Declarants of Flexible Communities, Beware of the Deadline To Exercise Your Rights

February 2014Articles In the Zone

Under the Pennsylvania Uniform Planned Community Act (PUPCA) and the Pennsylvania Uniform Condominium Act (PUCA), a flexible community is one that includes additional real estate, convertible real estate, and/or withdrawable real estate. Under the PUPCA and PUCA, a Declarant had seven years from the date the Declaration was recorded to add additional real estate, convert convertible real estate and/or withdraw withdrawable real estate.

Initially, it appeared as though the Pennsylvania Permit Extension Act would extend this deadline. The Permit Extension Act extends the expiration date of certain permits, and appears to apply to the time in which additional real estate can be added, convertible real estate can be converted and/or withdrawable real estate can be withdrawn. Section 1603-I(a) of the Permit Extension Act provides as follows:

“(a) Automatic suspension--The expiration date of an approval by a government agency that is granted for or in effect during the extension period, whether obtained before or after the beginning of the extension period, shall be automatically suspended during the extension period.”

The term “approval” is defined under the Permit Extension Act as “any governmental agency approval, agreement, permit, including a building permit or construction permit, or other authorization or decision to . . . (ii) relating to or affecting development, granted pursuant to a statute, regulation or ordinance adopted by a municipality, including the following: (C) 68 Pa.C.S. Pt. II Subpt. B (relating to condominiums)… (E) 68 Pa.C.S. Pt. II Subpt. D (relating to planned communities)”. In addition, the term “development” is defined under the Permit Extension Act to include “the right to convert convertible real estate or withdraw withdrawable real estate pursuant to 68 Pa.C.S. Pt. II Subpt. B (relating to condominiums) or D (relating to planned communities).” The extension period is the period beginning after December 31, 2008, and ending before July 2, 2016.

However, the Pennsylvania Commonwealth Court recently held in the case of Logan Greens Community Association, Inc. v. Church Reserve, LLCthat the Permit Extension Act does not apply to flexible communities. In this case, Church Reserve recorded the Declaration of Logan Greens, a Planned Community which described Lot 53 as withdrawable real estate and convertible real estate. Lot 53 was later subdivided into five new parcels, including Lot 54, which remained withdrawable and/or convertible real estate. Church Reserve did not withdraw Lot 54 within the 7-year period set forth in the PUPCA, nor did they execute a deed conveying Lot 54 to the Association. The Association brought an action to quiet title in the court of common pleas asserting its interest in title to Lot 54. Church Reserve filed preliminary objections claiming that the Permit Extension Act tolled the running of the conversion/withdrawal period.

The Pennsylvania Commonwealth Court determined that the Permit Extension Act specifically suspends the expiration date of a “government agency approval.” The right to add additional real estate, convert convertible real estate and withdraw withdrawable real estate are permitted under the PUPCA and PUCA without the need to obtain governmental approval. Therefore, the Pennsylvania Commonwealth Court held that since there was no “government agency decision” involved, the Permit Extension Act does not apply.

Even though the Court has held that the Permit Extension Act does not apply to flexible communities, the time limit to add additional real estate, convert convertible real estate and withdraw withdrawable real estate has been extended under the PUPCA and PUCA. Both Acts have recently been amended to extend the time limit not to exceed the later of:

  1. Ten years after the recording of the declaration; or
  2. In the case of a preliminary plat calling for the installation of improvements in sections, 120 days after municipal approval or denial of each particular section’s final plat which was filed prior to the deadline approved or modified by the municipal governing body pursuant to Section 508(4)(v) of the [Pennsylvania Municipalities Planning Code], or, in the event of an appeal from the municipal approval or denial of such final plat, 120 days after a final judgment on appeal.

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