Pa. House expected to address fight over county filing fees

Homeowner associations argue some counties levying unfair costs

//October 18, 2016

Pa. House expected to address fight over county filing fees

Homeowner associations argue some counties levying unfair costs

//October 18, 2016

The state House is expected to take up a bill, introduced by Sen. Scott Wagner (R-York), that would end the so-called practice of per-parcel index fees charged by the recorder of deeds in roughly one-third of Pennsylvania counties.

Critics say the practice leads to excessive costs for homeowner associations and similar groups, while supporters say the practice ensures fairness for all homeowners.

In counties such as Montgomery County, where this practice began in 2011, short amendments filed by condominium, cooperative and homeowner associations are being assessed recording fees that can run into thousands of dollars. The costs ultimately impact annual association dues paid by homeowners.

The Senate passed the bill, Senate Bill 1282, in June on a 48-2 vote. The House Urban Affairs Committee moved the bill over the summer recess. A group led by the Community Associations Institute, with support from state Realtor and builders associations, hopes the full House will push it across the finish line.

“The chances of it getting through are good, if it gets on the (House) calendar,” said Tony Campisi, executive director of the Pennsylvania and Delaware Valley Chapter of the Community Associations Institute. “This is just one more fee added on to what homeowners are already paying.”

The group’s primary argument is that it is not necessary to charge for indexing community amendments against each unit in an association. The fees are $15 per parcel in some counties, so a 500-home community would pay much more than a 50-home community for work that should take the same amount of time.

The associations said they have no problem with the amount of the fee, but believe it should be levied only against an association’s master parcel and not all parcels.

Most of the association amendments filed with counties are designed to comply with changes in state and federal law, such as updates to federal mortgage guidelines. And amendments can happen multiple times per year.

People not living in a community association would not have to record such documents. They may pay recording fees to the county only when they buy or sell a home, proponents argue.

But opponents of the bill — namely the County Commissioners Association of Pennsylvania and the Pennsylvania Recorders of Deeds Association — argue that exempting condo and homeowner associations from indexing fees would create a fairness issue for other taxpayers.

Indexing of amendments against each individual property assures that a property owner can find all of the information related to their property without having to separately research the association, said Lisa Schaefer, director of government relations for CCAP.

“All recording fees should be levied uniformly and exemptions should not be provided to the benefit of a single corporate interest nor at the expense of the taxpayers,” she said. “The only winners if this legislation becomes law are the condominium associations, who will realize reductions not provided to any other industry or individual.”

Singling out one group will open the door for others seeking exemptions, including gas and oil companies, said Patricia Streams-Warman, recorder of deeds in Indiana County. 

She believes the decision to charge for indexing every parcel should be left up to the counties. She also is advocating for a proposed House resolution that would study all fees charged by the recorder of deeds office.

Proposed by Rep. Scott Petri (R-Bucks), a supporter of S.B. 1282, the study would look at the “costs involved with the task of filing, the types of fees recorders are required to charge as directed by statute, and what would be a fair, sustainable and predictable fee and recording system.”

Petri doesn’t expect the House resolution to pass this year, but it should keep the conversation going, he said. 

“I think the study will help determine whether fees should be raised or where they need more money because of the cost of doing the work,” he said.

However, he wants to see the Senate bill pass now because he believes many counties are using that per-parcel fee as a “profit center.” He believes the excessive fees being charged to associations opens up the possibility of lawsuits being filed against counties.

“I think they are operating at great exposure to themselves,” Petri said, adding that he expected a failed vote on the bill will open the floodgates in court.

An estimated 2.8 million Pennsylvanians live in more than 10,000 condo, cooperative or homeowner associations. And community associations are on the rise nationwide, accounting for about 80 percent of new homes built in the first decade of this century.