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The SRA focuses on local public policy issues that impact the real estate settlement process, the rights of real property owners, and the cost of housing. Priority issues for the Alliance include: resale use and occupancy requirements and inspections; sign ordinances that impact real estate marketing; residential real estate disclosure issues, and transfer tax ordinances. In addition, issues such as land and water use planning, inter-municipal cooperation, urban revitalization, and open space preservation are monitored by the Alliance.
In an effort to educate the general public, government officials, and the real estate industry, we have included organizational policy statements on this site. If there are any questions or comments, please contact us via e-mail.
The Alliance has identified several areas of focus for this year:
The Pennsylvania Municipal Code and Ordinance Compliance Act (MCOCA) sets forth procedures which must be followed by municipalities that require property maintenance and other code inspections upon the sale of a residential property. MCOCA was recently amended through Act 133 of 2016 to address situations in which municipalities were not following the Act, leading to some real estate transactions being postponed or cancelled due to minor property maintenance violations. The amendments in Act 133 clarify the rights and responsibilities of both municipalities and property owners so these issues don't occur in the future.
Municipalities are not required by the Act to inspect existing homes that are being sold. However, municipalities that do require such inspections must issue a Use and Occupancy Certificate, prior to the date of purchase, in the following manner:
1) USE AND OCCUPANCY PERMIT: If no property maintenance or other code violations are found, a Use and Occupancy Certificate must be issued allowing the property to be used or occupied as intended.
2) TEMPORARY USE AND OCCUPANCY PERMIT: If the municipal inspection reveals at least one violation, but no substantial violations (see definition, next column), the municipality shall issue a Temporary Use and Occupancy Certificate. The purpose of a temporary use and occupancy permit is to authorize the purchaser to fully utilize or reside in the property while correcting code violations.
3) TEMPORARY ACCESS CERTIFICATE: If the municipal inspection reveals a substantial code violation which renders a building “unfit for habitation,” a Temporary Access Certificate must be issued. The purpose of the certificate is to authorize the purchaser to access the property for the purpose of correcting substantial violations. No person may occupy a property during the term of a Temporary Access Certificate, but the owner shall be permitted to store equipment that is related to the proposed use or occupancy of the property or is needed to repair the substantial violations during the time of the Temporary Access Certificate.
SUBSTANTIAL VIOLATION: A Substantial Violation is a condition which makes a building “unfit for habitation.” Unfit for habitation is defined as: “A condition which renders a building, structure, or any part thereof, dangerous or injurious to the health, safety or physical welfare of an occupant or the occupants of neighboring dwellings. The condition may include substantial violations of a property that show evidence of: a significant increase to the hazards of fire or accident; inadequate sanitary facilities; vermin infestation; or a condition of disrepair, dilapidation or structural defects such that the cost of rehabilitation and repair would exceed one-half of the agreed-upon purchase price of the property.”
ESCROWS AND BONDS PROHIBITED: A municipality may not require the escrowing of funds or posting of a bond, or impose any similar financial security as a condition of issuing a certificate. But before accessing the property, a property owner is still generally required to follow all the applicable rules for permits, fees, escrows, etc., under existing building, property maintenance and fire codes or other health or safety codes.
COMPLIANCE PERIOD: A new owner will have 12 months from the date of purchase to either bring the property into compliance with codes or demolish the building. At the request of the property owner the municipality may negotiate a longer time period, but may not shorten it.
REINSPECTION OF PROPERTY: (1) At the expiration of the 12 month time period or before that time, if requested by the property owner, the municipality shall reinspect the property to determine compliance with the cited violations. (2) If a temporary access permit has been issued and reinspection indicates that the noted substantial violations have been corrected but other cited violations have not yet been corrected, the municipality shall issue a temporary use and occupancy permit to be valid for the time remaining on the original temporary access permit. (3) If the reinspection indicates that all noted violations have been corrected, the municipality shall issue a Use and Occupancy Certificate for the property.
FAILURE TO COMPLY BY OWNER: If the property owner fails to correct the code violations cited by the municipality, the following actions may occur: 1) Revocation of the temporary certificate; 2) The purchaser will be subject to any existing municipal ordinances or codes relating to the occupation of a property without a Use and Occupancy Certificate; 3) The purchaser will be personally liable for the costs of maintenance, repairs or demolition sufficient to correct the cited violations, and a fine of not less than $1,000 and not more than $10,000.
