PRINTER'S NO. 2979
No. 2248 Session of 1988
INTRODUCED BY HARPER, ROEBUCK, VAN HORNE AND OLIVER, MARCH 16,
1988
REFERRED TO COMMITTEE ON BUSINESS AND COMMERCE, MARCH 16, 1988
AN ACT
1 Amending Title 68 (Real and Personal Property) of the
2 Pennsylvania Consolidated Statutes, adding and revising
3 provisions relating to condominiums; and making editorial
4 changes.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Section 3102 of Title 68 of the Pennsylvania
8 Consolidated Statutes is amended to read:
9 § 3102. Applicability of subpart.
10 (a) General rule.--This subpart applies to all condominiums
11 created within this Commonwealth after the effective date of
12 this subpart. [Sections] Subsection (b) and sections 3105
13 (relating to separate titles and taxation), 3106 (relating to
14 applicability of local ordinances, regulations and building
15 codes), 3107 (relating to eminent domain), 3203 (relating to
16 construction and validity of declaration and bylaws), 3204
17 (relating to description of units), 3222 (relating to master
18 associations), 3223 (relating to merger or consolidation of
1 condominiums), 3302(a)(1) through (6), (9) and (11) through (16)
2 (relating to powers of unit owners' association), 3311 (relating
3 to tort and contract liability), 3315 (relating to lien for
4 assessments), 3316 (relating to association records), 3407
5 (relating to resales of units) and 3412 (relating to effect of
6 violations on rights of action), and section 3103 (relating to
7 definitions) to the extent necessary in construing any of those
8 sections, apply to all condominiums created in this Commonwealth
9 before the effective date of this subpart; but those sections
10 apply only with respect to events and circumstances occurring
11 after the effective date of this subpart and do not invalidate
12 existing provisions of the declaration, code of regulations or
13 declaration plan of those condominiums.
14 (b) Prior statutory law.--The provisions of the act of July
15 3, 1963 (P.L.196, No.117), known as the ["]Unit Property Act,["]
16 do not apply to condominiums created after the effective date of
17 this subpart and do not invalidate any amendment to the
18 declaration, code of regulations or declaration plan of any
19 condominium created before the effective date of this subpart if
20 the amendment would be permitted by this subpart. The amendment
21 must be adopted in conformity with the procedures and
22 requirements specified by those instruments and by the
23 provisions of the ["]Unit Property Act.["] If the amendment
24 grants to any person any rights, powers or privileges permitted
25 by this subpart, all correlative obligations, liabilities and
26 restrictions in this subpart also apply to that person. By
27 amendment to the declaration, code of regulations and
28 declaration plan, a condominium created pursuant to the Unit
29 Property Act may be made subject to all of the provisions of
30 this subpart in lieu of the provisions of the Unit Property Act,
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1 effective as of the date of recordation of such amendments and
2 without in any way terminating the condominium status of the
3 property or in any way affecting any lien or encumbrance on the
4 property, if the terms of such amended documents conform to the
5 requirements of this subpart and if such amendments have been
6 approved by all the persons whose actions would have been
7 required to effect a removal of the property from the Unit
8 Property Act pursuant to section 601 thereof. No amendment of:
9 (1) the declaration, code of regulations or declaration
10 plan of a condominium created pursuant to the Unit Property
11 Act; or
12 (2) the declaration, bylaws or plats and plans of a
13 condominium created pursuant to this subpart;
14 may increase the obligations or responsibilities of a declarant
15 (as such and not as a unit owner) without the joinder of the
16 declarant in such amendment.
17 (c) Condominiums outside Commonwealth.--This subpart does
18 not apply to condominiums or units located outside this
19 Commonwealth, but the public offering statement provisions
20 (sections 3402 through 3405) apply to all dispositions thereof
21 in this Commonwealth unless exempt under section 3401(b)(5)
22 (relating to applicability; waiver).
23 Section 2. The definitions of "affiliate of a declarant,"
24 "common expenses," "conversion condominium," "declarant,"
25 "dispose or disposition," "limited common element," "offering,"
26 "purchaser" and "special declarant rights" in section 3103 of
27 Title 68 are amended and definitions are added to read:
28 § 3103. Definitions.
29 The following words and phrases when used in this subpart and
30 in the declaration and bylaws shall have the meanings given to
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1 them in this section unless specifically provided otherwise or
2 unless the context clearly indicates otherwise:
3 * * *
4 "Affiliate of a declarant." Any person who controls, is
5 controlled by, or is under common control with a declarant.
6 (1) A person "controls" a declarant if the person:
7 (i) is a general partner, officer, director or
8 [employee] employer of the declarant;
9 (ii) directly or indirectly or acting in concert
10 with one or more other persons, or through one or more
11 subsidiaries, owns, controls, holds with power to vote,
12 or holds proxies representing, more than 20% of the
13 voting interests of the declarant;
14 (iii) controls in any manner the election of a
15 majority of the directors of the declarant; or
16 (iv) has contributed more than 20% of the capital of
17 the declarant.
18 (2) A person "is controlled by" a declarant if the
19 declarant:
20 (i) is a general partner, officer, director or
21 employee of the person;
22 (ii) directly or indirectly or acting in concert
23 with one or more other persons, or through one or more
24 subsidiaries, owns, controls, holds with power to vote,
25 or holds proxies representing, more than 20% of the
26 voting interests of the person;
27 (iii) controls in any manner the election of a
28 majority of the directors of the person; or
29 (iv) has contributed more than 20% of the capital of
30 the person.
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1 (3) Control does not exist if the powers described in
2 paragraphs (1) and (2) are held solely as security for an
3 obligation and are not exercised.
4 * * *
5 "Common expenses." Expenditures made or liabilities incurred
6 by or on behalf of the association, together with any
7 allocations to reserves, including general common expenses and
8 limited common expenses.
9 * * *
10 "Conversion [condominium] building." A [condominium
11 containing any] building that at any time before [recording of
12 the declaration] the conversion notice date with respect to the
13 condominium in which the building is located was occupied wholly
14 or partially by persons other than purchasers and persons who
15 occupy with the consent of purchasers.
16 "Conversion notice." The notice required to be given to
17 tenants or subtenants by the terms of section 3410(a) (relating
18 to condominiums containing conversion buildings).
19 "Conversion notice date." The date on which the conversion
20 notice is placed in the United States mail, in the case of
21 mailed notices, or delivered to the unit leased by the
22 recipient, in the case of hand-delivered notices.
23 * * *
24 "Declarant."
25 (1) If the condominium has been created, "declarant"
26 means:
27 (i) any person who has executed a declaration, or an
28 amendment to a declaration to add additional real estate,
29 other than persons holding interests in the real estate
30 solely as security for an obligation, persons whose
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1 interests in the real estate will not be conveyed to unit
2 owners, or, in the case of a leasehold condominium, a
3 lessor who possesses no special declarant rights and who
4 is not an affiliate of a declarant who possesses special
5 declarant rights; or
6 (ii) any person who succeeds under section 3304
7 (relating to transfer of special declarant rights) to any
8 special declarant rights.
9 (2) If the condominium has not yet been created,
10 "declarant" means any person who offers to dispose of or
11 disposes of his interest in a unit to be created and not
12 previously disposed of.
13 (3) If a declaration is executed by a trustee of a land
14 trust, "declarant" means the beneficiary of the trust.
15 "Dispose" or "disposition." A voluntary transfer of any
16 legal or equitable interest in a unit (or a proposed unit),
17 other than as security for an obligation.
18 * * *
19 "Limited common element." A portion of the common elements
20 allocated by or pursuant to the declaration or by operation of
21 section 3202(2) or (4) (relating to unit boundaries) for the
22 exclusive use of one or more but fewer than all of the units.
23 "Limited common expenses." All expenses identified as such
24 pursuant to section 3314(c) (relating to assessments for common
25 expenses).
26 "Master association." An organization described in section
27 3222 (relating to master associations), whether or not it is an
28 association described in section 3301 (relating to organization
29 of unit owners' association).
30 ["Offering."] "Offer" or "offering." Any advertisement,
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1 inducement, solicitation or attempt to encourage any person to
2 acquire any interest in a unit, other than as security for an
3 obligation. An advertisement in a newspaper or other periodical
4 of general circulation, or in any broadcast medium to the
5 general public, of a condominium not located in this
6 Commonwealth, is not an offer or offering if the advertisement
7 states that an offer or offering may be made only in compliance
8 with the law of the jurisdiction in which the condominium is
9 located.
10 "Original lease termination date." The date on which the
11 lease or sublease of a residential tenant or subtenant in
12 possession of a unit in a conversion building will expire by the
13 terms of such lease or sublease, after taking into account any
14 renewal or extension rights that may have been exercised prior
15 to the conversion notice date.
16 * * *
17 "Purchaser." Any person, other than a declarant, who by
18 means of a [voluntary transfer] disposition acquires a legal or
19 equitable interest in a unit, other than:
20 (1) a leasehold interest (including renewal options) of
21 less than [five] 20 years, but a person who will become a
22 unit owner in a leasehold condominium upon consummation of
23 the disposition shall be deemed to be a purchaser; or
24 (2) as security for an obligation.
25 * * *
26 "Residential tenant" or "residential subtenant." A tenant or
27 subtenant, respectively, who is a natural person lawfully
28 occupying real estate for residential use.
29 "Special declarant rights." Rights reserved for the benefit
30 of a declarant to:
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1 (1) Complete improvements indicated on plats and plans
2 filed with the declaration (section 3210).
3 (2) Convert convertible real estate in a flexible
4 condominium (section 3211).
5 (3) Add additional real estate to a flexible condominium
6 (section 3211).
7 (4) Withdraw withdrawable real estate from a flexible
8 condominium (section 3212).
9 (5) Convert a unit into two or more units, common
10 elements, or into two or more units and common elements
11 (section 3215).
12 (6) Maintain [sales] offices, [management offices,]
13 signs [advertising the condominium,] and models (section
14 3217).
15 (7) Use easements through the common elements for the
16 purpose of making improvements within the condominium or
17 within any convertible or additional real estate (section
18 3218).
19 (8) Cause the condominium to be merged or consolidated
20 with another condominium (section 3223).
21 (9) Make the condominium subject to a master association
22 (section 3222).
23 [(8)] (10) Appoint or remove any officer of the
24 association or any master association or any executive board
25 member during any period of declarant control (section
26 3303(c)).
27 * * *
28 Section 3. Sections 3113, 3201, 3205, 3208, 3210, 3211,
29 3215, 3217, 3218, 3219, 3220, 3301, 3302, 3303, 3304, 3306,
30 3308, 3310, 3311, 3312, 3313, 3314, 3315, 3316, 3401, 3402,
19880H2248B2979 - 8 -
1 3403, 3404, 3405, 3406, 3407, 3408, 3409, 3410, 3411 and 3414 of
2 Title 68 are amended and sections are added to read:
3 § 3113. Remedies to be liberally administered.
4 (a) General rule.--The remedies provided by this subpart
5 shall be liberally administered to the end that the aggrieved
6 party is put in as good a position as if the other party had
7 fully performed. However, consequential, special or punitive
8 damages may not be awarded except as specifically provided in
9 this subpart or by other rule of law. Without limiting the
10 rights or remedies available to any person or classes of
11 persons, the Attorney General shall have the power to represent,
12 for the purpose of exercising any available right or seeking any
13 available remedy, one or more persons, including classes of
14 persons, who may have been injured by any breach of obligations
15 of a declarant under Chapter 34 (relating to protection of
16 purchasers).
17 (b) Judicial enforcement of rights and obligations.--Any
18 right or obligation declared by this subpart is enforceable by
19 judicial proceeding.
20 § 3201. Creation of condominium.
21 [(a) General rule.--]A condominium may be created pursuant
22 to this subpart only by recording a declaration executed, in the
23 same manner as a deed, by all persons whose interests in the
24 real estate will be conveyed to unit owners and by every lessor
25 of a lease the expiration or termination of which will terminate
26 the condominium or reduce its size, provided, however, in any
27 such lease wherein the lessor is the Commonwealth of
28 Pennsylvania, a municipal government or any agency thereof, said
29 lessor need not execute the declaration if they shall have
30 previously given written consent to its filing and agreed to be
19880H2248B2979 - 9 -
1 bound by the provisions of the Pennsylvania Uniform Condominium
2 Act, in which case said declaration shall be executed by the
3 lessee then in possession of the subject property. The
4 declaration shall be recorded in every county in which any
5 portion of the condominium is located in the same records as are
6 maintained for the recording of deeds of real property and shall
7 be indexed against each declarant as the grantor and the name of
8 the condominium as the grantee.
9 [(b) Substantial completion prerequisite to recording.--A
10 declaration or an amendment to a declaration adding units to a
11 condominium, may not be recorded unless all structural
12 components and mechanical systems of all buildings containing or
13 comprising any units thereby created are substantially completed
14 in accordance with the plans, as evidenced by a recorded
15 certificate of completion executed by an independent registered
16 surveyor, architect or professional engineer. Whenever a plat or
17 plan complying with section 3210 (relating to plats and plans)
18 has been previously recorded pursuant to the act of July 31,
19 1968 (P.L.805, No.247), known as the "Pennsylvania
20 Municipalities Planning Code," or an ordinance regulating land
21 development, the plat or plan may be incorporated into the
22 declaration by reference.
23 (c) Substantial completion prerequisite to conveyance.--No
24 interest in a unit may be conveyed until the unit is
25 substantially completed as evidenced by a recorded certificate
26 of completion executed by an independent registered architect,
27 surveyor or professional engineer.
28 (d) Construction of section.--Nothing contained in this
29 section shall prevent the offering for sale of a unit or
30 interest in a unit or the execution of any agreement to sell and
19880H2248B2979 - 10 -
1 purchase a unit or any interest in a unit (as opposed to actual
2 conveyance) prior to completion of the unit.]
3 § 3205. Contents of declaration; all condominiums.
4 The declaration for a condominium must contain:
5 (1) The name of the condominium which must include the
6 word "condominium" or be followed by the words "a
7 condominium."
8 (2) The name of every county in which any part of the
9 condominium is situated.
10 (3) A legally sufficient description of the real estate
11 included in the condominium.
12 (4) A description or delineation of the boundaries of
13 each unit including the unit's identifying number.
14 (5) A statement of the maximum number of units that may
15 be created by the subdivision or conversion of units owned by
16 the declarant pursuant to section 3215(c) (relating to
17 subdivision or conversion of units).
18 (6) A description of any limited common elements as
19 provided in section 3209 (relating to limited common
20 elements) and limited common expenses, if any, and how they
21 are to be assessed.
22 (7) A description of any common elements not within the
23 boundaries of any convertible real estate which may be
24 allocated subsequently as limited common elements together
25 with a statement that they may be so allocated and a
26 description of the method by which the allocations are to be
27 made.
28 (8) An allocation to each unit of an undivided interest
29 in the common elements, a portion of the votes in the
30 association and a percentage or fraction of the common
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1 expenses of the association (section 3208).
2 (9) Any restrictions created by the declarant on use,
3 occupancy and alienation of the units.
4 (10) The recording data for recorded easements and
5 licenses appurtenant to or included in the condominium or to
6 which any portion of the condominium is or may become
7 subject.
8 (11) If all or any of the units are or may be owned in
9 time-share estates as defined in section 3403(a) (relating to
10 public offering statement; time-share estates), which units
11 may be owned in time-share estates and the maximum number of
12 time-share estates that may be created in the condominium, it
13 being intended that time-share estates shall not be permitted
14 except if and to the extent expressly authorized by the
15 declaration.
16 (12) If the declarant wishes to retain the special
17 declarant right to cause section 3222 (relating to master
18 associations) to become applicable to a condominium, then:
19 (i) an explicit reservation of such right;
20 (ii) a statement of the time limit, not exceeding
21 seven years after the recordation of the declaration,
22 upon which the option reserved under subparagraph (i)
23 will lapse, together with a statement of any
24 circumstances that will terminate the option before the
25 expiration of the time limit; and
26 (iii) the information required to be included in the
27 declaration by the provisions of section 3222.
28 (13) If the declarant wishes to retain the special
29 declarant right to merge or consolidate the condominium
30 pursuant to section 3223 (relating to merger or consolidation
19880H2248B2979 - 12 -
1 of condominiums), then:
2 (i) an explicit reservation of such right;
3 (ii) a statement of the time limit, not exceeding
4 seven years after the recording of the declaration, upon
5 which any option reserved under subparagraph (i) will
6 lapse, together with a statement of any circumstances
7 that will terminate the option before the expiration of
8 the time limit;
9 (iii) a statement of the name and location of each
10 other condominium that may be subject to such a merger or
11 consolidation if such other condominiums exist and if
12 such other condominiums do not exist, then the
13 declaration shall include the following:
14 (A) A statement of the extent to which the
15 common element interest, relative voting strength in
16 the association and share of common expense liability
17 of each unit in the condominium at the time the
18 merger or consolidation is effectuated may be
19 increased or decreased by actions pursuant to any
20 option reserved under subparagraph (i), including the
21 formulas to be used for those reallocations.
22 (B) Legally sufficient descriptions of each
23 portion of real estate which is part of any other
24 condominiums which may be created and with which the
25 condominium may merge or consolidate.
26 (C) If mergers or consolidations may be
27 effectuated at different times, a statement to that
28 effect together with:
29 (I) either a statement fixing the boundaries
30 of those condominiums and regulating the order in
19880H2248B2979 - 13 -
1 which they may be merged or consolidated or a
2 statement that no assurances are made in those
3 regards; and
4 (II) a statement as to whether, if any other
5 condominiums are merged or consolidated with the
6 condominium, all or any of such condominiums must
7 be merged or consolidated.
