The Loophole to Avoid Subdivision Approval is Closed

February 2009Newsletters In The Zone

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It’s a question developers, lawyers and municipalities have been asking – does the creation of a planned community or a condominium require subdivision and/or land development approval under the Pennsylvania Municipalities Planning Code (MPC). In a recent decision, the Commonwealth Court of Pennsylvania has determined that the creation of units under a planned community, which involves the division of real property, requires subdivision and land development approval from the municipality. Frank N. Shaffer Family Limited Partnership, et al v. Zoning Hearing Board of Chanceford Township, et al, 2008 Pa. Commw. Lexis 657.

In Shaffer, the Frank N. Shaffer Family Limited Partnership (the Partnership) owned 25 acres of vacant land in Chanceford Township, York County. The Partnership created a planned community on the property under the Pennsylvania Uniform Planned Community Act (the Act), by recording a Declaration and plat. The Declaration created three units on the property; which were shown on the plat as three separate parcels of property (one containing the existing house, the second comprising 22 acres of vacant land, and the third containing two acres of open space). The Declaration defined a “unit” in the planned community as “being a separate and distinct parcel of real property, the location and dimensions of the vertical boundaries of which (the equivalent of “lot lines”) are shown on the plat….” A“unit” is defined under the Act as “a physical portion of the planned community designated for separate ownership or occupancy….”

The Township issued an enforcement notice based upon the appellant’s failure to submit subdivision and land development plans and, therefore, created an unlawful subdivision of the property when it create the three units in the planned community. The Township stated that the creation of a planned community falls within the definition of land development under its Subdivision Land Development Ordinance. The Township went on further to state that the creation of the planned community itself does not constitute a subdivision, but that the subsequent transfer of the unit constitutes a subdivision. A hearing was held before the zoning hearing board, who affirmed the enforcement notice.

In affirming the enforcement notice, the zoning hearing board determined that:

The filing of the Declaration and the plat divided the land into three “units”…. These three units of land did not exist as separate “units” prior to the filing of the Declaration and plat. It is…unquestionable that the filing of the Declaration constituted a division or change in lot lines relative to the 25 acres, and this is a “subdivision” and “land development” within the purview of the definition of the MPC and the Chanceford SALDO.

The Partnership appealed the zoning hearing board’s decision, which was upheld by the Court of Common Pleas of York County and the Commonwealth Court of Pennsylvania. In affirming the enforcement notice the Commonwealth Court specifically stated that:

“The Partnership’s division of the Property into three units and subsequent conveyance of a unit without Township approval established unlawful subdivision and land development under the SALDO, which required the Partnership to submit a final plan for subdivision or land development to the Township. A subdivision is defined as ‘the division or redivision of a lot, tract or parcel of land by any means into two or more lots … including changes to existing lot lines.’ Section 303 of the SALDO. A land development is defined as the “division or allocation of land or space … for the purposes of streets, common areas, leaseholds, condominiums … as well as ‘a subdivision of land.’ Id. It is undisputed that the Partnership divided or allocated a 25-acre parcel into planned community units, either as land or space, and then conveyed a unit to the Shaffers without Township approval. These actions unquestionably fall within the meaning of subdivision and land development under Section 303.”

An important distinction is mentioned in this case. Under Bensalem Township v. Salem Harbour Joint Venture, 21 Pa. D.&C.3rd 341 (1981) and Brookhaven Borough v. Iacobucci, 69 Pa. D.&C.2d 190 (1974), the conversion of existing lot lines or a structure, without changing the boundaries (i.e., division or redivision of space), into a condominium does not require subdivision and/or land development approval from the municipality. For example, if a property owner decides to convert an apartment building into condominiums for the purpose of selling the units to individual owners, and does not contemplate changing the boundaries of the units, subdivision and land development approval would not be required by the municipality. Condominiums and planned communities are treated substantially the same.

For more information regarding planned communities or condominiums, please contact Carrie Nase at 215.299.2030 or [email protected]