Real Estate E-Newsletter—Volume 1
COMMONWEALTH COURT RULES THAT WIND TURBINES ON RESIDENTIAL PROPERTY ARE A PERMITTED ACCESSORY USE
On December 16, 2009, the Commonwealth Court issued a decision in the case of Tink-Wig Mountain Lake Forrest Property Owners Association v. Lackawaxen Township Zoning Hearing Board, ___ A.2d ___ (Pa. Cmwlth. 2009). In the decision, a planned community comprising over 800 lots appealed the issuance of a zoning permit to one of its homeowners permitting the erection of a 55-foot wind turbine to generate electricity for their residence. The zoning permit was issued without special exception or conditional use approval as the zoning officer determined that the wind turbine was an accessory use under the zoning ordinance. The Commonwealth Court affirmed the issuance of the permit concluding that the zoning ordinance required conditional use approval only if the structure is over 60-feet in height.
The principal issue in the case related to whether a wind turbine can be an accessory use to a residential use. The Commonwealth Court affirmed the Township's determination that wind turbines are "customarily incidental to the principal use" holding the uses, such as solar panels, outdoor fireplaces, and wind turbines are becoming more prevalent on residential properties and are becoming akin to more traditional accessory uses such as gazebos and satellite dishes.
Given the increased prevalence of these uses and perceived incompatibilities between them and neighboring residential uses, prior to construction, a careful examination of the provisions of the zoning ordinance are necessary as individual zoning ordinances often deal with accessory uses in different manners. Most importantly, the specific use standards such as setbacks and height restrictions are often unclear with regard to accessory uses.
The attorneys at Fitzpatrick Lentz & Bubba have regularly represented clients with regard to the development of structures such as these, predominantly in the commercial context, such as cellular communication towers and utility facilities and are available if you have any questions or concerns relating to this or any other land use topics.
PENNSYLVANIA SUPREME COURT AFFIRMS DECISION HOLDING THAT CREATION OF PLANNED COMMUNITY LOTS REQUIRES SUBDIVISION APPROVAL
The Pennsylvania Supreme Court recently affirmed, without opinion, the Commonwealth Court's decision in Shaffer v. ZHB of Chanceford Township, - A.2d - (Pa. Cmmw. Ct. 2008). In that decision, the Commonwealth Court held that the creation of a planned community, by filing a Declaration and plan under the Uniform Planned Community Act and the conveyance of a unit, without subdivision approval, was a violation of the relevant subdivision and land development ordinances.
While there is a provision in the Uniform Planned Community Act which provides that the act of declaring a planned community does not, in and of itself, constitute a subdivision, the Commonwealth Court held that such section does not eliminate the need for subdivision approval when lot or unit boundaries are altered or created.
This decision will result in a significant change in municipal practice involving projects involving common interest communities such as planned communities or condominiums, especially as the statutory language in the Uniform Condominium Act is substantially the same. Specifically, this decision calls into question the use of "site condominiums" in developments such as industrial parks and shopping centers to create pad-sites for conveyance and/or separate financing.
The effect of this decision is that municipal involvement in such developments may be necessary given the need for subdivision approval. However, planned communities and condominiums remain viable and useful land planning and development tools.
COMMONWEALTH COURT RULES THAT MUNICIPALITIES HAVE "GOOD FAITH" DUTY TO COOPERATE AND REVIEW OF PROPERTY OWNER APPLICATIONS
Recently, in Highway Materials Inc. v. Board of Supervisors of Waymart Township, the Pennsylvania Commonwealth Court, the intermediate appellate court which handles the zoning and land development appeals, found that a municipality abused its discretion by denying a land development plan where the municipality did not act in "good faith" in its dealings with the applicant.
The Court determined that the municipality acted in "bad faith" by appeasing an active and well-funded opposition group by: (a) demonstrating a clear bias with regard to the development, (b) departing from its past practices in the plan review process, (c) refusing to communicate with the developer regarding issues such as ordinance interpretation and implementation, and (d) rezoning the property after the plan submissions to a categorization inconsistent with the proposed development. Most significantly, the Commonwealth Court found that the evidence demonstrated bad faith through the Township's refusal to communicate with the developer during the review process.
While the Courts had previously implicitly discussed the concept of a good faith duty in previous decisions, this case represents the first instance where a Pennsylvania appellate court expressly found against a township for violating such duty. Such cases will be analyzed on a case-to-case basis but, this case provides guidance as to a municipality's duty with regard to applications and will protect developers from outright denials by biased Boards and governing bodies.
RESIDENTIAL SALES: CHANGES TO THE PENNSYLVANIA ASSOCIATION OF REALTORS STANDARD FORM AND NEW RESPA REGULATIONS
The Pennsylvania Association of Realtors has issued proposed changes to its Standard Agreement of Sale which went into effect on January 1, 2010. The form has an entirely new look, and was revised to provide more simplicity. Changes include shorter time periods, simplified inspection options, contingency on financing terms, new seller disclosures and substantial changes to provisions relating to the return of deposits. In addition, although the new Agreement permitting termination at the Buyer's discretion, it also limits Seller liability.
New federally mandated mortgage rules pursuant to the Real Estate Settlement Procedures Act also went into effect on January 1, 2010. The new rules included significant changes to the Good Faith Estimate and HUD-1 settlement statement. Lenders are required to provide borrowers with a Good Faith Estimate that clearly and accurately discloses all key loan terms and closing costs, and the new HUD-1 settlement statement must compare the consumer's final and estimated costs.
To find out more information, please contact the Real Estate Group at Fitzpatrick Lentz & Bubba, P.C.
POSSIBLE INCREASE IN PROPERTY TAXES DUE TO THE PURCHASE OF LARGE EQUIPMENT
In case you missed it, on July 29, 2009, a Pennsylvania appellate court issued a decision with regard to whether the installation of diagnostic imaging system equipment constituted realty, resulting in possible increased property taxes; or personalty, resulting in the incurrence of sales tax. This was previously an issue of conflicting letter rulings by the Department of Revenue.
The case is entitled Northeastern Pennsylvania Imaging Center v. Commonwealth of Pennsylvania and the decision was rendered by the Commonwealth Court. In this case, an imaging center purchased an MRI system and a PET/CT system and was required to pay nearly $100,000 in sales tax. The imaging center appealed the sales tax and argued that the equipment was installed in connection with a construction contract and was, therefore, realty and not personalty.
Ultimately, to determine if the purchase constituted realty or personalty, the Court utilized a three-prong test which considered (i) whether the relevant object was affixed to the land; (ii) whether it was essential for the use of the property and; (iii) whether it is intended to be permanent. Considering various factors such as the size of the equipment and the significant changes which were required to be made to the property, the Court concluded that the relevant MRI and PET scan systems constituted realty, not personalty. Accordingly, such equipment was found not to be the subject of sales tax. In doing so, the Court ruled that the equipment became part of the real estate for purposes of assessing the value of the property.
This case should be considered with regard to future purchases of large equipment that requires extensive installation within a building. Although the case resulted in favorable sales tax treatment of the diagnostic imaging equipment, a property reassessment may result in greater tax liability due to the incurrence of higher property taxes over time.
For more information on these topics or other real estate matters please visit www.flblaw.com.
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