8 (D) A statement of:
9 (I) the maximum number of units that may be
10 created within any such other condominiums, the
11 boundaries of which are fixed pursuant to clause
12 (C);
13 (II) how many of those units will be
14 restricted exclusively to residential use; and
15 (III) the maximum number of units per acre
16 that may be created within any such other
17 condominiums, the boundaries of which are not
18 fixed pursuant to clause (C).
19 (E) If any of the units that may be built within
20 any such other condominiums are not to be restricted
21 exclusively to residential use, a statement with
22 respect to each portion of such other condominiums of
23 the maximum percentage of the real estate areas and
24 the maximum percentage of the floor areas of all
25 units that may be created therein that are not
26 restricted exclusively to residential use.
27 (F) A statement of the extent to which any
28 buildings and units that may be part of such other
29 condominiums will be compatible with the other
30 buildings and units in the condominium in terms of
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1 architectural style, quality of construction,
2 principal materials employed in construction and
3 size, or a statement that no assurances are made in
4 those regards.
5 (G) A statement that all restrictions in the
6 declaration affecting use, occupancy and alienation
7 of units will apply to units created within any such
8 other condominiums, or a statement of any
9 differentiations that may be made as to those units.
10 (H) General descriptions of all other
11 improvements and limited common elements that may be
12 made or created within such other condominiums, or a
13 statement that no assurances are made in that regard.
14 (I) A statement of any limitations as to the
15 locations of any buildings or other improvements that
16 may be made within such other condominiums, or a
17 statement that no assurances are made in that regard.
18 (J) A statement that any limited common elements
19 created within any such other condominiums will be of
20 the same general types and sizes as those within the
21 condominium, or a statement of any other assurances
22 in that regard, or a statement that no assurances are
23 made in that regard.
24 (K) A statement that the proportion of limited
25 common elements to units created within such other
26 condominiums will be approximately equal to the
27 proportion existing within the condominium, or a
28 statement of any other assurances in that regard, or
29 a statement that no assurances are made in that
30 regard.
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1 (L) A statement of the extent to which any
2 assurances made in the declaration regarding such
3 other condominiums pursuant to clauses (C) through
4 (K) apply in the event any such condominiums are not
5 merged or consolidated with the condominium, or a
6 statement that those assurances do not apply if the
7 condominiums are not merged or consolidated with the
8 condominium; and
9 (iv) a summary description of the other provisions
10 which materially change any rights, obligations or
11 liabilities that will be included in the agreement of
12 merger or consolidation if such right is exercised.
13 [(11)] (14) Any other matters the declarant deems
14 appropriate.
15 § 3208. Allocation of common element interests, votes and
16 common expense liabilities.
17 (a) General rule.--The declaration shall allocate a fraction
18 or percentage of undivided interests in the common elements and
19 in the common expenses of the association, and a portion of the
20 votes in the association, to each unit and state the formulas
21 used to establish those allocations. Such formulas may take into
22 account unusual attributes of identified units if the formulas
23 state how the deviation from the normal rule applies to such
24 units.
25 (b) Flexible condominiums.--[In a flexible condominium, the
26 common element interest and common expense liability allocated
27 to each unit must be equal, or proportionate to the relative
28 size of each unit, unless the declaration as originally
29 recorded:
30 (1) requires that any units created in additional or
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1 convertible real estate be substantially identical to the
2 other units in the condominium and provides that common
3 element interests and common expense liabilities will be
4 allocated to those units in accordance with the formulas used
5 for the initial allocations; or
6 (2) identifies all other types of units that may be
7 created in additional or convertible real estate in terms of
8 architectural style, quality of construction, principal
9 materials to be used and ranges of sizes and states the
10 formulas upon which any reallocations of common element
11 interests and common expense liabilities will be made, or
12 states the common element interest and common expense
13 liability to be allocated to each unit that may be created.]
14 If units may be added to, including by conversion of convertible
15 real estate to one or more units, or withdrawn from the
16 condominium, the declaration must state the formulas to be used
17 to reallocate the fractions or percentages of undivided
18 interests in the common elements and in the common expenses of
19 the association, and the portions of the votes in the
20 association among all units included in the condominium after
21 the addition or withdrawal.
22 (c) Votes.--[The number of votes allocated to each unit must
23 be equal, proportionate to that unit's common expense liability,
24 or proportionate to that unit's common element interest. If the
25 declaration allocates an equal number of votes in the
26 association to each unit, each unit that may be subdivided or
27 converted by the declarant into two or more units, common
28 elements, or both (section 3215), must be allocated a number of
29 votes in the association proportionate to the relative size of
30 that unit compared to the aggregate size of all units and the
19880H2248B2979 - 17 -
1 remaining votes in the association must be allocated equally to
2 the other units.] Each unit in the condominium shall be
3 allocated one or more votes in the condominium association. The
4 declaration shall specify how votes in the condominium shall be
5 allocated among the units and may provide:
6 (1) for different allocations of votes among the units
7 on particular matters specified in the declaration; and
8 (2) for class voting on specified issues affecting a
9 particular class of units if necessary to protect the valid
10 interests of the owners of such units and not affecting units
11 outside of the class.
12 Cumulative voting shall only be permitted if so provided
13 expressly in the declaration and only for the purpose of
14 electing members of the executive board. A declarant may not
15 utilize cumulative or class voting for the purpose of evading
16 any limitations imposed upon declarants by this subpart. The
17 declaration may provide that different allocations of votes
18 shall be made to the units on particular matters specified in
19 the declaration.
20 (d) Alteration or partition of allocations.--Except in the
21 case of eminent domain (section 3107), expansion or conversion
22 of a flexible condominium (section 3211), withdrawal of
23 withdrawable real estate (section 3212), relocation of
24 boundaries between adjoining units (section 3214) or subdivision
25 of units (section 3215), the common element interest, votes and
26 common expense liability allocated to any unit may not be
27 altered without unanimous consent of all unit owners. The common
28 elements are not subject to partition and any purported
29 conveyance, encumbrance, judicial sale or other voluntary or
30 involuntary transfer of an undivided interest in the common
19880H2248B2979 - 18 -
1 elements made without the unit to which it is allocated is void.
2 (e) Calculations for undivided interests.--Except for minor
3 variations due to rounding, the sums of the undivided interests
4 in the common elements and common expense liabilities allocated
5 at any time to all the units shall each equal one if stated as
6 fractions or 100% if stated as percentages. In the event of
7 discrepancy between the common element interest, votes or common
8 expense liability allocated to a unit and the result derived
9 from application of the formulas, the allocated common element
10 interest, vote or common expense liability prevails.
11 § 3210. Plats and plans.
12 (a) General rule.--Plats and plans are a part of the
13 declaration. Separate plats and plans are not required by this
14 subpart if all the information required by this section is
15 contained in either a plat or plan. Each plat and plan must be
16 clear and legible [and contain]. The plats and plans must
17 contain, on the first page of the plats and plans, a
18 certification that [the plat or plan accurately depicts all
19 existing conditions and contains] all of the plats and plans
20 contain all information required by this section.
21 (b) Contents of plat.--Each plat must show:
22 (1) The name, location and dimensions of the
23 condominium.
24 (2) The location and dimensions of all existing
25 improvements.
26 (3) The intended location and dimensions of any
27 contemplated improvement to be constructed anywhere within
28 the condominium labeled either "MUST BE BUILT" or "NEED NOT
29 BE BUILT" but need not show contemplated improvements within
30 the boundaries of convertible real estate.
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1 (4) The location and dimensions of any convertible real
2 estate, labeled as such.
3 (5) The location and dimensions of any withdrawable real
4 estate, labeled as such.
5 (6) The extent of any encroachments by or upon any
6 portion of the condominium.
7 (7) To the extent feasible, the location and dimensions
8 of all easements serving or burdening any portion of the
9 condominium.
10 (8) The location and dimensions of any vertical unit
11 boundaries not shown or projected on plans recorded pursuant
12 to subsection (c) and that unit's identifying number.
13 (9) The location with reference to established datum of
14 any horizontal unit boundaries not shown or projected on
15 plans recorded pursuant to subsection (c) and that unit's
16 identifying number.
17 (10) The location and dimensions of any real estate in
18 which the unit owners will own only an estate for years,
19 labeled as "leasehold real estate."
20 (11) The distance between noncontiguous parcels of real
21 estate comprising the condominium.
22 (12) The location and dimensions of limited common
23 elements, including porches, balconies and patios, other than
24 parking spaces and the other limited common elements
25 described in section 3202(2) and (4) (relating to unit
26 boundaries) not shown on plans recorded pursuant to
27 subsection (c).
28 (13) All other matters customarily shown on land
29 surveys.
30 (c) Contents of plan.--Plans of every building that contains
19880H2248B2979 - 20 -
1 or comprises all or part of any unit and is located or must be
2 built within any portion of the condominium, other than within
3 the boundaries of any convertible real estate, must show:
4 (1) The location and dimensions of the vertical
5 boundaries of each unit, to the extent those boundaries lie
6 within or coincide with the boundaries of the building in
7 which the unit is located, and that unit's identifying
8 number.
9 (2) Any horizontal unit boundaries, with reference to
10 established datum, not shown on plats recorded pursuant to
11 subsection (b), and that unit's identifying number.
12 (3) Any units that may be converted by the declarant to
13 create additional units or common elements (section 3215(c)),
14 identified appropriately.
15 (4) The location and dimensions of limited common
16 elements, including porches, balconies and patios, other than
17 parking spaces and other limited common elements described in
18 section 3202(2) and (4) not shown on plats recorded pursuant
19 to subsection (b).
20 (d) Horizontal boundaries of unit partly outside building.--
21 Unless the declaration provides otherwise, the horizontal
22 boundaries of part of a unit located outside of a building have
23 the same elevation as the horizontal boundaries of the inside
24 part and need not be depicted on the plats and plans.
25 (e) Converting or adding real estate.--Upon converting
26 convertible real estate or adding additional real estate
27 (section 3211), the declarant shall record new plats for that
28 real estate conforming to the requirements of subsection (b) and
29 new plans for any buildings on that real estate conforming to
30 the requirements of subsection (c). If less than all of any
19880H2248B2979 - 21 -
1 convertible real estate is being converted, the new plats must
2 also show the location and dimensions of the remaining portion.
3 (f) Converting units.--If a declarant converts any unit into
4 two or more units, limited common elements, or both (section
5 3215), he shall record new plans showing the location and
6 dimensions of any new units and limited common elements thus
7 created as well as the location and dimensions of any portion of
8 that space not being converted.
9 (g) Alternative recording.--Instead of recording new plats
10 and plans as required by subsections (e) and (f), the declarant
11 may record new certifications of plats and plans previously
12 recorded if those plats and plans show all improvements required
13 by subsections (e) and (f).
14 (h) Who may make certifications.--Any certification of a
15 plat or plan required by this section or section 3201(b)
16 (relating to creation of condominium) must be made by an
17 independent registered surveyor, architect or professional
18 engineer.
19 § 3211. Conversion and expansion of flexible condominiums.
20 (a) General rule.--To convert convertible real estate or add
21 additional real estate pursuant to an option reserved under
22 section 3206(1) (relating to contents of declaration; flexible
23 condominiums), the declarant shall prepare, execute and record
24 an amendment to the declaration (section 3219) and comply with
25 section 3210 (relating to plats and plans). The declarant is the
26 unit owner of any units thereby created. The amendment to the
27 declaration must assign an identifying number to each unit
28 formed in the convertible or additional real estate and
29 reallocate common element interests, votes in the association
30 and common expense liabilities. The amendment must describe or
19880H2248B2979 - 22 -
1 delineate any limited common elements formed out of the
2 convertible or additional real estate, showing or designating
3 the unit to which each is allocated to the extent required by
4 section 3209 (relating to limited common elements).
5 (b) Creations within [added] additional real estate.--
6 Convertible or withdrawable real estate may be created within
7 any additional real estate added to the condominium if the
8 amendment adding that real estate includes all matters required
9 by section 3205 (relating to contents of declaration; all
10 condominiums) or section 3206 (relating to contents of
11 declaration; flexible condominiums), as the case may be, and the
12 plat includes all matters required by section 3210(b) (relating
13 to plats and plans). This provision does not extend the time
14 limit on conversion or contraction of a flexible condominium
15 imposed by the declaration pursuant to section 3206(2).
16 (c) Liability for expenses and right to income.--Until
17 conversion occurs or the period during which conversion may
18 occur expires, whichever occurs first, the declarant alone is
19 liable for real estate taxes assessed against convertible real
20 estate and all other expenses in connection with that real
21 estate. No other unit owner and no other portion of the
22 condominium is subject to a claim for payment of those taxes or
23 expenses. Unless the declaration provides otherwise, any income
24 or proceeds from convertible real estate inures to the
25 declarant.
26 § 3215. Subdivision or conversion of units.
27 (a) General rule.--If the declaration expressly so permits,
28 a unit may be subdivided into two or more units or, in the case
29 of a unit owned by a declarant, may be subdivided or converted
30 into two or more units, common elements, or a combination of
19880H2248B2979 - 23 -
1 units and common elements. Subject to the provisions of the
2 declaration and other provisions of law, upon application of a
3 unit owner to subdivide a unit or upon application of a
4 declarant to convert a unit the association shall prepare,
5 execute and record an amendment to the declaration, including
6 the plats and plans, subdividing or converting that unit.
7 (b) Execution and contents of amendment.--The amendment to
8 the declaration must be executed by the owner of the unit to be
9 subdivided, assign an identifying number to each unit created
10 and reallocate the common element interest, votes in the
11 association and common expense liability formerly allocated to
12 the subdivided unit to the new units in any reasonable manner
13 prescribed by the owner of the subdivided unit.
14 (c) Conversion of unit of declarant to common elements.--In
15 the case of a unit owned by a declarant, if a declarant converts
16 all of a unit to common elements, the amendment to the
17 declaration must reallocate among the other units the common
18 element interest, votes in the association and common expense
19 liability formerly allocated to the converted unit on [the same
20 basis used for the initial allocation thereof] a pro rata basis,
21 inter se.
22 § 3217. [Use for sales purposes.] Declarant's offices, models
23 and signs.
24 [A declarant may maintain sales offices, management offices
25 and models in the condominium only if the declaration so
26 provides and specifies the rights of a declarant with regard to
27 the number, size, location and relocation thereof. Any sales
28 office, management office or model not designated a unit by the
29 declaration is a common element, and if a declarant ceases to be
30 a unit owner, he ceases to have any rights with regard thereto
19880H2248B2979 - 24 -
1 unless it is removed promptly from the condominium in accordance
2 with a right to remove reserved in the declaration. Subject to
3 any limitations in the declaration, a declarant may maintain
4 signs on the common elements advertising the condominium.]
5 (a) Common elements.--A declarant may maintain offices and
6 models in the common element portion of the condominium only in
7 connection with the management, sale or rental of units owned by
8 the declarant in the condominium, if the declaration so provides
9 and specifies the rights of a declarant with regard to the
10 number, size, location and relocation thereof. At such time as a
11 declarant ceases to be a unit owner, he ceases to have any
12 rights with regard to such portions of the common elements so
13 used unless such portions are removed promptly from the
14 condominium in accordance with a right to remove reserved in the
15 declaration. Upon the relocation of a model or office
16 constituting a common element, declarant may remove all personal
17 property and fixtures therefrom. Any fixtures not so removed
18 shall be deemed common elements, and any personal property not
19 so removed shall be deemed the property of the association.
20 (b) Signs.--Subject to any limitations in the declaration, a
21 declarant may maintain signs in his units and on the common
22 elements advertising units in the condominium owned by the
23 declarant for sale or lease.
24 (c) Units.--A declarant shall have the right to locate,
25 relocate and maintain offices and models used only in connection
26 with the management, sale or rental of units owned by the
27 declarant in the condominium, in his unit or units in the
28 condominium, notwithstanding the fact that the declaration would
29 otherwise preclude use of units for such purpose, but subject to
30 all other provisions in the declaration, including, without
19880H2248B2979 - 25 -
1 limitation, modification or elimination of declarant's rights
2 pursuant to this subsection by specific reference thereto.
3 § 3218. Easement to facilitate completion, conversion and
4 expansion.
5 Subject to the provisions of the declaration, a declarant has
6 an easement through the common elements as may be reasonably
7 necessary for the purpose of discharging a declarant's
8 obligations or exercising special declarant rights, [whether
9 arising under this subpart or reserved in the declaration]
10 however arising.
11 § 3219. Amendment of declaration.
12 (a) Number of votes required.--Except in cases of amendments
13 that may be executed by a declarant under [sections] section
14 3210(e) and (f) (relating to plats and plans), 3211(a) (relating
15 to conversion and expansion of flexible condominiums) or 3212(a)
16 (relating to withdrawal of withdrawable real estate); the
17 association under [sections] subsection (f) or section 3107
18 (relating to eminent domain), 3207(d) (relating to leasehold
19 condominiums), 3209(c) (relating to limited common elements) or
20 3215(a) (relating to subdivision or conversion of units); or
21 certain unit owners under [sections] section 3209(b) (relating
22 to limited common elements), 3214(a) (relating to relocation of
23 boundaries between adjoining units), 3215(b) (relating to
24 subdivision or conversion of units) or 3220(b) (relating to
25 termination of condominium), and except as limited by subsection
26 (d), the declaration, including the plats and plans, may be
27 amended only by vote or agreement of unit owners of units to
28 which at least 67% of the votes in the association are
29 allocated, or any larger majority the declaration specifies. The
30 declaration may specify a smaller number only if all of the
19880H2248B2979 - 26 -
1 units are restricted exclusively to nonresidential use.
