Title 68 - REAL AND PERSONAL PROPERTY Chapter 32 - Creation, Alteration and Termination of Condominiums
3220 - Termination of condominium.
(a) Number of votes required.--Except in the case of a
taking of all the units by eminent domain (section 3107), a
condominium may be terminated only by agreement of unit owners
of units to which at least 80% of the votes in the association
are allocated, or any larger percentage the declaration
specifies. The declaration may specify a smaller percentage only
if all of the units in the condominium are restricted
exclusively to nonresidential uses.
(b) Execution and recording agreement and ratifications.--An
agreement of unit owners to terminate a condominium must be
evidenced by their execution of a termination agreement or
ratifications thereof, in the same manner as a deed, by the
requisite number of unit owners who are owners of record as of
the date preceding the date of recordation of the termination
agreement. The termination agreement must specify the date it
was first executed or ratified by a unit owner. The termination
agreement will become null and void unless it is recorded on or
before the earlier of:
(1) The expiration of one year from the date it was
first executed or ratified by a unit owner.
(2) Such date as shall be specified in the termination
agreement.
If, pursuant to a termination agreement, the real estate
constituting the condominium is to be sold following
termination, the termination agreement must set forth the terms
of the sale. A termination agreement and all ratifications
thereof must be recorded in every county in which a portion of
the condominium is located in the same records as are maintained
for the recording of deeds of real property and shall be indexed
in the name of the condominium in both the grantor index and the
grantee index. A termination agreement is effective only upon
recordation.
(c) Status if real estate sold.--The association, on behalf
of the unit owners, may contract for the sale of the
condominium, but the contract is not binding on the unit owners
until approved pursuant to subsections (a) and (b). If the real
estate constituting the condominium is to be sold following
termination, title to that real estate, upon termination, vests
in the association as trustee for the holders of all interests
in the units. Thereafter, the association has all powers
necessary and appropriate to effect the sale. Until the sale has
been concluded and the proceeds thereof distributed, the
association continues in existence with all powers it had before
termination. Proceeds of the sale must be distributed to unit
owners and lienholders as their interests may appear, in
proportion to the respective interests of unit owners as
provided in subsection (f). Unless otherwise specified in the
termination agreement, as long as the association holds title to
the real estate, each unit owner and his successors in interest
have an exclusive right to occupancy of the portion of the real
estate that formerly constituted his unit. During the period of
that occupancy, each unit owner and his successors in interest
remain liable for all assessments and other obligations imposed
on unit owners by this subpart or the declaration.
(d) Status if real estate not sold.--If the real estate
constituting the condominium is not to be sold following
termination, title to the real estate, upon termination, vests
in the unit owners as tenants in common in proportion to their
respective interests as provided in subsection (f) and liens on
the units shift accordingly. While the tenancy in common exists,
each unit owner and his successors in interest have an exclusive
right to occupancy of the portion of the real estate that
formerly constituted his unit.
(e) Distribution of assets of association.--Following
termination of the condominium, the proceeds of any sale of real
estate, together with the assets of the association, shall be
held by the association as trustee or unit owners and holders of
liens on the units as their interests may appear. Following
termination, creditors of the association holding liens on the
units which were recorded, filed of public record or otherwise
perfected before termination may enforce those liens in the same
manner as any lienholder. All other creditors of the association
are to be treated as if they had perfected liens on the units
immediately before termination.
(f) Respective interests of unit owners.--The respective
interests of unit owners referred to in subsections (c), (d) and
(e) are as follows:
(1) Except as provided in paragraph (2), the respective
interests of unit owners are the fair market values of their
units, limited common elements and common element interests
immediately before the termination, as determined by one or
more independent appraisers selected by the association. The
decision of the independent appraisers shall be distributed
to the unit owners and becomes final unless disapproved
within 30 days after distribution by unit owners of units to
which 25% of the votes in the association are allocated. The
proportion of any unit owner's interest to that of all unit
owners is determined by dividing the fair market value of
that unit owner's unit and common element interest by the
total fair market values of all the units and common
elements.
(2) If any unit or any limited common element is
destroyed to the extent that an appraisal of the fair market
value thereof prior to destruction cannot be made, the
interests of all unit owners are their respective common
element interests immediately before the termination.
(g) Effect of foreclosure or enforcement of lien.--Except as
provided in subsection (h), foreclosure or enforcement of a lien
or encumbrance against the entire condominium does not of itself
terminate the condominium, and foreclosure or enforcement of a
lien or encumbrance against a portion of the condominium, other
than withdrawable real estate, does not withdraw that portion
from the condominium. Foreclosure or enforcement of a lien or
encumbrance against withdrawable real estate does not of itself
withdraw that real estate from the condominium but the person
taking title thereto has the right to require from the
association, upon request, an amendment excluding the real
estate from the condominium.
(h) Exclusion from condominium upon foreclosure.--If a lien
or encumbrance against a portion of the real estate comprising
the condominium has priority over the declaration and if the
lien or encumbrance has not been partially released, the parties
foreclosing the lien or encumbrance may, upon foreclosure,
record an instrument excluding the real estate subject to that
lien or encumbrance from the condominium.
(i) Ineffectiveness of termination provision.--In the case
of a declaration that contains no provision expressly providing
for a means of terminating the condominium other than a
provision providing for a self-executing termination upon a
specific date or upon the expiration of a specific time period,
such termination provision shall be deemed ineffective if no
earlier than five years before the date the condominium would
otherwise be terminated owners of units to which at least 80% of
the votes in the condominium are allocated vote that the self-
executing termination provision shall be annulled, in which
event the self-executing termination provision shall have no
force or effect.
(Dec. 18, 1992, P.L.1279, No.168, eff. 45 days; Nov. 30, 2004,
P.L.1509, No.191, eff. 60 days)
2004 Amendment. Act 191 added subsec. (i).
Cross References. Section 3220 is referred to in sections
3102, 3219, 3301, 3303, 3312 of this title.