Regular Session 2021-2022 House Bill 1795 P.N. 2190

PRIOR PRINTER'S NO. 2035

PRINTER'S NO. 2190

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1795

Session of

2021

INTRODUCED BY R. BROWN, RADER, HELM, M. MACKENZIE, CIRESI AND

GAYDOS, AUGUST 17, 2021

AS REPORTED FROM COMMITTEE ON URBAN AFFAIRS, HOUSE OF

REPRESENTATIVES, AS AMENDED, SEPTEMBER 28, 2021

AN ACT

Amending Title 68 (Real and Personal Property) of the

Pennsylvania Consolidated Statutes, in general provisions

relating to condominiums, further providing for definitions;

in management of the condominium, further providing for

executive board members and officers, for bylaws and for

meetings; in protection of purchasers, further providing for

effect of violations on rights of action; in general

provisions relating to cooperatives, further providing for

definitions; in creation, alteration and termination of

cooperatives, further providing for master associations; in

management of cooperatives, further providing for bylaws and

for meetings; in protection of cooperative interest

purchasers, further providing for effect of violations on

rights of action; in general provisions relating to planned

communities, further providing for definitions; in creation,

alteration and termination of planned communities, further

providing for master associations; in management of planned

community, further providing for bylaws and for meetings;

and, in protection of purchasers, further providing for

effect of violations on rights of action.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 3103 of Title 68 of the Pennsylvania

Consolidated Statutes is amended by adding a definition

DEFINITIONS to read:

§ 3103. Definitions.

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The following words and phrases when used in this subpart and

in the declaration and bylaws shall have the meanings given to

them in this section unless specifically provided otherwise or

unless the context clearly indicates otherwise:

* * *

"Independent reviewer." A person who is selected by the

declarant or a majority of the unit owners of a condominium and

satisfies all of the following:

(1) Holds a certificate issued by the Commonwealth as a

certified public accountant, is licensed to practice law in

this Commonwealth or is a vote management system.

(2) Is not a unit owner, directly or indirectly.

(3) Has no family relationship with the declarant, a

unit owner or a condominium manager.

(4) Has no financial interest shared with the declarant,

a unit owner or a condominium manager.

(5) If compensated by the declarant, a director, the

association or a condominium manager, has disclosed the terms

of the compensation to all unit owners.

* * *

"VOTE MANAGEMENT SYSTEM." A THIRD-PARTY VENDOR WHO OPERATES

A DIGITAL OR SUBSCRIPTION SERVICE THAT SECURELY MANAGES THE

CONDUCT OF ELECTIONS AND VOTING PROCEDURES.

* * *

Section 2. Section 3303(d) and (e) of Title 68 are amended

and the section is amended by adding a subsection to read:

§ 3303. Executive board members and officers.

* * *

(d) Election of members during transfer of declarant

control.--

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(1) Not later than 60 days after conveyance of 25% of

the units to unit owners other than a declarant, not less

than 25% of the members of the executive board shall be

elected by unit owners other than the declarant.

(2) Not later than 60 days after conveyance of 50% of

the units to unit owners other than a declarant, not less

than 33 1/3% of the members of the executive board shall be

elected by unit owners other than the declarant.

(3) A vote by a unit owner must be submitted by the unit

owner to an independent reviewer who shall tally the results

of the election and certify the results to the declarant, the

executive board and unit owners. All votes by unit owners

under this paragraph shall be submitted to the independent

reviewer in either an electronic or a paper format. The

interchangeable submission of votes by unit owners in an

electronic and a paper format in the same election shall be

prohibited. All votes in the same community shall be

submitted in the same form for the same election. This

paragraph shall only apply to a condominium with at least 25

100 units. IF A CONDOMINIUM HAS MORE THAN 100 UNITS AND LESS

THAN 500 UNITS, THE ASSOCIATION MAY OPT OUT OF THE

REQUIREMENTS UNDER THIS PARAGRAPH BY AMENDING THE

ASSOCIATION'S BYLAWS IN ACCORDANCE WITH SECTION 3306

(RELATING TO BYLAWS).

