During the Roman Empire, the term “condominium” came into use to describe a building where owners occupied separate floors but shared a common roof; however, common interest communities have existed in one form or another since as far back as 2,000 B.C. Over the years, as condominiums and other common interest properties grew popularity throughout the United States, these evolving communities became governed by statute, including Pennsylvania, which enacted its Unit Property Act in 1963. A common interest community is one that includes certain property and facilities that all owners in the community are collectively entitled to enjoy and responsible to maintain. Currently, Pennsylvania has three (3) types of common interest developments – condominiums, homeowners associations and cooperatives – are of which all controlled by similar but separate governing statutes.
Condominiums in Pennsylvania are governed by the Uniform Condominium Act, 68 Pa. Stat. §§ 3101 to 3414 (the “UCA”). Although “condominium” is a term generally used to refer to an individually-owed unit, it is also a form of ownership where property other than the individual unit is deemed to be common property. In a condominium form of ownership, each individual member holds title to a specific unit and has a percentage interest in this common property or common elements. A condominium is created by virtue of a master deed, by which the unit owners automatically become a member of the condominium association. This association is created to maintain the common property/elements and to manage the affairs of the condominium. Created in conjunction with that master deed will be a set of bylaws, which generally control the association’s governance, the duties of its board members and officers, and operation, administration and management of the condominium.
Homeowners Associations (also known as “HOAs”) are governed by Pennsylvania’s Uniform Planned Community Act, 68 Pa. Stat. §§ 4101 to 4414 (the “UPCA”). Similar to a condominium, HOAs are created by virtue of a declaration. Unit owners in the HOA automatically become a member of the association, which maintains the common property/elements and manages the affairs of the HOA. Created in conjunction with that declaration are certain bylaws, which control the association’s governance, the duties of its board members and officers, as well as the operation, administration and management of the HOA. In an HOA, each owner holds title to a specific unit, but unlike a condominium, the association owns the common property/elements. This common property/elements varies according to the community’s declaration, but can include roofs and building exteriors, open space, roads and sidewalks, among other property and/or structures.
Cooperatives (also know as “co-ops”) are a form of ownership where a corporation owns all of the real estate and personal property belonging to the co-op. The entity structure is similar to that of a condominium, except that co-op owners purchase shares of stock in the corporation, which entitles them, by virtue of their ownership interest in the corporation, to exclusive possession of a unit. The right to occupy a unit along with the duties and responsibilities of the co-op owners are detailed in the proprietary lease entered into between each shareholder and the co-op. In Pennsylvania, co-ops are governed by the Real Estate Cooperative Act, 68 Pa. Stat. §§ 5101 to 5414 (the “RECA”).