2 (b) Limitation of action to challenge amendment.--No action
3 to challenge the validity of an amendment adopted by the
4 association pursuant to this section may be brought more than
5 one year after the amendment is recorded.
6 (c) Recording amendment.--Every amendment to the declaration
7 must be recorded in every county in which any portion of the
8 condominium is located in the same records as are maintained for
9 the recording of deeds of real property and shall be indexed in
10 the name of the condominium in both the grantor and grantee
11 index. An amendment is effective only upon recordation.
12 (d) When unanimous consent required.--Except to the extent
13 expressly permitted or required by other provisions of this
14 subpart, no amendment may create or increase special declarant
15 rights, increase the number of units or change the boundaries of
16 any unit, the common element interest, common expense liability
17 or voting strength in the association allocated to a unit, or
18 the uses to which any unit is restricted, in the absence of
19 unanimous consent of the unit owners.
20 (e) Officer authorized to execute amendment.--Amendments to
21 the declaration required by this subpart to be recorded by the
22 association shall be prepared, executed, recorded and certified
23 by any officer of the association designated for that purpose
24 or, in the absence of designation, by the president of the
25 association.
26 (f) Corrective amendments.--Except as otherwise provided in
27 the declaration, if any amendment to the declaration is
28 necessary in the judgment of the executive board to cure any
29 ambiguity or to correct or supplement any provision of the
30 declaration, including the plats and plans, that is defective,
19880H2248B2979 - 27 -
1 missing or inconsistent with any other provision thereof, or
2 with this subpart, or if an amendment is necessary in the
3 judgment of the executive board to conform to the requirements
4 of any agency or entity that has established national or
5 regional standards with respect to loans secured by mortgages or
6 deeds of trust on units in condominium projects (such as the
7 Federal National Mortgage Association and the Federal Home Loan
8 Mortgage Corporation), then, at any time and from time to time,
9 the executive board may at its discretion effect an appropriate
10 corrective amendment without the approval of the unit owners or
11 the holders of any liens on all or any part of the condominium,
12 upon receipt by the executive board of an opinion from
13 independent legal counsel to the effect that the proposed
14 amendment is permitted by the terms of this subsection.
15 § 3220. Termination of condominium.
16 (a) Number of votes required.--Except in the case of a
17 taking of all the units by eminent domain (section 3107), a
18 condominium may be terminated only by agreement of unit owners
19 of units to which at least 80% of the votes in the association
20 are allocated, or any larger percentage the declaration
21 specifies. The declaration may specify a smaller percentage only
22 if all of the units in the condominium are restricted
23 exclusively to nonresidential uses.
24 (b) Execution and recording agreement and ratifications.--
25 [An agreement of unit owners to terminate a condominium must be
26 evidenced by their execution of a termination agreement or
27 ratifications thereof. If, pursuant to a termination agreement,
28 the real estate constituting the condominium is to be sold
29 following termination, the termination agreement must set forth
30 the terms of the sale.] An agreement of unit owners to terminate
19880H2248B2979 - 28 -
1 a condominium must be evidenced by their execution of a
2 termination agreement or ratifications thereof, in the same
3 manner as a deed, by the requisite number of unit owners who are
4 owners of record as of the date preceding the date of
5 recordation of the termination agreement. The termination
6 agreement must specify the date it was first executed or
7 ratified by a unit owner. The termination agreement will become
8 null and void unless it is recorded on or before the earlier of:
9 (1) The expiration of one year from the date it was
10 first executed or ratified by a unit owner.
11 (2) Such date as shall be specified in the termination
12 agreement.
13 If, pursuant to a termination agreement, the real estate
14 constituting the condominium is to be sold following
15 termination, the termination agreement must set forth the terms
16 of the sale. A termination agreement and all ratifications
17 thereof must be recorded in every county in which a portion of
18 the condominium is located in the same records as are maintained
19 for the recording of deeds of real property and shall be indexed
20 in the name of the condominium in both the grantor index and the
21 grantee index. A termination agreement is effective only upon
22 recordation.
23 (c) Status if real estate sold.--The association, on behalf
24 of the unit owners, may contract for the sale of the
25 condominium, but the contract is not binding on the unit owners
26 until approved pursuant to subsections (a) and (b). If the real
27 estate constituting the condominium is to be sold following
28 termination, title to that real estate, upon termination, vests
29 in the association as trustee for the holders of all interests
30 in the units. Thereafter, the association has all powers
19880H2248B2979 - 29 -
1 necessary and appropriate to effect the sale. Until the sale has
2 been concluded and the proceeds thereof distributed, the
3 association continues in existence with all powers it had before
4 termination. Proceeds of the sale must be distributed to unit
5 owners and lienholders as their interests may appear, in
6 proportion to the respective interests of unit owners as
7 provided in subsection (f). Unless otherwise specified in the
8 termination agreement, as long as the association holds title to
9 the real estate, each unit owner and his successors in interest
10 have an exclusive right to occupancy of the portion of the real
11 estate that formerly constituted his unit. During the period of
12 that occupancy, each unit owner and his successors in interest
13 remain liable for all assessments and other obligations imposed
14 on unit owners by this subpart or the declaration.
15 (d) Status if real estate not sold.--If the real estate
16 constituting the condominium is not to be sold following
17 termination, title to the real estate, upon termination, vests
18 in the unit owners as tenants in common in proportion to their
19 respective interests as provided in subsection (f) and liens on
20 the units shift accordingly. While the tenancy in common exists,
21 each unit owner and his successors in interest have an exclusive
22 right to occupancy of the portion of the real estate that
23 formerly constituted his unit.
24 (e) Distribution of assets of association.--Following
25 termination of the condominium, [and after payment of or
26 provision for the claims of the association's creditors, the
27 assets of the association shall be distributed to unit owners in
28 proportion to their respective interests as provided in
29 subsection (f). The proceeds of sale described in subsection (c)
30 and held by the association as trustee are not assets of the
19880H2248B2979 - 30 -
1 association.] the proceeds of any sale of real estate, together
2 with the assets of the association, shall be held by the
3 association as trustee or unit owners and holders of liens on
4 the units, as their interests may appear. Following termination,
5 creditors of the association holding liens on the units, which
6 were recorded, filed of public record or otherwise perfected
7 before termination, may enforce those liens in the same manner
8 as any lienholder. All other creditors of the association are to
9 be treated as if they had perfected liens on the units
10 immediately before termination.
11 (f) Respective interests of unit owners.--The respective
12 interests of unit owners referred to in subsections (c), (d) and
13 (e) are as follows:
14 (1) Except as provided in paragraph (2), the respective
15 interests of unit owners are the fair market values of their
16 units, limited common elements and common element interests
17 immediately before the termination, as determined by one or
18 more independent appraisers selected by the association. The
19 decision of the independent appraisers shall be distributed
20 to the unit owners and becomes final unless disapproved
21 within 30 days after distribution by unit owners of units to
22 which 25% of the votes in the association are allocated. The
23 proportion of any unit owner's interest to that of all unit
24 owners is determined by dividing the fair market value of
25 that unit owner's unit and common element interest by the
26 total fair market values of all the units and common
27 elements.
28 (2) If any unit or any limited common element is
29 destroyed to the extent that an appraisal of the fair market
30 value thereof prior to destruction cannot be made, the
19880H2248B2979 - 31 -
1 interests of all unit owners are their respective common
2 element interests immediately before the termination.
3 (g) Effect of foreclosure or enforcement of lien.--
4 [Foreclosure] Except as provided in subsection (h), foreclosure
5 or enforcement of a lien or encumbrance against the entire
6 condominium does not of itself terminate the condominium, and
7 foreclosure or enforcement of a lien or encumbrance against a
8 portion of the condominium, other than withdrawable real estate,
9 does not withdraw that portion from the condominium. Foreclosure
10 or enforcement of a lien or encumbrance against withdrawable
11 real estate does not of itself withdraw that real estate from
12 the condominium but the person taking title thereto has the
13 right to require from the association, upon request, an
14 amendment excluding the real estate from the condominium.
15 (h) Exclusion from condominium upon foreclosure.--If a lien
16 or encumbrance against a portion of the real estate comprising
17 the condominium has priority over the declaration and if the
18 lien or encumbrance has not been partially released, the parties
19 foreclosing the lien or encumbrance may, upon foreclosure,
20 record an instrument excluding the real estate subject to that
21 lien or encumbrance from the condominium.
22 § 3222. Master associations.
23 (a) Applicability of section.--If the declaration for a
24 condominium provides that any of the powers described in section
25 3302 (relating to powers of unit owners' association) with
26 respect to the condominium are to be exercised by or may be
27 delegated to a profit or nonprofit corporation or unincorporated
28 association (a "master association") which exercises those or
29 other powers on behalf of one or more other condominiums or
30 other incorporated or unincorporated associations, then, except
19880H2248B2979 - 32 -
1 as modified by this section, all provisions of this subpart
2 applicable to unit owners' associations shall apply to any such
3 master association insofar as its actions affect the
4 condominium.
5 (b) Powers.--Unless a master association is acting in the
6 capacity of an association described in section 3301 (relating
7 to organization of unit owners' association) with respect to a
8 condominium which is part of the master association, it may
9 exercise with respect to the condominium only such powers set
10 forth in section 3302 and only to the extent expressly permitted
11 in the declaration of condominium which provides for the
12 delegation of powers from its condominium association to the
13 master association and accepted by such master association as
14 indicated in the provisions of the declaration or other
15 organizational documents of such master association.
16 (c) Liability of executive board members and officers.--If
17 the declaration of a condominium provides that the executive
18 board may delegate certain powers to a master association, the
19 members of the executive board have no liability for the acts or
20 omissions of the master association with respect to those powers
21 following such delegation. The officers and members of the
22 governing board of the master association are subject to
23 liability to the condominium association whose powers are
24 delegated thereto and the unit owners of such condominium on the
25 same basis as officers and executive board members of such
26 condominium immediately before such delegation of powers.
27 (d) Rights and responsibilities of persons electing
28 governing body.--The rights and responsibilities of unit owners
29 with respect to the unit owners' association set forth in
30 sections 3303 (relating to executive board members and
19880H2248B2979 - 33 -
1 officers), 3308 (relating to meetings), 3309 (relating to
2 quorums), 3310 (relating to voting; proxies) and 3320 (relating
3 to declarant delivery of items to association) apply in the
4 conduct of the affairs of a master association with respect to
5 the exercise of powers delegated pursuant to a condominium
6 declaration to such master association, but apply only to those
7 persons who elect the governing body of a master association,
8 whether or not those persons are otherwise unit owners within
9 the meaning of this subpart.
10 (e) Election of master association governing body.--
11 Notwithstanding the provisions of section 3303(e) with respect
12 to the election of the executive board by all unit owners after
13 the period of declarant control ends, and even if a master
14 association is also an association described in section 3301,
15 the instrument creating the master association and the
16 declaration of each condominium or the organizational documents
17 of other associations the powers of which are assigned pursuant
18 to the declaration or organizational documents or delegated to
19 the master association shall provide that the governing body of
20 the master association must be elected after the period of
21 declarant control in any of the following ways:
22 (1) All unit owners of all condominiums and other
23 properties subject to the master association elect all
24 members of the governing body of the master association.
25 (2) All members of the governing bodies of the
26 condominium associations and other property owners'
27 associations subject to the master association elect all
28 members of the master association governing body.
29 (3) All unit owners of each condominium and other
30 property owners' associations subject to the master
19880H2248B2979 - 34 -
1 association elect specified members of the master association
2 governing body.
3 (4) All members of the governing bodies of the
4 condominiums and other property associations subject to the
5 master association elect specified members of the master
6 association governing body.
7 (f) Delegation of responsibility and authority.--The
8 provisions of this section shall apply to a condominium if and
9 when:
10 (1) there occurs either a date specified in the
11 declaration, or any amendment thereto, from and after which
12 this section shall apply to the condominium;
13 (2) there occurs an event or action that the
14 declaration, or any amendment thereto, states shall cause
15 this section to become applicable, and the association causes
16 to be recorded an instrument duly executed by the president
17 of the association stating that:
18 (i) such event or action has occurred, and the date
19 of such occurrence, thereby causing this section to
20 become applicable to the condominium; and
21 (ii) that a copy of such instrument has been sent to
22 all unit owners; or
23 (3) the declarant executes and records an instrument
24 stating that this section shall thereafter apply to the
25 condominium and that a copy of such instrument has been sent
26 to the executive board and all unit owners.
27 Paragraph (3) shall be applicable only if the declarant shall
28 have expressly reserved in the declaration, pursuant to section
29 3205(12) (relating to contents of declaration; all
30 condominiums), the special declarant right to make this section
19880H2248B2979 - 35 -
1 applicable to the condominium and only if the instrument
2 exercising such right shall have been recorded during the time
3 period allowed for the exercise of such right.
4 (g) Delegation of all powers.--If all the powers of a
5 condominium association are delegated to a master association
6 and accepted by such master association pursuant to subsection
7 (b), then the governing body of the master association may act
8 in all respects as the executive board of the condominium and no
9 separate executive board need be elected or exist.
10 § 3223. Merger or consolidation of condominiums.
11 (a) General rule.--Any two or more condominiums, by
12 agreement of the unit owners as provided in subsection (b), may
13 be merged or consolidated into a single condominium. In the
14 event of a merger or consolidation, unless the agreement
15 otherwise provides, the resultant condominium is, for all
16 purposes, the legal successor of all of the preexisting
17 condominiums, and the operations and activities of all
18 associations of the preexisting condominiums shall be merged or
19 consolidated into a single association which shall hold all
20 powers, rights, obligations, assets and liabilities of all
21 preexisting associations. The resultant condominium shall, in
22 addition, be subject in all respects to the provisions and
23 requirements of this subpart regardless of whether or not any of
24 the preexisting condominiums shall have been established under
25 this subpart.
26 (b) Requirements of agreement.--The merger or consolidation
27 of two or more condominiums pursuant to subsection (a) must be
28 evidenced by a recorded agreement duly executed by the president
29 of the association of each of the preexisting condominiums
30 following approval by owners of units to which are allocated the
19880H2248B2979 - 36 -
1 percentage of votes in each condominium required to terminate
2 such condominium. Any such agreement must be recorded in every
3 county in which a portion of the condominium is located and is
4 not effective until so recorded.
5 (c) Reallocations.--Every merger or consolidation agreement
6 must provide for the reallocation of the common element
7 interests, common expense liability, including both general and
8 limited common expenses, and portion of the votes in the
9 resulting association among the units of the resulting
10 condominium either:
11 (1) by stating the reallocations or the formulas upon
12 which they are based; or
13 (2) by stating the common element interests, common
14 expense liability, including both general and limited common
15 expenses, and portion of the votes in the resulting
16 association which are allocated to all of the units
17 comprising each of the preexisting condominiums, and
18 providing that the common element interests, common expense
19 liability, including both general and limited common
20 expenses, and portion of the votes in the association for the
21 resulting condominium shall be the same as was allocated to
22 each unit formerly comprising a part of the preexisting
23 condominium by the declaration of the preexisting
24 condominium.
25 (d) Action by declarant.--Notwithstanding the provisions of
26 subsections (a) and (b), if a declarant expressly retained the
27 special declarant right to merge or consolidate a condominium
28 pursuant to section 3205(10.3) (relating to contents of
29 declaration; all condominiums) and if the declarant exercised
30 such right within the time period allowed for such exercise, by
19880H2248B2979 - 37 -
1 giving written notice to that effect to all unit owners
2 accompanied by a copy of the agreement evidencing such merger or
3 consolidation, then such agreement may be executed by the
4 declarant rather than by the president of the association of
5 that condominium and without the necessity for approval or
6 consent by unit owners, or their mortgagees; provided that the
7 agreement is recorded within the time period allowed for the
8 exercise of this special declarant right.
9 § 3301. Organization of unit owners' association.
10 A unit owners' association shall be organized no later than
11 the date [the condominium is created] the first unit of the
12 condominium is conveyed to a person other than a successor
13 declarant. The membership of the association at all times shall
14 consist exclusively of all the unit owners or, following
15 termination of the condominium, of all former unit owners
16 entitled to distributions of proceeds under section 3220
17 (relating to termination of condominium) or their heirs,
18 successors or assigns. The association shall be organized as a
19 profit or nonprofit corporation or as an unincorporated
20 association.
21 § 3302. Powers of unit owners' association.
22 (a) General rule.--Subject to the provisions of the
23 declaration, the association, even if unincorporated, may:
24 (1) Adopt and amend bylaws and rules and regulations.
25 (2) Adopt and amend budgets for revenues, expenditures
26 and reserves and collect assessments for common expenses from
27 unit owners.
28 (3) Hire and terminate managing agents and other
29 employees, agents and independent contractors.
30 (4) Institute, defend or intervene in litigation or
19880H2248B2979 - 38 -
1 administrative proceedings in its own name on behalf of
2 itself or two or more unit owners on matters affecting the
3 condominium.
4 (5) Make contracts and incur liabilities.
5 (6) Regulate the use, maintenance, repair, replacement
6 and modification of common elements.
7 (7) Cause additional improvements to be made as a part
8 of the common elements.
9 (8) Acquire, hold, encumber and convey in its own name
10 any right, title or interest to real or personal property,
11 but common elements may be conveyed or subjected to a
12 security interest only pursuant to the provisions of section
13 3318 (relating to conveyance or encumbrance of common
14 elements).
15 (9) Grant easements, leases, licenses and concessions
16 through or over the common elements, but any such easement,
17 lease, license or concession:
18 (i) that is not for the benefit of all or
19 substantially all of the unit owners shall not be granted
20 without the same unit owner approval that is required for
21 an amendment to the declaration; or
22 (ii) that materially impairs any right or benefit
23 that one or more unit owners may have with respect to the
24 common elements shall not be granted without the prior
25 written approval of those unit owners.
