303 (relating to executive board members 17 and officers). 18 Section 3. Sections 4216(a) and (f), 4217(a), 4218, 4302(a) 19 and 4303(a) of Title 68 are amended to read: 20 § 4216. Amendment of declaration. 21 (a) Number of votes required.--Except in cases of amendments 22 that may be executed by a declarant under section 4209 (relating 23 to exercise of development rights), the association under 24 section 4107 (relating to eminent domain), 4206(c) (relating to 25 leasehold cooperatives), 4208(c) (relating to limited common 26 elements), 4211(a) (relating to relocation of boundaries between 27 adjoining units) or 4212 (relating to subdivision of units), the 28 executive board of the association under subsection (f) or 29 certain proprietary lessees under section 4208(b), 4211(a), 30 4212(b) or 4217(b) (relating to termination of cooperative 19990H1993B2515 - 3 -
1 ownership), and except as limited by subsection (d), the 2 declaration, including the plats and plans, may be amended only 3 by vote or written agreement of proprietary lessees of 4 cooperative interests to which at least 67% of the votes in the 5 association are allocated [or any larger majority the 6 declaration specifies.], without regard for any larger majority 7 the declaration may specify or the absence of any amendment 8 provisions in the declaration. The declaration may specify a 9 smaller number only if all of the units are restricted 10 exclusively to nonresidential use. 11 * * * 12 (f) Corrective amendments.--Except as otherwise provided in 13 the declaration, if any amendment to the declaration is 14 necessary in the judgment of the executive board to cure any 15 ambiguity or to correct or supplement any provision of the 16 declaration that is defective, missing or inconsistent with any 17 other provision thereof or with this subpart or if an amendment 18 is necessary in the judgment of the executive board to conform 19 to the requirements of any agency or entity that has established 20 national or regional standards with respect to loans secured by 21 mortgages or deeds of trust on units in condominium projects 22 (such as the Federal National Mortgage Association and the 23 Federal Home Loan Mortgage Corporation), to comply with any 24 statute, regulation, code or ordinance which may now or 25 hereafter be made applicable to the cooperative or association, 26 or to make a reasonable accommodation or permit a reasonable 27 modification in favor of handicapped, as may be defined by 28 prevailing Federal or State laws or regulations applicable to 29 the association, unit owners, residents or employees, then, at 30 any time and from time to time, the executive board may at its 19990H1993B2515 - 4 -
1 discretion effect an appropriate corrective amendment without 2 the approval of the proprietary lessees or the holders of any 3 liens on all or any part of the cooperative, upon receipt by the 4 executive board of an opinion from independent legal counsel to 5 the effect that the proposed amendment is permitted by the terms 6 of this subsection. 7 § 4217. Termination of cooperative ownership. 8 (a) Number of votes required.--[Except:] Without regard for 9 the provisions of any declaration purporting to establish any 10 self-executing deadline or termination date for any cooperative 11 existing under this subpart, except: 12 (1) in the case of the taking of all of the units by 13 eminent domain (section 4107); 14 (2) in the case of foreclosure of a security interest 15 against the entire cooperative which has priority over the 16 declaration or which is subordinate to a declaration that 17 expressly provides that the holder of the security interest 18 has the right to terminate the cooperative when the 19 foreclosure of the security interest has been consummated; or 20 (3) in the case of the expiration or termination of a 21 lease which has priority over the declaration (unless a 22 contrary intent is expressly stated in the lease); 23 no cooperative ownership may be terminated [only at a meeting of 24 the association and] except by the vote, in person or by proxy, 25 or by the written agreement of proprietary lessees of 26 cooperative interests to which at least 80% of the votes in the 27 association are allocated or any larger percentage the 28 declaration specifies. The declaration may specify a smaller 29 percentage only if all of the units in the cooperative are 30 restricted exclusively to nonresidential uses. 19990H1993B2515 - 5 -
1 * * * 2 § 4218. Rights of secured lenders and secured creditors. 3 (a) Secured lender approval.--The declaration may provide 4 that all or a specified number or percentage of secured 5 creditors of the association or lenders holding security 6 interests encumbering the cooperative interests approve 7 specified actions of the proprietary lessees of the association 8 as a condition to the effectiveness of those actions, and the 9 declaration may provide for procedures that will enable such 10 lenders to have their approval rights recognized by the 11 executive board, but no requirement for approval may operate to: 12 (1) Deny or delegate control over the general 13 administrative affairs of the association by the proprietary 14 lessees or the executive board. 15 (2) Prevent the association or the executive board from 16 commencing, intervening in or settling any litigation or 17 proceeding. 