The Law Office of Harper J. Dimmerman | Philadelphia and New Jersey Real Estate Lawyer

Site-Specific Zoning Challenges

dew215 — Tue, 15 Nov 2011 16:41:36 +0000

On September 28, 2011 the Pennsylvania Supreme Court handed down a unanimous decision in Piper Group, Inc., et al v. Bedminster Township Board of Supervisors and Bedminster Township (Pa. 2011), one which clarified the pending ordinance doctrine and will likely impact the manner in which zoning ordinances are challenged in the Commonwealth. The dispute revolved around a proposed high-density residential development in an area zoned as an Agricultural Preservation (AP) District in Bucks County. In light of a de facto zoning ordinance challenge, the Piper Court ruled that ordinance defects are to be resolved by the appropriate local Board, even in the case where a challenge to the ordinance pre-dates a Board’s declaration of intent to amend.

In deciding this matter, the Court discussed, at quite some length mind you, the 2002 Pennsylvania Supreme Court decision in C&M Developers, Inc. v. Bedminster Township 820 A.2d 143, which held as unconstitutional parts of the same zoning ordinance that the Piper Group, Inc. (Piper) attacked as well as the pending ordinance doctrine enunciated by the Pennsylvania Supreme Court in 1974 in Casey v. Zoning Hearing Board of Warwick Twp, 328 A.2d 464 and further refined in 1992 in H. R Miller & Co. Inc v. Board of Supervisors, 605 A.2d 321.

The procedural history that informs the Piper decision is inextricably tied to the C&M decision. In August 1996 Bedminster Township (Township) passed an ordinance which established an Agricultural Preservation District (AP) and which enumerated the following restrictions on private development: at least 50% of the acreage must be set aside for agriculture; the minimum lot size for any residential property was one acre; and acreage that included wetlands, lakes or ponds was strictly off limits. Just days after the Township passed the ordinance, C&M Developers (C&M) filed a validity challenge. Twenty-nine Board meetings were held to address the challenge. C&M was desirous of engaging in residential development which exceeded that allowable under the ordinance.In addition to Board review, which found no fault with the ordinance, both the trial court and the Commonwealth Court affirmed its constitutionality. However, the Supreme Court did reverse. The Court concluded that a one acre minimum lot size was tantamount to an unreasonable restriction upon a landowner’s right to use his/her real estate and not substantially related to the township’s interest in preserving agricultural land. The core issue in the C&M decision entails a substantive due process violation, where the Court was forced to strike a balance between the legitimate public interest of the Township’s exercise of its police power in establishing an AP district and the rights of private landowners to develop. The ordinance was deemed overbroad. However, the lessons learned from the C&M decision helped to inform the Piper Court, in addressing allegations that site-specific relief was warranted as a result of Piper filing a cure challenge before the Township announced its intent to amend any de facto defects.

Two weeks after Piper filed its cure challenge (the Piper challenge was leveled within a week of the C&M decision), the Township declared the subject ordinance invalid. The curative amendments implicated the defects identified in C&M, mainly eliminating the one acre requirement, reducing the minimum lot size from one acre to 32,000 square feet and permitting a maximum of .5 dwelling units per acre. Nevertheless, from May 2003 through January 2007, the Board went to Herculean lengths to address the Piper challenge. Ultimately though, the Board refused to grant Piper site-specific relief, to develop in accordance with its filed plan.

Piper elected not to contest the Board’s decision as an abuse of discretion but contended that it was entitled to have its development plan approved as a matter of law, based upon the MPC and the pending ordinance doctrine. Piper specifically argued that “a municipality cannot thwart a validity challenge to its zoning ordinance by invoking a municipal cure after the challenge is filed.” In effect, Piper asserted that the new ordinance could not apply to Piper because its challenge predated the declaration. Piper also raised a vested rights claim, by virtue of filing its challenge before the Board’s declaration of invalidity. As we shall see, the Court dismissed Piper’s arguments out of hand.

The Court accepted the Township’s theory that it properly evaluated Piper’s challenge under the MPC, which mandates that timely challenges, proposed ordinances and site plans be evaluated by considering the impact on a variety of sources such as infrastructure, the environment, the need for such housing and the preservation of agricultural lands. Simply stated, based upon the Board’s extensive findings of fact and conclusions of law gleaned from four dozen hearings, the Court was unable to find any proof in the record that the cure challenge and site plans were not properly evaluated and that the new ordinance did not provide Piper with the appropriate relief. Despite this seemingly straightforward analysis, the Court did exhaustively address Piper’s argument that the Board’s actions contravened the decisions in Casey v. Zoning Hearing Board of Warwick Twp, (Casey) and its progeny.

The Court reasoned that because the C&M decision gave constructive notice that the ordinance would have to be amended, the Board retained the power to reject plans that were inconsistent with the non-offensive provisions of the ordinance. A comprehensive examination of all of the nuances of the pending ordinance doctrine is beyond the scope of this article. Yet perhaps some background is in order. The Casey court applied the pending ordinance doctrine to the scenario of de jure exclusions. Casey held that a municipality cannot adopt curative provisions that cured the defect for the municipality as a whole but not for the landowner who initiated a timely challenge. Suffice it to say, the Court found Piper distinguishable from Casey. Casey involved a de jure defect that the challenger identified. Once the defect was cured, the challenger was inappropriately denied relief, which was subsequently overturned on appeal. But Piper appears to have requested relief that would have defeated the aspects of the ordinance that did not involve a constitutional defect. The Court foundH. R Miller & Co. Inc v. Board of Supervisors (Miller), rather than Casey, to be controlling. Miller concerned an ordinance that unconstitutionally restricted, but did not prohibit, quarrying activities in an industrial district – a de facto defect. The appropriate relief in response to the Miller challenge was to strike an unlawful building setback requirement that impermissibly restricted the quarrying activities without invalidating the entire ordinance. Miller was not granted a windfall by being allowed to conduct industrial quarrying activities on residential lands he owned simply because he identified a defect. The Miller Court emphasized that courts should pay close attention to the nature of the defect when fashioning a remedy.

