On April 20, 2016, Governor Tom Wolf signed into law Act 21 – House Bill 1340, sponsored by Representative Martina White, which amended the Pennsylvania Uniform Planned Community Act (UPCA) and the Uniform Condominium Act (UCA) under Title 68 (Real and Personal Property). The amendments, specifically with regard to Section 3315(d) and Section 5315(e) of the Title 68 Acts – Lien for Assessments, expanded the provisions under the UPCA and the UCA and established that a lien for unpaid assessments may now be instituted within four (4) years (rather than the previous timeframe of three (3) years) after the assessments become payable. Additionally, the amendments now enable associations to resolve assessment delinquencies by allowing an association to obtain a personal judgment against the delinquent unit owner(s) rather than foreclosing on the lien, while still preserving the statutory lien. Previous to the amendment, in 2014, the United States Court of Appeals held that a personal judgment obtained by a community association in Pennsylvania did not preserve the statutory lien and that unless associations filed a lien foreclosure action within three (3) years of a delinquency, the lien for assessments was extinguished. The amendment allows associations to resolve assessment delinquencies without putting ownership of homes at risk through foreclosure proceedings.
Additionally, House Bill 1340 amended Section 3219(d) and Section 5219(d) of the Title 68 Acts – Amendment of Declaration, by clarifying that amendments to declarations governing condominiums and planned communities – to limit the number of rental units to below fifty (50%) percent, only requires an affirmative vote of sixty-seven (67%) percent of the unit owners, instead of the unanimous consent required under the Acts if, among other things, the amendment changes the “use to which the unit is restricted.” Previously, most practitioners agreed that an amendment limiting the number of rental units permitted in a community association did not change “the use” of a unit as the unit has been, and will remain, used for residential purposes. However, the amendments made it clear that the term “uses to which any unit is restricted” does not include the leasing of units, which now allows associations to more easily amend its governing documents to meet certain current mortgage underwriting guidelines to avoid ineligibility for mortgage financing if the number of rental units in the community exceed fifty (50%) percent.
These amendments may potentially save substantial sums of money for associations, and their members, since they effectively eliminate additional time-consuming hurdles. A full version of the text of House Bill 1340 can be found here.
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