26 (10) Impose and receive any payments, fees or charges
27 for the use, rental or operation of the common elements other
28 than limited common elements described in section 3202(2) and
29 (4) (relating to unit boundaries).
30 (11) Impose charges for late payment of assessments and,
19880H2248B2979 - 39 -
1 after notice and an opportunity to be heard, levy reasonable
2 fines for violations of the declaration, bylaws and rules and
3 regulations of the association.
4 (12) Impose reasonable charges for the preparation and
5 recordation of amendments to the declaration, resale
6 certificates required by section 3407 (relating to resales of
7 units) or statements of unpaid assessments.
8 (13) Provide for the indemnification of its officers and
9 executive board and maintain directors' and officers'
10 liability insurance.
11 (14) Exercise any other powers conferred by the
12 declaration or bylaws.
13 (15) Exercise all other powers that may be exercised in
14 this Commonwealth by legal entities of the same type as the
15 association.
16 (16) Exercise any other powers necessary and proper for
17 the governance and operation of the association.
18 (17) Assign its right to future income, including the
19 right to receive the payments made on account of common
20 expense assessments, but only to the extent the declaration
21 expressly so provides.
22 (18) Assign or delegate any powers of the association
23 listed in this section to a master association subject to the
24 provisions of section 3222 (relating to master associations)
25 and accept any assignment or delegation of powers from one or
26 more condominiums or other incorporated or unincorporated
27 associations.
28 (b) Restriction on limitations in declaration.--
29 Notwithstanding subsection (a), the declaration may not impose
30 limitations on the power of the association to deal with the
19880H2248B2979 - 40 -
1 declarant that are more restrictive than the limitations imposed
2 on the power of the association to deal with other persons.
3 § 3303. Executive board members and officers.
4 (a) Powers and fiduciary status.--Except as provided in the
5 declaration, the bylaws, in subsection (b) or other provisions
6 of this subpart, the executive board may act in all instances on
7 behalf of the association. [The] In the performance of their
8 duties, the officers and members of the executive board
9 [appointed by the declarant are subject to liability as
10 fiduciaries of the unit owners for their acts or omissions]
11 shall stand in a fiduciary relation to the association and shall
12 perform their duties, including duties as members of any
13 committee of the board upon which they may serve, in good faith,
14 in a manner they reasonably believe to be in the best interests
15 of the association and with such care, including reasonable
16 inquiry, skill and diligence, as a person of ordinary prudence
17 would use under similar circumstances. In performing his duties,
18 an officer or executive board member shall be entitled to rely
19 in good faith on information, opinions, reports or statements,
20 including financial statements and other financial data, in each
21 case prepared or presented by any of the following:
22 (1) One or more other officers or employees of the
23 association whom the officer or executive board member
24 reasonably believes to be reliable and competent in the
25 matters presented.
26 (2) Counsel, public accountants or other persons as to
27 matters which the officer or executive board member
28 reasonably believes to be within the professional or expert
29 competence of such person.
30 (3) A committee of the executive board upon which he
19880H2248B2979 - 41 -
1 does not serve, duly designated in accordance with law, as to
2 matters within its designated authority, which committee the
3 officer or executive board member reasonably believes to
4 merit confidence.
5 An officer or executive board member shall not be considered to
6 be acting in good faith if he has knowledge concerning the
7 matter in question that would cause his reliance to be
8 unwarranted.
9 (b) Limitation on authority.--The executive board may not
10 act on behalf of the association to amend the declaration
11 (section 3219), to terminate the condominium (section 3220) or
12 to elect members of the executive board or determine the
13 qualifications, powers and duties or terms of office of
14 executive board members (section 3303(e)) but the executive
15 board may fill vacancies in its membership for the unexpired
16 portion of any term. The executive board shall deliver to all
17 unit owners copies of each budget approved by the executive
18 board and notice of any capital expenditure approved by the
19 executive board promptly after either such approval. In addition
20 to other rights conferred by the declaration, bylaws or this
21 subpart, the unit owners, by majority or any larger vote
22 specified in the declaration, may reject any budget or capital
23 expenditure approved by the executive board, within 30 days
24 after the approval.
25 (c) Status during period of declarant control.--Subject to
26 subsection (d), the declaration may provide for a period of
27 declarant control of the association during which period a
28 declarant or persons designated by him may appoint and remove
29 the officers and members of the executive board. Any period of
30 declarant control extends from the date of the first conveyance
19880H2248B2979 - 42 -
1 of a unit to a person other than a declarant for a period not
2 exceeding seven years in the case of a flexible condominium
3 containing convertible real estate or to which additional real
4 estate may be added, or five years in the case of any other
5 condominium. Regardless of the period provided in the
6 declaration, a period of declarant control terminates no later
7 than 180 days after conveyance of 75% of the units to unit
8 owners other than a declarant. A declarant may voluntarily
9 surrender the right to appoint and remove officers and members
10 of the executive board before termination of that period but in
11 that event he may require, for the duration of the period of
12 declarant control, that specified actions of the association or
13 executive board, as described in a recorded instrument executed
14 by the declarant, be approved by the declarant before they
15 become effective.
16 (d) Election of members during transfer of declarant
17 control.--Not later than 60 days after conveyance of 25% of the
18 units to unit owners other than a declarant, not less than 25%
19 of the members of the executive board shall be elected by unit
20 owners other than the declarant. Not later than 60 days after
21 conveyance of 50% of the units to unit owners other than a
22 declarant, not less than 33 1/3% of the members of the executive
23 board shall be elected by unit owners other than the declarant.
24 (e) Election of members and officers following declarant
25 control.--Not later than the termination of any period of
26 declarant control, the unit owners shall elect an executive
27 board of at least three members at least a majority of whom must
28 be unit owners, except that the executive board may consist of
29 two members, both of whom must be unit owners, if the
30 condominium consists of two units. The executive board shall
19880H2248B2979 - 43 -
1 elect the officers. The persons elected shall take office upon
2 election.
3 (f) Calculation of percentages of units conveyed.--In
4 determining whether the period of declarant control has
5 terminated under subsection (c), or whether unit owners other
6 than a declarant are entitled to elect members of the executive
7 board under subsection (d), the percentage of the units conveyed
8 is presumed to be that percentage which would have been conveyed
9 if all the units the declarant has built or reserved the right
10 to build in the declaration were included in the condominium.
11 § 3304. Transfer of special declarant rights.
12 (a) Execution and recording instrument of transfer.--No
13 special declarant rights (section 3103) created or reserved
14 under this subpart may be transferred except by an instrument
15 evidencing the transfer recorded in every county in which any
16 portion of the condominium is located in the same records as are
17 maintained for the recording of deeds of real property and shall
18 be indexed in the name of the condominium in both the grantor
19 and grantee index. The instrument is not effective unless
20 executed by the transferee.
21 (b) Liability of declarant following transfer.--Upon
22 transfer of any special declarant right, the liability of a
23 transferor declarant is as follows:
24 (1) A transferor is not relieved of any obligation or
25 liability arising before the transfer and remains liable for
26 warranty obligations imposed upon him by this subpart. Lack
27 of privity does not deprive any unit owner of standing to
28 bring an action to enforce any obligation of the transferor.
29 (2) If [a transferor retains any special declarant right
30 or if] a successor to any special declarant right is an
19880H2248B2979 - 44 -
1 affiliate of a declarant (section 3103), the transferor [is
2 subject to liability for all obligations and liabilities
3 imposed on a declarant by this subpart or by the declaration
4 arising after the transfer and] is jointly and severally
5 liable with [the] any successor for the liabilities and
6 obligations or liabilities of the successor [which relate]
7 relating to the condominium.
8 (2.1) If a transferor retains any special declarant
9 right, but transfers one or more other special declarant
10 rights to a successor who is not an affiliate of the
11 declarant, the transferor is liable for any obligations or
12 liabilities imposed on a declarant by this subpart or by the
13 declaration relating to the retained special declarant rights
14 arising after the transfer.
15 (3) A transferor [who retains no special declarant
16 right] has no liability for any act or omission or any breach
17 of a contractual or warranty obligation arising from the
18 exercise of a special declarant right by a successor
19 declarant who is not an affiliate of the transferor and to
20 whom the special declarant right has not theretofore been
21 assigned.
22 (c) Rights of purchaser in foreclosure, etc. proceedings.--
23 Unless otherwise provided in a mortgage instrument or deed of
24 trust, in case of foreclosure of a mortgage, sale by a trustee
25 under a deed of trust or sale under [the Federal Bankruptcy Act]
26 11 U.S.C. (relating to bankruptcy) or receivership proceedings
27 of any units owned by a declarant in the condominium or
28 additional real estate in a flexible condominium, a person
29 acquiring title to all the units being foreclosed or sold, but
30 only upon his request, succeeds to all special declarant rights
19880H2248B2979 - 45 -
1 related to such units or additional real estate, or only to any
2 rights reserved in the declaration pursuant to section 3217
3 (relating to use for sales purposes) and held by that declarant
4 to maintain models, sales offices and signs. The judgment or
5 instrument conveying title shall provide for transfer of only
6 the special declarant rights requested.
7 (d) Rights of declarant following foreclosure, etc.
8 proceedings.--Upon foreclosure, tax sale, judicial sale, sale by
9 a trustee under a deed of trust or sale under [the Federal
10 Bankruptcy Act] 11 U.S.C. (relating to bankruptcy or
11 receivership or similar proceedings of all units and other real
12 estate in a condominium owned by a declarant:
13 (1) the declarant ceases to have any special declarant
14 rights; and
15 (2) the period of declarant control (section 3303(c))
16 terminates unless the judgment or instrument conveying title
17 provides for transfer of all special declarant rights held by
18 that declarant to a successor declarant.
19 (e) Liabilities and obligations of successors.--The
20 liabilities and obligations of persons who succeed to special
21 declarant rights are as follows:
22 (1) A successor to any special declarant right who is an
23 affiliate of a declarant is subject to all obligations and
24 liabilities imposed on [any declarant] the transferor by this
25 subpart or by the declaration.
26 (2) A successor to any special declarant right, other
27 than a successor described in paragraph (3) or (4), who is
28 not an affiliate of a declarant is subject to all obligations
29 and liabilities imposed [upon a declarant] by this subpart or
30 the declaration [but he is not subject to liability for
19880H2248B2979 - 46 -
1 misrepresentations or warranty obligations on components made
2 by any previous declarant or made before the condominium was
3 created, or for a breach of fiduciary obligation by any
4 previous declarant.]:
5 (i) on a declarant which relate to his exercise or
6 nonexercise of special declarant rights; or
7 (ii) on his transferor, other than:
8 (A) misrepresentations by any previous declarant
9 except to the extent knowingly continued or permitted
10 to continue without correcting such
11 misrepresentations;
12 (B) warranty obligations on improvements made by
13 any previous declarant or made before the condominium
14 was created;
15 (C) breach of any fiduciary obligation by any
16 previous declarant or his appointees to the executive
17 board; or
18 (D) any liability or obligation imposed on the
19 transferor as a result of the transferor's acts or
20 omissions after the transfer.
21 (3) A successor to only a right reserved in the
22 declaration to maintain models, sales offices and signs
23 (section 3217), if he is not an affiliate of a declarant, may
24 not exercise any other special declarant right and is not
25 subject to any liability or obligation as a declarant except
26 the obligation to provide a public offering statement and any
27 liability arising as a result thereof.
28 (4) A successor to all special declarant rights held by
29 his transferor who is not an affiliate of [a] that transferor
30 declarant and who succeeded to those rights pursuant to a
19880H2248B2979 - 47 -
1 deed in lieu of foreclosure or a judgment or instrument
2 conveying title to units under subsection (c) may declare his
3 intention in a recorded instrument to hold those rights
4 solely for transfer to another person. Thereafter, until
5 transferring all special declarant rights to any person
6 acquiring title to any unit owned by the successor or until
7 recording an instrument permitting exercise of all those
8 rights, that successor may not exercise any of those rights
9 other than [the] any right held by his transferor to control
10 the executive board in accordance with the provisions of
11 section 3303(c) (relating to executive board members and
12 officers) for the duration of any period of declarant control
13 and any attempted exercise of those rights is void. So long
14 as a successor declarant may not exercise special declarant
15 rights under this subsection he is not subject to any
16 liability or obligation as a declarant other than liability
17 for the successor's acts and omissions under section 3303(c).
18 (f) Limitation on liability of successor.--Nothing in this
19 section subjects any successor to a special declarant right to
20 any claims against or other obligations of a transferor
21 declarant other than claims and obligations arising under this
22 subpart or the declaration.
23 § 3306. Bylaws.
24 (a) Mandatory provisions.--The bylaws of the association
25 must provide for:
26 (1) The number of members of the executive board and the
27 titles of the officers of the association.
28 (2) Election by the executive board of a president,
29 treasurer, secretary and any other officers of the
30 association the bylaws specify.
19880H2248B2979 - 48 -
1 (3) The qualifications, powers and duties, terms of
2 office and manner of electing and removing executive board
3 members and officers and filling vacancies.
4 (4) Which, if any, of its powers the executive board or
5 officers may delegate to other persons or to a managing
6 agent.
7 (5) Which of its officers may prepare, execute, certify
8 and record amendments to the declaration on behalf of the
9 association.
10 (6) The method of amending the bylaws.
11 (b) Other provisions.--Subject to the provisions of the
12 declaration, the bylaws may provide for any other matters the
13 association deems necessary and appropriate.
14 § 3308. Meetings.
15 The bylaws must require that meetings of the association be
16 held at least once each year and provide for special meetings.
17 The bylaws must specify which of the association's officers, not
18 less than ten nor more than 60 days in advance of any meeting,
19 shall cause notice to be hand delivered or sent prepaid by
20 United States mail to the mailing address of each unit or to any
21 other mailing address designated in writing by the unit owner.
22 The notice of any meeting must state the time and place of the
23 meeting and the items on the agenda, including the general
24 nature of any proposed amendment to the declaration or bylaws,
25 any budget or assessment changes and, where the declaration or
26 bylaws require approval of unit owners, any proposal to remove
27 an executive board member or officer.
28 § 3310. Voting; proxies.
29 (a) [Multiple owners of a unit.--If only one of the multiple
30 owners of a unit is present at a meeting of the association, he
19880H2248B2979 - 49 -
1 is entitled to cast all the votes allocated to that unit.] Unit
2 owner other than natural person.--If the owner of a unit is a
3 corporation, joint venture, partnership or unincorporated
4 association, the natural person who shall be entitled to cast
5 the vote for such unit shall be the person named in a
6 certificate executed by such entity pursuant to its governing
7 documents. If the owner of a unit is a trust, the trustee or
8 trustees shall be deemed to be the owner for the voting
9 purposes. Where the ownership of a unit is in more than one
10 person, the natural person who shall be entitled to cast the
11 vote of such unit shall be the person named in a certificate
12 executed by all of the owners of such unit and filed with the
13 secretary or, in the absence of such named person from the
14 meeting or the failure to execute and file such a certificate,
15 the person who shall be entitled to cast the vote of such unit
16 shall be the person owning such unit who is present. If more
17 than one of the multiple owners are present, the votes allocated
18 to that unit may be cast only in accordance with their unanimous
19 agreement unless the declaration expressly provides otherwise.
20 There [is] shall be deemed to be unanimous agreement if any one
21 of the multiple owners casts the votes allocated to that unit
22 without protest being made promptly to the person presiding over
23 the meeting by any of the other owners of the unit. Such
24 certificate shall be valid until revoked by a subsequent
25 certificate similarly executed. Except where execution by owners
26 of a unit in the same manner as a deed is required in this
27 subpart and subject to the provisions of the declaration and
28 bylaws, wherever the approval or disapproval of a unit owner is
29 required by this subpart, the declaration or the bylaws, such
30 approval or disapproval shall be made only by the person who
19880H2248B2979 - 50 -
1 would be entitled to cast the vote of such unit at any meeting
2 of the association.
3 (b) Proxies.--Votes allocated to a unit may be cast pursuant
4 to a proxy duly executed by a unit owner. If a unit is owned by
5 more than one person, each owner of the unit may vote or
6 register protest to the casting of votes by the other owners of
7 the unit through a duly executed proxy. A unit owner may not
8 revoke a proxy given pursuant to this section except by actual
9 notice of revocation to the person presiding over a meeting of
10 the association. A proxy is void if it is not dated or purports
11 to be revocable without notice. A proxy terminates one year
12 after its date unless it specifies a shorter term.
13 [(c) Cumulative and class voting.--The declaration may
14 provide for cumulative voting only for the purpose of electing
15 members of the executive board and for class voting on specified
16 issues affecting the class if necessary to protect valid
17 interests of the class. A declarant may not utilize cumulative
18 or class voting for the purpose of evading any limitation
19 imposed on declarants by this subpart.]
20 (d) Units owned by association.--No votes allocated to a
21 unit owned by the association may be cast.
22 § 3311. Tort and contract liability.
23 (a) General rule.--
24 (1) An action in tort alleging a wrong done by a
25 declarant or his agent or employee in connection with a
26 portion of any convertible or withdrawable real estate or
27 other portion of the condominium which the declarant has the
28 responsibility to maintain may not be brought against the
29 association or against a unit owner other than a declarant.
30 (2) Except as otherwise provided by paragraph (1):
19880H2248B2979 - 51 -
1 (i) An action in tort alleging a wrong done by the
2 association or by an agent or employee of the
3 association, or an action arising from a contract made by
4 or on behalf of the association, shall be brought against
5 the association.
