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Pennsylvania Supreme Court affirms Shaffer Decision by Commonwealth Court – Beware of Potential Impacts upon Planned Communities

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) holding that the purported division of a tract of land into units, by filing a Declaration and plan under the Pennsylvania Uniform Planned Community Act (the “UPCA”) and the transfer of a unit, without first having received subdivision and land development approval, was an unlawful subdivision and land development.

The Shaffer Family Partnership owned 25 acres of land (the “Property”) upon which they built a home.  Subsequently, the Partnership created a planned community with respect to the Property, consisting of two units and a common area, by filing a Declaration under the UPCA and a plat that defined the “units” as parcels of land, just as if they were subdivided lots.    One unit with the home was then conveyed to Kevin and Kendra Shaffer.  The Chanceford Township Zoning Hearing Board concluded that prior to filing of the Planned Community Declaration and Plat, the Property consisted of a single 25 acre tract of land improved with a single home and that the filing of the Declaration and Plat had the effect of dividing the Property into three parcels which constitutes subdivision and land development under the MPC and township ordinances.  The Commonwealth Court upheld this conclusion.

The Commonwealth Court seemed to focus heavily on the nature of the units themselves – described in the Declaration and on the plat as the functional and legal equivalent of subdivided lots.  Thus, the decision calls into question any development in which “units” of this type are created under the Planned Community Act without compliance with applicable subdivision and land development ordinances. 

The decision has significant implications for many developments, especially if a similar result would be reached under the Uniform Condominium Act (“UCA”) as it would call into question the validity of “site condominium” regimes often used in office parks and shopping centers to create pad-sites for conveyance and/or separate financing. 

Although the affirmation of the Schaffer decision by the Pennsylvania Supreme Court may cause those utilizing the Planned Community form of ownership to be wary, this form of ownership remains a viable and useful land planning tool.   And, where the units as described in the Declaration and Plats of a Planned Community correspond with subdivided lot lines, it should present little if any concern.   The Commonwealth Court reiterates that declaring a planned community form of ownership does not in and of itself establish a subdivision or land development.   And, the Schaffer Court cites to several court decisions where the Courts found that a change in form of ownership, such as the creating of a condominium in an existing apartment building, where the change in form does not change the buildings, their use, or property lines, does not constitute land subdivision.  

As always, development under the UPCA and UCA requires legal input, an understanding of recent case law such as the Schaffer decision and a continued careful review of local subdivision and land use ordinances.  For assistance and guidance on these issues, please contact our municipal department or our transactional department.

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