18 (3) Receive and distribute any insurance proceeds except 19 pursuant to section 4313 (relating to insurance). 20 (b) Secured lender approval procedures.--If the declaration 21 requires mortgagees or beneficiaries of deeds of trust 22 encumbering the units to approve specified actions of the 23 proprietary lessees or the association as a condition to the 24 effectiveness of those actions, then the executive board will 25 provide the lender with written notice of the specified action 26 proposed to be taken, together with a request for the secured 27 lender to approve or disapprove the actions specified. If the 28 notice to the secured lender states that the secured lender will 29 be deemed to have approved the actions specified in the written 30 notice if it does not respond to the request within 30 days, and 19990H1993B2515 - 6 -
1 the secured lender does not respond in writing within 30 days, 2 then the secured lender will be deemed for all purposes to have 3 approved the action specified in the notice. Written notice to 4 the secured lender shall be given by first-class mail, postage 5 prepaid, at the address provided by the secured lender, or in 6 the absence thereof, at the address of the secured lender 7 endorsed on any mortgage or deed of trust of record, or the 8 address to which the unit owner mails any periodic payment paid 9 to the secured lender; the notice to the secured lender shall 10 include a statement of the specified action, and a copy of the 11 full text of any proposed amendment, and a form prepared by the 12 association upon which the secured lender may indicate its 13 approval or rejection of the specified action or amendment. 14 § 4302. Powers of association. 15 (a) General rule.--Except as provided in subsection (b) and 16 subject to the provisions of the declaration, the association 17 may: 18 (1) Adopt and amend bylaws and rules and regulations. 19 (2) Adopt and amend budgets for revenues, expenditures 20 and reserves, which budgets shall include, but shall not be 21 limited to, the financial information listed in section 22 4403(a)(5) (relating to public offering statement; general 23 provisions), and collect assessments for common expenses from 24 proprietary lessees. 25 (3) Hire and discharge managing agents and other 26 employees, agents and independent contractors. 27 (4) Institute, defend or intervene in litigation or 28 administrative proceedings, or engage in arbitrations or 29 mediations, in its own name on behalf of itself or two or 30 more proprietary lessees on matters affecting the 19990H1993B2515 - 7 -
1 cooperative. 2 (5) Make contracts and incur liabilities. 3 (6) Regulate the use, maintenance, repair, replacement 4 and modification of common elements[.] and make reasonable 5 accommodation, or permit reasonable modifications to be made 6 to units or the common elements, to accommodate handicapped, 7 as defined by prevailing Federal, State or local statute, 8 regulation, code or ordinance, proprietary lessees, 9 residents, tenants or employees. 10 (7) Cause additional improvements to be made as a part 11 of the common elements. 12 (8) Acquire, hold, encumber and convey in its own name 13 any right, title or interest to real or personal property, 14 and pledge or assign assessment income necessary to create 15 amortization reserves to retire debts, but part of the 16 cooperative may be conveyed or all or part of the cooperative 17 may be subjected to a security interest only pursuant to 18 section 4312 (relating to conveyance or encumbrance of 19 cooperative). Reserve funds held for future major repairs and 20 replacements of the common elements may not be assigned or 21 pledged. 22 (9) Grant easements, leases, licenses and concessions 23 through or over the common elements. Any such easement, 24 lease, license or concession that is not for the benefit of 25 all or substantially all of the proprietary lessees shall not 26 be granted without the same proprietary lessee approval that 27 is required for an amendment to the declaration or that 28 materially impairs any right or benefit that one or more 29 proprietary lessees may have with respect to the common 30 elements shall not be granted without the prior written 19990H1993B2515 - 8 -
1 approval of those proprietary lessees. 2 (10) Impose and receive any payments, fees or charges 3 for the use, rental or operation of the common elements other 4 than limited common elements described in section 4202(2) and 5 (4) (relating to unit boundaries) and for services provided 6 to proprietary lessees. 7 (11) Impose charges for late payment of assessments and, 8 after notice and an opportunity to be heard, levy reasonable 9 fines for violations of the declaration, bylaws and rules and 10 regulations of the association. 11 (12) Impose reasonable charges for the preparation and 12 recordation of amendments to the declaration, resale 13 certificates required by section 4409 (relating to resales of 14 cooperative interests) or statements of unpaid assessments. 15 In addition, an association may impose a capital improvement 16 fee, but no other fees, on the resale or transfer the 17 leasehold interest in units in accordance with the following: 18 (i) The capital improvement fee for any unit shall 19 not exceed the annual assessments for general common 20 expense charged to such unit during the most recently 21 completed fiscal year of the association, provided that: 22 (A) in the case of resale or transfer of the 23 leasehold interest in a unit consisting of unimproved 24 real estate, the capital improvement fee shall not 25 exceed one-half of the annual assessments for general 26 common expenses charged to such unit during the most 27 recently completed fiscal year of the association; 28 (B) in the case of resale or transfer of the 29 leasehold interest in a unit which was created or 30 added to the cooperative in accordance with section 19990H1993B2515 - 9 -
1 4209 (relating to exercise of development rights) at 2 some time during the most recently completed fiscal 3 year of the association but was not in existence for 4 the entire fiscal year, the capital improvement fee 5 shall not exceed one-half of the annual assessments 6 for general common expenses charged to a unit 7 comparable to such unit during the most recently 8 completed fiscal year of the association; and 9 (C) capital improvement fees are not refundable 10 upon any sale, conveyance or other transfer of the 11 proprietary lease to a unit. 12 (ii) Capital improvement fees allocated by an 13 association must be maintained in a separate capital 14 account and may be expended only for new capital 15 improvements or replacement of existing common elements 16 and improvements on the common elements, and may not be 17 expended for operation, maintenance or other purposes. 18 (iii) No capital improvement fee shall be imposed on 19 any gratuitous transfer of a proprietary interest in a 20 unit between any of the following family members: 21 spouses, parent and child, siblings, grandparent and 22 grandchild. 23 (iv) No fees may be imposed upon any person who: 24 (A) acquires a proprietary interest in a unit 25 consisting of unimproved real estate and signs and 26 delivers to the association at the time of such 27 person's acquisition a sworn affidavit declaring the 28 person's intention to reconvey such unit within 18 29 months of its acquisition; and 30 (B) completes such reconveyance within 18 19990H1993B2515 - 10 -
1 months.
2 (13) Provide for the indemnification of its officers and
3 executive board and maintain directors' and officers'
4 liability insurance.
5 (14) Assign its right to future income, including the
6 right to receive the payments made on account of common
7 expense assessments, but only to the extent the declaration
8 expressly so provides.
9 (15) Enjoin, abate or remedy by appropriate legal
10 proceedings either at law or in equity any violation of the
11 declaration, bylaws or this subpart by any proprietary lessee
12 or other person.
13 (16) Terminate proprietary leases and all rights of
14 proprietary lessees with respect to their cooperative
15 interests and redeem cooperative interests of proprietary
16 lessees in connection with the exercise of the association's
17 remedies for nonpayment of assessments pursuant to section
18 4315 (relating to lien for assessments) or in connection with
19 the association's remedies for other violations of the
20 declaration, bylaws, proprietary lease or this subpart
21 pursuant to section 4319 (relating to termination of
22 cooperative interest), although the declaration may expressly
23 require such termination to be subject to the approval of a
24 specified vote of the proprietary lessees if the cause for
25 such termination is of a type specified in the declaration or
26 is for any cause if the declaration so specifies.
27 (17) Assign or delegate any powers of the association
28 listed in this section to a master association subject to the
29 provisions of section 4219 (relating to master associations)
30 and accept any assignment or delegation of powers from one or
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1 more cooperatives or other incorporated or unincorporated 2 associations. 3 (18) Exercise any other powers conferred by the 4 declaration or bylaws. 5 (19) Exercise all other powers that may be exercised in 6 this Commonwealth by legal entities of the same type as the 7 association. 8 (20) Exercise any other powers necessary and proper for 9 the governance and operation of the association. 10 * * * 11 § 4303. Executive board members and officers. 12 (a) Fiduciary status and exercise of duties.--Except as 13 provided in the declaration, the bylaws in subsection (b) or in 14 other provisions of this subpart, the executive board may act in 15 all instances on behalf of the association. In the performance 16 of their duties, the officers and members of the executive board 17 shall stand in a fiduciary relation to the association and shall 18 perform their duties, including duties as members of any 19 committee of the board upon which they may serve, in good faith, 20 in a manner they reasonably believe to be in the best interests 21 of the association and with such care, including reasonable 22 inquiry, skill and diligence, as a person of ordinary prudence 23 would use under similar circumstances. In authorizing the 24 investment of association funds, including, but not limited to, 25 reserves, the officers and members of the executive board shall 26 exercise that degree of judgment and care, under the then 27 prevailing circumstances of the association, which persons of 28 prudence, discretion and intelligence would exercise in the 29 management of their own affairs, not in regard to speculation, 30 but in regard to the permanent disposition of their funds, 19990H1993B2515 - 12 -
