NEWS BRIEFS

Stay up to date on current News & Issues.

General News
Pennsylvania DEP proposes strict limits for ‘forever chemicals’ in drinking water

Bucks County
Falls proposed budget would be 30th year without a tax increase

Chester County
Tower Health finds new owner for Jennersville and Brandywine Hospitals

Delaware County
Board of Assessment rules Springfield Country Club and Ridley Marina are taxable

Montgomery County
With $50M in bank, Lower Merion commissioners opt for 3% tax hike

Philadelphia County
Philadelphia inspects only 7% of its rental units each year, Pew says

 

Blog

Thursday, July 1, 2021

Webinar: What Realtors should know about Act 133

Posted by: Pete Kennedy on Thursday, July 1, 2021 at 11:00:00 am Comments (0)

Update: Watch a recording of the webinar below:

 

Jump to a section:

0:00 Introduction

3:18 What is Act 133?

5:18 Why did the old law (MCOCA) need to be amended in 2016?

6:58 Did the revisions in Act 133 'do the trick'? Are there still issues with U&Os?

8:38 Why are some municipalities slow to implement Act 133?

10:48 Glenolden Borough lawsuit

15:08 Are there situations in which municipalities can still withhold permits?

20:43 What should a Realtor do if they think a municipality is not following Act 133?

23:53 How is Act 133 and U&O inspections playing out in the current market?

31:33 What are the commercial implications of Act 133?

32:28 Are there penalties for violations?

34:08 Are you seeing municipalities requiring repairs in less than 12 months?

35:28 Is there a link that can be shared with municipalities regarding Act 133?

36:58 Can sellers set up these municipal inspections prior to putting a property on the market?

38:58 What can be done with municipalities that refuse to work within Act 133?

41:28 If a property was already sold and the municipality didn't inspect, can they come back to inspect later?

46:08 If a buyer feels forced to sign a 30-day affidavit, is it enforceable?

48:18 When are municipalities allowed to prevent occupancy? What are the differences between the three types of resale permits described in Act 133?

 

Original post continues below. 


The SRA will host a webinar about Act 133 on Wednesday, July 14, from 1 to 2 p.m.

Act 133, also known as the Municipal Code and Ordinance Compliance Act, was amended in 2016 to better protect sellers and buyers in municipalities that require resale use and occupancy inspections. Hank Lerner, general counsel at the Pennsylvania Association of Realtors, and SRA president Jamie Ridge will review the basics of the law and how it has been applied, and answer audience questions. 

The webinar will help Realtors understand this important law, which requires municipalities to issue use and occupancy certificates after resale inspections. 

Here's an example of how Act 133 can be helpful:

Just last week, we had an agent facing a tough situation in Norristown — the municipality was refusing to issue a temporary access certificate after a U&O inspection to allow the settlement to move forward. Luckily, the Realtor was aware of Act 133 and knew she should contact us in such situations. After a quick conversation about the details, SRA staff were able to help her draft a letter to the municipality that resolved her situation the next day. 

Registration for the webinar is free and open to Realtors. For more information and to register, click here.

 

Friday, May 15, 2020

Watch: 'Legislative Update: Reopening Real Estate in Pennsylvania'

Posted by: Pete Kennedy on Friday, May 15, 2020 at 2:00:00 pm Comments (0)

The Suburban Realtors® Alliance hosted a webinar — "Legislative Update: Reopening Real Estate in Pennsylvania" — on Friday, May 15, 2020. Watch it below:

 

The discussion covered efforts in the state House and Senate to reopen real estate throughout Pennsylvania, with a focus on House Bill 2412. The bill would to allow real estate service providers to be designated as a life-sustaining industry and resume working with safety precautions.

