68 Pa.C.S. Ch. 54

in effect

68 Pa.C.S. § 5401 Applicability; waiver.

(a) General rule.--This chapter applies to all units subject to this subpart, except as provided in subsection (b) and section 5411 (relating to warranty against structural defects) or as modified or waived by agreement of the purchaser of any unit which is intended for nonresidential use at the time of sale of such unit by the declarant or by agreement of purchasers of units in a planned community who are or intend to be in the business of buying and selling planned community units, provided that: (1) a purchaser of a unit intended for residential use at the time of sale by the declarant may not modify or waive the provisions of section 5411 with regard to such unit and the common elements; (2) with regard to any limited common element appurtenant only to nonresidential units, the unit owners of all such units have agreed to such modification or waiver and, with regard to any common elements other than limited common elements in a planned community in which all units are restricted to nonresidential use, all unit owners have agreed to such modification or waiver; and (3) no modification or waiver shall prevent any unit owner from indirectly benefiting from any provision in this chapter by reason of such unit owner being a unit owner in the planned community and a member of the association. (b) Public offering statements.--A public offering statement need not be prepared or delivered in the case of: (1) a gratuitous transfer of a unit; (2) a disposition pursuant to court order; (3) a disposition by a government or governmental agency; (4) a disposition by foreclosure or deed in lieu of foreclosure; (5) a disposition of a unit situated wholly outside this Commonwealth pursuant to a contract executed wholly outside this Commonwealth; or (6) a transfer to which section 5407 (relating to resales of units) applies. (c) Resale certificates.--A resale certificate as described in section 5407 need not be prepared or delivered in the cases described in subsection (b)(1) through (5). (d) Unified public offering statement.--If a unit is part of two or more planned communities or is part of a planned community and is part of any other real estate regime in connection with the sale of which the delivery of a public offering statement is required under the laws of this Commonwealth, a single public offering statement conforming to the requirements of sections 5402 (relating to public offering statement; general provisions), 5403 (relating to public offering statement; time-share estates) and 5404 (relating to public offering statement; planned communities containing conversion buildings), as those requirements relate to any real estate regimes in which the unit is located and to any other requirements imposed under the laws of this Commonwealth, may be prepared and delivered in lieu of providing two or more public offering statements. Cross References. Section 5401 is referred to in sections 5102, 5406 of this title.