1 considering the probable income to be derived therefrom as well 2 as the probable safety of their capital. In performing his 3 duties, an officer or executive board member shall be entitled 4 to rely in good faith on information, opinions, reports or 5 statements, including financial statements and other financial 6 data, in each case prepared or presented by any of the 7 following: 8 (1) One or more other officers or employees of the 9 association whom the officer or executive board member 10 reasonably believes to be reliable and competent in the 11 matters presented. 12 (2) Counsel, public accountants or other persons as to 13 matters which the officer or executive board member 14 reasonably believes to be within the professional or expert 15 competence of such person. 16 (3) A committee of the executive board upon which he 17 does not serve, duly designated in accordance with law, as to 18 matters within its designated authority, which committee the 19 officer or executive board member reasonably believes to 20 merit confidence. 21 An officer or executive board member shall not be considered to 22 be acting in good faith if he has knowledge concerning the 23 matter in question that would cause his reliance to be 24 unwarranted. 25 * * * 26 Section 4. Sections 4313(a), (b), (e) and (g) and 4315(b) of 27 Title 68 are amended and the sections are amended by adding 28 subsections to read: 29 § 4313. Insurance. 30 (a) Insurance to be carried by association.--Commencing not 19990H1993B2515 - 13 -
1 later than the time of the first conveyance of a cooperative 2 interest to a person other than a declarant, the association 3 shall maintain, to the extent reasonably available: 4 (1) Property insurance on the common elements and units 5 insuring against all risks of direct physical loss commonly 6 insured against or, in the case of a conversion building, 7 against fire and extended coverage perils. The total amount 8 of insurance after application of any deductibles shall be 9 not less than 80% of the actual cash value of the insured 10 property at the time the insurance is purchased and at each 11 renewal date, exclusive of land, excavations, foundations and 12 other items normally excluded from property policies. 13 (2) Liability insurance, including medical payments 14 insurance, in an amount determined by the executive board but 15 not less than any amount specified in the declaration, 16 covering all occurrences commonly insured against for death, 17 bodily injury and property damage arising out of or in 18 connection with the use, ownership or maintenance of the 19 common elements and units. 20 (3) Any property or comprehensive general liability 21 insurance carried by the association may contain a deductible 22 provision in a reasonable amount to be determined by the 23 executive board based on the prevailing circumstances of the 24 association and market conditions for the insurance to be 25 carried. 26 (b) Other insurance carried by association.--If the 27 insurance described in subsection (a) is not reasonably 28 available, the association promptly shall cause notice of that 29 fact to be hand delivered or sent prepaid by the United States 30 mail to all proprietary lessees. The declaration may require the 19990H1993B2515 - 14 -
1 association to carry any other insurance, and the association in 2 any event may carry any other insurance [it deems] in such 3 reasonable amounts and with such reasonable deductibles as it 4 may deem appropriate to protect the association or the 5 proprietary lessees. 6 * * * 7 (e) Unit owner may obtain insurance.--It shall be the 8 obligation of the proprietary lessee to insure his unit for all 9 losses not covered by such insurance as is provided by the 10 association in accordance with this section or the declaration. 11 An insurance policy issued to the association [does] shall not 12 prevent a proprietary lessee from obtaining insurance for his 13 own benefit[.], including, but not limited to, insurance to 14 cover any deductibles or losses not covered by the association's 15 property or comprehensive general liability insurance. 16 * * * 17 (g) Disposition of insurance proceeds.-- 18 (1) Any portion of the cooperative for which insurance 19 is required under this section which is damaged or destroyed 20 shall be repaired or replaced promptly by the association 21 unless: 22 (i) the cooperative is terminated; 23 (ii) repair or replacement would be illegal under 24 any State or local health or safety statute or ordinance; 25 or 26 (iii) 80% of the proprietary lessees, including 27 every proprietary lessee of a unit or assigned limited 28 common element which will not be rebuilt, vote not to 29 rebuild. 30 [The] Except for the costs of repair or replacement which are 19990H1993B2515 - 15 -