As applied to Piper, the challenged unconstitutional exclusionary requirements restricted, but did not preclude, development in the AP district. The new ordinance cured these de facto defects for the entire AP district, including Piper’s land, by allowing development with the offending provisions excised. Piper received the benefit of the subsequent amendments and was allowed to develop the land in accordance with the new ordinance. The Court noted with approval the Board’s finding that Piper’s site plans, unlike C&M’s, did not preserve “the substantial public benefits of an AP district.” The new ordinance permitted increased building density while preserving the substantial public benefit of the AP district. Consequently, the Court steered clear of granting Piper a proverbial windfall. Neither the pending ordinance doctrine nor the MPC give developers carte blanche to develop their land once an ordinance has been held unconstitutional, regardless of the time a challenge and site plan is filed in relation to a declaration to amend a de facto defect.

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James M. Lammendola is an Instructor at Temple University’s Fox School of Business who was in private practice for twenty years. He may be reached via e-mail at james.lammendola@temple.edu or telephone 267-254-3324.

Our Commonwealth Court Reaffirms the Lofty Variance Hardship Standard

dew215 — Sat, 17 Sep 2011 03:17:28 +0000

The recent case of Goldstein v. The Zoning Hearing Board of the Township of Lower Merion, 19 A.3D 565 filed on April 21 by the Commonwealth Court emphatically illustrates the importance of not disregarding the mandates of local ordinances when constructing additions or new structures on one’s real estate. As we shall soon see, neither the long-standing nature of a nonconformity, the expense of compliance, nor the acquiesance of one’s immediate neighbors will afford relief to the landowner when a hardship is not directly tied to a pre-existing unique physical condition on one’s property.

William and Frances Goldstein (hereinafter “landowners”) constructed a pool house on their property in 1982. The pool house violated the Lower Merion Township Ordinance (hereinafter “ordinance”), regulating aggregate side set back requirements, by 2.51 feet. Remarkably, the Township never cited the landowners for the violation. Twenty-four years later, in 2006, the landowners began construction of an addition to the west side of their home that violated the aggregate side setback by 11.5 feet. The permit for the addition was contingent upon resolving the status of the non-conforming pool house.

Consequently, the landowners filed an application requesting a dimensional variance from the aggregate yard setback requirement so that the pool would not have to be moved or demolished. The landowners presented uncontroverted evidence at the Board hearing that it would cost $55,000.00 to move the pool house and it would cost $95,000.00 to demolish and rebuild it. In short order, the Board denied the application pursuant to a finding that the landowners failed to show that the hardship was caused by property’s unique physical conditions and that the hardship was not of their own making. Without the benefit of additional evidence, both the Montgomery County Court of Common Pleas and the Commonwealth Court affirmed the Board’s decision. The Commonwealth Court denied a Petition for Rehearing on June 10, 2011.

Pennsylvania case law appears to require a lesser burden for the applicant to sustain when a dimensional variance is requested, as is the case here, rather than a use variance. When reviewing a use variance application, a Zoning Board must consider all of the following factors, where relevant, as enumerated in the Municipal Planning Code 53 P. S. 10910.2.: 1.) that the unnecessary hardship is due to unique physical characteristics or conditions, peculiar to the property; 2) due to the unique conditions or characteristics, there is no possibility that the property can be developed in strict conformity with the Code provisions; 3.) The unnecessary hardship has not been created by the landowner; 4.) A variance, if authorized would not alter the essential character of the neighborhood or district; and 5.) if the variance were granted, it would represent the least modification possible.

In support of their request for a dimensional variance the landowners argued that the Board erred in its analysis by applying a more stringent standard than that set by the Pennsylvania Supreme Court in Hertzberg v. Zoning Board of Adjustment of the City of Pittsburgh, 721 A.2d 43 (1998), i.e., that the burden of proof necessary to earn dimensional variance is less than that to establish a use variance, as a dimensional variance seeks only a “reasonable adjustment” of the zoning regulations that will serve the public interest. . Nonetheless, it appears the trend is to apply the relaxed standard only to considerations of whether unnecessary hardship results from the unique characteristics of the land and the timing of the applicant’s request.

On appeal, the landowners raised the thoughtful, but albeit unsuccessful, argument that the use was not contrary to the public interest, and that the necessity of bearing extensive reconstruction or demolition costs, in and of itself, constitutes a physical condition unique to the property that is sufficient to establish the existence of an unnecessary hardship. This argument is based on the holding in Appeal of Crawford, 57 A.2d 862 (Pa. 1948). The Crawford court allowed a dimensional variance for the purpose of converting a garage into a personal residence, overruling the decision of the local Zoning Board. The Court held that to require the property owner to destroy valuable and ornamental shade trees, in conjunction with moving the building to a different location on the property at a cost of $3,500.00 (in 1948 dollars), imposed an unnecessary hardship if a variance were denied. In opposing the variance, Lower Merion Township, cited another relatively vintage Supreme Court case, Phillips v. Griffiths, 77A.2d 375 (1951), which held that a variance cannot be granted when there is a deliberate violation of a zoning ordinance. The variance was denied in Phillips due to a deliberate violation of an ordinance, unlike in Crawford where the property owner requested the variance before expending any construction costs.