Jamie Ridge, SRA CEO/president, facilitated the conversation. Panelists included:

• State Sen. Tom Killion (9th District/Chester and Delaware counties)
• Mike McGee (PAR CEO)
• State Rep. Todd Polinchock (144th District/Bucks County)
• Jamie Ridge (SRA president/CEO)

 

Tuesday, March 17, 2020

COVID-19 Update: SRA Office Closes Temporarily

Posted by: Jamie Ridge on Tuesday, March 17, 2020 at 11:00:00 am Comments (0)

 
Dear SRA members,
 
In response to the coronavirus/COVID-19 outbreak in our region, the Suburban Realtors® Alliance office in Malvern is temporarily closed, but our work continues uninterrupted.

Alliance staff are working remotely, starting this week through the end of March. We continue to monitor the news and legal notices for any issues that could affect the members of our three shareholder associations. Our municipal database remains online. We are in contact with government officials to ensure necessary public health measures cause as little disruption to real estate as possible.

Stay in touch.

As always, our Realtor® members are a vital source of on-the-ground information. Please continue to contact us with any questions, concerns or issues you’re experiencing. We are responding promptly to messages sent via email and phone.

As this outbreak progresses, we will send updates as necessary.  In the meantime, we encourage you to utilize these sources of information.

Coronavirus: A Guide for REALTORS®
Centers for Disease Control and Prevention
The Pennsylvania Department of Health
Analysis from NAR chief economist Lawrence Yun  
 
Sincerely,
Jamie Ridge
President/CEO, Suburban Realtors Alliance
Tuesday, February 26, 2019

Why is a Delco school district suing the state?

Posted by: Pete Kennedy on Tuesday, February 26, 2019 at 12:00:00 am Comments (0)

In 2014, William Penn School District in Delaware County joined with other districts, associations and parents to file William Penn School District et al. v. Pennsylvania Department of Education et al. They argue that the state is failing in its constitutional duty to provide adequate public education and is discriminating against students based on geography.

In fact, Pennsylvania does have a reputation for unfair education funding. In 2015, a Washington Post analysis declared, “Pa. schools are the nation’s most inequitable.” In 2016, the General Assembly tried to address the problem by enacting a new Fair Funding Formula, which was designed to equitably distribute Basic Education Funding to all districts in the state by taking into account factors like the poverty level, number of non-English speakers and charter schools.

However, only money added since the Fair Funding Formula was put into place is distributed through it. In the 2018-2019 school year, that’s $539 million out of $6.1 billion — less than 9 percent.

What would happen if all of the $6.1 billion was put through the Fair Funding Formula?

William Penn would receive an additional $2.92 million dollars, about $530 more for each of its roughly 5,500 students, according to a 2018 report by the House Appropriations Committee.

In Delaware County, 12 of the 15 districts would receive more money. Upper Darby would receive an additional $16.2 million per year over its current state allocation of $38.6 million.   

In Chester County, 7 of the 12 districts would see a boost. Phoenixville Area School District would receive an additional $2.7 million per year over its current state allocation of $4.9 million.

In Bucks County, 6 out of 13 counties would receive more money. In the 2018-2019 school year, Bensalem Township School District would receive an additional $6.8 million per year over its current allocation of $12.8 million.

In Montgomery County, 18 out of 22 school districts would receive more money. In the 2018-2019 school year, Pottstown School District would receive an additional $13 million per year — more than doubling its current allocation of $11.5 million.

The corresponding losses would be felt by districts who are benefiting from a “hold-harmless” provision that allows them to maintain previous funding levels despite falling enrollment.

State funding is important for districts like those listed above, where a low tax base means raising tax rates wouldn’t yield much increased revenue. The lawsuit is expected to go to trial in 2020, and it could result in major changes in state education funding.