1 not covered due to deductibles, the cost of repair or 2 replacement in excess of insurance proceeds and reserves 3 which have not been identified by the executive board to fund 4 costs of capital expenditures budgeted for the current fiscal 5 year of the association is a common expense. 6 (2) If the entire cooperative is not repaired or 7 replaced: 8 (i) the insurance proceeds attributed to the damaged 9 common elements must be used to restore the damaged area 10 to a condition compatible with the remainder of the 11 cooperative; and 12 (ii) except to the extent that other persons will be 13 distributees and except as is otherwise provided in 14 section 4321(i) (relating to limited equity 15 cooperatives): 16 (A) the insurance proceeds attributable to units 17 and limited common elements which are not rebuilt 18 must be distributed to the proprietary lessees of 19 those units and the proprietary lessees of the units 20 to which those limited common elements were located 21 or to lienholders, as their interests may appear; and 22 (B) the remainder of the proceeds must be 23 distributed to all the proprietary lessees or 24 lienholders, as their interests may appear, in 25 proportion to the common expense liabilities of all 26 the cooperative interests. 27 If the proprietary lessees vote not to rebuild any unit, the 28 allocated interests of the cooperative interest of which that 29 unit is a part are automatically reallocated upon the vote as 30 if the unit had been condemned under section 4107(a) 19990H1993B2515 - 16 -
1 (relating to eminent domain), and the association promptly 2 shall prepare, execute and record an amendment to the 3 declaration reflecting the reallocations. 4 (3) Notwithstanding the provisions of this subsection, 5 section 4217 (relating to termination of cooperative 6 ownership) governs the distribution of insurance proceeds if 7 the cooperative is terminated. 8 * * * 9 (i) Recovery of deductibles.--If any insurance policy 10 maintained by the association contains a deductible, then that 11 portion of any loss or claim which is not covered by insurance 12 due to the application of a deductible, as well as any claim or 13 loss for which the association is self-insured, shall be levied 14 by the executive board in accordance with section 4314(c) 15 (relating to assessments for common expenses) to the extent 16 applicable, or in the absence of the application thereof, as a 17 common expense assessment against all of the units. 18 § 4315. Lien for assessments. 19 * * * 20 (b) Priority of lien.-- 21 (1) A lien under this section is prior to all other 22 liens and encumbrances on a cooperative interest except: 23 (i) Liens and encumbrances on the cooperative which 24 the association creates, assumes or takes subject to. 25 (ii) The first security interest encumbering only 26 the cooperative interest and perfected before the date on 27 which the assessment or the first installment payable on 28 the assessment, if the assessment is payable in 29 installments, sought to be enforced became delinquent. 30 (iii) Liens for real estate taxes and other 19990H1993B2515 - 17 -
1 governmental assessments or charges against the 2 cooperative or the cooperative interest. 3 (2) The association's lien for common expenses shall be 4 divested by a judicial sale in foreclosure of the first 5 mortgage of the cooperative interest: 6 (i) [As to unpaid common expense assessments made 7 under section 4314(b)] Except as to unpaid assessments 8 for which the association has a lien under this section 9 that come due during the six months immediately preceding 10 [institution of] a judicial sale of a cooperative 11 interest in an action to enforce collection of a lien 12 against a cooperative interest [by a judicial sale, only 13 to the extent that the six months unpaid assessments are 14 paid out of the proceeds of the sale]. 15 (ii) As to unpaid [common expense] assessments [made 16 under section 4314(b)] for which the association has a 17 lien under this section other than the six months 18 assessment referred to in subparagraph (i), in the full 19 amount of these unpaid assessments[, whether or not the 20 proceeds of the judicial sale are adequate to pay these 21 assessments]. 22 To the extent the proceeds of the sale are sufficient to pay 23 some or all of [these] the additional unpaid assessments, 24 after satisfaction in full of the costs of the judicial sale, 25 and the liens and encumbrances of the types described in 26 paragraph (1) and the unpaid common expense assessments that 27 come due during the six-month period described in 28 subparagraph (i), they shall be paid before any remaining 29 proceeds may be paid to any other claimant, including the 30 prior owner of the cooperative interest. 19990H1993B2515 - 18 -
1 (3) The lien is not subject to the provisions of 42 2 Pa.C.S. § 8123 (relating to general monetary exemption). 3 * * * 4 (i) Application of payments.--Unless the declaration 5 otherwise provides, any payment received by an association in 6 connection with the lien under this section shall be applied 7 first to any interest accrued by the association, then to any 8 late fee, then to any costs and reasonable attorney fees 9 incurred by the association in collection or enforcement and 10 then to the delinquent assessment. The foregoing shall be 11 applicable notwithstanding any restrictive endorsement, 12 designation or instructions placed on or accompanying a payment. 13 Section 5. This act shall take effect in 60 days. B11L68JS/19990H1993B2515 - 19 -