(e) Election of members and officers following declarant

control.--

(1) Not later than the termination of any period of

declarant control, the unit owners shall elect an executive

board of at least three members at least a majority of whom

must be unit owners, except that the executive board may

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consist of two members, both of whom must be unit owners, if

the condominium consists of two units. The executive board

shall elect the officers. The persons elected shall take

office upon election.

(2) In the event that the election of the executive

board by the unit owners fails to take place not later than

the termination of a period of declarant control as provided

in this section, then a special meeting of the unit owners

may be called for such purpose by any member of the executive

board elected by the unit owners or, if there is no such

member of the executive board, the unit owners entitled to

cast at least 10% of the votes in the association.

(3) A vote by a unit owner must be submitted by the unit

owner to an independent reviewer who shall tally the results

of the election and certify the results to the executive

board and unit owners. All votes by unit owners under this

paragraph shall be submitted to the independent reviewer in

either an electronic or a paper format. The interchangeable

submission of votes by unit owners in an electronic and a

paper format in the same election shall be prohibited. All

votes in the same community shall be submitted in the same

form for the same election. This paragraph shall only apply

to a condominium with at least 25 100 units. IF A CONDOMINIUM

HAS MORE THAN 100 UNITS AND LESS THAN 500 UNITS, THE

ASSOCIATION MAY OPT OUT OF THE REQUIREMENTS UNDER THIS

PARAGRAPH BY AMENDING THE ASSOCIATION'S BYLAWS IN ACCORDANCE

WITH SECTION 3306.

* * *

(g) Penalties.--A person who attempts to interfere with the

votes or election process under subsection (d) or (e) is guilty

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of a misdemeanor of the first degree a nd, upon conviction, shall

be sentenced to pay a fine not exceeding $10,000 or to undergo

imprisonment of not more than five years, or both, in the

discretion of the court.

Section 3. Sections 3306(a)(6), 3308 and 3412 of Title 68

are amended to read:

§ 3306. Bylaws.

(a) Mandatory provisions.--The bylaws of the association

must provide for:

* * *

(6) The method of amending the bylaws. The following

apply:

(i) The bylaws may be amended only by vote or

agreement of unit owners of units to which at least:

(A) sixty-seven FIFTY-ONE percent of the votes

in the association is allocated as provided under

section 3208 (relating to allocation of common

element interests, votes and common expense

liabilities);

(B) any larger majority as specified in the

bylaws; or

if all of the units are restricted exclusively to

nonresidential use.

(ii) The vote may be taken only at a scheduled

meeting as provided under section 3308 (relating to

meetings) that was advertised seven days in advance to

the unit owners. Absentee voting shall be permitted to

unit owners provided that the ballots must be submitted

to an independent reviewer during a time period

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consistent with the absentee voting provisions under

Article XIII of the act of June 3, 1937 (P.L.1333,

No.320), known as the Pennsylvania Election Code.

* * *

§ 3308. Meetings.

(a) Association meetings.--The bylaws must require that

meetings of the association be held at least once each year and

provide for special meetings. The bylaws must specify which of

the association's officers, not less than ten nor more than 60

days in advance of any meeting, shall cause notice to be hand

delivered or sent prepaid by United States mail to the mailing

address of each unit or to any other mailing address designated

in writing by the unit owner. The notice of any meeting must

state the time and place of the meeting and the items on the

agenda, including the general nature of any proposed amendment

to the declaration or bylaws, any budget or assessment changes

and, where the declaration or bylaws require approval of unit

owners, any proposal to remove an executive board member or

officer.

(b) Election meetings SESSIONS .--The bylaws must require

that a special meeting SESSION of the association be held not

later than seven days before the election of an executive board

member or officer of the association to allow the unit owners to

meet each candidate for an executive board position or officer

position. A special meeting SESSION under this subsection may be

held virtually or in person. Each candidate for an executive

board position or officer position with the association shall

have equal time to address the unit owners during a special

meeting SESSION under this subsection.

§ 3412. Effect of violations on rights of action.

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(a) General rule.--If a declarant or [any other person] AN

EXECUTIVE BOARD MEMBER subject to this subpart violates any

provision thereof or any provision of the declaration or

bylaws[, any]: IN EXECUTING HIS OR HER DUTIES AS A DECLARANT OR

AN EXECUTIVE BOARD MEMBER:

(1) Any person or class of persons adversely affected by

the violation has a claim for appropriate relief.

