If you are house-hunting and have considered purchasing a home in what is called a planned community, you should be aware that there is a body of law which regulates such communities. In 1997, Pennsylvania’s Uniform Planned Community Act (the “Act”) became effective, regulating residential developments in which the common areas are owned and maintained by homeowners’ associations.
Typically, a homeowners’ association will own, maintain, or control elements of the community such as the open space areas, walking trails, entrance gates, streets, street lights, hydrants, storm water management systems, and on-site septic systems, unless these improvements are dedicated to the municipality.
Under the Act, a planned community is “created” upon the recording of a declaration which contains regulations of the homeowners’ association and planned community. A declaration of planned community describes, among other things, the boundaries of the overall property, the individual lots, and the land to be owned by the homeowners’ association. Perhaps what are most important to the homeowner are the provisions regarding his or her obligations to pay part of the common expenses of the community, known as assessments. A careful review of this often-lengthy document will disclose what common expenses will be passed on to the homeowner. For example, if the association is responsible for insurance, real property taxes, or storm water management facilities which are in need of repair, the costs ultimately will be allocated ratably to the homeowners.
Also important are provisions in the declaration which set forth easements, covenants, and restrictions. A declaration could contain restrictions such as limitations on the number of household pets allowed, and regulations regarding landscaping, building exteriors, and aesthetics applicable to each home within the community. Other potential legal issues relate to any provision describing a deed restriction, such as a restriction against further subdivision of a lot.
When purchasing a home within a planned community, the buyer should receive a number of documents, including copies of the association’s declaration and by-laws, the rules and regulations of the community, and a resale certificate. Furthermore, if the buyer is purchasing the home directly from the developer, he or she is also entitled to receive a document called a Public Offering Statement. If the developer fails to provide the buyer with a copy of the document by the date of the execution of an agreement of sale, legal remedies are available; i.e., the buyer may cancel the agreement within seven days after receiving the Public Offering Statement and any amendments that materially and adversely affect the buyer.
If you are considering purchasing a home in a planned community, don’t be caught off-guard by homeowners’ association expenses, rules, and regulations. Contact us if we can assist you in this area.
— Denise Ciampitti