68 Pa.C.S. § 5402 Public offering statement; general provisions.

(a) General rule.--Except as provided in subsection (b), a public offering statement must contain or fully and accurately disclose: (1) The name and principal address of the declarant and of the planned community. (2) A general description of the planned community, including, without limitation, the types, number and declarant's schedule of commencement and completion of construction of all buildings, units and amenities. (3) A narrative description of the type and character of units offered, including a statement of the degree of completion to be provided or undertaken by the declarant of such units and the common elements necessary for use and enjoyment of such units upon the conveyance by the declarant of units offered. (4) The total number of additional units that may be included in the planned community and the proportion of units the declarant intends to rent or market in blocks of units to investors. (5) A brief narrative description of any options reserved by a declarant to withdraw withdrawable real estate under section 5206(1) (relating to contents of declaration for flexible planned communities) and the expected effect that withdrawal would have on the remaining portion of the planned community. (6) Copies and a brief narrative description of the significant features of the declaration, other than the plats and plans, and the bylaws, rules and regulations, agreement of sale, copies of any contracts and leases to be signed by the purchasers prior to or at closing and a brief narrative description of any other contracts or leases or agreements of a material nature to the planned community that will or may be subject to cancellation by the association under section 5305 (relating to termination of contracts and leases of declarant). (7) Any current balance sheet and a projected budget for the association, either within or as an exhibit to the public offering statement, for one year after the date of the first conveyance to a purchaser and thereafter the current budget of the association, a statement of who prepared the budget and a statement of the budget's material assumptions, including those concerning occupancy and inflation factors. The budget must include, without limitation: (i) A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement. (ii) A statement containing a description of any provisions made in the budget for reserves for anticipated material capital expenditures or any other reserves or, if no provision is made for reserves, a statement to that effect. (iii) The projected common expense assessment by category of expenditures for the association. (iv) The projected monthly common expense assessment for each type of unit. (8) Any of the following: (i) Services not reflected in the budget that the declarant provides or expenses that the declarant pays and that the declarant expects may become at any subsequent time a common expense of the association. (ii) Personal property not owned by the association but provided by the declarant and being used or to be used in the operation and enjoyment of the common elements which is or will be required in connection with the operation and enjoyment of the common elements after such personal property is no longer provided by the declarant and the projected common expense assessment for the association and for each type of unit attributable to each of those services or expenses and purchase or rental of such personal property. (9) Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee. (10) A description of any liens, defects or encumbrances on or affecting the title to the planned community. (11) A description of any financing for purchasers offered or arranged by the declarant. (12) The terms and significant limitations of any warranties provided by the declarant, including statutory warranties and limitations on the enforcement thereof or on damages. (13) A statement in at least ten-point boldface type, appearing on the first page of the public offering statement, as follows: (i) That, within seven days after receipt of a public offering statement or an amendment to the public offering statement that materially and adversely affects the rights or obligations of the purchaser, the purchaser, before conveyance, may cancel any contract for purchase of a unit from a declarant. (ii) That, if a declarant fails to provide a public offering statement and any amendments to a purchaser before conveying a unit, the purchaser may recover from the declarant damages as provided in section 5406(c) (relating to purchaser's right to cancel). (iii) A description of damages under section 5406(c). (iv) That, if a purchaser receives the public offering statement more than seven days before signing a contract, the purchaser cannot cancel the contract unless there is an amendment to the public offering statement that would have a material and adverse effect on the rights or obligations of that purchaser. (14) A statement of any judgments against the association, the status of any pending suits to which the association is a party and the status of any pending suits material to the planned community of which a declarant has actual knowledge. (15) A statement that any deposit made in connection with the purchase of a unit will be held in an escrow account in accordance with the provisions of section 5408 (relating to escrow of deposits) and will be returned to the purchaser if the purchaser cancels the contract pursuant to section 5406. (16) Any restraints on alienation of any portion of the planned community. (17) A description of all insurance coverage provided or intended to be provided, if such insurance is not then in effect, for the benefit of unit owners, including the types and extent of coverage and the extent to which such coverage includes or excludes improvements or betterments made to units, in accordance with section 5312 (relating to insurance). (18) Any fees or charges to be paid by unit owners, currently or in the future, for the use of the common elements, limited common elements and other facilities related to the planned community. (19) The extent to which financial arrangements have been provided for completion of all improvements labeled "MUST BE BUILT" under section 5414 (relating to declarant's obligation to complete and restore). (20) All unusual and material circumstances, features and characteristics of the planned community and the units. (21) In the case of a leasehold planned community, at least the following information: (i) The name and address of each lessor and his assignee, if any. (ii) Any relationship between the declarant and any lessor or assignee. (iii) A description of the leased property. (iv) The rent and any provision in the lease for increases in the rent and any other charges or payments required to be paid by the lessee under the lease. (v) Whether the lessee has any right to terminate the lease. (vi) The information contained in the declaration as required by section 5207(a) (relating to leasehold planned communities). (vii) The following notice in boldface type: "Purchasers should be aware that this is a leasehold planned community, and the purchaser's interest therein may be less valuable than a fee interest, may depreciate over time and may be of questionable marketability." (22) A statement containing a declaration as to the present condition of all structural components and major utility installations in the subject property, including the dates of construction, installation and major repairs, if known or ascertainable, and the expected useful life of each item, together with the estimated cost in current dollars of replacing each of the same. (23) A description of how votes are allocated among the units and a statement as to whether cumulative or class voting is permitted and, if so, under what circumstances. The statement shall also explain the operation of cumulative or class voting. (24) A description of any circumstances under which the association is to become a master association or part of a master association. (25) A statement of all governmental approvals and permits required for the use and occupancy of the planned community, indicating the name and expiration date of each such approval or permit that has been obtained and, as to any approvals or permits that have not been obtained, a statement indicating when each such approval or permit is expected to be obtained and the person responsible for the expense of obtaining each such approval or permit. (26) A statement as to whether there are any outstanding and uncured notices of violations of governmental requirements and, if there are any such notices of violations, a description of the alleged violation and a statement indicating when each violation is expected to be cured and the person who shall bear the expense of curing such violation. (27) A statement as to whether the declarant has knowledge of any one or more of the following: (i) Hazardous conditions, including contamination, affecting the planned community site by hazardous substances, hazardous wastes or the like or the existence of underground storage tanks for petroleum products or other hazardous substances. (ii) Any investigation conducted to determine the presence of hazardous conditions on or affecting the planned community site. (iii) Any finding or action recommended to be taken in the report of any such investigation or by any governmental body, agency or authority, in order to correct any hazardous conditions and any action taken pursuant to those recommendations. If the declarant has no knowledge of such matters, the declarant shall make a statement to that effect. The declarant shall also set forth the address and phone number of the regional offices of the Department of Environmental Resources and the United States Environmental Protection Agency where information concerning environmental conditions affecting the planned community site may be obtained. (28) A summary and description of all the provisions of the declaration for the planned community to comply with section 5205(16) (relating to contents of declaration; all planned communities). (29) A statement identifying all facilities and amenities in the planned community which the declarant shall be obligated to complete and with respect thereto: (i) The time within which each identified facility or amenity shall be completed. (ii) Whether there is a source of funding to complete the facilities and amenities or any security for the completion, and a description of any such funding source and security. (iii) Who will own the facilities and amenities to be completed by the declarant. (iv) The responsibilities of unit owners and the association, respectively, for the maintenance, repair, improvement, administration and regulation of the facilities and amenities. (b) Exceptions.--If a planned community composed of not more than 12 units is not a flexible planned community and no power is received to a declarant to make the planned community part of a larger planned community, a group of planned communities or other real estate, a public offering statement may, but need not, include the information otherwise required by subsection (a)(4) and (5) and the narrative descriptions of documents required by subsection (a)(6). (c) Amendment for material change in information.--A declarant shall promptly amend the public offering statement to report any material change in the information required by this section. (Nov. 30, 2004, P.L.1486, No.189, eff. 60 days; Mar. 27, 2020, P.L.35, No.11, eff. 60 days) 2020 Amendment. Act 11 amended subsec. (a)(18). 2004 Amendment. Act 189 amended subsec. (a)(13)(i) and (iv). References in Text. The Department of Environmental Resources, referred to in subsec. (a)(27)(iii), was renamed the Department of Environmental Protection by the act of June 28, 1995 (P.L.89, No.18). Cross References. Section 5402 is referred to in sections 5102, 5320, 5401, 5403, 5404, 5407, 5410, 5414 of this title.