Read more about Pennsylvania public education funding at www.suburbanrealtorsalliance.com/schools

Monday, December 18, 2017

Amended State Constitution Could Bring Property Tax Reform

Posted by: Peter Kennedy III on Monday, December 18, 2017 at 9:00:00 am Comments (0)

Pennsylvania voters have approved a constitutional amendment that many experts feel could lead the way to real property tax reform in the state. The amendment expands the reform options available to state legislators by making a key change to the tax uniformity clause of the Pennsylvania Constitution. That change could allow local taxing authorities, such as school districts, to exempt up to 100 percent of the assessed value of homestead properties (primary residences) from paying property taxes, without the requirement that non-homestead properties also be excluded.

While the initial euphoria of the amendment’s passage is still fresh in the air, it’s very important to note that voter approval was just a first step. Before school districts or other local entities are allowed to fully exempt homes from property tax liabilities, the PA General Assembly must pass a law authorizing such action.

Along with allowing school districts to exempt homes from property taxes, the legislature must also come up with a new menu of tax options that could be used to replace the revenue lost through the exemptions. A requirement of such a plan will be that local authorities may not increase the millage rate on other real property to pay for homestead exclusions.

Even with all of these hurdles, the passage of the ballot question is certainly welcome news for many home owners whose local property tax burdens have outstripped their ability to keep up over the past decade. It is also good news for many school districts who have done all they can to slow the growth of property tax burdens, while at the same time dealing with strict limits on other means of raising revenue.

What’s next in Harrisburg?

Now that voters have done their part to make change possible, our elected leaders in Harrisburg must take the next step of producing implementing legislation. Given the most recent efforts of the legislature to reform property taxes, it’s safe to bet that they’ll be taking a new look at several revenue-replacement options that have been previously on the table.

Raise Local Earned Income Taxes: Only four states, including Pennsylvania, allow school districts to levy a local earned-income tax for school funding. Currently, the local income tax rate in most districts is capped at 1%, which is typically divided by the district and municipal governments. One drawback is that income tax proceeds are historically less stable than property tax revenues, making the budget planning process more difficult.

Collect Personal Income Taxes: While a personal income tax could capture revenue from a broader base of taxpayers, there is currently no taxing jurisdiction besides the state that collects it. This could make implementation of such a tax more difficult at the local level. Additionally, the personal income tax is a less stable tax regarding the collection of the unearned income portion (interest, dividends, capital gains, etc.) as it can vary dramatically from year to year.

Allow Local Sales Taxes: Currently, only two states – Louisiana and Georgia – allow individual school districts to levy a sales tax. Nonetheless, sales taxes are easy to collect at the retail level, and studies have shown that voters sometimes prefer them to income taxes. However, revenues from sales taxes are even less stable than income taxes. In addition, local sales taxes could create situations in which businesses are penalized by consumers because of the district in which they reside.

Statewide Approach: Proponents of Senate Bill 76, the most recent attempt at property tax reform in Pennsylvania, feel that their effort to eliminate property taxes through a centralized system of school funding could regain momentum as a result of the amendment to the Constitution’s Uniformity Clause. However, that measure has proven to be very unpopular in southeastern Pennsylvania, as opponents claim it would leave important budget decisions to a state government that has continually cut education spending over the past decade.

While it’s clear that the task ahead for the state legislature will not be easy, the passage of the Constitutional amendment could produce a window of opportunity for change. Only time will tell whether our elected leaders are up to the task.

 Flickr image  by David Woo (CC BY-ND 2.0)

Wednesday, November 8, 2017

Voters Approve Homestead Exemption Referendum: What's Next?

Posted by: Pete Kennedy on Wednesday, November 8, 2017 at 3:30:00 pm Comments (0)

 
Pennsylvania voters on Tuesday approved a statewide property tax referendum affecting local taxing authorities, but that does not mean any changes for taxpayers yet.

We made this graphic to show how things will proceed.

Tuesday, October 24, 2017

What Is a Homestead?

Posted by: Pete Kennedy on Tuesday, October 24, 2017 at 10:00:00 am Comments (0)
 
On Nov. 7, PA voters will see a referendum question on whether to allow increased property tax relief for homesteads. First things first — What, exactly, is a homestead?
 
