Very often, a real estate developer is only active in a project until the subdivision plan is approved.  At that point, the developer often sells some or all of the development rights to the builders who actually construct and sell the homes. The developer may not realize that it usually retains liability for the completion of the community, even though the developer and builder planned to pass that responsibility onto the builder.  Why?  Like most legal surprises, the reason is not taking care of the details of the transaction.

In Hillside Villas Condominium Association, Inc. v. Bottaro Development Company, a neighborhood was created using this typical model.  The developer created a community in nine separate phases. The builder constructed the homes, and paid the developer every time a home was sold. This looks like a typical residential condominium project. Whenever a phase of the community was added, the developer assigned special declarant rights to the builder. This allowed the builder to construct and to legally declare the units. The developer retained all of the declarant rights that were not specifically transferred or assigned to the builder.  So long as the builder sold at least four units per year, this relationship would continue until the community was sold out.

In all of these relationships, the problem comes when the builder fails to complete something.  Here, the storm water management basins were not completed, and the roads required repairs totaling $900,000.00.  The Association sued both the builder and the developer. 
Continue Reading

* House Bill 595 was signed by Governor Tom Wolf on Monday, May 7, 2018.  The Bill becomes effective on Wednesday, July 6.

The Pennsylvania General Assembly passed House Bill 595, which is expected to be signed by Governor Wolf.  This Bill gives a process for deciding disputes in Condominium and Homeowners’ Associations.  There are a few things that every Association should know about this new requirement.  They are:

  • Most Associations need to adopt bylaws or rules and regulations that establish Alternate Dispute Resolution (ADR) procedures. This includes procedures for disputes between two or more unit owners and/or between a unit owner and the Association.
  • A “unit owner in good standing” can file a Complaint with the Attorney General’s Bureau of Consumer Protection for a violation of the Act relating to meetings, quorums, voting, proxies, and Association records. Previously, this option was available only to disputes over Association financial records.
  • A “unit owner in good standing” is someone who has no past due assessments. So a unit owner that is behind on their assessments cannot file a Complaint with the Bureau of Consumer Protection.  Except that if the unpaid assessments are related to a Complaint filed with the Bureau of Consumer Protection, then the unit owner is in good standing regardless of unpaid assessments.
  • A unit owner cannot file a Complaint with the Bureau of Consumer Protection until he or she has exhausted the ADR procedure or at least 100 days after the unit owner started the Alternative Dispute Resolution procedure. If there is no ADR procedure, the unit owner can go straight to the Bureau.
  • Finally, if a unit owner has a dispute with the Association and wins, he or she may be entitled to an award of costs and reasonable attorney’s fees.

These additions to the Uniform Condominium Act and the Uniform Planned Communities Act are intended to help owners and Associations settle their differences without going to court.  In order to do this, Associations will need to take some steps to prepare themselves:
Continue Reading

I recently wrote about a trend in Pennsylvania case law that has permitted short-term vacation rentals, such as Airbnb, HomeAway, VRBO and others, in otherwise residential neighborhoods. In each of these cases, a homeowner rented out their single-family residential dwelling to vacationers, the municipality claimed the short-term rental was a violation of the Zoning ordinance, and the Pennsylvania Commonwealth Court said that the short-term rentals were still residential uses, not hotels or tourist homes.  All of these cases said that if the municipality wanted to prohibit short-term vacation rentals, they needed to specifically and unquestionably prohibit that use. 
Continue Reading

I had the pleasure of attending the 2017 general membership meeting for the BIA of Lancaster County at the Inn at Leola Village.  The featured speaker for the event was Dr. Robert Dietz, the chief economist for the National Association of Home Builders.  Dr. Dietz gave a detailed status report about the state of the building industry today, and some projections for the near future.  Most of Dr. Dietz’s discussion centered on one main theme:  there are not enough single family homes to meet today’s demand.  He spent time discussing why this is happening and the effects it could have over the next few years. 
Continue Reading