68 Pa.C.S. § 5403 Public offering statement; time-share estates.

If the declarant provides that ownership or occupancy of any units are or may be owned in time-shares, the public offering statement shall contain or disclose in addition to the information required by section 5402 (relating to public offering statement; general provisions): (1) The total number of units in which time-share estates may be created. (2) The total number of time-share estates that may be created in the planned community. (3) The projected common expense assessment for each time-share estate and whether those assessments may vary seasonally. (4) A statement of any services, not reflected in the budget, which the declarant provides or expenses which he pays and which the declarant expects may become at any subsequent time a common expense of the association and the projected common expense assessment attributable to each of those services or expenses for each time-share estate. (5) The extent to which the time-share owners of a unit are jointly and severally liable for the payment of real estate taxes and all assessments and other charges levied against that unit. (6) The extent to which a suit for partition may be maintained against a unit owned in time-share estates. (7) The extent to which a time-share estate may become subject to a tax or other lien arising out of claims against other time-share owners of the same unit. (8) A statement in at least ten-point boldface type, appearing on the first page of the public offering statement, that: (i) Within seven days after receipt of a public offering statement, a purchaser, before conveyance, may cancel any contract for purchase of a unit from a declarant. (ii) If a declarant fails to provide a public offering statement to a purchaser before conveying a unit, the purchaser may recover from the declarant damages as provided in section 5406(c) (relating to purchaser's right to cancel) and a description of such damages. (iii) If a purchaser receives the public offering statement more than seven days before signing a contract, the purchaser cannot cancel the contract. Cross References. Section 5403 is referred to in sections 5102, 5401 of this title.

68 Pa.C.S. § 5404 Public offering statement; planned communities containing conversion buildings.

(a) General rule.--The public offering statement of a planned community containing a conversion building must contain, in addition to the information required by section 5402 (relating to public offering statement; general provisions): (1) A statement by the declarant, based on a report prepared by an independent registered architect or professional engineer: (i) Describing the age and present condition and, if known or reasonably ascertainable, the dates of construction, installation and major repairs of all structural components and mechanical and electrical installations, including, but not limited to, roofs, plumbing, heating, air conditioning, elevators, storm water systems and sewage treatment systems material to the use and enjoyment of the planned community. (ii) Describing the results of the inspection of the units and common elements required pursuant to section 5411(c) (relating to warranty against structural defects) for visible conditions that adversely affect the health or safety of residential occupants. The statement should also state the extent to which the report by the architect or professional engineer is based upon a visual inspection of the units as well as the common elements. (2) A statement by the declarant of the expected useful life of each item reported on in paragraph (1), including the current replacement costs of such item. (3) A list of any outstanding notices of uncured violations of building codes or other municipal regulations, together with the estimated cost of curing those violations. (4) A statement by the declarant, based on a report prepared by an independent licensed exterminating company, describing the presence at the planned community of any visible pest conditions dangerous to health and safety, such as the presence of insects and rodents dangerous to health or safety, and outlining actions taken or to be taken to eliminate the existence of pest conditions dangerous to health or safety. (b) Applicability of section.--This section applies only to units that may be occupied for residential use. Cross References. Section 5404 is referred to in sections 5102, 5401, 5411 of this title.

68 Pa.C.S. § 5405 Public offering statement; planned community securities.

If an interest in a planned community is currently registered with the Securities and Exchange Commission of the United States, a declarant satisfies all requirements relating to the preparation of a public offering statement in this subpart if the declarant delivers to the purchaser a copy of the public offering statement filed with the Securities and Exchange Commission. An interest in a planned community is not in and of itself a security under the provisions of the act of December 5, 1972 (P.L.1280, No.284), known as the Pennsylvania Securities Act of 1972. The offer and sale of planned community units in accordance with the requirements of this chapter shall not also be subject to the registration requirements of section 201 or 301 of the Pennsylvania Securities Act of 1972 or the promotional real estate sales requirements of the act of February 19, 1980 (P.L.15, No.9), known as the Real Estate Licensing and Registration Act. Cross References. Section 5405 is referred to in section 5102 of this title.