6 (ii) A unit owner shall not be subject to suit or,
7 except as otherwise provided by subsection (b), be
8 otherwise directly or indirectly held accountable for the
9 acts of the association or its agents or employees on
10 behalf of the association.
11 (3) If the tort or breach of contract occurred during
12 any period of declarant control (section 3303(c)), the
13 declarant is liable to the association for all unreimbursed
14 losses suffered by the association as a result of that tort
15 or breach of contract, including costs and reasonable
16 attorney's fees. If a claim for a tort or breach of contract
17 is made after the period of declarant control, the
18 association shall have no right against the declarant under
19 this paragraph unless the association shall have given the
20 declarant:
21 (i) notice of the existence of such a claim promptly
22 after the date on which one or more members of the
23 executive board who are not designees of the declarant
24 learns of the existence of such a claim; and
25 (ii) an opportunity to defend against such claim on
26 behalf of the association but at the declarant's expense.
27 Any statute of limitation affecting the association's right
28 of action under this section is tolled until the period of
29 declarant control terminates.
30 (4) A unit owner is not precluded from bringing an
19880H2248B2979 - 52 -
1 action contemplated by this subsection because he is a unit
2 owner or a member or officer of the association.
3 (b) Lien of judgment.--[A] Except as otherwise provided in
4 this subpart, a judgment for money against the association, if
5 and when entered of record against the name of the association
6 in the office of the clerk of the court of common pleas of the
7 county or counties where the condominium is located, or in the
8 office of the branch of the court of common pleas embracing such
9 county or counties, shall also constitute a lien against each
10 unit for a pro rata share of the amount of that judgment,
11 including interest thereon, based on the common expense
12 liability allocated to that unit (section 3208). No other
13 property of a unit owner is subject to the claims of creditors
14 of the association.
15 (c) Indexing judgment.--A judgment against the association
16 shall be indexed in the name of the condominium.
17 (d) Applicability of section.--The provisions of this
18 section shall be applicable to all associations without regard
19 to whether the association is organized as a corporation or as
20 an unincorporated association.
21 § 3312. Insurance.
22 (a) Insurance to be carried by association.--Commencing not
23 later than the time of the first conveyance of a unit to a
24 person other than a declarant, the association shall maintain,
25 to the extent reasonably available:
26 (1) Property insurance on the common elements and units
27 exclusive of improvements and betterments installed in units
28 [by unit owners] insuring against all risks of direct
29 physical loss commonly insured against or, in the case of a
30 conversion [condominium] building, against fire and extended
19880H2248B2979 - 53 -
1 coverage perils. The total amount of insurance after
2 application of any deductibles shall be not less than 80% of
3 the actual cash value of the insured property exclusive of
4 land, excavations, foundations and other items normally
5 excluded from property policies.
6 (2) Comprehensive general liability insurance, including
7 medical payments insurance, in an amount determined by the
8 executive board but not less than any amount specified in the
9 declaration covering all occurrences commonly insured against
10 for death, bodily injury and property damage arising out of
11 or in connection with the use, ownership or maintenance of
12 the common elements.
13 (b) Other insurance carried by association.--If the
14 insurance described in subsection (a) is not maintained, the
15 association promptly shall cause notice of that fact to be hand
16 delivered or sent prepaid by United States mail to all unit
17 owners. The declaration may require the association to carry any
18 other insurance and the association in any event may carry any
19 other insurance it deems appropriate to protect the association
20 or the unit owners.
21 (c) Contents of insurance policies.--Insurance policies
22 carried pursuant to subsection (a) must provide that:
23 (1) Each unit owner is an insured person under the
24 policy with respect to liability arising out of his ownership
25 of an undivided interest in the common elements or membership
26 in the association.
27 (2) The insurer waives its right to subrogation under
28 the policy against any unit owner of the condominium or
29 members of his household.
30 (3) No act or omission by any unit owner, unless acting
19880H2248B2979 - 54 -
1 within the scope of his authority on behalf of the
2 association, will void the policy or be a condition to
3 recovery under the policy.
4 (4) If, at the time of a loss under the policy, there is
5 other insurance in the name of a unit owner covering the same
6 property covered by the policy, the policy is primary
7 insurance not contributing with the other insurance.
8 (d) Proceeds from property insurance.--Any loss covered by
9 the property policy under subsection (a)(1) shall be adjusted
10 with the association but the insurance proceeds for that loss
11 shall be payable to any insurance trustee designated for that
12 purpose or otherwise to the association and not to any mortgagee
13 or beneficiary under a deed of trust. The insurance trustee or
14 the association shall hold any insurance proceeds in trust for
15 unit owners and lienholders as their interests may appear.
16 Subject to the provisions of subsection (g), the proceeds shall
17 be disbursed first for the repair or restoration of the damaged
18 common elements and units and unit owners and lienholders are
19 not entitled to receive payment of any portion of the proceeds
20 unless there is a surplus of proceeds after the common elements
21 and units have been completely repaired or restored or the
22 condominium is terminated.
23 (e) Unit owner may obtain insurance.--An insurance policy
24 issued to the association does not prevent a unit owner from
25 obtaining insurance for his own benefit.
26 (f) Evidence and cancellation of insurance.--An insurer that
27 has issued an insurance policy under this section shall issue
28 certificates or memoranda of insurance to the association and,
29 upon request, to any unit owner, mortgagee or beneficiary under
30 a deed of trust. The insurance may not be cancelled until 30
19880H2248B2979 - 55 -
1 days after notice of the proposed cancellation has been mailed
2 to the association, each unit owner and each mortgagee or
3 beneficiary under a deed of trust to whom certificates of
4 insurance have been issued.
5 (g) Disposition of insurance proceeds.--
6 (1) Any portion of the condominium damaged or destroyed
7 shall be repaired or replaced promptly by the association
8 unless:
9 (i) the condominium is terminated;
10 (ii) repair or replacement would be illegal under
11 any state or local health or safety statute or ordinance;
12 or
13 (iii) eighty percent of the unit owners, including
14 every owner of a unit or assigned limited common element
15 which will not be rebuilt, vote not to rebuild.
16 The cost of repair or replacement in excess of insurance
17 proceeds and reserves is a common expense.
18 (2) If the entire condominium is not repaired or
19 replaced:
20 (i) the insurance proceeds attributable to the
21 damaged common elements shall be used to restore the
22 damaged area to a condition compatible with the remainder
23 of the condominium;
24 (ii) the insurance proceeds attributable to units
25 and limited common elements which are not rebuilt shall
26 be distributed to the owners of those units and the
27 owners of the units to which those limited common
28 elements were assigned; and
29 (iii) the remainder of the proceeds shall be
30 distributed to all the unit owners in proportion to their
19880H2248B2979 - 56 -
1 common element interests.
2 If the unit owners vote not to rebuild any unit, that unit's
3 entire common element interest, votes in the association and
4 common expense liability are automatically reallocated upon
5 the vote as if the unit had been condemned under section
6 3107(a) (relating to eminent domain) and the association
7 promptly shall prepare, execute and record an amendment to
8 the declaration reflecting the reallocations.
9 (3) Notwithstanding the provisions of this subsection,
10 section 3220 (relating to termination of condominium) governs
11 the distribution of insurance proceeds if the condominium is
12 terminated.
13 (h) Nonresidential condominiums.--The provisions of this
14 section may be varied or waived in the case of a condominium all
15 of whose units are restricted to nonresidential use.
16 § 3313. Surplus funds.
17 [Unless otherwise provided in the declaration, any surplus
18 funds of the association remaining after payment of or provision
19 for common expenses and any prepayment of reserves must be
20 credited to the unit owners to reduce their future common
21 expense assessments.] Any amounts accumulated from assessments
22 for limited common expenses and income from the operation of
23 limited common elements to which such limited common expenses
24 pertain in excess of the amount required for actual limited
25 common expenses and reserves for future limited common expenses
26 shall be credited to each unit assessed for a share of such
27 limited common expenses in proportion to the share of such
28 limited common expenses so assessed, these credits to be
29 applied, unless the declaration provides otherwise, to the next
30 monthly assessments of limited common expenses against that unit
19880H2248B2979 - 57 -
1 under the then current fiscal year's budget, and thereafter,
2 until exhausted. Any amounts accumulated from assessments for
3 general common expenses and income from the operation of the
4 common elements, other than limited common elements with regard
5 to which limited common expenses are assessed, in excess of the
6 amount required for actual general common expenses and reserves
7 for future general common expenses shall be credited to each
8 unit in accordance with such unit's interests in common
9 elements, these credits to be applied, unless the declaration
10 provides otherwise, to the next monthly assessments of general
11 common expenses against that unit under the then current fiscal
12 year's budget and thereafter, until exhausted.
13 § 3314. Assessments for common expenses.
14 (a) General rule.--Until the association makes a common
15 expense assessment, the declarant shall pay all the expenses of
16 the condominium. After any assessment has been made by the
17 association, assessments shall be made at least annually and
18 shall be based on a budget adopted at least annually by the
19 association. The budgets of the association shall segregate
20 limited common expenses from general common expenses, if and to
21 the extent appropriate.
22 (b) Allocation and interest.--Except for assessments under
23 subsection (c), common expenses shall be assessed against all
24 the units in accordance with the common expense liability
25 allocated to each unit (section 3208) in the case of general
26 common expenses and in accordance with subsection (c) in the
27 case of special allocations of expenses. Any past due assessment
28 or installment thereof shall bear interest at the rate
29 established by the association not exceeding 15% per year.
30 (c) [Limited] Special allocations of expenses.--Except as
19880H2248B2979 - 58 -
1 provided by the declaration:
2 (1) [any] Any common expense associated with the
3 maintenance, repair or replacement of a limited common
4 element shall be assessed in equal shares against the units
5 to which that limited common element was assigned at the time
6 the expense was incurred[; and].
7 (2) [any] Any common expense benefiting fewer than all
8 of the units shall be assessed exclusively against the units
9 benefited.
10 (3) The costs of insurance shall be assessed in
11 proportion to risk and the costs of utilities that are
12 separately metered to each unit shall be assessed in
13 proportion to usage.
14 (4) If any common expense is caused by the negligence or
15 misconduct of any unit owner, the association may assess that
16 expense exclusively against his unit.
17 (d) Reallocation.--If common expense liabilities are
18 reallocated, common expense assessments and any installment
19 thereof not yet due shall be recalculated in accordance with the
20 reallocated common expense liabilities.
21 § 3315. Lien for assessments.
22 (a) General rule.--The association has a lien on a unit for
23 any assessment levied against that unit or fines imposed against
24 its unit owner from the time the assessment or fine becomes due.
25 The association's lien may be foreclosed in like manner as a
26 mortgage on real estate. A judicial or other sale of the unit in
27 execution of a common element lien or any other lien shall not
28 affect the lien of a mortgage thereon, except the mortgage for
29 which the sale is being held, if the mortgage is or shall be
30 prior to all other liens upon the same property except those
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1 liens identified in 42 Pa.C.S. § 8152(a) (relating to judicial
2 sale as affecting lien of mortgage) and liens for condominium
3 assessments created under this section. Unless the declaration
4 otherwise provides, fees, charges, late charges, fines and
5 interest charged pursuant to section 3302(a)(10), (11) and (12)
6 (relating to powers of unit owners' association) and reasonable
7 costs and expenses of the association, including legal fees,
8 incurred in connection with collection of any sums due the
9 association by the unit owner or enforcement of the provisions
10 of the declaration, bylaws, rules or regulations against the
11 unit owner are enforceable as assessments under this section. If
12 an assessment is payable in installments[, the full amount of
13 the assessment becomes effective as a lien from the time the
14 first installment thereof becomes due] and one or more
15 installments is not paid when due, the entire outstanding
16 balance of the assessment becomes effective as a lien from the
17 due date of the delinquent installment.
18 (b) Priority of lien.--
19 (1) General rule.--A lien under this section is prior to
20 all other liens and encumbrances on a unit except:
21 (i) Liens and encumbrances recorded before the
22 recordation of the declaration.
23 (ii) [Mortgages and deeds of trust on the unit
24 securing first mortgage holders and recorded before the
25 due date of the assessment or the due date of the first
26 installment payable on the assessment.] Mortgages and
27 deeds of trust on the unit securing first mortgage
28 holders and recorded before the due date of the
29 assessment, if the assessment is not payable in
30 installments, or the due date of the unpaid installment,
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1 if the assessment is payable in installments.
2 (iii) Liens for real estate taxes and other
3 governmental assessments or charges against the unit.
4 (2) Limited nondivestiture.--The association's lien for
5 common expenses shall be divested by a judicial sale of the
6 unit:
7 (i) As to unpaid common expense assessments made
8 under section 3314(b) (relating to assessments for common
9 expenses) that come due during the six months immediately
10 preceding institution of an action to enforce collection
11 of a lien against a unit by a judicial sale, only to the
12 extent that the six months unpaid assessments are paid
13 out of the proceeds of the sale.
14 (ii) As to unpaid common expense assessments made
15 under section 3314(b) other than the six months
16 assessment referred to in subparagraph (i), in the full
17 amount of these unpaid assessments, whether or not the
18 proceeds of the judicial sale are adequate to pay these
19 assessments. To the extent the proceeds of the sale are
20 sufficient to pay some or all of these additional
21 assessments, after satisfaction in full of the costs of
22 the judicial sale, and the liens and encumbrances of the
23 types described in paragraph (1) and the unpaid common
24 expense assessments that come due during the six-month
25 period described in subparagraph (i), they shall be paid
26 before any remaining proceeds may be paid to any other
27 claimant, including the prior owner of the unit.
28 (3) Monetary exemption.--The lien is not subject to the
29 provisions of 42 Pa.C.S. § 8123 (relating to general monetary
30 exemption).
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1 (c) Notice and perfection of lien.--Subject to the
2 provisions of subsection (b), recording of the declaration
3 constitutes record notice and perfection of the lien.
4 (d) Limitation of actions.--A lien for unpaid assessments is
5 extinguished unless proceedings to enforce the lien are
6 instituted within three years after the assessments become
7 payable.
8 (e) Other remedies preserved.--Nothing in this section shall
9 be construed to prohibit actions or suits to recover sums for
10 which subsection (a) creates a lien or to prohibit an
11 association from taking a deed in lieu of foreclosure.
12 (f) Costs and attorney's fees.--A judgment or decree in any
13 action or suit brought under this section shall include costs
14 and reasonable attorney's fees for the prevailing party.
15 (g) Statement of unpaid assessments.--The association shall
16 furnish to a unit owner upon written request a recordable
17 statement setting forth the amount of unpaid assessments
18 currently levied against his unit and any credits of surplus in
19 favor of his unit pursuant to section 3313 (relating to surplus
20 funds). The statement shall be furnished within ten business
21 days after receipt of the request and is binding on the
22 association, the executive board and every unit owner.
23 § 3316. Association records.
24 During the period of declarant control, the association shall
25 keep detailed financial records, including, without limitation,
26 a record of expenses paid by the declarant until the
27 commencement of common expense assessments by the association
28 under section 3314(a) (relating to assessments for common
29 expenses), the commencement date of common expense assessments
30 by the association, and, for the period commencing on such date,
19880H2248B2979 - 62 -
1 a record for each unit in the condominium, (including those
2 owned by the declarants) of its common expense assessments and
3 the payments thereof. The association shall keep financial
4 records sufficiently detailed to enable the association to
5 comply with section 3407 (relating to resales of units). All
6 financial and other records shall be made reasonably available
7 for examination by any unit owner and his authorized agents.
8 § 3318. Conveyance or encumbrance of common elements.
9 (a) General rule.--Portions of the common elements may be
10 conveyed or subjected to a security interest by the association
11 if the persons entitled to cast at least 80% of the votes in the
12 association, including 80% of the votes allocated to units not
13 owned by a declarant, or any larger percentage the declaration
14 specifies, agree to that action; but all the owners of units to
15 which any limited common element is allocated must agree in
16 order to convey that limited common element or subject it to a
17 security interest. The declaration may specify a smaller
18 percentage only if all of the units are restricted exclusively
19 to nonresidential uses. Proceeds of the sale are an asset of the
20 association.
21 (b) Required agreement.--An agreement to convey common
22 elements or subject them to a security interest must be
23 evidenced by the execution of an agreement, or ratifications
24 thereof, in the same manner as a deed, by the requisite number
25 of unit owners. The agreement must specify a date after which
26 the agreement will be void unless recorded before that date. The
27 agreement and all ratifications thereof must be recorded in
28 every county in which a portion of the condominium is situated,
29 and is effective only upon recordation.
30 (c) Association powers.--The association, on behalf of the
19880H2248B2979 - 63 -
1 unit owners, may contract to convey common elements, or subject
2 them to a security interest, but the contract is not enforceable
3 against the association until approved pursuant to subsections
4 (a) and (b). Thereafter, the association has all powers
5 necessary and appropriate to effect the conveyance or
6 encumbrance, including the power to execute deeds or other
7 instruments.
8 (d) Other conveyances or encumbrances void.--Any purported
9 conveyance, encumbrance, judicial sale or other voluntary
10 transfer of common elements, unless made pursuant to this
11 section, is void.
12 (e) Right of access and support.--A conveyance or
13 encumbrance of common elements pursuant to this section does not
14 deprive any unit of its right of access and support.
15 (f) Preexisting encumbrances.--Unless the declaration
16 otherwise provides, a conveyance or encumbrance of common
17 elements pursuant to this section does not affect the priority
18 or validity of preexisting encumbrances.
19 (g) Limitation.--Common elements which may be conveyed or
20 encumbered pursuant to this section shall not include any land,
21 buildings or other facilities:
22 (1) containing or comprising one or more units; or
23 (2) necessary for the use or operation of one or more
24 units.
25 § 3319. Other liens affecting the condominium.