The short version: A homestead is a home that is the primary residence of its owner. That excludes vacation homes, second homes, rental homes and corporate-owned properties, among others. 
 
The word "homestead" might bring to mind a house on the prairie, but a townhouse in the Delaware Valley can fit the bill, too.
 
The long version, from the state website:
 
In Pennsylvania law, a homestead is defined as dwelling, including the parcel of land on which the dwelling is located and the other improvements located on the parcel for which any of the following apply:
 
1.  The dwelling is primarily used as the domicile of an owner who is a natural person. The homestead for real property qualifying under this paragraph shall not include the land on which the dwelling is located if the land is owned by a person other than the person who owns the dwelling.
 
2.  The dwelling is a unit in a condominium as the term is defined in Section 3103 of Title 68 of the Pennsylvania Consolidated Statutes and the unit is primarily used as the domicile of a natural person who is an owner of the unit; or the dwelling is a unit in a cooperative as the term is defined in Section 4103 of Title 68 of the Pennsylvania Consolidated Statutes and the unit is primarily used as the domicile of a natural person who is an owner of the unit. The homestead for a unit in a condominium or a cooperative shall be limited to the assessed value of the unit, which shall be determined in a manner consistent with the assessment of real property taxes on those units under Title 68 of the Pennsylvania Consolidated Statutes or as otherwise provided by law. If the unit is not separately assessed for real property taxes, the homestead shall be a pro rata share of the real property.
 
3.  The dwelling does not qualify under the criteria listed above and a portion of the dwelling is used as the domicile of an owner who is a natural person. The homestead for real property qualifying under this paragraph shall be the portion of the real property that is equal to the portion of the dwelling that is used as the domicile of an owner.
 
That legal definition begs the question: What is a natural person? A natural person is simply a human being — as opposed to a legal person, such a corporate entity.
 
The Suburban Realtors® Alliance and the Pennsylvania Association of Realtors® urge you to vote "Yes" on the referendum.
 
For more information about the referendum, see this earlier blog post: 

      Property tax referendum will be on November ballot

Flickr image by Lane Pearman (CC BY 2.0)

 

Friday, September 22, 2017

Property tax referendum will be on November ballot

Posted by: Pete Kennedy on Friday, September 22, 2017 at 9:00:00 am Comments (0)

On Nov. 7, Pennsylvanians voting in the municipal general election will have the opportunity to vote on a referendum question that could lead to substantial property tax reform. Though it hasn't yet received widespread attention, the Property Tax Relief and Homestead Exclusion referendum, if approved, would amend the state constitution to allow local taxing authorities to exclude from taxation the entire assessed values of homes within their borders. 

Essentially, municipalities, counties and school districts would have the authority to zero out many residents' property taxes. Currently, these taxing entities can exempt only up to 50 percent of the median assessed home value. The Pennsylvania Association of Realtors® supports the Property Tax Relief and Homestead Exclusion Amendment, which would provide local taxing entities the flexibility of providing property tax relief to homeowners.

Essentially, municipalities, counties and school districts would have the authority to zero out many residents' property taxes.

Here is the question that voters will see: "Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?"

There are a few important points to keep in mind. The exclusion would apply to homesteads, which doesn't include, for example, commercial properties or second homes. Even if passed, the referendum would not have an immediate effect on residents' taxes. State legislators would need to enact legislation setting the parameters for local taxing entities to follow. Most importantly, the legislation would need to provide school districts and municipalities the ability to raise other taxes – such as earned income – to offset the loss of property tax revenue.  And those entities would not be required to exercise the new flexibility; in fact, only a handful of them utilize the full 50 percent exclusion limit allowed under existing law.

There will be more information about this referendum coming in the weeks leading up to the election. 

