Mayflower Square Condominium Ass'n v. KMALM, Inc.
1999 Pa. Commw. LEXIS 15, 724 A2d 389 (1999)
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Rule of Law:
A party that acquires title to condominium units, even if unbuilt, along with the exclusive right to use associated limited common elements, is obligated to pay assessments and fees for those common elements as a unit owner under the Uniform Condominium Act and the condominium declaration, provided challenges to declaration amendments are brought within the statutory one-year period.
Facts:
- In January 1984, Mayflower Associates converted a 64-unit apartment complex, including an underground garage and a rear development parcel, into the Mayflower Square Condominium by recording a declaration.
- In July 1984, Mayflower Associates added the rear development parcel (Additional Real Estate) to the Condominium, with attached plats and plans showing twelve proposed townhouse units to be built there.
- Mayflower Associates experienced financial difficulties, failed to complete common area improvements, and could not obtain approval for the townhouse units, leading to a bankruptcy petition in 1985.
- In January 1987, a Second Corrective Amendment to the Declaration was recorded, correctly labeling and identifying the twelve proposed townhouse units, assigning them percentage interests, and allocating parking spaces to them.
- On June 4, 1991, the bankruptcy trustee for Mayflower Associates entered into an agreement to sell the Additional Real Estate, the proposed townhouse units, unsold garage parking spaces, and special declarant rights to Marc A. Zaid.
- Zaid subsequently assigned his interests to KMALM, Inc.
- On February 18, 1992, the bankruptcy trustee conveyed legal title to KMALM for all condominium units not yet sold, the exclusive right to use all garage parking spaces (except those already allocated), and all rights as Declarant under the Declaration, establishing KMALM as a Successor Declarant.
- Since KMALM acquired the property, the twelve townhouse units have not been built on the Additional Real Estate, and KMALM failed to pay the Association assessments and monthly fees for the twelve parking spaces allocated to these units.
Procedural Posture:
- The Mayflower Square Condominium Association filed an action against KMALM, Inc. in the Court of Common Pleas of Montgomery County to recover unpaid monthly fees and assessments for garage parking spaces.
- KMALM filed a motion for summary judgment.
- The Association filed a cross-motion for summary judgment.
- The Court of Common Pleas (trial court) granted the Association's cross-motion for summary judgment and denied KMALM's motion for summary judgment.
- KMALM, as appellant, appealed the trial court's order to the Superior Court.
- The Superior Court, upon the Association's motion, transferred the appeal to the Commonwealth Court of Pennsylvania.
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Issue:
Does KMALM, Inc., as a successor declarant and owner of unbuilt condominium units to which parking spaces were allocated, have an obligation to pay the condominium association for assessments and fees related to those parking spaces?
Opinions:
Majority - Mirarchi, Jr., Senior Judge
Yes, KMALM, Inc. is obligated to pay the assessments and fees for the parking spaces because it acquired ownership of the townhouse units and the exclusive right to use the designated parking spaces, and thus is bound by the condominium declaration and the Uniform Condominium Act. The court reasoned that under Section 3211(a) of the Uniform Condominium Act, Mayflower Associates, as the declarant, became the owner of the twelve townhouse units when they were created by the 1987 Corrective Amendment, which also identified and allocated the parking spaces to these units. KMALM subsequently acquired ownership of these units and parking spaces by accepting the 1992 deed from the bankruptcy trustee. KMALM's argument that the units could not have been legally created or sold due to Mayflower Associates’ non-compliance with Section 3201(b) and (c) (requiring substantial completion before recording/conveyance) was rejected, as Section 3219(b) of the Act establishes a one-year statute of limitations for challenging the validity of an amendment, which KMALM failed to do. The court found that Section 10.1(f) of the Declaration, despite being grammatically incorrect, clearly allocates expenses for parking spaces, stating that once a parking stall is designated to units, the unit owner is assessed such expenses. Even if the parking spaces were considered "unallocated" as KMALM asserted, KMALM, as a successor declarant, would still be liable for the parking space expenses under the second sentence of Section 10.1(f) and Section 3304(e) of the Act. Therefore, as the unit owner with the exclusive right to use the parking spaces, KMALM is obligated to pay for their maintenance under the Declaration, the Act, and general principles of property law.
Analysis:
This case clarifies the obligations of successor developers or declarants in flexible condominiums under Pennsylvania's Uniform Condominium Act. It establishes that the 'creation' of units through declaration amendments, even if the physical structures are not yet built, can trigger unit ownership and associated financial responsibilities. The decision reinforces the importance of the one-year statute of limitations for challenging condominium declaration amendments, preventing belated challenges to established unit allocations and financial structures. It also confirms that the exclusive right to use a limited common element, such as a parking space, creates an obligation for the unit owner to pay for its maintenance, regardless of whether the physical unit it's assigned to is constructed. This ruling helps ensure the financial stability of condominium associations by holding successor developers accountable for assessments related to units they acquire, even if development plans stall.