68 Pa.C.S. § 5406 Purchaser's right to cancel.

(a) General rule.--In cases where delivery of a public offering statement is required under section 5401 (relating to applicability; waiver), a declarant shall provide a purchaser of a unit with a copy of the public offering statement and all amendments thereto not later than the date the purchaser executes the contract of sale for such unit or, if no contract of sale is executed, not later than seven days before conveyance of such unit. Unless a purchaser is given the public offering statement, including all the currently effective amendments thereof, within the time period referred to in the preceding sentence, the purchaser, before conveyance, may cancel the contract within seven days, after first receiving the public offering statement and all currently effective amendments. If a public offering statement is amended after the public offering statement has been received by a purchaser of a unit, the amendment shall be provided to the purchaser promptly after it becomes effective. If the amendment materially and adversely affects the rights or obligations or both of the purchaser, then the purchaser, before conveyance, may cancel the contract of sale within seven days after receiving the amendment. (b) Method and effect of cancellation.--If a purchaser elects to cancel a contract pursuant to subsection (a), the purchaser may do so by hand-delivering notice thereof to the declarant or by mailing notice thereof by prepaid United States mail to the declarant or to the declarant's agent for service of process. Cancellation is without penalty, and all payments made by the purchaser before cancellation shall be refunded promptly. (c) Penalty for noncompliance by declarant.--If a declarant fails to provide a purchaser to whom a unit is conveyed with a public offering statement and all amendments thereto as required by subsection (a), the purchaser, in addition to any other relief, is entitled to receive from the declarant an amount equal to 5% of the sales price of the unit up to a maximum of $2,000 or actual damages, whichever is the greater amount. A minor omission or error in the public offering statement or an amendment thereto that is not willful shall entitle the purchaser to recover only actual damages, if any. (Mar. 24, 1998, P.L.206, No.37, eff. 60 days) 1998 Amendment. Act 37 amended subsec. (a). Cross References. Section 5406 is referred to in sections 5402, 5403 of this title.

68 Pa.C.S. § 5407 Resales of units.

(a) Information supplied by unit owner.--In the event of a resale of a unit by a unit owner other than a declarant, the unit owner shall furnish to a purchaser before execution of any contract for sale of a unit or otherwise before conveyance a copy of the declaration other than the plats and plans, the bylaws, the rules or regulations of the association and a certificate containing: (1) A statement disclosing the effect on the proposed disposition of any right of first refusal or other restraint on the free alienability of the unit. (2) A statement setting forth the amount of the monthly common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner and any surplus fund credits to be applied with regard to the unit pursuant to section 5313 (relating to surplus funds). (3) A statement of any other fees payable by unit owners. (4) A statement of any capital expenditures proposed by the association for the current and two next succeeding fiscal years. (5) A statement of the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified project. (6) The most recent regularly prepared balance sheet and income and expense statement, if any, of the association. (7) The current operating budget of the association. (8) A statement of any judgments against the association and the status of any pending suits to which the association is a party. (9) A statement describing any insurance coverage provided for the benefit of unit owners. (10) A statement as to whether the executive board has knowledge that any alterations or improvements to the unit or to the limited common elements assigned thereto violate any provision of the declaration. (11) A statement as to whether the executive board has knowledge of any violations of applicable governmental requirements or knowledge of the existence of any hazardous conditions pursuant to section 5402(a)(27) (relating to public offering statement; general provisions) with respect to the unit, the limited common elements assigned to the unit or any other portion of the planned community. (12) A statement of the remaining term of any leasehold estate affecting the planned community and the provisions governing any extension or renewal thereof. (13) A statement as to whether the declaration provides for cumulative voting or class voting. (14) A statement as to whether an agreement to terminate the planned community has been submitted to the unit owners for approval and remains outstanding. (15) A statement of whether the planned community is a master association or is part of a master association or could become a master association or part of a master association. (16) A statement describing which units, if any, may be owned in time-share estates and the maximum number of time-share estates that may be created in the planned community. (17) A statement of whether the declarant retains the special declarant right to cause a merger or consolidation of the planned community and, if so, the information describing such right which was supplied by the declaration pursuant to section 5205(13) (relating to contents of declaration; all planned communities), if any. (b) Information supplied by association.--The association, within ten days after a request by a unit owner, shall furnish a certificate containing the information and copies of documents necessary to enable the unit owner to comply with this section. A unit owner providing a certificate pursuant to subsection (a) is not liable to the purchaser for any erroneous information provided by the association and included in the certificate. (c) Liability for error or inaction by association.--A purchaser is not liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the association. A unit owner is not liable to a purchaser for the failure or delay of the association to provide the certificate in a timely manner. (d) Purchase contract voidable.--The purchase contract is voidable by the purchaser until the certificate has been provided and for five days thereafter or until conveyance, whichever first occurs. (Nov. 30, 2004, P.L.1486, No.189, eff. 60 days) 2004 Amendment. Act 189 amended subsec. (c) and added subsec. (d). Cross References. Section 5407 is referred to in sections 5102, 5302, 5316, 5401 of this title.