The Commonwealth Court emphasized three critical factors in affirming the denial of the landowners dimensional variance application: 1.) the landowners did not apply for the variance until after construction on the addition; 2.) with full knowledge that the construction would only exacerbate the long standing violation of the aggregate setback requirements as a result of the erection of the pool house in 1982; and 3.) the absence of any proof that unique physical conditions were present on the property, giving rise to the hardship. The Goldstein Court held that whether the hardship is substantial or minor “is of no moment” when a hardship is self-created. And a more recent example of how stringent enforcement can be is illustrated in the 2003 Commonwealth Court decision, Appletree Land Development v. Zoning Hearing Board of York, 834 A. 2d 1214, where a dimensional variance for a porch was denied for a one foot setback violation.

The argument that the necessity of bearing extensive reconstruction or demolition costs, in and of itself, constitutes a physical condition unique to the property that is sufficient to establish the existence of an unnecessary hardship proved unsuccessful as did the contention that there was actually a beneficial impact on neighboring properties, as evidenced by the testimony of the neighbors in favor of the application for its aesthetic and privacy benefits. In the Court’s estimation, any beneficial impact, if the variance was to be granted, merely demonstrates that the variance would not negatively impact the public interest. Furthermore, even assuming arguendo that the public interest prong could be satisfied, landowners still were unable to mount a strong case on the unnecessary hardship front; both factors must be considered, not just one. Applicants must be mindful of the hurdles associated with demonstrating hardship for the purpose of obtaining a variance. Doing the work, without the proper permits, could ultimately backfire and merely serve to accentuate the self-created nature of the owner’s predicament.

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The Benefits and Burdens of the Deficiency Judgment Act

dew215 — Tue, 07 Jun 2011 13:06:30 +0000

A hypertechnical distinction can rear its ugly head at any given time, even when a litigant has been prudent throughout, successfully navigating the confession of judgment rules for instance. The Home Savings v. Irongate decision, 2011 PA Super 72; 2011 Pa Super LEXIS 140 (hereinafter Irongate) just handed down by our Superior Court on April 8, 2011, is a stark reminder that judgment creditors must strictly adhere to every statutory mandate during the course of judgment enforcement, no matter how technical some of these requirements can be. Mortgagees and mortgagors alike would be remiss not to pay close attention to the analysis applied and the derived outcome in Irongate.

Superficially at least, the Irongate case appears relatively straightforward. A default on commercial loans results in multiple confessions of judgment followed by foreclosure actions. Ultimately the judgment creditor is left with no alternative but to pursue deficiencies vis-à-vis the Deficiency Judgment Act, 42 Pa. C. S. A. Sec. 8103 (hereinafter DJA). However, it is the evolution of the DJA and its historical context that reinforces the result and is worthy of consideration. Does a Petition to Fix the Fair Market value in pursuit of such a judgment have to be docketed with the underlying foreclosure action or will it suffice to be docketed in a related action, stemming from default? Just how significant is the timing of such an action?

Before the passage of the DJA, “the price at which the mortgaged property [was] sold by the Sheriff, even when purchased by the mortgagee for a nominal bid . . . [was] conclusive as to the value of the mortgaged property.” PENNSYLVANIA LEGISLATIVE JOURNAL – HOUSE (June 9, 1941) [hereinafter, LEGISLATIVE JOURNAL - HOUSE] at 3434. The Pennsylvania legislature recognized that during the Great Depression, prices realized at forced sales on foreclosed property were often much less than the price at which the property would be sold to a willing buyer by a willing seller. LEGISLATIVE JOURNAL – HOUSE at 3436. This trend brought “intensified public dissatisfaction” with the common law rule, to which our legislature responded with the Mortgage Deficiency Judgment Act in 1934. Although our Commonwealth’s highest court would go on to strike down that the DJA as an unconstitutional impairment on the obligation of contracts, in 1941 our legislature would revisit the relevance of the DJA and enunciate the provisions which would go on to enjoy vitality for decades to follow, albeit in various incarnations.

In Irongate, the corporate defendants defaulted on commercial loans extended by the lender, Home Savings. The loans were personally guaranteed and secured by real estate owned by the individual defendants, not an atypical fact pattern. As a consequence of default, Home Savings opted first to file several Complaints in Confession of Judgment, to secure money judgments against all defendants in June 2007. It was not until March 2008 that Home Savings would file the Complaints in Mortgage Foreclosure; these resulted in obtaining title to the property on April 23, 2009 pursuant to a Sheriff sale held on April 9, 2009. Unsurprisingly, as Home Savings did not have its claim satisfied by the sale proceeds, it remained entitled to recoup any losses pursuant to the DJA. Hence it filed two Petitions to Fix Fair Market Value of Property Sold at Sheriff Sale and for Deficiency Judgment (FMV Petitions) on September 18, 2009. At first blush, it would appear that Home Savings filed its FMV Petitions well within the six-month statutory window; this window commences from the execution and delivery of the sheriff’s deed pursuant to DJA Section 8103 (b-2). Critically, the FMV Petitions were filed in the Confession of Judgment docket and not the Mortgage Foreclosure docket. And for the trial court, as these papers were docketed in that fashion, the judgment creditor waived its right to proceed under the DJA. Predictably, such a draconian result became fodder for an appeal by the disenchanted and undercompensated mortgagee.

Section 8103(d) of the DJA permits the debtor to Petition the Common Pleas Court and “direct the clerk to mark the judgment satisfied, released and discharged” if the Court determines that the creditor failed to file a FMV Petition within the six month time limit established by 42 Pa. C. S. Section 5522(b) (2). On November 25, 2009, well after the six months expired, the corporate defendants and individual guarantors did precisely this, mainly file a Petition to Mark the Judgments Satisfied and Discharged. Home Savings’ preliminary objections fell upon deaf ears as did their contention that the lower court should simply transfer the FMV Petitions over to the foreclosure dockets. At the end of the day, it was directed that the judgments be marked satisfied, released and discharged.