(2) The violation shall constitute an unfair trade

practice as defined in and may be enforced by the Office of

Attorney General under the act of December 17, 1968

(P.L.1224, No.387), known as the Unfair Trade Practices and

Consumer Protection Law.

(b) Punitive damages.--Punitive damages may be awarded in

the case of a willful violation of the subpart and, if

appropriate, the prevailing party may be entitled to an award of

costs and reasonable attorney fees.

Section 4. Section 4103 of Title 68 is amended by adding a

definition DEFINITIONS to read:

§ 4103. Definitions.

Subject to additional definitions contained in subsequent

provisions of this subpart which are applicable to specific

provisions of this subpart, the following words and phrases when

used in this subpart and in the declaration and bylaws shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Independent reviewer." A person who is selected by the

declarant or a majority of the proprietary lessees of a

cooperative and satisfies all of the following:

(1) Holds a certificate as a certified public accountant

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issued by the Commonwealth, is licensed to practice law in

this Commonwealth or is a vote management system.

(2) Is not a proprietary lessee of the cooperative,

directly or indirectly.

(3) Has no family relationship with a proprietary lessee

of the cooperative or a cooperative manager.

(4) Has no financial interest shared with a proprietary

lessee of the cooperative or a cooperative manager.

(5) If compensated by the declarant, a director, the

association or a cooperative manager, has disclosed the terms

of the compensation to all proprietary lessees of the

cooperative.

* * *

"VOTE MANAGEMENT SYSTEM." A THIRD-PARTY VENDOR WHO OPERATES

A DIGITAL OR SUBSCRIPTION SERVICE THAT SECURELY MANAGES THE

CONDUCT OF ELECTIONS AND VOTING PROCEDURES.

Section 5. Section 4219 of Title 68 is amended by adding

subsections to read:

§ 4219. Master associations.

* * *

(e.1) Independent reviewer.--The certificate of

incorporation or other instrument creating the master

association and the declaration of each cooperative, the powers

of which are assigned by the declaration or delegated to the

master association, shall provide that a vote by a proprietary

lessee in an election of the executive board of an association

must be submitted by the proprietary lessee to an independent

reviewer who shall tally the results of the election and certify

the results to the executive board and proprietary lessees. All

votes by proprietary lessees under this subsection shall be

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submitted to the independent reviewer in either an electronic or

a paper format. The interchangeable submission of votes by

proprietary lessees in an electronic and a paper format in the

same election shall be prohibited. All votes in the same

community shall be submitted in the same form for the same

election. This subsection shall only apply to a cooperative with

at least 25 100 units. IF A COOPERATIVE HAS MORE THAN 100 UNITS

AND LESS THAN 500 UNITS, THE ASSOCIATION MAY OPT OUT OF THE

REQUIREMENTS UNDER THIS SUBSECTION BY AMENDING THE ASSOCIATION'S

BYLAWS IN ACCORDANCE WITH SECTION 4306 (RELATING TO BYLAWS).

* * *

(h) Penalties.--A person who attempts to interfere with the

votes or election process under subsection (e.1) is guilty of a

misdemeanor of the first degree and, upon conviction, shall be

sentenced to pay a fine not exceeding $10,000 or to undergo

imprisonment of not more than five years, or both, in the

discretion of the court.

Section 6. Sections 4306(a)(6), 4308 and 4415 of Title 68

are amended to read:

§ 4306. Bylaws.

(a) Mandatory provisions.--The bylaws of the association

must provide for:

* * *

(6) The method of amending the bylaws. The following

apply:

(i) The bylaws may be amended only by vote or

agreement of proprietary lessees of cooperative interests

to which at least 67% 51% of the votes in the association

are allocated as provided under section 4207 (relating to

allocation of ownership interests, votes and common

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expense liabilities) or any larger majority the

declaration specifies. The declaration may specify a

smaller number only if all of the units are restricted

exclusively to nonresidential use.

(ii) The vote may be taken only at a scheduled

meeting as provided under section 4308 (relating to

meetings) that was advertised seven days in advance to

the proprietary lessees. Absentee voting shall be

permitted to proprietary lessees provided that the

ballots must be submitted to an independent reviewer

during a time period consistent with the absentee voting

provisions under Article XIII of the act of June 3, 1937

(P.L.1333, No.320), known as the Pennsylvania Election

Code.

* * *

§ 4308. Meetings.

(a) Association meetings.--A meeting of the association must

be held at least once each year. Special meetings of the

association may be called by the president, a majority of the

executive board or by 20%, or any lower percentage specified in

the bylaws, of the proprietary lessees. Not less than ten nor

more than 60 days in advance of any meeting, the secretary or

other officer specified in the bylaws shall cause notice to be

hand delivered or sent prepaid by United States mail to the

mailing address of each unit or to any other mailing address

designated in writing by the proprietary lessee. The notice of

any meeting must state the time and place of the meeting and the

items on the agenda, including the general nature of any

proposed amendment to the declaration or bylaws, any budget or

assessment changes and, where the declaration or bylaws require

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approval of the proprietary lessees, any proposal to remove an

executive board member or officer.

(b) Election meetings SESSIONS .--The bylaws must require

that a special meeting SESSION of the association be held not

later than seven days before the election of an executive board

member or officer of the association to allow the proprietary

lessees to meet each candidate for an executive board position

or officer position. A special meeting SESSION under this

subsection may be held virtually or in person. Each candidate

for an executive board position or officer position with the

association shall have equal time to address the proprietary

lessees during a special meeting SESSION under this subsection.

§ 4415. Effect of violations on rights of action.

(a) General rule.--If a declarant or [any other person] AN

EXECUTIVE BOARD MEMBER subject to this subpart fails to comply

with any provision of this subpart or any provision of the

declaration or bylaws[, any]: IN EXECUTING HIS OR HER DUTIES AS

A DECLARANT OR AN EXECUTIVE BOARD MEMBER:

(1) Any person or class of persons adversely affected by

the failure to comply has a claim for appropriate relief.

(2) The violation shall constitute an unfair trade

practice as defined in and may be enforced by the Office of

Attorney General under the act of December 17, 1968

(P.L.1224, No.387), known as the Unfair Trade Practices and

Consumer Protection Law.

(b) Punitive damages.--Punitive damages may be awarded for a

willful failure to comply with this subpart. The court, in an

appropriate case, may award reasonable attorney fees.

Section 7. Section 5103 of Title 68 is amended by adding a

definition DEFINITIONS to read:

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§ 5103. Definitions.

The following words and phrases when used in this subpart and

in the declaration and bylaws shall have the meanings given to

them in this section unless specifically provided otherwise or

unless the context clearly indicates otherwise:

* * *

"Independent reviewer." A person who is selected by the

declarant or a majority of the unit owners of a planned

community and satisfies all of the following:

(1) Holds a certificate as a certified public accountant

issued by the Commonwealth, is licensed to practice law in

this Commonwealth or is a vote management system.

(2) Is not a unit owner of the planned community,

directly or indirectly.

(3) Has no family relationship with a unit owner of the

planned community or a planned community manager.

(4) Has no financial interest shared with a unit owner

of the planned community or a planned community manager.

(5) If compensated by the declarant, a director, the

association or a planned community manager, has disclosed the

terms of the compensation to all unit owners of the planned

community.

* * *

"VOTE MANAGEMENT SYSTEM." A THIRD-PARTY VENDOR WHO OPERATES

A DIGITAL OR SUBSCRIPTION SERVICE THAT SECURELY MANAGES THE

CONDUCT OF ELECTIONS AND VOTING PROCEDURES.

* * *

Section 8. Section 5222 of Title 68 is amended by adding

subsections to read:

§ 5222. Master associations.

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* * *

(e.1) Independent reviewer.--The instrument creating the

master association and the declaration of each planned community

of the organizational documents of other associations, the

powers of which are assigned pursuant to the declaration or

organizational documents or delegated to the master association,

shall also provide that a vote by a unit owner in an election of

the members of the master association governing body must be

submitted by the unit owner to an independent reviewer who shall

tally the results of the election and certify the results to the

executive board and unit owner. All votes by unit owners under

this subsection shall be submitted to the independent reviewer

in either an electronic or a paper format. The interchangeable

submission of votes by unit owners in an electronic and a paper

format in the same election shall be prohibited. All votes in

the same community shall be submitted in the same form for the

same election. This subsection shall only apply to a planned

community with at least 25 100 units. IF A PLANNED COMMUNITY HAS

MORE THAN 100 UNITS AND LESS THAN 500 UNITS, THE ASSOCIATION MAY

OPT OUT OF THE REQUIREMENTS UNDER THIS SUBSECTION BY AMENDING

THE ASSOCIATION'S BYLAWS IN ACCORDANCE WITH SECTION 5306

(RELATING TO BYLAWS).

* * *

(h) Penalties.--A person who attempts to interfere with the

votes or election process under subsection (e.1) is guilty of a

misdemeanor of the first degree and, upon conviction, shall be

sentenced to pay a fine not exceeding $10,000 or to undergo

imprisonment of not more than five years, or both, in the

discretion of the court.

Section 9. Sections 5306(a)(6), 5308 and 5412 of Title 68

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are amended to read:

§ 5306. Bylaws.

(a) Mandatory provisions.--The bylaws of the association

shall provide for all of the following:

* * *

(6) The method of amending the bylaws. The following

apply:

(i) The bylaws may be amended only by vote or

agreement of unit owners of units to which at least:

(A) sixty-seven FIFTY-ONE percent of votes in

the association are allocated as provided under

section 5208 (relating to allocation of votes and

common expense liabilities);

(B) a larger percentage of the votes in the

association as specified in the bylaws; or

association as specified in the bylaws if all units

are restricted exclusively to nonresidential use.

(ii) The vote may be taken only at a scheduled

meeting as provided under section 5308 (relating to

meetings) that was advertised seven days in advance to

the unit owners. Absentee voting shall be permitted to

unit owners provided that the ballots must be submitted

to an independent reviewer during a time period

consistent with the absentee voting provisions under

Article XIII of the act of June 3, 1937 (P.L.1333,

No.320), known as the Pennsylvania Election Code.

* * *

§ 5308. Meetings.

(a) Association meetings.--The bylaws shall require that

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meetings of the association be held at least once each year and

shall provide for special meetings. The bylaws shall specify

which of the association's officers, not less than ten nor more

than 60 days in advance of any meeting, shall cause notice to be

hand delivered or sent prepaid by United States mail to the

mailing address of each unit or to any other mailing address

designated in writing by the unit owner. The notice of any

meeting must state the time and place of the meeting and the

items on the agenda, including the general nature of any

proposed amendment to the declaration or bylaws; any budget or

assessment changes; and, where the declaration or bylaws require

approval of unit owners, any proposal to remove a director or

officer.

(b) Election meetings SESSIONS .--The bylaws shall require

that a special meeting SESSION of the association be held not

later than seven days before the election of an executive board

member or officer of the association to allow the unit owners to

meet each candidate for an executive board position or officer

position. A special meeting SESSION under this subsection may be

held virtually or in person. Each candidate for an executive

board position or officer position with the association shall

have equal time to address the unit owners during a special

meeting SESSION under this subsection.

§ 5412. Effect of violations on rights of action.

(a) General rule.--If a declarant or [any other person] AN

EXECUTIVE BOARD MEMBER subject to this subpart violates any

provision of this subpart or any provisions of the declaration

or bylaws[, any]: IN EXECUTING HIS OR HER DUTIES AS A DECLARANT

OR AN EXECUTIVE BOARD MEMBER:

(1) Any person or class of persons adversely affected by

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the violation has a claim for appropriate relief.

(2) The violation shall constitute an unfair trade

practice as defined in and may be enforced by the Office of

Attorney General under the act of December 17, 1968

(P.L.1224, No.387), known as the Unfair Trade Practices and

Consumer Protection Law.

(b) Punitive damages.--Punitive damages may be awarded in

the case of a willful violation of the subpart and, if

appropriate, the prevailing party may be entitled to an award of

costs and reasonable attorney fees.

Section 10. This act shall take effect in 60 days.

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