68 Pa.C.S. § 5408 Escrow of deposits.

(a) General rule.--Any deposit (which shall not include any installment payment under an installment sales contract nor a payment specifically stated in a sales contract to be in payment of or on account of extras, changes or custom work) made in connection with the purchase or reservation of a unit from a declarant shall be placed in escrow and held in this Commonwealth by a licensed real estate broker, an attorney admitted to practice in this Commonwealth, a financial institution or a licensed title insurance company in an account or in the form of a certificate of deposit designated solely for that purpose with a financial institution whose accounts are insured by a governmental agency or instrumentality until: (1) delivered to the declarant at closing or, in the case of the sale of a unit pursuant to an installment sales contract, upon the expiration of 30 days from the date of occupancy of the unit; (2) delivered to the declarant because of purchaser's default under a contract to purchase the unit; or (3) refunded to the purchaser. (b) Use of bond or letter of credit.--In lieu of escrowing deposits in accordance with subsection (a), a declarant may: (1) obtain and maintain a corporate surety bond issued by a surety authorized to do business in this Commonwealth, and in which the declarant has no direct or indirect ownership interest, in the form and in the amount set forth in subsection (d); or (2) obtain and maintain an irrevocable letter of credit issued by a financial institution whose accounts are insured by a governmental agency or instrumentality, and in which the declarant has no direct or indirect ownership interest, in the form and in the amount set forth in subsection (d). (c) Timing.--A corporate surety bond or irrevocable letter of credit obtained pursuant to subsection (b) shall be maintained until all deposits received by the declarant have been deposited in escrow or properly credited or refunded to a purchaser under the conditions enumerated in subsection (a). (d) Form and amount of bond or letter of credit.-- (1) A bond obtained pursuant to subsection (b)(1) shall be payable to the Commonwealth for use and benefit of every person protected by the provisions of this section. The declarant shall deposit the bond with the Attorney General. The bond shall be a blanket bond in the minimum amount of $1,000,000, in a form acceptable to the Attorney General. (2) A letter of credit obtained pursuant to subsection (b)(2) shall be payable to the Commonwealth for the use and benefit of every person protected by the provisions of this section. The declarant shall deposit the letter of credit with the Attorney General. The letter of credit shall be a blanket letter of credit, in a form acceptable to the Attorney General, in the minimum amount of $1,000,000. (e) Adjustment of bond amount.--The Attorney General may annually adjust the amount of the required bond, based upon the cumulative change in the Consumer Price Index for All Urban Consumers for the Pennsylvania, New Jersey, Delaware and Maryland area, using 2004 as the base year. An adjustment shall be effective 60 days after publication in the Pennsylvania Bulletin of notice of the adjustment. (Jan. 6, 2006, P.L.13, No.3, eff. 60 days) Cross References. Section 5408 is referred to in sections 5102, 5402 of this title.

68 Pa.C.S. § 5409 Release of liens.

(a) General rule.--Before conveying a unit, other than by deed in lieu of foreclosure, to a purchaser other than a declarant, a declarant shall record or furnish to the purchaser releases of all liens affecting that unit and its rights with respect to any common elements which the purchaser does not expressly agree to take subject to or assume or shall provide a surety bond or substitute collateral for or insurance against the liens adequate in nature and amount. This subsection does not apply to any convertible or withdrawable real estate in which no unit has been conveyed. (b) Other liens.--Before conveying real estate to the association, the declarant shall have the real estate released from: (1) All liens the foreclosure of which would deprive unit owners of any right of access to or easements of support of their units. (2) All other liens, including, without limitation, real estate taxes, on that real estate unless the public offering statement describes certain real estate which may be conveyed subject to liens in specified amounts. (Oct. 19, 2018, P.L.551, No.84, eff. 60 days) 2018 Amendment. Act 84 amended subsec. (b)(2). Cross References. Section 5409 is referred to in section 5102 of this title.