On appeal, the lender argued that the filing of the FMV Petitions in the Confession of Judgment dockets preserved any deficiency claims, and, furthermore, rather than resting on such a procedural nuance that as a matter of public policy, the Pennsylvania Rules of Civil Procedure should be construed in a manner that favors disposing of controversies on their merits (Pa. R.C.P. 126). Interestingly however, the appellate court gave short shrift to the lender’s plea for leniency. The plain language of the DJA, not to mention the Superior Court’s pronouncement in a 2000 decision, First Federal Savings & Loan v. Keisling, 746 1150, 1153-54, proved too formidable foes for Home Savings. The DJA is to be liberally interpreted in favor of judgment debtors. Additionally, the judgment creditor has the burden of proof on matters of compliance. Succinctly put, a FMV Petition must be filed as a supplementary proceeding in the docket in which the judgment was entered. Of course, this could not possibly be said to apply to the Confession of Judgment dockets.

Section 8103(g) of the DJA critically defines the term “judgment” as the “judgment” which was enforced by the execution proceeding referred to in 8103(a). Here, it was the foreclosure proceeding where the execution took place. Such language is mandatory and an abuse of discretion did not occur when the lower court denied the request to simply transfer the FMV Petition from one docket to another. As a side note it should be noted that footnote number 3 in Irongate is a reminder that the holding in Commonwealth v. Neiman, 5 A.3d 353 (Pa Super 2010), which declared the 2004 amendments to the DJA unconstitutional, has been stayed, pending Pennsylvania Supreme Court review. Neiman challenged the constitutionality of Megan’s Law. The Megan’s Law bill, as passed in 2004, also contained an amendment to the DJA; Megan’s Law survived the challenge. However, the Neiman court held the DJA amendment violated the “single subject rule” of Article III of the Pennsylvania Constitution. The amendments to the DJA, comprising twelve percent of the total bill, were stricken as extraneous. Despite this interesting side note, the lessons gleaned from this case retain their value as the amendments do not address the supplemental proceeding issue germane to Irongate.

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Harper J. Dimmerman is an adjunct professor at Temple University’s Fox School of Business and co- chair of the law practice management committee of the Philadelphia Bar Association. He represents clients in general litigation, various land use, residential, commercial real estate and criminal law matters. His firm also provides approved attorney title insurance services and real estate consulting statewide. He can be reached via e-mail at harper@hjdlaw.net or telephone at 215-545-0600. His blog is landdweller.com

How Can I Have Someone Removed from an Apartment Lease

dew215 — Fri, 20 May 2011 20:56:41 +0000

A common situation that arises when it comes to renting an apartment jointly with someone else, be it a friend or significant other, is the time when the two can no longer functionally live together. Take for example the following scenarios:

Significant others or spouses going through a split or separation
A roommate at college who decides to drop out in the middle of the year
A friend or family member who refuses to pay their respective share of rent and/or utilities

The first thing that needs to happen is the communication of the problem or situation that exists to the landlord. You do not have the right to remove or evict the other person on your own, nor make amendments to the lease, as the landlord would have to determine if the agreement has been breached by either of the parties. If steps towards eviction end up being necessary, it will be the responsibiliy of the landlord to initiate those proceedings.

If the dispute cannot be settled amicably and legal actions are required, it is very likely that the services A Real Estate Attorney may be needed to help complete the process of.

The Pitfalls of Property Management

HDimmerman — Sat, 23 Apr 2011 02:28:23 +0000

Please enjoy my latest collaborative effort with James Lammendola, Esq., set to appear in The Legal Intelligencer.

The Commonwealth Court case of Yvonne Jewell and Jewell Realty Company v. State Real Estate Commission 2011 Pa. Commw. Unpub. Lexis 162 is a glaring example of the pitfalls associated with assuming responsibility for a client’s money and legal implications of permitting a simple inquiry as to its status to fester. Denial and its consequent inaction could lead to drastic consequences when one is finally called to task for errors of omission, as a real estate broker recently learned the hard way.

The Jewell case is an appeal that originated with a hearing before a Commonwealth Real Estate Commission (REC) examiner. The examiner recommended the revocation of a broker’s license along with conditional reinstatement as a salesperson. The accused Broker filed exceptions to the findings. Those findings were denied by the REC and the denial of the exceptions was ultimately affirmed at the Commonwealth Court level.

The facts are relatively straightforward. Pursuant to the terms of an oral agreement, Jewell Realty Company (Company) managed three rental properties for husband and wife investors. The relationship commenced in the early eighties and lasted for more than two decades. The findings of fact indicated that the Company collected rents, and paid bills and for repairs as is standard in such agreements. However, profits were distributed to the clients only when they requested the Company do so. Despite these transgressions, a demand for an accounting was not requested until the Company’s services were terminated in 2004. Upon the Company’s failure to comply with the accounting demand, a formal complaint was levied with the REC and referred to an investigator from the Pennsylvania Bureau of Professional and Occupational Affairs. Despite six demands by the investigator to the Company for its complete bank records, the company only produced its rental ledgers.

At the REC hearing, the broker of record admitted to failing to reduce the rental management agreement to writing, not supplying the required bank records to the investigator and that the former client was owed $37,218.91. As previously noted, the REC revoked the license with a provision that the broker be allowed to work as a salesperson, under certain probationary conditions, which will be discussed shortly. In turn, the Company was found guilty of violations of the Commonwealth’s Real Estate Licensing and Registration Act (Act) and REC Regulations for not having a written rental management agreement, not accounting for the rental monies, not maintaining adequate records, not providing the investigator with the documentation pertaining to account records and “failing to exercise professional skill, and failing to deal honestly and in good faith.” Critically, oral brokerage agreements are expressly prohibited under Pennsylvania law. There are no exceptions.

