The Pennsylvania Commonwealth Court recently reinforced the importance of following statutorily prescribed provisions when creating planned communities under Pennsylvania law. In a December decision, the court denied the ability of a developer to encumber property with declarations of covenants, conditions and restrictions (CCRs) where the developer failed to follow specific provisions of the Uniform Planned Community Act (UPCA) in creating a homeowners association, accepting homeowners' assertions that they were neither subject to CCRs that did not clearly encumber their property nor subject to CCRs recorded after they purchased their property.

In Kadar-Kallen v. Old Iron Estates Homeowners Association, __ A.3d __, No. 1671 C.D. 2019 (Pa. Commw. Ct. Dec. 3, 2020), homeowners (the Kadar-Kallens) filed a lawsuit seeking a judicial determination that they were not members of a homeowners association, were not subject to the relevant association's CCRs, and did not have to pay homeowners association (HOA) fees. The property in question was a single lot in a residential development that was developed in four phases, a common practice in new residential developments. The developer recorded CCRs against Phase I of the development that referenced final subdivision plans specifically detailing the properties subject to the CCRs. Though the CCRs did not legally describe all of the future lots involved in the development, the recorded document did reference un-described additional land to be added to the planned community (though the land was not described as flexible real estate). Nevertheless, and subsequently fatal to the developer's arguments, the Kadar-Kallens property was located not in Phase I, but Phase III of the development. While the developer would eventually record CCRs for Phase III, that recordation did not occur until several years after the Kadar-Kallens purchased the relevant property. Furthermore, the deed conveying the property to the Kadar-Kallens did not expressly subject the property to the existing CCRs.