68 Pa.C.S. § 5410 Planned communities containing conversion buildings.

(a) Notice of conversion.--The declarant of every planned community containing one or more conversion buildings shall give each of the residential tenants and residential subtenants, if any, lawfully in possession of a unit or units in a conversion building or buildings a conversion notice no later than one year before the declarant requires the residential tenant and residential subtenant to vacate. The conversion notice must set forth generally the rights of residential tenants and residential subtenants under this section and shall be hand delivered to the unit or mailed by prepaid United States certified or registered mail, return receipt requested, to the residential tenant and residential subtenant at the address of the unit and not more than one other mailing address provided by the residential tenant. Every notice shall be accompanied by a public offering statement concerning the proposed sale of planned community units within such building or buildings. Except as provided in subsection (f), no residential tenant or residential subtenant in a conversion building may be required by the declarant to vacate the unit earlier than one year after the conversion notice date except by reason of nonpayment of rent, waste or conduct that disturbs other tenants' peaceful enjoyment of the premises, and the terms of the tenancy, including those terms that apply to a period occurring in whole or in part after the conversion notice date, may not be altered but may be enforced during that period. Failure of a declarant to give notice to a residential tenant or residential subtenant entitled to such notice under this subsection is a defense to an action for possession against such residential tenant or residential subtenant. (b) Offer to tenant to purchase unit.--For six months after the conversion notice date, the declarant shall offer to convey each unit or proposed unit occupied for residential use in a conversion building to the tenant who leases that unit. If the tenant fails to purchase his unit during that six-month period, the declarant may not offer to dispose of an interest in that unit during the following six months at a price or on terms more favorable to the offeree than the price or terms offered to the tenant. This subsection shall not apply to any rental unit: (1) which, immediately prior to the conversion notice date, was restricted or devoted exclusively to nonresidential use; or (2) the boundaries of which, after the creation of the planned community, will not substantially conform to the boundaries of such unit on the conversion notice date. (c) Effect of wrongful conveyance.--If a declarant, in violation of subsection (b), conveys a unit to a purchaser for value who has no knowledge of the violation, recording of the deed conveying the unit extinguishes any right a tenant may have under subsection (b) to purchase that unit if the deed states that the seller has complied with subsection (b) but does not affect the right of a tenant to recover damages from the declarant for a violation of subsection (b). (d) Notice to vacate.--If a conversion notice specifies a date by which a unit or proposed unit must be vacated, the conversion notice also constitutes a notice of termination of the tenant's lease, subject to revocation in accordance with subsection (i), and a notice to quit specified by section 501 of the act of April 6, 1951 (P.L.69, No.20), known as The Landlord and Tenant Act of 1951. (e) Improper lease termination prohibited.-- (1) Nothing in this section permits termination of a lease by a declarant in violation of its terms. (2) Nothing in this section or in any lease shall prohibit a residential tenant, after receiving notice under subsection (a), from terminating any lease without any liability for such termination provided such tenant gives the building owner 90 days' written notice of the intent to terminate the lease. (3) The declarant or owner of any proposed conversion planned community shall not engage in any activity of any nature which would coerce the tenant into terminating any lease, including, but not limited to, harassing tenants or withholding normal services or repairs. (f) Units leased to senior citizens and disabled persons.-- (1) For the purpose of this subsection, an eligible tenant or subtenant shall be a natural person who, on the conversion notice date, lawfully occupies a unit in a conversion building as a principal residence and is 62 years of age or older or is disabled and has occupied the unit for at least two years. For purposes of this subsection, a person shall be deemed to be disabled if on the conversion notice date he is totally and permanently unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impediment, including, but not limited to, blindness. (2) Within 60 days after the conversion notice date, any tenant or subtenant in possession of a unit who believes that he is an eligible tenant or subtenant shall so notify the declarant and shall provide the declarant with proof of his eligibility. Any eligible tenant or subtenant who has established his eligibility as aforesaid shall be entitled to remain in possession of his unit for two years following the conversion notice date, notwithstanding any prior termination date in his lease, except by reason of nonpayment of rent, waste or conduct that disturbs other occupants' peaceful enjoyment of the planned community, and the terms of the tenancy, including terms that apply to a time period after the conversion notice date, may not be altered but may be enforced during the time period between the original lease termination date and the expiration of this two-year period except as is otherwise provided in paragraph (3). (3) The monthly rental payable by the tenant during the time period commencing upon the later to occur of the original lease termination date or the first anniversary of the conversion notice date and ending upon the expiration of the two-year period described in paragraph (2) shall be the same monthly rental as was payable for the month immediately preceding the original lease termination date, except that, at the landlord's option, such monthly rental may be increased by the lesser of 5% of such monthly rental or the same percentage increase as the percentage increase, if any, in the Consumer Price Index as calculated and published by the United States Department of Labor for the six-month time period commencing on the first day of the first full calendar month after the conversion notice date. (4) Failure of a declarant to comply with the provisions of this subsection is a defense to an action for possession. (g) Tenant meetings; open to the public.--With respect to any conversion building containing one or more units then occupied for residential use, at least 30 days before the conversion notice date, the declarant shall hold a tenant meeting open to the public in the municipality where the proposed conversion building is located at a place and time convenient to the persons who may be directly affected by the conversion. At least ten days' notice of the time and place of the meeting shall be given to residential tenants and subtenants in lawful possession of their units, in the same manner as is required for the giving of the conversion notice, and to the general public by a notice in a newspaper of general circulation in the municipality in which the planned community is located, except that no notice to the general public need be given with respect to conversion buildings as to which the provisions of section 5402(b) (relating to public offering statement; general provisions) are applicable. At such meeting, representatives of the declarant shall briefly describe the following and may, but shall not be required to, discuss other matters: (1) The rights and obligations of tenants and subtenants under this section. (2) Improvements, if any, then planned to be made to the planned community by the declarant. (3) The anticipated approximate range of initial unit sales prices. Specific unit sales prices need not, however, be provided. (4) The anticipated approximate range of estimated monthly common expenses for various types of units; however, specific per unit estimates need not be provided. (h) Community development grants.--If Federal funds under the Community Economic Development Act of 1981 (Public Law 97-35, 42 U.S.C. § 9801 et seq.) have been used to finance the rehabilitation of multifamily rental housing, with the intent that such housing subsequent to the rehabilitation is to be used for residential rental purposes, such housing shall not be converted to a planned community for a period of ten years from the date the rehabilitation is completed. (i) Revocation.--A declarant may subsequently revoke a conversion notice if the declarant has expressly reserved the right of revocation in the conversion notice and if the notice of revocation: (1) Is given prior to the conveyance of any unit in the planned community occurring after the conversion notice date other than a unit or units conveyed to a successor declarant or as a result of foreclosure of a mortgage on the unit or a deed in lieu thereof. (2) Is given in the same manner as is required for the giving of the conversion notice. (3) Is given to all persons who were entitled to receive the conversion notice and who continue to be in lawful occupancy at the time such notice of revocation is given. The giving of a notice of revocation revokes all rights granted under this section but does not revoke the rights granted to residential tenants under subsection (a) or (f), and such rights shall be deemed to have been incorporated in each residential tenant's lease. (j) Waiver of purchase rights.--Notwithstanding any provisions of this subpart prohibiting waiver of rights, any tenant may waive his right to purchase a unit under subsection (b) if the waiver is in writing, is acknowledged and is given in consideration of: (1) an extension of the term of the tenant's tenancy and right of occupancy under this subpart beyond the time period required by subsections (a) and (f) as applicable; (2) the tenant entering into an agreement to purchase another unit in the planned community; or (3) all occupants of the unit making alternative living arrangements. (k) Alteration of terms of tenancy.--Notwithstanding any provisions of subsection (a) or (f), the terms of the tenancy of a tenant or subtenant may be altered with the express written consent of that tenant or subtenant, and such altered terms shall then be the terms of tenancy referred to in this section. (l) Application of section.--The provisions of this section shall apply only with respect to conversion buildings in which one or more residential tenants or residential subtenants are in lawful occupancy on the conversion notice date, and the only tenants who are entitled to exercise the rights granted under this section are residential tenants or residential subtenants: (1) who are in lawful occupancy of conversion building on the date the declarant gives the conversion notice; or (2) who commence their tenancy after the notice of conversion is given to the other residential tenants without having been notified in writing, at or prior to the commencement of their tenancy, that the property is then a planned community and that they are not entitled to the rights granted under this section. Such rights continue only so long as the lawful occupancy of the tenant or subtenant continues. (Nov. 30, 2004, P.L.1486, No.189, eff. 60 days) 2004 Amendment. Act 189 amended subsecs. (d) and (j)(1). Cross References. Section 5410 is referred to in section 5103 of this title.