On appeal, the broker of record took issue with every finding rendered by the REC. The applicable scope of review of a Pennsylvania agency decision is whether an error of law occurred, whether a licensee’s constitutional rights were violated or whether the findings of fact were supported by substantial evidence. She first contended that the finding of a violation for failing to maintain adequate records was an error of law in that the provision of 601(a)(5)(v) only pertains to escrow accounts. Hence, it was argued the finding that the Company failed to maintain a rental management account does not fall within the ambit of the statute. The court wasted little time in concluding that such a contention was meritless. A separate provision of the Act, 604(a) (17) requires the prompt production of records upon the REC’s request, after a complaint is received. Notably, the investigator was never provided with documentation of the existence of any bank accounts. All that was provided was a ledger, which does not even prove the existence of an account, let alone constitute proof of its contents. The broker also argued that her failure to account to her clients does not equate to conduct that rises to the level of “bad faith, dishonesty, incompetence or lack of trustworthiness,” despite the fact only $22,467.37 of the $37,218.91 outstanding was paid; and that did not occur until approximately three years after the complaint was lodged with the REC.

In an effort to justify the shortfall, evidence of the theft of funds by a Company employee years earlier, in the sum of $21,000.00 was submitted. However, the court was naturally unimpressed with this defense, especially in light of testimony that the embezzled funds were replaced from monies from other accounts and the aforementioned delay in making any payments. The Company was also taken to task for a recordkeeping system characterized by the Court as confusing, inefficient and idiosyncratic. Finally, it appears that the appellants tried to convince the Court that there was not a violation of the regulation requiring representation agreements to be in writing because the oral rental management agreement was of such a lengthy duration that it was essentially waived. The Court was steadfast in its holding that there are absolutely no exceptions to the statutory requirements and waivers are not permitted under the Act.

As with any representation agreement, a fiduciary duty is created which commands adherence to duties of care, loyalty, accounting, disclosure and obedience to lawful instructions to one’s client. In Meinhard v. Salmon, 164 N. E. 545 (N.Y. 1928), the eminent Judge Benjamin Cardozo wrote that a fiduciary must conduct himself as such…”Not honesty alone but the punctilio of an honor the most sensitive is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate.”

While there appears to be an egregious breach of the fiduciary duties to the Company’s client, the broker of record was given permission to apply for and secure a salespersons license to be placed in a probationary status during the minimum five-year revocation period. The only conditions attached to the granting of a salesperson license were a prohibition against having a financial stake in the Company of her affiliation, she be denied access to the Company escrow account and an acknowledgment from the employing broker that these restrictions would be enforced. These conditions seem to be a magnanimous gesture, one that could easily spark a debate about whether the sanctions are too lenient under the circumstances. It could also be argued that remedy balances the mission of the REC to protect the public from an agent who has fallen short, in this one instance, of performing her fiduciary duties, and her ability to earn a living in a profession for which he has been trained, and in other areas of the practice of brokerage in which she may provide a valuable service to the community.

When do I Need to Hire a Real Estate Attorney?

HDimmerman — Wed, 13 Apr 2011 21:05:52 +0000

Real Estate transactions take place all over the country on a daily basis. They occur with great frequency and in many cases a Real Estate Attorney (lawyer) is not involved. Below are just a few example scenarios where you might need to call in someone who is an expert in real estate legal matters.

Zoning

Are you on your way to becoming the next big real estate investor? Thinking about flipping or renting a property? Then you definitely will want to retain the services of a legal professional versed in this area. Local zoning codes can be very complicated, and with the amount of money involved in your investment, you will want to be sure you follow the book to the letter or risk unexpected losses in time and money.

Landloard / Tenant Affairs

Before you decide to take matters into your own hands, be sure to consult a real estate attorney. There are rules and laws involved that it is very likely that you aren’t aware of. In Philadelphia, Pennsylvania for example, but you cannot evict a tenant without filing a civil suit and taking said tenant to court. Unfortunately it’s not as simple as changing the locks while they are away.

Just In Case

Whether buying a house as a new home or an investment vehicle, the purchase is most likely going to be one of the largest you make in your life. You might just sleep a little better knowing that there wasn’t something you overlooked in your mortgage or if you are concerned that your agent may not have told you everything that you really needed to know. It may be worth it in the long run into legal guidance costs into the overall price tag on your investment.

The Descriptive/Normative Tension In Land Development

HDimmerman — Tue, 22 Mar 2011 20:27:21 +0000

Authored by: Harper Dimmerman & James M. Lammendola
The Descriptive/Normative Tension In Land Development

James M. Lammendola & Harper J. Dimmerman

Some may contend that the concept of real estate development, by its very definition, requires at least some modicum of vision aimed at meeting future demand in the marketplace. In fact, some developers have the capacity to manufacture demand, creating a community so enticing that buyers, who may not have originally been targeting a specific locale, alter their perception of what they want or even need. In other words, there are those projects that have the potential to spark a population spurt in an otherwise slow growth area. Even with the most ingenious foresight however, land use restrictions can occasionally rear their head, quelling the passion associated with entrepreneurship.

On January 27, 2011, our Commonwealth Court handed down an unpublished opinion which in our estimation, illustrates the “do’s” and “don’ts” when proposing a curative amendment to a municipal zoning board. Numerous landmines confront the unwary developer in a staunchly agricultural township. Plus the “fair share” principles announced by the Pennsylvania Supreme Court in 1978 can wreak havoc upon developers who wish to penetrate an area that purports to have sufficient housing to satisfy present demand.