Short-term vacation home rentals – such as Airbnb, HomeAway, VRBO and others – are becoming more and more common today.  They are present not only in traditional vacation spots such as the Poconos, but more and more in every kind of neighborhood.  Many of these short-term rentals are happening in relatively “normal” suburban or urban communities.  Very often, these neighborhoods are not equipped to deal with vacationing out-of-towners using, and all too frequently abusing, one of their neighbor’s homes every week.  So the question remains “are these short-term rentals violations?” 
Continue Reading

In many cases, an association will seek a Court Order to enforce its rules and regulations.  In those cases, the association asks a Judge to order the unit owner to stop doing something that they are not allowed to do, or to make some sort of change to comply with association governing documents or rules and regulations.  Since the association is asking the Judge to require a specific behavior, it needs to be sure that it asks for exactly what it wants. 
Continue Reading

We have written a couple of posts about the Lancaster County-wide Property Tax Reassessment.  In this post, we want to focus specifically on commercial and industrial properties.  This includes any sort of income producing properties, including apartments and other rental properties.

As we explained before, the aim of the 2018 Reassessment is to make the assessed value of property equal to the actual fair market value of that property.  That is relatively easy to do with residential property – the County can see what properties of a similar size and location have sold for, and compare that to your residential property.  But for commercial property, that is much more difficult.  Your commercial property is different from most other properties. 
Continue Reading

By now, all property owners have had some time to stew over the preliminary reassessments they have received.  You’ve read our recent post on the Lancaster County property reassessment, searched Google for more information and discussed it with friends and neighbors.  The good news is, you don’t have to do anything yet.  That doesn’t mean, however, that it’s not time for you to start considering your options and preparing for the inevitable.

Final assessments will be mailed to all property owners on June 1, 2017.  You have 40 days from the date of final notice to file your appeal if you don’t agree with your property’s assessed value or the value becomes final.  As is the case with everything else in life, that time will fly by.  And because the appeal process may in some cases require an appraisal of your property, your decision to begin the process should be made sooner rather than later.
Continue Reading

One of my coworkers (thanks Taylor!) recently shared an interesting article with me: YouTubers Face Fines, Possible Eviction For Making Videos From Their Home. Since I often help clients start new business ventures, many of whom begin operating out of their home, this story was particularly interesting to me.

In short, the article describes a situation where a group of friends lived together and professionally make YouTube gaming videos and vlogs – one of the residents has nearly a million subscribers on his Channel. The residents of the house received a visit from their county code enforcement official, who said that the group was allegedly in violation of a zoning restriction that prohibited a certain number of unrelated people living in the same residence.

In addition, the group was allegedly running a business out of their house without a license and if they didn’t either stop operating or obtain a business license, they could be subject to fines of up to $136 per day.

While the definitions of what constitutes “doing business” can vary from jurisdiction to jurisdiction, in Cobb County, Georgia, filming and uploading YouTube videos can constitute doing business and requires a business license.

So what lessons can be learned from the above situation?
Continue Reading

What did you do on your snow day? I woke up, got a cup of coffee, and brushed up on the changes to Pennsylvania’s Mechanics’ Lien Law in my pajamas. Anything to put off several hours of snow shoveling and to stave off the regret of not investing in a snow blower.

Anyway, back to why you’re here: mechanics’ liens. What is a mechanics’ lien? It’s a legal claim, technically a security interest, against property that has been remodeled or improved, and is typically held by subcontractors and suppliers to ensure that they get paid for the work, services or supplies that they contributed to the project.

Pennsylvania’s Mechanics’ Lien Law recently underwent some fairly significant changes. Act 142 of 2014 modified Pennsylvania’s Mechanics’ Lien Law and required the creation of a standardized online directory called the State Construction Notices Directory. For projects over a certain dollar amount, Act 142 also provides property owners the ability to limit subcontractors’ mechanics’ lien claims if they don’t comply with certain requirements.
Continue Reading