USE AND OCCUPANCY / POINT OF SALE RESTRICTIONS

In the last several years, local governments have increasingly enacted ordinances that require property owners to conduct certain inspections, make certain disclosures, pay outstanding taxes, and/or take other required actions before they may sell (or, in some case, lease) their homes and buildings. If the required conditions are not satisfied, these ordinances provide that the sellers/lessors (and, in some cases, the sellers’ REALTORS®) may be fined, or that their use and occupancy, zoning or other permits may be withheld until the required actions are taken. These consequences may temporarily deprive owners of the full use and enjoyment of their properties.

These ordinances are often referred to, generically, as Point of Sale (“POS”) laws, though some apply to property leases as well. Municipal officials contend that they protect prospective purchasers or lessees from unseen dangers and ensure that properties are safe and that they retain their values. Property owners and RELATORS®, however, believe that such ordinances unreasonably interfere with the owners’ property rights by discriminating against those who wish to sell or lease their properties; notably, owners who have not placed their properties for sale or lease are not subject to the ordinance requirements (hence their designation as “point of sale” ordinances).

Unfortunately for owners and REALTORS®, municipalities are vested with broad authority to enact ordinances that purport to protect the health, safety, welfare and morals of their residents. Consequently, it has been difficult to challenge many of these ordinances due to the great deference that courts afford to the actions of local lawmakers. Nevertheless, REALTORS® and residents have experienced some success in challenging overreaching and poorly drafted POS ordinances.

Listed below are the names of some municipalities. Accompanying the names are brief descriptions outlining the POS ordinance requirements that currently affect -- or previously affected -- residents of those municipalities. By “clicking” on one of the names, you will able to view a more thorough discussion of the POS ordinance and certain documents relating to the ordinance. Some counsel opinions regarding the constitutionality of POS ordinances are also provided for your use and review. The Committee hopes that these materials will allow you and your counsel to identify similar ordinances in the municipalities with which you deal and to devise strategies by which to challenge them.

For those REALTORS® who practice in Bucks, Delaware and Montgomery counties, you may also wish to view the Suburban REALTORS® Alliance (“SRA”) web site to determine the inspection and other point of sale requirements that apply in municipalities that are situated in those counties.

The SRA site can be accessed at: http://www.suburbanrealtorsalliance.com/

EXAMPLES OF MUNICIPAL POS ORDINANCES

Lansdowne Borough: Ordinance requires an owner to obtain a zoning certificate from the Borough prior to sale of a property or modification of its use, and authorizes zoning inspections. Borough has, however, begun to withhold zoning certifications until repairs, discovered during property maintenance inspections, are made by owners, although the provisions of the Code upon which the Borough relies do not seem to authorize such withholding.

Milford Township: Required Point of Sale disclosures and included REALTORS® within the definition of “sellers” as those who may be penalized.

Limerick Township: Draft Ordinance that was proposed by the SRA. It modifies the originally proposed Limerick Twp. Ordinance – which was similar to the Milford Twp. Ordinance -- to protect REALTORS® and to reduce the imposition on sellers by recognizing the preemption provisions of the Seller Disclosure Act, the Pennsylvania Planned Community Act and the Pennsylvania Condominium Act. This may be used as a model for other municipalities.

Penbrook Borough: Original ordinance required a seller or lessor to disclose the zoning classifications and permitted uses/non-conforming uses of a property to a buyer or lessee before selling or leasing the property. Ordinance also required a seller or lessor to conduct a property inspection prior to executing a sales or lease agreement and to disclose all building, safety, property maintenance, electrical and fire prevention violations for the property to be sold or leased.

LEGAL OPINIONS ON POS ORDINANCES GENERALLY 

Constitutionality of POS ordinances

Enforceability of inspections prior to transfer