In Cherokee – Rush Associates, Inc. v. Rush Township and Board of Supervisors of Rush Township, et al, 2011 Pa. Commw. Unpub. LEXIS 94 the Rush Township Board of Supervisors (Board) denied an application for a curative amendment to allow Cherokee Rush Associates, Inc. (Cherokee) to develop seventy-five one-acre lots for single-family residences, with on-site sewer and water, in an Agricultural Zoning District located in Rush Township, Northumberland County. The zoning requirements place significant restrictions on the number and types of structures that can be erected in the district. Specifically the tracts under consideration are along Pennsylvania State Route 54 between the hamlets of Elysburg and Danville.

Pursuant to The Municipal Planning Code, 53 P. S. 10609.1, a curative amendment must contain five categories for the Board’s consideration. In relevant part, an application must include its impact on 1) roads, sewer and water facilities, 2), the suitability relating to intensity and impact of use, 3), how it impacts natural features such as woodlands, natural features and aquifers, to the degree which they are protected or destroyed and any adverse environmental impacts, 4) the impact of the proposal on the preservation of agriculture and land uses and 5) the impact on the regional housing needs and the effectiveness of the proposal on providing housing units of the type actually available and affordable by those otherwise unlawfully excluded by the challenged provisions of the ordinance.

As a preliminary observation, the Court took Cherokee to task for failing to submit any of the required documentation concerning water and sewer use as well as other potential environmental impacts. Consequently, the matters the Court considered, among the list of errors presented for review by Cherokee, was that the curative amendment was improperly denied because the ordinance as applied is exclusionary and that the planned development would meet the needs of those willing to live in the township, a need which Cherokee alleged was not being met. For the purpose of this case, the crucial factors that a Board must consider are whether the amendment will cure an exclusionary impact on residents or potential residents of the township as well as whether there is a demand for the proposed housing that it is not being met and which the curative amendment may ameliorate.

The nature of testimony gleaned from four Board hearings was relatively predictable. A representative of the developer, an engineering and planning firm and a local real estate agent all testified in favor of the amendment. Whereas, a Township engineer and zoning officer, another planning firm and adjoining property owners testified against the amendment. Despite the sizeable volume of testimony offered by the developer and its allies, the Board logically found that testimony to generally be unpersuasive. Testimony was submitted that Rush Township was experiencing growth from 1990-2000, albeit Northumberland County suffered population loss. In that ten-year period, Rush Township grew by merely ninety-two people. And from 2000-2006, the population grew another thirty-seven people, for a total of 129 people over the course of a significant span of time. During that interval, seventy-five additional housing units had been constructed. The developer pointed to the close proximity of both Bucknell and Bloomsburg University, Merck Pharmaceuticals, a federal prison and four other prisons as well. Yet none of the aforementioned employers were closer than twelve miles with some being as far away as twenty-eight miles. Finally, in the estimation of the applicant, the proposed seventy-five homes were necessary to meet an anticipated population surge.

The opposition naturally pained a much different picture, honing in on the extremely slow growth. The average of seven or eight homes constructed annually between 1970-2000 had been more than sufficient to meet the needs of buyers in the region. Two other telling statistics stunted the developer’s case as well. The Board received testimony that 800 other lots were available in the township for residential housing. Finally, the average price of a home in Rush County was only $91,000.00, not in the quarter to a half million-dollar price range being proposed by the developer. The demographic figures and current opportunity for residential development in other sections, only bolstered the Township’s position, vis-à-vis the “fair share” principle, articulated by the Pennsylvania Supreme Court decades ago and designed to ascertain whether local zoning ordinances accommodate the needs of all who wish to reside within a given municipality. A zoning ordinance which violates “fair share” principles constitutes a due process violation under both the Pennsylvania and United States Constitutions.

The Court, in Surrick v. Zoning Hearing Board of the Township of Upper Providence, 382 A.2d 105 (Pa. 1978), laid out the following three-prong test when applying this “fair share” concept: 1.) if in fact the municipality is a logical place for development, it must bear its rightful proportion of the burden; it cannot ignore the needs of surrounding areas, 2.) the present level of development is examined considering population density, the percentage of undeveloped land and the percentage of that actually available and 3.) if the municipality is an appropriate area and is not highly developed, whether the development would have effect of “zoning out” the natural population growth. By examining the projected growth of the township, access to major roads, anticipated economic development and the growth of neighboring communities, the Court had little difficulty concluding that Rush Township was well within its right to deny the curative amendment in Cherokee.

There was simply no need, real or imagined, for such a massive concentration of upscale homes in that Township. Also, since there was no cognizable “fair share” issue, Rush Township’s actions were consistent with general welfare principles, aimed at preserving the agricultural character of the Township. Undeniably though, the question of whether a developer should be permitted to incur the risks inherent in making this sort of investment, on its own property, lingers despite a legally sound analysis. Might not the success of a luxury project, over time at least, alter the socioeconomic landscape of a given region, transforming it into something altogether different because of the natural evolution of things? It is sometimes difficult to strike a balance between development and preservation. Perhaps too much regulation, even when well intended, subverts the true nature of things. At the end of the day, who is to say whether or not a particular area is ripe for development?

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Harper J. Dimmerman is an adjunct professor at Temple University’s Fox School of Business and co- chair of the law practice management committee of the Philadelphia Bar Association. He represents clients in general litigation, various land use, residential and commercial real estate matters. His firm also provides approved attorney title insurance services and real estate consulting statewide. He can be reached via e-mail at harper@hjdlaw.net or telephone at 215-545-0600. His blog is landdweller.com

THIS ARTICLE APPEARED IN THE LEGAL INTELLIGENCER (MARCH 2011). THE UNAUTHORIZED REPRODUCTION OR DISSEMINATION IS STRICTLY PROHIBITED. COPYRIGHT ALM.

Real Estate Consulting

HDimmerman — Wed, 19 Jan 2011 20:23:09 +0000

Greetings!