Flickr image of a Chalfont, Bucks County, home  by Doug Kerr (CC BY-SA 2.0)

Monday, August 7, 2017

What You Should Know About Act 133, An Important New Tool for Realtors®

Posted by: Jamie Ridge on Monday, August 7, 2017 at 9:00:00 am Comments (0)

In February, I received a call from a Realtor® handling a home sale in a Delaware County municipality. With the closing only 2 weeks away, the code inspector in the borough was withholding a use and occupancy (U&O) permit until the seller completed a list of repairs to the home. These repairs included a cracked sidewalk, missing handrails, and window maintenance.

The borough’s decision to withhold a U&O permit might have been hard to challenge in 2016.  In 2017, circumstances have changed for the better. Thanks to state legislation approved last year and implemented on Jan. 2, municipalities must now issue a permit allowing sales to move forward, regardless of the outcome of completed code inspections.

With the new law in hand, I contacted the township’s solicitor and explained the amendments that had taken place. To his credit, the solicitor listened carefully, reviewed the changes, and directed the borough to issue the permit. The sale went through on schedule. A happy ending!

Unfortunately, not every municipality is so willing to bring their inspection practices into compliance with the new state law, officially titled Act 133 of 2016. That’s where our services can make a difference for you and your clients. We’re here to help you understand the new law, take full advantage of it, and assist you when municipalities try to ignore it.

What Act 133 means to your clients:

  • Once a municipality has conducted a resale code inspection, it must issue a resale certificate (U&O) to allow real estate settlements to move forward. There are three types of resale certificates: a normal U&O permit; a temporary U&O permit, allowing new owners to move in immediately and make repairs within 12 months; or a temporary access permit, a new type of permit allowing buyers of homes deemed “unfit for habitation” to access the building and make substantial repairs within 12 months.
  • Municipalities can no longer demand escrow money in connection with resale code inspections that result in required repairs.
  • The term “unfit for habitation” has been more clearly defined to describe homes that are “dangerous or injurious to the health, safety or physical welfare of an occupant or the occupants of neighboring dwelling.” As a result, code inspectors can no longer deny a U&O permit due to minor issues such as missing house numbers.

Call the Suburban Realtors® Alliance if:

  • …your client is being denied a U&O permit or a temporary access permit. The municipality must provide one as long as they have been given an opportunity to inspect the home.
  • …your client is being asked to provide escrow toward repairs on the home prior to the sale, as a condition of receiving a U&O permit.
  • …a municipal official tells you that Act 133 does not apply to them for any reason.

Nearly every day, the Alliance staff hears from Realtors® experiencing one of the problems above, so we have experience resolving them. We always recommend that agents schedule inspections at least 30 days before the scheduled closing, to allow sufficient time to work through any code-related issues.

Please note that not all municipalities require point of sale inspections for U&O permits, but many in southeastern PA do.  

You can read more about Act 133 in the Issue Briefs section of our website, www.suburbanrealtorsalliance.com. To learn more about the various code inspections required in our four-county territory – including Chester, Delaware, Montgomery and Bucks – you can check out the SRA’s comprehensive Municipal Database at: http://www.suburbanrealtorsalliance.com/municipal-database/

(Photo: Governor Tom Wolf signs Act 133 of 2016, joined by Realtors® and legislators.)

Wednesday, July 22, 2015

New state school funding formula is a crucial step, but pension crisis looms

Posted by: Jamie Ridge on Wednesday, July 22, 2015 at 12:00:00 am Comments (0)

Much has been written over the past year about a proposed new education funding formula for Pennsylvania schools. As reported, the new formula would mark an important first step on the road to getting the state’s dysfunctional education funding system back on the right track. Most importantly, the funding formula promises to put school districts throughout the Commonwealth on more equal ground when it comes to education appropriations from the state.

