CAI’S PENNSYLVANIA LEGISLATIVE ACTION COMMITTEE SCORES SIGNIFICANT VICTORY FOR PA HOMEOWNER AND CONDO ASSOCIATIONS


STEFAN RICHTER, Esq. Clemons Richter & Reiss, P.C.


Throughout2014,membersoftheLACconnuedtheireortsto assurethelegal,nancial,andadministravesustainabilityof Pennsylvania’scommunityassociaons.Insupportofthis endeavor,theLACdraedandsoughtsponsorsforlegislaon requiringfairtreatmentofassociaonsinobtaininggovernmental andmunicipalservices,andreversingtheimpactoferroneous decisionsmadebyappellatecourts.And,asthelegislature repeatedlydemonstratesitsfailuretocomprehendevenbasic elementsofassociaongovernance,theLACopposedcertainbills topreventthemfrombecominglaw.SuccessoftheLACisthusnot onlymeasuredbyprogressmadeonlegislaonithasproposed,it isalsomeasuredbyCAI’sabilitytoprotectassociaonsfrom detrimentalnewlaw. 


AmongtheLAC’sdefensiveaccomplishmentsisthecomplete revisiontoSenateBill1302,whichwasintroducedonMarch26, 2014byStateSenatorFolmer.Asisoenthecase,SB1302was createdinresponsetoavocalconstuent’scomplaintaboutthe associaoninwhichsheresides.Basedoninformaonprovidedto membersoftheLACduringnumerousmeengs,theboardofthe constuent’sassociaonapparentlyamendeditsdocuments withoutmeengs,heldmeengswithoutaquorumpresent,and threatenedherwithlegalbillsifshebroughtsuitagainstthe associaon.Clearly,ifaccuratelydescribed,herassociaonhad alreadybrokenthelaw.SB1302wasnonethelessintendedto preventthiskindofboardbehaviorbyamendinganumberof seconsoftheUniformPlannedCommunityAct(68PA.C.S.A. Secon5101–etseq–the“Act”). 


However,asoriginallydraed,SB1302wouldhavedrascally alteredexisngrequirementsformeengquorums,created legislaveinconsistenciesregardingtheadoponofbudgetsand imposionofnes,anderectedunnecessarypiallstohinderan associaon’sabilitytocollectassessments.SB1302essenally proposedunworkablesoluonstononexistentproblems.TheAct authorizesassociaonboardstolevyassessmentsthroughan annualbudgetprocess.Secon5303(b)oftheActrequiresthat noceoftheadoponoftheannualbudgetorapprovalofa





capitalexpenditurebedeliveredtoeachunitownerpromptly aersuchapproval;andfurthermoreprovidesthattheowners mayvotetorejectsame.Secon5302(a)(11)oftheActrequires thatnesandpenalesbeprecededbynoceandanopportunity tobeheard.SB1302wouldhaveimplementedarequirementthat assessments,nesandpenaltyamountsbeapprovedbythe membershipatanannualmeeng.Strippingboardsof managementandenforcementpowersisnotonlyimpraccal,itis clearlyinconsistentwithconceptsofassociaongovernanceasset forthintheActandthedeclaraonsofcommunies. Furthermore,implemenngarequirementforunitownervoteon basicnancialdecisionswouldseriouslyimpactanassociaon’s abilitytomaintainrevenuenecessarytomeettheassociaon’s scalobligaons. 


Inaddiontotheforegoingamendments,SenatorFolmer'sBill wouldhaverequiredassociaonstosendtwonocesforall annualandspecialmeengs.TheActandvirtuallyallassociaon documentsalreadyrequirethatwriennoceofmeengsbe deliveredtoeachunitowner.Mandangasecondnoceis nanciallyandadministravelyburdensome.Unitownerswho ignorearstnocearenomorelikelytoreadasecondnoce. SB1302alsosoughttoincreasequorumrequirementsfrom20%to 50%,andinnoeventlessthan40%.Theintentofthischangewas tofosterincreasedparcipaon.However,asassociaonsoen havedicultyachievingquorumsattheirannualorspecial meengsevenatcurrentlevels,increasingaendance requirementswouldnotfosterariseinparcipaon.Instead,the repeatedinabilitytoobtainaquorumwouldhavehindered associaonsfromproperlyconducngbusiness. 


Finally,SenatorFolmer'slegislaonwouldhaveimposed restriconsonanassociaon’sabilitytocollectassessments. Essenally,itwouldhaveprohibitedanassociaonfromadvising unitownersofitsrighttocollectaorneys’feesandcostsincurred ineortstocollectassessments.Thiskindoflimitaonruns 


(Connued on page 20)


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