John Adam Di Pietro, Esquire, an experienced commercial real estate attorney and I are pleased to announce that we have officially begun to offer real estate consulting services. What does this mean and how is it any different from legal services? Simply, we now enjoy the freedom to play a much broader role in the commercial real estate world.

For example, we are frequently approached by newer real estate ventures in search of the best possible financing alternatives. Now we will be utilizing our lending resources and assisting them with positioning to maximize the potential for stronger financing. As to developers, for instance, occasionally they demand a real estate specialist with a legal background to coordinate a specific project. Take zoning for instance. Now we can do just that.

Please call my office to schedule a consult or to discuss these consulting services in greater detail.

All the best,

Harper J. Dimmerman, Esquire

The Law Office of Harper J. Dimmerman P.C.

THE PRIVATE ROAD ACT: STILL ALIVE BUT NOT AT ALL WELL

HDimmerman — Wed, 19 Jan 2011 16:49:01 +0000

THIS ARTICLE APPEARED IN THE LEGAL INTELLIGENCER (JANUARY 2011). THE UNAUTHORIZED REPRODUCTION OR DISSEMINATION IS STRICTLY PROHIBITED. COPYRIGHT ALM.

In a case that has the potential to alter or abolish the procedure by which landlocked property owners are afforded relief, the Supreme Court of Pennsylvania appears to have left the constitutionality of Pennsylvania’s Private Road Act in grave doubt. In a recent decision, In the Matter of: Opening of a Private Road For the Benefit of Timothy P. O’Reilly, 5 A.3d 246, the Pennsylvania Supreme Court remanded the case for reconsideration. The Court took issue with the Commonwealth Court’s holding that the Pennsylvania Private Road Act, 36 P.S. 2731, (hereinafter PRA) does not affect an unconstitutional taking of private property. Over a three justice dissent, the Supreme Court determined that the Commonwealth Court engaged in a flawed analysis in upholding the challenge to the constitutionality of the PRA. The Court unequivocally declared that the taking of private land for private use is a taking. Nevertheless, the Court was not prepared to use this particular case to abandon long-standing precedent.

The PRA has been on a collision course with the Fifth Amendment and the Pennsylvania Constitution for some time now. And what makes the decision all the more interesting is how the seemingly insurmountable conflict between the ability of a landlocked property owner to gain access to a public road against the right of a private property owner not to be forced to have a private road transverse his land will be resolved. The PRA provides the statutory basis for a landlocked property owner to apply to a quarter session court to gain access to a public road through private property. It mandates a Board of Viewers visit the site(s) at issue. A Board enjoys the discretion to place a right of way wherever it deems necessary, so long as it considers the statutorily prescribed factors pursuant to 36 P. S. Section 1785. Those factors, predictably, concentrate upon the shortest distance, the best ground to have a private road, the wishes of the petitioner, compensation and to create the least injurious solution vis-à-vis other affected property owners.

The backdrop of this impasse began when the landlocked landowner (hereinafter O’Reilly) successfully persuaded the trial court in Allegheny County to award him a private road over the lands of an individual landowner and a neighboring condominium complex. O’Reilly’s property became landlocked as a result of the Commonwealth’s exercise of eminent domain to build a portion of Interstate 79 over his property. The lower court opined that the PRA should be analyzed as an extension of both the Commonwealth’s exercise of its police power as well as an extension of the doctrine of easement by necessity which gives a landlocked landowner a right of use, not ownership, in the land of another. The trial court did note; however, that if it was bound by the plurality opinion in the 2002 Pennsylvania Supreme Court decision of In re: The Interest of Robert W.Forrester, et al, 836 A.2d. 102 (Forrester) that PRA serves only private interests, then the constitutional foundation of the PRA would appear to be fatally undermined. Constrained by precedent, the lower court could only uphold the constitutionality of the PRA.

On appeal, the Commonwealth Court refused to characterize the creation of a private road under the PRA in favor of O’Reilly as an unconstitutional taking, despite the 2007 Pennsylvania Supreme Court’s holding in Middletown Township the Lands of Josef Stone, etal, (Stone), 939 A.2d. 331. Stone held that the PRA will pass constitutional muster only when the public, not a private person, is the primary and paramount beneficiary. The Commonwealth Court appears to have tried, albeit unsuccessfully, to characterize the PRA’s application as benefiting the public since it is in the public’s interest to grant landlocked owners access to public roads over the lands of another. Otherwise, landlocked property would be unproductive and unmarketable creating a situation that is detrimental to all of the citizens of Pennsylvania. The Commonwealth Court characterized the PRA as an appropriate exercise of police power and also attempted to fight back the constitutional challenge by reviewing the not only the 19th century enactments of the PRA but also its origins in the pre-Commonwealth, 18th century, Provincial Legislature. In short, the Commonwealth Court reasoned that all lands in Pennsylvania are encumbered by an incorporeal six percent burden for the erection of public roads which includes private roads.

Although a considerable portion of the Commonwealth Court’s opinion was dedicated to a lengthy and complex analysis of its incorporeal burden rationale, the Supreme Court was not persuaded that this history is proof of the PRA’s constitutionality, even going as far as to characterize the analysis as “misguided.” The Court reasoned that the Commonwealth Court erred because it did not evaluate this particular application of the PRA under the “primary and paramount beneficiary” standard, articulated in Stone, which necessitates an analysis of who is the true primary beneficiary. In short, the key is that if the benefit to the public is incidental and not primary, then the application of the PRA amounts to an unconstitutional taking. The Court even cited an Amicus brief which pointed out that eight other states have declared their respective PRA’s as unconstitutional.