26 (a) General rule.--Except as provided in subsection (b), a
27 judgment for money against the association, if and when the
28 judgment has been perfected as a lien on real property, is not a
29 lien on the common elements, but is a lien in favor of the
30 judgment lienholder against all of the units in the condominium
19880H2248B2979 - 64 -
1 at the time the judgment was entered. No other property of a
2 unit owner is subject to the claims of creditors of the
3 association.
4 (b) If security interest in common elements.--If the
5 association has granted a security interest in the common
6 elements to a creditor of the association pursuant to section
7 3318 (relating to conveyance or encumbrance of common elements),
8 the holder of that security interest shall exercise its right
9 against the common elements before its judgment lien on any unit
10 may be enforced.
11 (c) Release upon payment of unit owner's share.--Whether
12 perfected before or after the creation of the condominium, if a
13 lien other than a deed of trust or mortgage, including a
14 judgment lien or lien attributable to work performed or
15 materials supplied before creation of the condominium, becomes
16 effective against two or more units, the unit owner of an
17 affected unit may pay to the lienholder the amount of the lien
18 attributable to his unit, and the lienholder, upon receipt of
19 payment, promptly shall deliver a release of the lien covering
20 that unit. The amount of the payment must be proportionate to
21 the ratio which that unit owner's common expense liability bears
22 to the common expense liabilities of all unit owners whose units
23 are subject to the lien. After payment, the association may not
24 assess or have a lien against that unit owner's unit for any
25 portion of the common expenses incurred in connection with that
26 lien.
27 (d) Indexing of judgments.--A judgment against the
28 association must be indexed in the name of the condominium and
29 the association and, when so indexed, is notice of the lien
30 against the units.
19880H2248B2979 - 65 -
1 § 3320. Declarant delivery of items to association.
2 Except as set forth in paragraph (9), not later than 60 days
3 after the required termination of the period of declarant
4 control pursuant to section 3303(c) (relating to executive board
5 members and officers) or the declarant's earlier voluntary
6 termination of control, the declarant shall deliver to the
7 association all property of the unit owners and of the
8 association held by or controlled by the declarant, including,
9 without limitation, all of the following items, if applicable,
10 as to each condominium or other owners' association operated by
11 the association:
12 (1) The original or a certified copy or a photocopy of
13 the recorded declaration and all amendments thereto. If a
14 photocopy is delivered, such photocopy shall reflect the
15 recording information and shall be accompanied by an
16 affidavit executed by the declarant certifying such photocopy
17 to be a true, correct and complete copy of the actual
18 recorded declaration and all amendments thereto.
19 (2) The association articles of incorporation, if
20 incorporated, with evidence of filing with the Department of
21 State.
22 (3) A copy of the bylaws.
23 (4) A complete set of all executive board minutes and
24 resolutions and all other books and records of the
25 association.
26 (5) A complete copy of all rules and regulations that
27 may have been adopted.
28 (6) Copies of all Federal, State and local tax returns
29 filed by or on behalf of the association and copies of any
30 tax-exempt elections made by or on behalf of the association.
19880H2248B2979 - 66 -
1 (7) Copies of all past and current budgets of the
2 association.
3 (8) Resignations of officers and members of the
4 executive board who are required to resign because the
5 declarant is required to relinquish or has relinquished
6 control of the association.
7 (9) Not later than 90 days after the required
8 termination of the period of declarant control pursuant to
9 section 3303(c) or the declarant's earlier voluntary
10 termination of control, a complete audit of the finances of
11 the association for the time period between the last audit of
12 the association's financial books and records and the date of
13 termination of the period of declarant control, prepared by
14 an independent certified public accountant in accordance with
15 generally accepted accounting principles, the costs of which
16 audit are to be borne equally by the declarant and the
17 association. If the condominium consists of not more than 12
18 units, a warranty from the declarant to the association that
19 the books and records of the association completely and
20 accurately reflect all activities of the association from its
21 inception through the date of termination of the period of
22 declarant control may be substituted for the audit referred
23 to in this paragraph.
24 (10) All association funds or control thereof.
25 (11) All tangible personal property, and inventories
26 thereof:
27 (i) that may have been represented or should have
28 been represented by the declarant in any public offering
29 statement, sales materials or other writings to be part
30 of the common elements; or
19880H2248B2979 - 67 -
1 (ii) that is otherwise property of the association.
2 (12) A copy of the plans or drawings and specifications,
3 if any, utilized in the construction, rehabilitation,
4 renovation or remodeling of any buildings and improvements
5 within the condominium and in the construction and
6 installation of any mechanical components and equipment
7 serving the buildings and improvements and property, if and
8 to the extent the construction, rehabilitation, renovation,
9 remodeling or installation was performed by or on behalf of
10 the declarant and substantially completed during the period
11 commencing three years prior to the date of the first public
12 offering statement regarding the condominium, unless no
13 public offering statement is required for any unit in the
14 condominium in which event such period shall commence on the
15 date of the recordation of the condominium declaration or
16 amendment thereto with respect to such improvements, and
17 ending on the date by which compliance with this section is
18 required. In the event such construction, rehabilitation,
19 renovation, remodeling or installation was substantially
20 completed within such period but not by or on behalf of the
21 declarant, the obligation of the declarant under this
22 paragraph shall be to provide all such plans, drawings and
23 specifications in the possession of the declarant and to use
24 reasonable efforts to obtain and provide any such plans,
25 drawings or specifications not within the possession of the
26 declarant. If such construction, rehabilitation, renovation,
27 remodeling or installation was substantially completed more
28 than three years prior to the commencement of the period
29 described in this paragraph, the obligations of the declarant
30 under this paragraph shall be to provide all such plans,
19880H2248B2979 - 68 -
1 drawings and specifications in the possession of the
2 declarant. To the extent previously made available to the
3 declarant, the declarant in all cases shall deliver to the
4 association owners, operating, care and maintenance manuals
5 and other information regarding mechanical components and
6 equipment serving any buildings and improvements in the
7 condominium. A declarant's delivery of any plans, drawings or
8 specifications pursuant to this paragraph shall not
9 constitute a representation or warranty of the accuracy or
10 completeness of such plans, drawings or specifications, and
11 shall not expand, or otherwise affect, the declarant's
12 warranties created under section 3411 (relating to warranty
13 against structural defects).
14 (13) All insurance policies insuring the association
15 then in force.
16 (14) Copies of any certificates or statements of
17 occupancy which may have been issued with respect to the
18 improvements comprising the condominium, if and to the extent
19 available.
20 (15) Any other permits issued by governmental bodies
21 applicable to the condominium property which are then
22 currently in force, all notices of violations of governmental
23 requirements then outstanding and uncured and all reports of
24 investigations for the presence of hazardous conditions as
25 defined in section 3402(a)(26) (relating to public offering
26 statement; general provisions).
27 (16) Any written warranties then in force and effect
28 from contractors, subcontractors, suppliers or manufacturers
29 who have performed work with respect to the condominium
30 property or have supplied equipment or services to the
19880H2248B2979 - 69 -
1 condominium property.
2 (17) A roster of unit owners and mortgagees and their
3 respective addresses and telephone numbers, if known, as
4 shown on the declarant's records.
5 (18) Employment contracts in which the association is or
6 is to be one of the contracting parties.
7 (19) Service and other contracts and leases in which the
8 association is or is to be one of the contracting parties and
9 service contracts in which the association has directly or
10 indirectly an obligation or a responsibility to pay some or
11 all of the fees or charges of the person or persons
12 performing such services.
13 § 3401. Applicability; waiver.
14 (a) General rule.--This chapter applies to all units subject
15 to this subpart, except as provided in subsection (b) and
16 section 3411 (relating to warranty against structural defects)
17 or as modified or waived by agreement of [purchasers of units in
18 a condominium in which all units are restricted to residential
19 use.] the purchaser of any unit which is intended for
20 nonresidential use at the time of sale of such unit by the
21 declarant or by agreement of purchasers of units in a
22 condominium who are or intend to be in the business of buying
23 and selling condominium units, provided that:
24 (1) a purchaser of a unit intended for residential use
25 at the time of sale by the declarant may not modify or waive
26 the provisions of section 3411 with regard to such unit and
27 the common elements;
28 (2) with regard to any limited common element
29 appurtenant only to nonresidential units, the unit owners of
30 all such units have agreed to such modification or waiver
19880H2248B2979 - 70 -
1 and, with regard to any common elements, other than limited
2 common elements, in a condominium in which all units are
3 restricted to nonresidential use, all unit owners have agreed
4 to such modification or waiver; and
5 (3) no modification or waiver shall prevent any unit
6 owner from indirectly benefiting from any provision in this
7 chapter by reason of such unit owner being a unit owner in
8 the condominium and a member of the association.
9 (b) Public offering statements.--A public offering statement
10 need not be prepared or delivered in the case of:
11 (1) a gratuitous transfer of a unit;
12 (2) a disposition pursuant to court order;
13 (3) a disposition by a government or governmental
14 agency;
15 (4) a disposition by foreclosure or deed in lieu of
16 foreclosure;
17 (5) a disposition of a condominium situated wholly
18 outside this Commonwealth pursuant to a contract executed
19 wholly outside this Commonwealth; or
20 (6) a transfer to which section 3407 (relating to
21 resales of units) applies.
22 (c) Resale certificates.--A resale certificate as described
23 in section 3407 need not be prepared or delivered in the cases
24 described in subsection (b)(1) through (5).
25 (d) Unified public offering statement.--If a unit is part of
26 a condominium and is part of any other real estate regime in
27 connection with the sale of which the delivery of a public
28 offering statement is required under the laws of this
29 Commonwealth, a single public offering statement conforming to
30 the requirements of sections 3402 (relating to public offering
19880H2248B2979 - 71 -
1 statement; general provisions), 3403 (relating to public
2 offering statement; time-share estates) and 3404 (relating to
3 public offering statement; condominiums containing conversion
4 buildings) as those requirements relate to any real estate
5 regimes in which the unit is located, and to any other
6 requirements imposed under the laws of this Commonwealth, may be
7 prepared and delivered in lieu of providing two or more public
8 offering statements.
9 § 3402. Public offering statement; general provisions.
10 (a) General rule.--Except as provided in subsection (b), a
11 public offering statement must contain or fully and accurately
12 disclose:
13 (1) The name and principal address of the declarant and
14 of the condominium.
15 (2) A general description of the condominium, including
16 without limitation the types, number and declarant's schedule
17 of commencement and completion of construction of all
18 buildings, units and amenities. The public offering statement
19 shall also contain a narrative description of the type and
20 character of units offered, including a statement of the
21 degree of completion to be provided or undertaken by the
22 declarant of such units and the common elements necessary for
23 use and enjoyment of such units upon the conveyance by the
24 declarant of the units offered.
25 (3) The total number of additional units that may be
26 included in the condominium and the proportion of units the
27 declarant intends to rent or market in blocks of units to
28 investors.
29 (4) A brief narrative description of any options
30 reserved by a declarant to withdraw withdrawable real estate
19880H2248B2979 - 72 -
1 under section 3206(1) (relating to contents of declaration;
2 flexible condominiums) and the expected effects that
3 withdrawal would have on the remaining portion of the
4 condominium.
5 (5) Copies and a brief narrative description of the
6 significant features of the declaration (other than the plats
7 and plans), and the bylaws [and] rules and regulations, the
8 agreement of sale, copies of any contracts and leases to be
9 signed by the purchasers prior to or at closing and a brief
10 narrative description of any other contracts or leases or
11 agreements of a material nature to the condominium that will
12 or may be subject to cancellation by the association under
13 section 3305 (relating to termination of contracts and leases
14 of declarant).
15 (6) Any current balance sheet and a projected budget for
16 the association, either within or as an exhibit to the public
17 offering statement, for one year after the date of the first
18 conveyance to a purchaser, and thereafter the current budget
19 of the association, a statement of who prepared the budget
20 and a statement of the budget's material assumptions,
21 including those concerning occupancy and inflation factors.
22 The budget must include, without limitation:
23 (i) A statement of the amount, or a statement that
24 there is no amount, included in the budget as a reserve
25 for repairs and replacement.
26 (ii) A statement [of any other reserves] containing
27 a description of any provisions made in the budget for
28 reserves for anticipated material capital expenditures or
29 any other reserves or, if no provision is made for
30 reserves, a statement to that effect.
19880H2248B2979 - 73 -
1 (iii) The projected common expense assessment by
2 category of expenditures for the association.
3 (iv) The projected monthly common expense assessment
4 for each type of unit.
5 (7) Any:
6 (i) services not reflected in the budget that the
7 declarant provides, or expenses that he pays, and that he
8 expects may become at any subsequent time a common
9 expense of the association; and
10 (ii) personal property not owned by the association
11 but provided by the declarant and being used or to be
12 used in the operation and enjoyment of the common
13 elements which is or will be required in connection with
14 the operation and enjoyment of the common elements after
15 such personal property is no longer provided by the
16 declarant, and the projected common expense assessment
17 for the association and for each type of unit
18 attributable to each of those services or expenses [for
19 the association and for each type of unit] and purchase
20 or rental of such personal property.
21 (8) Any initial or special fee due from the purchaser at
22 closing together with a description of the purpose and method
23 of calculating the fee.
24 (9) A description of any liens, defects or encumbrances
25 on or affecting the title to the condominium.
26 (10) A description of any financing for purchasers
27 offered or arranged by the declarant.
28 (11) The terms and significant limitations of any
29 warranties provided by the declarant including statutory
30 warranties and limitations on the enforcement thereof or on
19880H2248B2979 - 74 -
1 damages.
2 (12) A statement in at least ten-point bold face type,
3 appearing on the first page of the public offering statement,
4 [that] as follows:
5 (i) [Within 15 days after receipt of a public
6 offering statement a] That within 15 days after receipt
7 of a public offering statement, or within seven days in
8 the case of the sale of a time-share estate, or an
9 amendment to the public offering statement that
10 materially and adversely affects the rights or
11 obligations of the purchaser, the purchaser, before
12 conveyance, may cancel any contract for purchase of a
13 unit from a declarant.
14 (ii) [If] That if a declarant fails to provide a
15 public offering statement, and any amendments thereto, to
16 a purchaser before conveying a unit, that purchaser may
17 recover from the declarant damages as provided in section
18 3406(c) (relating to purchaser's right to cancel) [and a
19 description of such damages].
20 (iii) A description of such damages.
21 [(iii) If] (iv) That if a purchaser receives the
22 public offering statement more than 15 days before
23 signing a contract, he cannot cancel the contract, or
24 more than seven days in the case of the sale of a time-
25 share estate, except that, in accordance with
26 subparagraph (i), he shall have the right to cancel the
27 contract before conveyance within 15 days (seven days in
28 the case of the sale of a time-share estate) after
29 receipt of any amendment thereto that would have a
30 material and adverse effect on the rights or obligations
19880H2248B2979 - 75 -
1 of that purchaser.
2 (13) A statement of any judgments against the
3 association, the status of any pending suits to which the
4 association is a party and the status of any pending suits
5 material to the condominium of which a declarant has actual
6 knowledge.
7 (14) A statement that any deposit made in connection
8 with the purchase of a unit will be held in an escrow account
9 in accordance with the provisions of section 3408 (relating
10 to escrow of deposits) and will be returned to the purchaser
11 if the purchaser cancels the contract pursuant to section
12 3406.
13 (15) Any restraints on alienation of any portion of the
14 condominium.
15 (16) A description of [the] all insurance coverage
16 provided, or intended to be provided if such insurance is not
17 then in effect, for the benefit of unit owners, including the
18 types and extent of coverage, and the extent to which such
19 coverage includes or excludes improvements or betterments
20 made to units.
21 (17) Any current or expected fees or charges to be paid
22 by unit owners for the use of the common elements and other
23 facilities related to the condominium.
24 (18) The extent to which financial arrangements have
25 been provided for completion of all improvements labeled
26 "MUST BE BUILT" pursuant to section 3414 (relating to
27 declarant's obligation to complete and restore).
28 (19) All unusual and material circumstances, features
29 and characteristics of the condominium and the units.
30 (20) In the case of a leasehold condominium, at least
19880H2248B2979 - 76 -
1 the following information:
2 (i) The name and address of each lessor and his
3 assignee, if any.
4 (ii) Any relationship between the declarant and any
5 lessor or assignee.
6 (iii) A description of the leased property.
7 (iv) The rent and any provision in the lease for
8 increases in the rent and any other charges or payments
9 required to be paid by the lessee under the lease.
10 (v) Whether the lessee has any right to terminate
11 the lease.
12 (vi) The information contained in the declaration as
13 required by section 3207(a) (relating to leasehold
14 condominiums).
15 (vii) The following notice in bold type: "Purchasers
16 should be aware that this is a leasehold condominium and
17 the purchaser's interest therein may be less valuable
18 than a fee interest, may depreciate over time and may be
19 of questionable marketability."
20 [(21) A statement containing a description of any
21 provisions made in the budget for reserves for capital
22 expenditures or, if no provision is made for reserves, a
23 statement to this effect.
24 (22)] (21) A statement containing a declaration as to
25 the present condition of all structural components and major
26 utility installations in the subject property, including the
27 dates of construction, installation and major repairs if
28 known or ascertainable, and the expected useful life of each
29 item, together with the estimated cost (in current dollars)
30 of replacing each of the same.
19880H2248B2979 - 77 -
1 (22) A description of how votes are allocated among the
2 units and a statement as to whether cumulative or class
3 voting is permitted and, if so, under what circumstances.
4 Such statement shall also explain the operation of such
5 cumulative or class voting.
6 (23) A description of any circumstances under which the
7 association is to become a master association or part of a
8 master association.
9 (24) A statement of all governmental approvals and
10 permits required for the use and occupancy of the condominium
11 indicating the name and expiration date of each such approval
12 of permit that has been obtained and, as to any governmental
13 approvals or permits that have not been obtained, a statement
14 indicating when each such permit or approval is expected to
15 be obtained and the person who shall bear the expense of
16 obtaining each such permit or approval.
17 (25) A statement as to whether there are any outstanding
18 and uncured notices of violations of governmental
19 requirements and, if there are any such notices of
20 violations, a description of the alleged violation and a
21 statement indicating when each violation is expected to be
22 cured and the person who shall bear the expense of curing
23 such violation.
24 (26) A statement as to whether the declarant has
25 knowledge of any one or more of the following:
26 (i) Hazardous conditions, including contamination
27 affecting the condominium site by hazardous substances,
28 hazardous wastes or the like, or the existence of
29 underground storage tanks for petroleum products or other
30 hazardous substances.
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1 (ii) Any investigation conducted to determine the
2 presence of hazardous conditions on or affecting the
3 condominium site.
4 (iii) Any finding or action recommended to be taken
5 in the report of any such investigation, or by any
6 governmental body, agency or authority, in order to
7 correct any hazardous conditions, and any action taken
8 pursuant to those recommendations.
9 If the declarant has no knowledge of such matters, the declarant
10 shall make a statement to that effect. Declarant shall also set
11 forth the address and phone number of the regional offices of
12 the Department of Environmental Resources and the United States
13 Environmental Protection Agency where information concerning
14 environmental conditions affecting the condominium site may be
15 obtained.
16 (b) Exceptions.--If a condominium composed of not more than
17 12 units is not a flexible condominium and no power is reserved
18 to a declarant to make the condominium part of a larger
19 condominium, group of condominiums or other real estate, a
20 public offering statement may but need not include the
21 information otherwise required by subsection (a)(3), (4) and
22 (18) and the narrative descriptions of documents required by
23 subsection (a)(5).
24 (c) Amendment for material change in information.--A
25 declarant promptly shall amend the public offering statement to
26 report any material change in the information required by this
27 section.
28 § 3403. Public offering statement; time-share estates.
29 (a) Definition.--For purposes of this section, "time-share
30 estate" means either:
19880H2248B2979 - 79 -
1 (1) an "interval estate," meaning a combination of:
2 (i) an estate for years in a unit, during the term
3 of which title to the unit rotates among the time-share
4 owners thereof, vesting in each of them in turn for
5 periods established by a fixed recorded schedule, with
6 the series thus established recurring regularly until the
7 term expires, coupled with
8 (ii) a vested undivided fee simple interest in the
9 remainder in that unit, the magnitude of that interest
10 having been established by the declaration or by the deed
11 creating the interval estate; or
12 (2) a "time-span estate," meaning a combination of:
13 (i) an undivided interest in a present estate in fee
14 simple in a unit, the magnitude of that interest having
15 been established by the declaration or by the deed
16 conveying the time-span estate, coupled with
17 (ii) the exclusive right to possession and occupancy
18 of that unit during a regularly recurring period
19 designated by that deed or by a recorded document
20 referred to therein.
21 (b) General rule.--If the declaration provides that
22 ownership or occupancy of [the] any units are or may be owned in
23 time-shares, the public offering statement shall contain or
24 disclose in addition to the information required by section 3402
25 (relating to public offering statement; general provisions):
26 (1) The total number of units in which time-share
27 estates may be created.
28 (2) The total number of time-share estates that may be
29 created in the condominium.
30 (3) The projected common expense assessment for each
19880H2248B2979 - 80 -
1 time-share estate and whether those assessments may vary
2 seasonally.
3 (4) A statement of any services not reflected in the
4 budget which the declarant provides, or expenses which he
5 pays, and which he expects may become at any subsequent time
6 a common expense of the association, and the projected common
7 expense assessment attributable to each of those services or
8 expenses for each time-share estate.
9 (5) The extent to which the time-share owners of a unit
10 are jointly and severally liable for the payment of real
11 estate taxes and all assessments and other charges levied
12 against that unit.
13 (6) The extent to which a suit for partition may be
14 maintained against a unit owned in time-share estates.
15 (7) The extent to which a time-share estate may become
16 subject to a tax or other lien arising out of claims against
17 other time-share owners of the same unit.
18 (8) A statement in at least ten-point bold face type,
19 appearing on the first page of the public offering statement,
20 that:
21 (i) Within seven days after receipt of a public
22 offering statement a purchaser, before conveyance, may
23 cancel any contract for purchase of a unit from a
24 declarant.
25 (ii) If a declarant fails to provide a public
26 offering statement to a purchaser before conveying a
27 unit, the purchaser may recover from the declarant
28 damages as provided in section 3406(c) (relating to
29 purchaser's right to cancel) and a description of such
30 damages.
19880H2248B2979 - 81 -
1 (iii) If a purchaser receives the public offering
2 statement more than seven days before signing a contract,
3 he cannot cancel the contract.
4 § 3404. Public offering statement; [conversion] condominiums
5 containing conversion buildings.
6 (a) General rule.--The public offering statement of a
7 [conversion] condominium containing a conversion building must
8 contain, in addition to the information required by section 3402
9 (relating to public offering statement; general provisions):
10 (1) A statement by the declarant, based on a report
11 prepared by an independent registered architect or
12 professional engineer[,]:
13 (i) describing the age and present condition, and,
14 if known or reasonably ascertainable, the dates of
15 construction, installation and major repairs, of all
16 structural components and mechanical and electrical
17 installations, including but not limited to roofs,
18 plumbing, heating, air conditioning[,] and elevators [and
19 pest control conditions], material to the use and
20 enjoyment of the condominium[.]; and
21 (ii) describing the results of the inspection of the
22 units and common elements required pursuant to section
23 3411(c) (relating to warranty against structural defects)
24 for visible conditions that adversely affect the health
25 or safety of residential occupants. The statement should
26 also state the extent to which the report by the
27 architect or professional engineer is based upon a visual
28 inspection of the units as well as the common elements.
29 (2) A statement by the declarant of the expected useful
30 life of each item reported on in paragraph (1) including the
19880H2248B2979 - 82 -
1 current replacement costs of such item.
2 (3) A list of any outstanding notices of uncured
3 violations of building code or other municipal regulations,
4 together with the estimated cost of curing those violations.
5 (4) A statement by the declarant, based on a report
6 prepared by an independent licensed exterminating company,
7 describing the presence at the condominium of any visible
8 pest conditions dangerous to health and safety, such as the
9 presence of insects and rodents dangerous to health or
10 safety, and outlining actions taken or to be taken to
11 eliminate the existence of pest conditions dangerous to
12 health or safety.
13 (b) Applicability of section.--This section applies only to
14 units that may be occupied for residential use.
15 § 3405. Public offering statement; condominium securities.
16 If an interest in a condominium is currently registered with
17 the Securities and Exchange Commission of the United States, a
18 declarant satisfies all requirements relating to the preparation
19 of a public offering statement in this subpart if he delivers to
20 the purchaser a copy of the public offering statement filed with
21 the Securities and Exchange Commission. An interest in a
22 condominium is not, in and of itself, a security under the
23 provisions of the act of December 5, 1972 (P.L.1280, No.284),
24 known as the ["]Pennsylvania Securities Act of 1972[."], and the
25 offer and sale of condominium units in accordance with the
26 requirements of this chapter shall not also be subject to the
27 registration requirements of sections 201 or 301 of the
28 Pennsylvania Securities Act of 1972 or the promotional real
29 estate sales requirements of the act of February 19, 1980
30 (P.L.15, No.9), known as the Real Estate Licensing and
19880H2248B2979 - 83 -
1 Registration Act.
2 § 3406. Purchaser's right to cancel.
3 (a) General rule.--[Unless] In cases where delivery of a
4 public offering statement is [not] required under section
5 3401[(b)] (relating to applicability; waiver), a declarant shall
6 provide a purchaser of a unit with a copy of the public offering
7 statement and all amendments thereto not later than the date [of
8 any] the purchaser executes the contract of sale for such unit
9 or, if no contract of sale is executed, 15 days before
10 conveyance of such unit. Unless a purchaser is given the public
11 offering statement [more than 15 days before execution of a
12 contract for the purchase of a unit], including all the
13 currently effective amendments thereof, within the time period
14 referred to in the preceding sentence, the purchaser, before
15 conveyance, may cancel the contract within 15 days after first
16 receiving the public offering statement and all currently
17 effective amendments thereof, except in the case of the sale of
18 a time-share estate. Unless a purchaser of a time-share estate
19 is given the public offering statement, including all the
20 currently effective amendments thereof, more than seven days
21 before [execution of a] the purchase executes the contract for
22 the purchase of [a] such unit or, if no contract of sale is
23 executed, seven days before conveyance of such unit, the
24 purchaser, before conveyance, may cancel the contract within
25 seven days after first receiving the public offering statement
26 and all currently effective amendments thereof. If a public
27 offering statement is amended after the public offering
28 statement has been received by a purchaser of a unit, the
29 amendment shall be provided to the purchaser promptly after it
30 becomes effective, and, if the amendment materially and
19880H2248B2979 - 84 -
1 adversely affects the rights or obligations, or both, of the
2 purchaser, then the purchaser, before conveyance, may cancel the
3 contract of sale within 15 days, or seven days in case of the
4 sale of a time-share estate, after receiving the amendment.
5 (b) Method and effect of cancellation.--If a purchaser
6 elects to cancel a contract pursuant to subsection (a), he may
7 do so by hand delivering notice thereof to the declarant, or by
8 mailing notice thereof by prepaid United States mail to the
9 declarant or to his agent for service of process. Cancellation
10 is without penalty and all payments made by the purchaser before
11 cancellation shall be refunded promptly.
12 (c) Penalty for noncompliance by declarant.--If a declarant
13 fails to provide a purchaser to whom a unit is conveyed with a
14 public offering statement and all amendments thereto as required
15 by subsection (a), the purchaser, in addition to any other
16 relief, is entitled to receive from the declarant an amount
17 equal to 5% of the sales price of the unit up to the maximum of
18 $2,000, or actual damages, whichever is the greater amount. A
19 minor omission or error in the public offering statement or an
20 amendment thereto, that is not willful, shall entitle the
21 purchaser to recover only actual damages, if any.
22 § 3407. Resales of units.
23 (a) Information supplied by unit owner.--In the event of a
24 resale of a unit by a unit owner other than a declarant, the
25 unit owner shall furnish to a purchaser before execution of any
26 contract for sale of a unit, or otherwise before conveyance, a
27 copy of the declaration (other than the plats and plans), the
28 bylaws, the rules or regulations of the association and a
29 certificate containing:
30 (1) A statement disclosing the effect on the proposed
19880H2248B2979 - 85 -
1 disposition of any right of first refusal or other restraint
2 on the free alienability of the unit.
3 (2) A statement setting forth the amount of the monthly
4 common expense assessment and any unpaid common expense or
5 special assessment currently due and payable from the selling
6 unit owner and any surplus fund credits to be applied with
7 regard to the unit pursuant to section 3313 (relating to
8 surplus funds).
9 (3) A statement of any other fees payable by unit
10 owners.
11 (4) A statement of any capital expenditures proposed by
12 the association for the current and two next succeeding
13 fiscal years.
14 (5) A statement of the amount of any reserves for
15 capital expenditures and of any portions of those reserves
16 designated by the association for any specified project.
17 (6) The most recent regularly prepared balance sheet and
18 income and expense statement, if any, of the association.
19 (7) The current operating budget of the association.
20 (8) A statement of any judgments against the association
21 and the status of any pending suits to which the association
22 is a party.
23 (9) A statement describing any insurance coverage
24 provided for the benefit of unit owners.
25 (10) A statement as to whether the executive board has
26 knowledge that any alterations or improvements to the unit or
27 to the limited common elements assigned thereto violate any
28 provision of the declaration.
29 (11) A statement as to whether the executive board has
30 knowledge of any violations of [the health or building codes]
19880H2248B2979 - 86 -
1 applicable governmental requirements or knowledge of the
2 existence of any hazardous conditions pursuant to section
3 3402(a)(27) (relating to public offering statement; general
4 provisions) or with respect to the unit, the limited common
5 elements assigned thereto or any other portion of the
6 condominium.
7 (12) A statement of the remaining term of any leasehold
8 estate affecting the condominium and the provisions governing
9 any extension or renewal thereof.
10 (13) A statement as to whether the declaration provides
11 for cumulative voting or class voting.
12 (14) A statement as to whether an agreement to terminate
13 the condominium has been submitted to the unit owners for
14 approval and remains outstanding.
15 (15) A statement of whether the condominium is a master
16 association or is part of a master association, or could
17 become a master association or part of a master association.
18 (16) A statement describing which units, if any, may be
19 owned in time-share estates and the maximum number of time-
20 share estates that may be created in the condominium.
21 (17) A statement of whether the declarant retains the
22 special declarant right to cause a merger or consolidation of
23 the condominium and, if so, the information describing such
24 right which was supplied by the declarant pursuant to section
25 3205(13) (relating to contents of declaration; all
26 condominiums), if any.
27 (b) Information supplied by association.--The association,
28 within ten days after a request by a unit owner, shall furnish a
29 certificate containing the information and copies of documents
30 necessary to enable the unit owner to comply with this section.
19880H2248B2979 - 87 -
1 A unit owner providing a certificate pursuant to subsection (a)
2 is not liable to the purchaser for any erroneous information
3 provided by the association and included in the certificate.
4 (c) Liability for error or inaction by association.--A
5 purchaser is not liable for any unpaid assessment or fee greater
6 than the amount set forth in the certificate prepared by the
7 association. A unit owner is not liable to a purchaser for the
8 failure or delay of the association to provide the certificate
9 in a timely manner but the purchase contract is voidable by the
10 purchaser until the certificate has been provided and for five
11 days thereafter or until conveyance, whichever first occurs.
12 § 3408. Escrow of deposits.
13 Any deposit (which shall not include any installment payment
14 under an installment sales contract nor payments specifically
15 stated in a sales contract to be in payment of or on account of
16 extras, changes or custom work) made in connection with the
17 purchase or reservation of a unit from a declarant shall be
18 placed in escrow and held in this Commonwealth by a licensed
19 real estate broker, an attorney admitted to practice in this
20 Commonwealth, a financial institution or a licensed title
21 insurance company, in an account, or in the form of a
22 certificate of deposit, designated solely for that purpose [by
23 an] with a financial institution whose accounts are insured by a
24 governmental agency or instrumentality until:
25 (1) delivered to the declarant at closing, or in the
26 case of the sale of a unit pursuant to an installment sales
27 contract, upon the expiration of 30 days from the date of
28 occupancy of the unit;
29 (2) delivered to the declarant because of purchaser's
30 default under a contract to purchase the unit; or
19880H2248B2979 - 88 -
1 (3) refunded to the purchaser.
2 § 3409. Release of liens.
3 (a) General rule.--Before conveying a unit, other than by
4 deed in lieu of foreclosure, to a purchaser other than a
5 declarant, a declarant shall record or furnish to the purchaser
6 releases of all liens affecting that unit and its common element
7 interest which the purchaser does not expressly agree to take
8 subject to or assume, or shall provide a surety bond or
9 substitute collateral for or insurance against the lien adequate
10 in nature and amount. This subsection does not apply to any
11 convertible or withdrawable real estate in which no unit has
12 been conveyed.
13 (b) [Lien against multiple units.--Whether perfected before
14 or after creation of the condominium, if a lien other than a
15 deed of trust or mortgage, including a lien attributable to work
16 performed or materials supplied before creation of the
17 condominium, becomes effective against two or more units, the
18 unit owner of an affected unit may pay to the lienholder the
19 amount of the lien attributable to his unit and the lienholder,
20 upon receipt of payment, promptly shall deliver a release of the
21 lien covering that unit and its common element interest. The
22 amount of the payment must be proportionate to the ratio which
23 that unit owner's common expense liability bears to the common
24 expense liabilities of all unit owners whose units are subject
25 to the lien. After payment, the association may not assess or
26 have a lien against that unit owner's unit for any portion of
27 the common expenses incurred in connection with that lien.]
28 Other liens.--Before conveying real estate to the association,
29 the declarant shall have the real estate released from:
30 (1) All liens the foreclosure of which would deprive
19880H2248B2979 - 89 -
1 unit owners of any right of access to or easements of support
2 of their units.
3 (2) All other liens on that real estate unless the
4 public offering statement describes certain real estate which
5 may be conveyed subject to liens in specified amounts.
6 § 3410. [Conversion condominiums] Condominiums containing
7 conversion buildings.
8 (a) Notice of conversion.--[A] The declarant of every
9 [conversion] condominium containing one or more conversion
10 buildings shall give each of the residential tenants and [any
11 subtenant] residential subtenants, if any, lawfully in
12 possession of a unit or units in a conversion building or
13 buildings [subject to this subpart], a conversion notice [of the
14 conversion] no later than one year before the declarant will
15 require [the tenant and any] such residential tenant and
16 residential subtenant [in possession] to vacate. The conversion
17 notice must set forth generally the rights of residential
18 tenants and residential subtenants under this section and shall
19 be hand delivered to the unit or mailed by prepaid United States
20 certified or registered mail return receipt requested to the
21 residential tenant and residential subtenant at the address of
22 the unit and not more than one other mailing address provided by
23 a residential tenant. Every notice shall be accompanied by a
24 public offering statement concerning the proposed sale of
25 condominium units within such building or buildings. Except as
26 otherwise provided in subsection (f), no residential tenant or
27 residential subtenant in a conversion building may be required
28 by the declarant to vacate [upon less] the unit he leases
29 earlier than one [year's] year after the conversion notice date,
30 except by reason of nonpayment of rent, waste or conduct that
19880H2248B2979 - 90 -
1 disturbs other tenants' peaceful enjoyment of the premises, and
2 the terms of the tenancy, including those terms that apply to a
3 period occurring in whole or in part after the conversion notice
4 date, may not be altered, but may be enforced, during that
5 period. Failure of a declarant to give notice [as required by]
6 to a residential tenant or residential subtenant entitled to
7 such notice pursuant to this subsection is a defense to an
8 action for possession against such residential tenant or
9 residential subtenant.