68 Pa.C.S. § 5411 Warranty against structural defects.

(a) Scope.--Nothing in this section shall be construed to make the declarant responsible for any items of maintenance relating to the units or common elements. (b) General rule.-- (1) A declarant warrants against structural defects in structures constructed, modified, altered or improved by or on behalf of such declarant in: (i) each of the units and the controlled facilities that are part of a unit for two years from the date each unit is conveyed to a bona fide purchaser; and (ii) all of the controlled facilities that are not part of a unit and all common facilities for two years except facilities which have been dedicated to a municipality, municipal authority or other governmental unit. (2) Only the association may bring an action for breach of warranty with respect to common facilities and the controlled facilities that are not part of a unit. An action for breach of warranty with respect to one or more units or controlled facilities that are a part of a unit may be brought either by the association or an owner of an affected unit. Any conveyance of a unit during the two-year warranty period shall be deemed to transfer to the purchaser all of the declarant's warranties created under this section. The two years shall begin, as to each of the controlled facilities that are not part of a unit, whenever the controlled facilities that are not part of the unit have been completed and, as to each common facility, whenever such common facilities have been completed or, if later: (i) As to any controlled facilities that are not part of a unit and as to common facilities within any additional real estate or portion thereof, at the time the first unit therein is conveyed to a bona fide purchaser. (ii) As to any controlled facilities that are not part of a unit and as to common facilities within any convertible real estate or portion thereof, at the time the first unit therein is conveyed to a bona fide purchaser. (iii) As to any controlled facilities that are not part of a unit and as to common facilities within any other portion of the planned community, at the time the first unit therein is conveyed to a bona fide purchaser. (c) Planned communities containing conversion buildings.--A declarant of a planned community containing one or more conversion building warrants as follows: (1) That there are no structural defects in components installed anywhere in the planned community or in work done or improvements made by or on behalf of the declarant anywhere in the planned community. (2) That all units and common elements in each conversion building have been inspected for visible structural and mechanical defects and for other visible conditions that adversely affect the health or safety of residential occupants, as required by section 5404(a)(1) (relating to public offering statement; planned communities containing conversion buildings), except no such inspection is required of any unit if the tenant or other lawful occupant of the unit does not permit such inspection to be conducted. (3) That any defects and other visible conditions found have been repaired. The warranties under subsection (b) shall be applicable to any units and common elements that are located within a building that contains or comprises one or more units and is not a conversion building. Otherwise, the declarant may offer the units, common elements or both in an "as is" condition. The declarant of a planned community containing any conversion buildings may also give a more extensive warranty in writing. The times at which the warranties required by this subsection commence and the duration of such warranties shall be as provided in subsection (b). (d) Exclusion or modification of warranty.--Except with respect to a purchaser of a unit for residential use, the warranty against structural defects: (1) May be excluded or modified by agreement of the parties. (2) Is excluded by expression of disclaimer, such as "as is," "with all faults" or other language which in common understanding calls the buyer's attention to the exclusion of warranties. (e) Limitation of actions.--No action to enforce the warranty created by this section shall be commenced later than six years after the warranty begins, provided, however, that the limitation period affecting a right of action by the association under this section shall be six years after the warranty begins or two years after the unit owners elect an executive board under section 5303(e) (relating to executive board members and officers), whichever is later. (f) Disclaimer of implied warranties.--To the extent permitted by applicable law, a declarant may disclaim implied warranties applicable to any unit or common elements to which the warranty provided by this section applies, provided such disclaimer is set forth in the contract for the sale of a unit and in the public offering statement for the planned community of which the unit or common element is a part. The disclaimer required under this subsection shall be set forth in 14-point boldface type. (Mar. 24, 1998, P.L.206, No.37, eff. 60 days; Oct. 19, 2018, P.L.551, No.84, eff. 60 days) 2018 Amendment. Act 84 amended subsec. (e). 1998 Amendment. Act 37 amended subsec. (b) and added subsec. (f). Cross References. Section 5411 is referred to in sections 5102, 5103, 5320, 5401, 5404 of this title.