Finally, the Supreme Court majority took the Commonwealth Court to task for failing to examine the arguably relevant details regarding the manner in which the condemnation of a portion of O’Reilly’s land for Interstate 79 and the application of the PRA to his neighbor’s lands may have been interrelated. In other words, it was important to know whether the use of the PRA had been contemplated at the time the Commonwealth’s exercise of eminent domain caused Mr. O’Reilly’s land to become landlocked. The Court appeared concerned that issues may not have been properly preserved on appeal as well as whether the sequence of events may be outcome-determinative as to whether the public is fairly regarded as the primary and paramount beneficiary in the context of the PRA’s application to the lands adjacent to O’Reilly’s.

Given the complexity of the issues, the reasoning of the dissenting Justices deserves careful consideration. In addition for questioning the need for a remand, the dissent cited a number of factors that call into question the majority rationale. The factors include the use of the PRA is akin to the doctrine of easements by necessity (as both are avenues of the last resort), the legislature’s apparent lack of motivation to repeal the PRA, and the Court’s passing on numerous opportunities to declare the PRA unconstitutional. And last but not least, in the wake of the 2005 United States Supreme Court decision of Kelo v City of New London, 545 U. S. 469, the Pennsylvania legislature specifically permitted the use of eminent domain procedures under 26 Pa. C. S. 204 (b) (9). According to the dissent, the aforementioned statute specifically states that eminent domain procedures may be utilized when a private landowner becomes landlocked as a result of the use of eminent domain, such as occurred to Mr. O’Reilly.

Unless the dissent’s arguments and the reliance on police power principles carry the day, the stage may be set for a forthcoming significant change in Pennsylvania law. The lesson here may be that, in light of the Court’s holding in this case and in Stone, it appears that the taking of private property for private use under the PRA, albeit a compensated transaction, can only be sustained if the Court accepts the proposition that the primary and paramount beneficiary is the general public.

Harper J. Dimmerman is an adjunct professor at Temple University’s Fox School of Business and co- chair of the law practice management committee of the Philadelphia Bar Association. He represents clients in general litigation, various land use, residential and commercial real estate matters. His firm also provides approved attorney title insurance services and real estate consulting statewide. He can be reached via e-mail at harper@hjdlaw.net or telephone at 215-545-0600. His blog is landdweller.com
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Time Travel – Gladiators Fight to the Death

HDimmerman — Wed, 22 Dec 2010 01:33:36 +0000

It’s a rare occurrence but every once in a while I have the luxury of indulging in a bit of channel surfing. This afternoon the excitement lasted for a whole thirty minutes or so, until the house phone rang and woke the sleeping baby. Anyway, I wound up selecting one of those History Channel documentaries (the only HD channel playing anything remotely entertaining – those commercials are all hype), the sort that make you feel like you’re actually learning, justifying the time wasted by zoning out to TV. The subject was entertainment in the Roman Empire, which we all know wasn’t too dissimilar from the sporting events of today. Instead of the Lincoln Financial or whatever they’re calling it these days, the citizens had the Coliseum, which arguably was more advanced architecturally. And rather than pampered football stars making more than the GDP of some small nations, they had slaves trained to be gladiators, fighting for their survival and their freedom. Apparently each time these fighters stepped into the Coliseum, they had a 1 in 5 shot of even making it out alive. And for those who lived to see another day, they were housed in barracks style quarters right nearby, living, eating and sleeping mortality.

Anyway, watching the show got me thinking about interpretations of justice. At least the way the spectators were portrayed, they just sat by idly, mercilessly as other human beings were dismembered and disgraced, all for the sake of entertainment. The gorier the better too, akin to the perverse sense of pleasure derived from rubbernecking at a car wreck, secretly craving to see faces of death. The lunchtime intermission, which preceded the gladiator battles, was a special treat for the ravenous onlookers. That was when the criminals were executed with a virtual cornucopia of barbaric torture devices or perhaps, the least painful – crucifixion. Apparently they had no prisons there, which made committing crimes somewhat foolish. And for those falsely accused? Well, like the remaining pieces of the gnarled animals and gladiator corpses, they were just dumped into the Tiber River. Out of sight out of mind. Notions of due process were not even a twinkle in the eye of Mother Justice during these ancient times. With the complex labyrinths of tunnels designed to heighten the dramatic impact of the spectacles, a lot of thought clearly went into suspending disbelief, with a blatant disregard for human rights.

Compare this to a system, which in my lowly opinion, has swung entirely too far in the other direction. Now we have murderers and predators roaming the streets freely, mocking the justice system as they search for their next unsuspecting victim. Landlords too afraid of inquiring about whether or not someone’s been convicted of a sex crime, courts enlarging the rights of pro se litigants for fear of frivolous appeals, lenders with too powerful a lobby to be checked, scam artists preying upon the elderly, businesspeople defrauding creditors with the aid of the federal bankruptcy laws. I see far too many plaintiffs who should be defendants and far too few consequences for duping the system. When it comes to money and freedom, people will say and do just about anything, ala O.J. Simpson. A clear conscience is no longer in vogue and I’m sure there’s an app for repenting by now. Like the visionaries of yesteryear, the ones wielding the power these days are a bit too consumed with staging the semblance of fairness. Anyone out there have a little gladiator in them, someone who’s willing to risk their reputation for justice’s sake? I only have had the privilege of meeting a few.

Harper J. Dimmerman, Attorney at Law, is also an adjunct real estate law professor, published legal columnist and lecturer. His law firm focuses on general litigation as well as real estate law matters. Areas of law practice include: general disputes, general litigation/trial matters, appellate litigation, commercial litigation, personal injury, mortgage foreclosure defense, approved attorney title insurance, commercial real estate, homeowners association law/condominium law, landlord & tenant law/evictions, confessions of judgment, partition actions, ejectments, quiet title actions, residential real estate/buying & selling a home, eminent domain & condemnation, zoning, planning & land use.