The Pennsylvania General Assembly recently enacted bills amending the common interest ownership laws, the Uniform Condominium Act (UCA), the Uniform Planned Community Act, and the Uniform Real Estate Cooperative Act. The amendments require community documents to address alternative dispute resolution (ADR), strengthen the position of associations against developers, and allow associations to impose stronger penalties against delinquent unit owners.
The amendments make the same changes to all three types of communities, and apply to all communities created after their effective dates—but preexisting communities may also adopt them. The new amendments become effective December 18, 2018.
The statutes were amended in July to require new projects to provide for ADR in their bylaws, but only if all parties agree to submit to it. Since developers often prefer arbitration to a jury trial—especially respecting construction warranty or misrepresentation claims brought by associations—condominium documents usually provide for mandatory arbitration. This amendment would allow associations and unit owners to decide whether they will agree to ADR for any particular dispute. It also requires that ADR costs and fees be shared equally by the parties—with the exception of attorney's fees.
Also made effective in July, the statutes were amended to allow unit owners "in good standing" to file complaints with the Bureau of Consumer Protection, subject to certain ADR conditions, for any violation by the declarant or association, but only regarding provisions of those statutes relating to meetings, quorums, proxies, and association records.
The latest amendments give associations broad powers to suspend certain rights of defaulting or delinquent unit owners—for example, voting, serving on the Executive Board, and access to common elements, recreational facilities and amenities. Some associations have already enacted such rules, but their enforceability had been unclear.
These amendments strengthen the rights of an association against the declarant after the period of declarant control ends. Under the UCA, when 75 percent of the units are sold, a special meeting is to be called at which the unit owners will elect the Executive Board. If the declarant does not call that meeting, the amendments give unit owners the power to do so. The statute of limitations for a construction warranty claim is six years. The amendments change the statute of limitations to six years or two years after the post-declarant control election, whichever is later.
In recent years, Pennsylvania has fortified its stormwater management requirements. Under these amendments, a declaration is required to expressly impose compliance responsibility on the association.
Attorneys in Ballard Spahr's Mixed-Use Development and Condominiums Group help clients identify critical issues involving ownership, operation, repair, liability, and development rights, and offer counsel on federal and state regulatory compliance.
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