PRE-EXISTING VIOLATIONS: This Act generally applies to violations that are found as a part of the municipal inspections done for property resale. But these rules do not apply to violations of a local code or ordinance that are already the subject of a fine or some other judicial action against the current owner, or to properties that are subject to certain other statutory provisions. In those instances, the violations must be addressed under the other applicable rules, whatever they may be.
If you are a member of the Suburban REALTORS® Alliance and have a question about enforcement of the Municipal Code and Ordinance Compliance Act, please call our staff at (610) 981-9000 or email firstname.lastname@example.org
REALTORS® support the development and enforcement of reasonable use and occupancy criteria for all types of real property. However, in general, REALTORS® believe that use and occupancy requirements enforced solely at the point of sale do little to promote health, safety and welfare of all citizens. Ideally, if inspections are to be required for occupancy of a home, business or rental unit, they should be conducted on a regular basis for all properties - not only at the point of sale. Further, occupancy criteria should be standardized and limited to true health and safety issues.
A real estate transfer tax is a state and local tax assessed on real property when ownership of the property is exchanged between parties. All types of real property, including residential, commercial, and agricultural, are subject to the transfer tax. Although the tax is generally levied on the value of the property, it is assessed only on the sales transaction instead of on an annual basis like the general property tax. Transfer taxes may be assessed on either the buyer or the seller, but both are usually jointly and severely liable for the tax.
In many states, the realty transfer tax is used to fund programs designed to preserve open space in residential or commercial areas and to fund housing programs for low-incomes residents. Pennsylvania currently imposes a 1% tax, with an additional tax levied by school districts and municipalities. Generally speaking, the local transfer tax equals an additional 1%.
Suburban REALTORS Alliance Position
The Alliance is opposed to increases in the current transfer tax for the following reasons: 1) As the transfer tax is levied only on buyers and sellers of property, the burden per taxpayer is greater than the burden from a more broad-based tax designed to generate the same amount of revenue; 2) Since public transportation is a benefit that is open to all members of society, the charge should not be placed solely on buyers and sellers of property; 3) The transfer tax adds additional burdens on first-time home buyers saving for a down-payment and covering the closing costs and runs contrary to existing federal, state, and local programs including the mortgage interest deduction, low interest property maintenance loans, and grants to first time homebuyers; 4) A real estate transfer tax is a state and local tax assessed on real property when ownership of the property is exchanged between parties. All types of real property, including residential, commercial, and agricultural, are subject to the transfer tax. Although the tax is generally levied on the value of the property, it is assessed only on the sales transaction instead of on an annual basis like the general property tax. Transfer taxes may be assessed on either the buyer or the seller, but both are usually jointly and severely liable for the tax.
REALTORS® believe that rental property owners offer a much needed service by providing housing to citizens who, either by choice or other circumstances, may not want or be able to purchase a home.
We oppose regulations that subject property owners to onerous governmental inspection, registration or licensure requirements which hinder affordable housing opportunities by discouraging investment in rental properties in a community.
We believe that the overwhelming majority of investment property owners provide safe, quality, and affordable housing options, and maintain their properties in a responsible manner.
We believe rental property owners who do not maintain their property in accordance with existing regulations should be held accountable and prosecuted to the fullest extent of the law, just as owner-occupied homeowners should be held accountable to existing regulations.
REALTORS® believe that if rental unit inspections are to be required, they should be conducted for all properties on a systematic basis utilizing criteria that are standardized, well-publicized and limited to true health and safety issues only. Rental inspection ordinances that are enforced solely at the point of transfer, or re-renting, do little to promote health, safety and welfare of all citizens.
Rental Inspection and Licencing Fees
Under Pennsylvania law, the amount of a licensing fee must be commensurate with the expense incurred by the municipality in connection with the issuance and supervision of the licensee and privilege. If a licensee fee collects more than the amount necessary to administer the license, it is no longer a valid licensing fee, but a tax revenue in violation of Article 8, Section 1 of the Pennsylvania Constitution. Property owners who feel that they are subjected to excessive fees for the right to rent property may successfully challenge such fees upon a showing that the amount of the fees exceeds the costs to enforce the regulation.
Learn about key local issues, the SRA's position, and how they affect REALTORS®, home buyers, and private property owners by browsing all of the SRA's adopted policy statements.
Learn about the ways you can become an involved and informed REALTOR® in your community, including: