Pennsylvania House Bill 1582 and its Effect on Condominium Associations
House Bill 1582 was introduced on May 24, 2011 and provides the Business Improvement Districts (BID) the option of adopting an alternative method of billing residential units within a condominium association. Currently BIDs assess a fee on every property based upon the tax assessed value of the property. Each individual condo owner then receives a bill for their property assessment and pays the assessment directly to BID.
The new Bill would allow the BIDs to value the condominium building in full and then send the bill with the assessed value to the condominium association. The association would be responsible for billing each condominium owner based on their proportionate share of the condominium and this additional expense would be added into the common expenses.
A problem with the proposed alternative way for BID to bill the condominiums is that if an association has delinquent owners, the association would still be responsible for paying BID in full and all the other owners in the association would have the burden of paying the fee for the delinquent owners. This would cause an additional financial burden on many unit owners in an already difficult financial time.
Another negative with the alternative was of billing by BID is that originally each unit was assessed individually based on the tax assessed value of the unit. Following the alternative method, all of the units are lumped together as the building and assessed as one large property. It is then up to the association for dividing up the amount per the proportionate share of ownership which means some unit owners may be paying more than if based on their tax assessed value.
As proposed, this new legislation will not be beneficial to condominium associations and in the long run will become a liability.
If you would like to discuss this client alert in more detail or how it may affect your community association, please contact Ellen Goodman at 609-219-7448 or by email at egoodman@stark-stark.com