If enacted by the legislature and Gov. Tom Wolf, the new formula will: 1) provide funding based on the average number of students in each district over the past three years; 2) give extra funding for impoverished students and English language learners in each district; 3) consider the number of students attending charter schools in a district to help cover the cost of revenue that follows students to those schools; and 4) factor in median household income, the local tax burden and taxing capacity of each district to help gauge the population’s ability to generate school funding. All of these steps will help ease the tremendous burden that poorer school districts in our region have faced over the past several years because no formula has been in place in the state.

REALTORS® should strongly consider supporting this new formula because it will help eliminate some of the inequities in state funding that have caused property taxes to soar in certain districts, making homes in those localities extremely hard to sell. But even this major reform, worked out over the past year, can’t save school districts and tax payers from major budgetary pain ahead without further heavy lifting by state lawmakers who have been reluctant to make tough choices. First and foremost on the priority list after the funding formula is in place is reform of the state’s public pension system, which threatens to place a heavy burden on taxpayers and deplete funds available for critical long-term investments – including education – if left untouched.

While there is some disagreement regarding what should be done to fix the system, most experts agree that years of large benefit increases, negligent underfunding, and several recessions have left the state's public pension funds in a huge budget hole. It is estimated that the two largest pension systems in the state – covering teachers and other government employees—are underfunded by more than $50 billion dollars.

How serious is this issue? The PA Institute of Certified Public Accountants says that at the state level, taxpayer contributions to pension plans will increase to $3.3 billion, or nearly 10 percent of the budget, by 2020. That’s compared to the $1.7 billion, or 6 percent of the budget, made in contributions this year. According to the CPAs, that rate of debt increase is “fiscally unsustainable and will prove increasingly unacceptable to taxpayers who must either pay increased taxes or forgo other services to pay for these liabilities.”

The effect of the pension crisis on school districts is already being felt. Beginning this month, the annual contribution level for districts to the pension fund will jump to 25.8%, up from 16.9% only two years ago. By 2019-20, that number will skyrocket to 32.2%. The fact that school districts are being asked to pay for more and more of the pension costs has much to do with the growing property tax burden we are feeling at the local level in southeastern PA. And much like the added government spending needed to cover entitlement debt at the federal level in the massive Social Security and Medicare programs, these school pension liabilities are beginning to “crowd out” investments that are needed to ensure a strong work force for the future of the Commonwealth.

What’s needed to fix the system? Many pension and budget experts agree that moving new employees into a defined contribution plan with 401(k)-style benefits would be a good first step. A tougher, more impactful fix might include rolling back benefit formula changes that some experts say helped produce the present-day crisis. Looking to other states that have dealt more effectively with their own pension challenges will also be critical.

As both citizens of the state and small business owners, REALTORS should strongly consider voicing their support for legislators who make the tough choices necessary to put the pension system back on a sustainable path before it’s too late.

 

Monday, November 30, -1

COVID-19 Update: SRA Office Closes Temporarily

Posted by: Jamie Ridge on Monday, November 30, -1 at 12:00:00 am Comments (0)

 

Dear SRA members,
 
In response to the coronavirus/COVID-19 outbreak in our region, the Suburban Realtors® Alliance office in Malvern is temporarily closed, but our work continues uninterrupted.

Alliance staff are working remotely, starting this week through the end of March. We continue to monitor the news and legal notices for any issues that could affect the members of our three shareholder associations. Our municipal database remains online. We are in contact with government officials to ensure necessary public health measures cause as little disruption to real estate as possible.

Stay in touch.

As always, our Realtor® members are a vital source of on-the-ground information. Please continue to contact us with any questions, concerns or issues you’re experiencing. We are responding promptly to messages sent via email and phone.

As this outbreak progresses, we will send updates as necessary.  In the meantime, we encourage you to utilize these sources of information.

Coronavirus: A Guide for REALTORS®
Centers for Disease Control and Prevention
The Pennsylvania Department of Health
Analysis from NAR chief economist Lawrence Yun  
 
Sincerely,
Jamie Ridge
President/CEO, Suburban Realtors Alliance

Designed and delivered by Accrisoft