10 (b) Offer to tenant to purchase unit.--For six months after
11 [delivery or mailing of the notice described in subsection (a)]
12 the conversion notice date, the declarant shall offer to convey
13 each unit or proposed unit occupied for residential use in a
14 conversion building to the tenant who leases that unit. If [a]
15 the tenant fails to purchase [the] his unit during that six-
16 month period, the declarant may not offer to dispose of an
17 interest in that unit during the following six months at a price
18 or on terms more favorable to the offeree than the price or
19 terms offered to the tenant. This [section] subsection (b) shall
20 not apply to any rental unit which immediately prior to the
21 conversion notice date was restricted or devoted exclusively to
22 nonresidential use or the boundaries of which unit, after the
23 creation of the condominium, will not substantially conform to
24 the boundaries of such unit on the conversion notice date. [The
25 purchase option set forth in this subsection shall be recorded
26 in the recorder of deeds office in any county in which the
27 proposed conversion condominium is located.]
28 (c) Effect of wrongful conveyance.--If a declarant, in
29 violation of subsection (b), conveys a unit to a purchaser for
30 value who has no knowledge of the violation, recordation of the
19880H2248B2979 - 91 -
1 deed conveying the unit extinguishes any right a tenant may have
2 under subsection (b) to purchase that unit if the deed states
3 that the seller has complied with subsection (b) but does not
4 affect the right of a tenant to recover damages from the
5 declarant for a violation of subsection (b).
6 (d) Notice to vacate.--If a [notice of] conversion notice
7 specifies a date by which a unit or proposed unit must be
8 vacated, the conversion notice also constitutes a notice of
9 termination of the tenant's lease, subject to revocation in
10 accordance with subsection (j), and a notice to quit specified
11 by section 501 of the act of April 6, 1951 (P.L.69, No.20),
12 known as ["]The Landlord and Tenant Act of 1951.["]
13 (e) Improper lease termination prohibited.--
14 (1) Nothing in this section permits termination of a
15 lease by a declarant in violation of its terms.
16 (2) Nothing in this section or in any lease shall
17 prohibit a residential tenant, after receiving notice
18 pursuant to subsection (a), from terminating any lease
19 without any liability for such termination provided such
20 tenant gives the building owner 90 days' written notice of
21 the intent to terminate the lease.
22 (3) The declarant or owner of any proposed conversion
23 condominium shall not engage in any activity of any nature
24 which would coerce the tenant into terminating any lease,
25 including but not limited to stampeding, harassing tenants or
26 withholding normal services or repairs.
27 (f) Units leased to senior citizens and [blind and] disabled
28 persons.--
29 (1) For the purpose of this subsection, an eligible
30 tenant or subtenant shall be a natural person who, [at the
19880H2248B2979 - 92 -
1 time the notice described in subsection (a) is given by the
2 declarant,] on the conversion notice date, lawfully occupies
3 a unit in a conversion building as his principal residence
4 and is 62 years of age or older or is [blind or] disabled,
5 and has occupied the unit for at least two years. For the
6 purpose of this subsection, a person shall be deemed to be
7 "disabled" if on the conversion notice date he is totally and
8 permanently unable to engage in any substantial gainful
9 activity by reason of any medically determinable physical or
10 mental impediment, including, but not limited to, blindness.
11 (2) Within [30] 60 days after [receipt of] the
12 conversion notice [from the declarant referred to in
13 subsection (a)] date, any tenant, or subtenant, in possession
14 of a unit, who believes that he is an eligible tenant or
15 subtenant shall so notify the declarant and shall provide the
16 declarant with proof of his eligibility. Any eligible tenant
17 or subtenant who has established his eligibility as aforesaid
18 shall be entitled to remain in possession of his unit for two
19 years following the conversion notice date [of the notice
20 referred to in subsection (a)], notwithstanding any prior
21 termination date in his lease, except by reason of nonpayment
22 of rent, waste or conduct that disturbs other occupants'
23 peaceful enjoyment of the condominium, and the terms of the
24 tenancy, including terms that apply to a time period after
25 the conversion notice date, may not be altered, but may be
26 enforced, during the time period between the original lease
27 termination date [on which the tenant's lease would otherwise
28 terminate] and the expiration of this two-year period except
29 [that the rental may be increased to the extent necessary to
30 reflect any increase in real estate taxes and utility
19880H2248B2979 - 93 -
1 charges, applicable to the unit and not separately paid by
2 the tenant, for the time period between the date of the
3 notice referred to in subsection (a) and the date on which
4 the tenant's lease would otherwise terminate.] as is
5 otherwise provided in paragraph (3).
6 (3) The monthly rental payable by the tenant during the
7 time period commencing upon the later to occur of the
8 original lease termination date or the first anniversary of
9 the conversion notice date and ending upon the expiration of
10 the two-year period described in paragraph (2) shall be the
11 same monthly rental as was payable for the month immediately
12 preceding the original lease termination date, except that,
13 at the landlord's option, such monthly rental may be
14 increased by the lesser of 5% of such monthly rental or the
15 same percentage increase as the percentage increase, if any,
16 in the Consumer Price Index as calculated and published by
17 the United States Department of Labor for the six-month time
18 period commencing on the first day of the first full calendar
19 month after the conversion notice date.
20 (4) Failure of a declarant to comply with the provisions
21 of this subsection is a defense to an action for possession.
22 (g) Tenant meetings; open to the public.--[At] With respect
23 to any conversion building containing one or more units then
24 occupied for residential use, at least 30 days before the
25 [notice of] conversion [is given] notice date, the declarant
26 shall hold a tenant meeting open to the public in the
27 municipality where the [conversion is] proposed conversion
28 building is located at a place and time convenient to the
29 persons who may be directly affected by the conversion. At least
30 10 days' notice of the time and place of the meeting shall be
19880H2248B2979 - 94 -
1 given to residential tenants and subtenants, in lawful
2 possession of their units, in the same manner as is required for
3 the giving of the conversion notice, and to the general public
4 by a notice in a newspaper of general circulation in the
5 municipality in which the condominium is located, except that no
6 notice to the general public need be given with respect to
7 conversion buildings as to which the provisions of section
8 3402(b) (relating to public offering statement; general
9 provisions) are applicable. At such meeting, representatives of
10 the declarant shall briefly describe the following and may, but
11 shall not be required to, discuss other matters:
12 (1) The rights and obligations of tenants and subtenants
13 pursuant to this section.
14 (2) Improvements, if any, then planned to be made to the
15 condominium by the declarant.
16 (3) The anticipated approximate range of initial unit
17 sales prices. Specific unit sales prices need not, however,
18 be provided.
19 (4) The anticipated approximate range of estimated
20 monthly common expenses for various types of units, however,
21 specific per unit estimates need not be provided.
22 (h) Community development grants.--If Federal funds under
23 Title I of the Community Development Act of 1974 have been used
24 to finance the rehabilitation of multifamily rental housing,
25 with the intent that such housing subsequent to the
26 rehabilitation is to be used for residential rental purposes,
27 such housing shall not be converted to a condominium for a
28 period of ten years from the date the rehabilitation is
29 completed.
30 (i) Revocation.--A declarant may subsequently revoke a
19880H2248B2979 - 95 -
1 conversion notice if the declarant has expressly reserved the
2 right of revocation in the conversion notice and if the notice
3 of revocation:
4 (1) is given prior to the conveyance of any unit in the
5 condominium occurring after the conversion notice date other
6 than a unit or units conveyed to a successor declarant or as
7 a result of foreclosure of a mortgage on the unit or a deed
8 in lieu thereof;
9 (2) is given in the same manner as is required for the
10 giving of the conversion notice; and
11 (3) is given to all persons who were entitled to receive
12 the conversion notice and who continue to be in lawful
13 occupancy at the time such notice of revocation is given.
14 The giving of a notice of revocation revokes all rights granted
15 under this section, but does not revoke the rights granted to
16 residential tenants under subsection (a) or (f), and such rights
17 shall be deemed to have been incorporated in each residential
18 tenant's lease.
19 (j) Waiver of purchase rights.--Notwithstanding any
20 provisions of this subpart prohibiting waiver of rights, any
21 tenant may waive his right to purchase a unit pursuant to
22 subsection (b) if the waiver is in writing, is acknowledged and
23 is given in consideration of:
24 (1) an extension of the term of the tenant's tenancy and
25 right of occupancy under this subpart beyond the time period
26 required by subsection (b);
27 (2) the tenant entering into an agreement to purchase
28 another unit in the condominium; or
29 (3) all occupants of the unit making alternative living
30 arrangements.
19880H2248B2979 - 96 -
1 (k) Alteration of terms of tenancy.--Notwithstanding any
2 provisions of subsection (a) or (f), the terms of the tenancy of
3 a tenant or subtenant may be altered with the express written
4 consent of that tenant or subtenant, and such altered terms
5 shall then be the terms of tenancy referred to in this section.
6 (l) Application of section.--The provisions of this section
7 shall apply only with respect to conversion buildings in which
8 one or more residential tenants or residential subtenants are in
9 lawful occupancy on the conversion notice date and the only
10 tenants who are entitled to exercise the rights granted under
11 this section are residential tenants or residential subtenants:
12 (1) who are in lawful occupancy of conversion building
13 on the date the declarant gives the conversion notice; or
14 (2) who commence their tenancy after the notice of
15 conversion is given to the other residential tenants without
16 having been notified in writing, at or prior to the
17 commencement of their tenancy, that the property is then a
18 condominium and that they are not entitled to the rights
19 granted under this section.
20 Such rights continue only so long as the lawful occupancy of the
21 tenant or subtenant continues.
22 § 3411. Warranty against structural defects.
23 (a) Definition.--As used in this section, "structural
24 defects" means those defects in components constituting any unit
25 or common element which reduce the stability or safety of the
26 structure below accepted standards or restrict the normal
27 intended use of all or part of the structure and which require
28 repair, renovation, restoration or replacement. Nothing in this
29 section shall be construed to make the declarant responsible for
30 any items of maintenance relating to the units or common
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1 elements.
2 (b) General rule.--A declarant warrants against structural
3 defects in each of the units for two years from the date each is
4 conveyed to a bona fide purchaser, and all of the common
5 elements for two years. Any conveyance of a unit during the two-
6 year warranty period shall be deemed to transfer to the
7 purchaser all of the declarant's warranties created under this
8 section. The two years shall begin as to each of the common
9 elements whenever the common element has been completed or, if
10 later:
11 (1) as to any common element within any additional real
12 estate or portion thereof, at the time the first unit therein
13 is conveyed to a bona fide purchaser;
14 (2) as to any common element within any convertible real
15 estate or portion thereof, at the time the first unit therein
16 is conveyed to a bona fide purchaser; and
17 (3) as to any common element within any other portion of
18 the condominium, at the time the first unit therein is
19 conveyed to a bona fide purchaser.
20 (c) [Conversion condominiums.--A declarant of a conversion
21 condominium warrants against structural defects in components
22 installed by the declarant, work done or improvements made by
23 the declarant, and that the unit and common elements have been
24 inspected for structural and mechanical defects and that any
25 such defects found have been repaired. Otherwise, the declarant
26 of a conversion condominium may offer the units, common
27 elements, or both in an "as is" condition. The declarant of a
28 conversion condominium may also give a more extensive warranty
29 in writing. The times at which these warranties commence and the
30 duration of these warranties shall be as provided in subsection
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1 (b).] Condominiums containing conversion buildings.--A declarant
2 of a condominium containing one or more conversion buildings
3 warrants as follows:
4 (1) That there are no structural defects in components
5 installed anywhere in the condominium by or on behalf of the
6 declarant, or in work done or improvements made by or on
7 behalf of the declarant anywhere in the condominium.
8 (2) That all units and common elements in each
9 conversion building have been inspected for visible
10 structural and mechanical defects and for other visible
11 conditions that adversely affect the health or safety of
12 residential occupants, as required by subsection 3404(a)(1)
13 (relating to public offering statement; condominiums
14 containing conversion buildings), except that no such
15 inspection is required of any unit if the tenant or other
16 lawful occupant of the unit does not permit such inspection
17 to be conducted.
18 (3) That any such defects and other visible conditions
19 found have been repaired.
20 The warranties set forth in subsection (b) shall be applicable
21 to any units and common elements that are located within a
22 building that contains or comprises one or more units and is not
23 a conversion building. Otherwise, such a declarant may offer the
24 units, common elements, or both, in an "as is" condition. The
25 declarant of a condominium containing any conversion buildings
26 may also give a more extensive warranty in writing. The times at
27 which the warranties required by this subsection commence and
28 the duration of such warranties shall be as provided in
29 subsection (b).
30 (d) Exclusion or modification of warranty.--Except with
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1 respect to a purchaser of a unit for residential use, the
2 warranty against structural defects:
3 (1) may be excluded or modified by agreement of the
4 parties; and
5 (2) is excluded by expression of disclaimer, such as "as
6 is," "with all faults" or other language which in common
7 understanding calls the buyer's attention to the exclusion of
8 warranties.
9 (e) Limitation of actions.--No action to enforce the
10 warranty created by this section shall be commenced later than
11 six years after the warranty begins.
12 § 3414. Declarant's obligation to complete and restore.
13 (a) Completing improvements.--The declarant shall complete
14 all improvements labeled "MUST BE BUILT" on plats or plans
15 prepared pursuant to section 3210 (relating to plats and plans).
16 (b) Repair and restoration.--The declarant is subject to
17 liability for the prompt repair and restoration, to a condition
18 compatible with the remainder of the condominium, of any portion
19 of the condominium affected by the exercise of rights reserved
20 pursuant to or created by sections 3211 (relating to conversion
21 and expansion of flexible condominiums), 3212 (relating to
22 withdrawal of withdrawable real estate), 3217 (relating to use
23 for sales purposes) and 3218 (relating to easement to facilitate
24 completion, conversion and expansion).
25 (c) Substantial completion prerequisite to conveyance.--A
26 unit which is part of or constitutes a structure shall not be
27 conveyed unless all structural components and common element
28 mechanical systems of the structure containing or constituting
29 such unit or units are substantially completed to the extent
30 required of declarant so as to permit the use of such unit or
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1 units, and any limited common elements appurtenant thereto, for
2 their intended use. Such substantial completion shall be
3 evidenced by a recorded certification of completion executed by
4 an independent registered surveyor, architect or professional
5 engineer with regard to any such structure.
6 (d) Substantial completion of unit.--No interest in a unit
7 shall be conveyed until the unit is substantially completed in
8 accordance with the descriptions set forth in both the
9 declaration pursuant to section 3205(4) (relating to contents of
10 declaration; all condominiums) and in the public offering
11 statement pursuant to section 3402(a) (relating to public
12 offering statement; general provisions) as evidenced by a
13 recorded certificate of completion executed by an independent
14 registered surveyor, architect or professional engineer.
15 (e) Construction of section.--Nothing contained in this
16 subpart shall prevent the offering for sale of a unit or
17 interest in a unit or the execution of any agreement to sell and
18 purchase a unit or any interest in a unit (as opposed to actual
19 conveyance) prior to the completion of the unit or any other
20 portion of the condominium.
21 Section 4. (a) Except as set forth in this section, the
22 amendments to 68 Pa.C.S. made by this act shall apply only with
23 respect to events and circumstances occurring after the
24 effective date of this act. The changes to 68 Pa.C.S. made by
25 this act neither invalidate otherwise valid provisions of the
26 declaration, code of regulations, bylaws, declaration plan or
27 plats and plans of any condominium created prior to the
28 effective date of this act nor invalidates otherwise proper
29 actions of any declarant, condominium association, council or
30 executive board taken prior to the effective date of this act.
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1 (b) The provisions of this act amending 68 Pa.C.S. §§
2 3208(b) and (c), 3215(c), 3217(c) and 3306(a)(6) shall apply
3 only to condominiums created after the effective date of this
4 act.
5 (c) The provisions of this act amending 68 Pa.C.S. § 3220
6 shall apply only with regard to a termination agreement or
7 ratifications thereof not executed by any unit owner prior to
8 the effective date of this act.
9 (d) The provisions of this act amending 68 Pa.C.S. § 3308
10 shall apply only with regard to notices of meetings given after
11 the effective date of this act.
12 (e) The provisions of this act amending 68 Pa.C.S. §
13 3311(a)(3) shall apply only with regard to a claim for a tort or
14 breach of contract, for which litigation shall have been
15 initially instituted after the effective date of this act.
16 (f) The provisions of this act amending 68 Pa.C.S. §§ 3313
17 and 3314 shall apply only with regard to fiscal years of the
18 association commencing after the effective date of this act.
19 (g) The provisions of this act amending 68 Pa.C.S. §§
20 3402(a) and 3404 shall apply only with regard to a public
21 offering statement not delivered to any purchaser prior to the
22 effective date of this act.
23 (h) The provisions of this act amending 68 Pa.C.S. § 3411(c)
24 shall not apply to a conversion building in a condominium with
25 regard to which there has been a conveyance or binding agreement
26 to sell any unit in the conversion building to a bona fide
27 purchaser prior to the effective date of this act.
28 Section 5. This act shall take effect in 45 days.
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