68 Pa.C.S. § 5412 Effect of violations on rights of action.

If a declarant or any other person subject to this subpart violates any provision of this subpart or any provisions of the declaration or bylaws, any person or class of persons adversely affected by the violation has a claim for appropriate relief. Punitive damages may be awarded in the case of a willful violation of the subpart and, if appropriate, the prevailing party may be entitled to an award of costs and reasonable attorney fees. (May 4, 2018, P.L.96, No.17, eff. 60 days) Cross References. Section 5412 is referred to in section 5102 of this title.

68 Pa.C.S. § 5413 Labeling of promotional material.

If any improvement contemplated in a planned community is required by section 5210 (relating to plats and plans) to be labeled "NEED NOT BE BUILT" on a plat or plan or is to be located within convertible real estate, no promotional material may be displayed or delivered to prospective purchasers which describes or depicts that improvement unless the description or depiction of the improvement is conspicuously labeled or identified as "NEED NOT BE BUILT."

68 Pa.C.S. § 5414 Declarant's obligation to complete and restore.

(a) Completing improvements.--The declarant shall complete all improvements labeled "MUST BE BUILT" on plats or plans prepared pursuant to section 5210 (relating to plats and plans). (b) Repair and restoration.--The declarant is subject to liability for the prompt repair and restoration, to a condition compatible with the remainder of the planned community, of any portion of the planned community affected by the exercise of rights reserved pursuant to or created by sections 5211 (relating to conversion and expansion of flexible planned communities), 5212 (relating to withdrawal of withdrawable real estate), 5217 (relating to declarant offices, models and signs) and 5218 (relating to easement to facilitate completion, conversion and expansion). (c) Substantial completion prerequisite to conveyance.--A unit which is part of or constitutes a structure shall not be conveyed to a person other than a successor to any special declarant rights unless all structural components and common element mechanical systems of the structure containing or constituting such unit or units are substantially completed to the extent required of the declarant so as to permit the use of such unit or units and any limited common elements appurtenant thereto for their intended use. Such substantial completion shall be evidenced by a recorded certification of completion executed by an independent registered surveyor, architect or professional engineer with regard to any such structure. (d) Substantial completion of unit.--No interest in a unit shall be conveyed to a person other than a successor to any special declarant rights until the unit is substantially completed in accordance with the descriptions set forth in both the declaration under section 5205 (relating to contents of declaration; all planned communities) and in the public offering statement under section 5402(a) (relating to public offering statement; general provisions), as evidenced by a recorded certificate of completion executed by an independent registered surveyor, architect or professional engineer. (e) Construction of section.--Nothing contained in this subpart shall prevent the offering for sale of a unit or interest in a unit or the execution of any agreement to sell and purchase a unit or any interest in a unit (as opposed to actual conveyance) prior to the completion of the unit or any other portion of the planned community. Cross References. Section 5414 is referred to in section 5402 of this title. SUBPART E USES OF PROPERTY Chapter 55. Adult-Oriented Establishments Enactment Note. Subpart E was added October 16, 1996, P.L.696, No.120, eff. 60 days.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=68Fetched: 10/16/2026