3402 - Public offering statement; general provisions.
§ 3402. Public offering statement; general provisions. (a) General rule.--Except as provided in subsection (b), a public offering statement must contain or fully and accurately disclose: (1) The name and principal address of the declarant and of the condominium. (2) A general description of the condominium, including without limitation the types, number and declarant's schedule of commencement and completion of construction of all buildings, units and amenities. The public offering statement shall also contain a narrative description of the type and character of units offered, including a statement of the degree of completion to be provided or undertaken by the declarant of such units and the common elements necessary for use and enjoyment of such units upon the conveyance by the declarant of the units offered. (3) The total number of additional units that may be included in the condominium and the proportion of units the declarant intends to rent or market in blocks of units to investors. (4) A brief narrative description of any options reserved by a declarant to withdraw withdrawable real estate under section 3206(1) (relating to contents of declaration; flexible condominiums) and the expected effects that withdrawal would have on the remaining portion of the condominium. (5) Copies and a brief narrative description of the significant features of the declaration (other than the plats and plans), and the bylaws, rules and regulations, the agreement of sale, copies of any contracts and leases to be signed by the purchasers prior to or at closing and a brief narrative description of any other contracts or leases or agreements of a material nature to the condominium that will or may be subject to cancellation by the association under section 3305 (relating to termination of contracts and leases of declarant). (6) Any current balance sheet and a projected budget for the association, either within or as an exhibit to the public offering statement, for one year after the date of the first conveyance to a purchaser, and thereafter the current budget of the association, a statement of who prepared the budget and a statement of the budget's material assumptions, including those concerning occupancy and inflation factors. The budget must include, without limitation: (i) A statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement. (ii) A statement containing a description of any provisions made in the budget for reserves for anticipated material capital expenditures or any other reserves or, if no provision is made for reserves, a statement to that effect. (iii) The projected common expense assessment by category of expenditures for the association. (iv) The projected monthly common expense assessment for each type of unit. (7) Any: (i) services not reflected in the budget that the declarant provides, or expenses that he pays, and that he expects may become at any subsequent time a common expense of the association; and (ii) personal property not owned by the association but provided by the declarant and being used or to be used in the operation and enjoyment of the common elements which is or will be required in connection with the operation and enjoyment of the common elements after such personal property is no longer provided by the declarant, and the projected common expense assessment for the association and for each type of unit attributable to each of those services or expenses and purchase or rental of such personal property. (8) Any initial or special fee due from the purchaser at closing together with a description of the purpose and method of calculating the fee. (9) A description of any liens, defects or encumbrances on or affecting the title to the condominium. (10) A description of any financing for purchasers offered or arranged by the declarant. (11) The terms and significant limitations of any warranties provided by the declarant including statutory warranties and limitations on the enforcement thereof or on damages. (12) A statement in at least ten-point bold face type, appearing on the first page of the public offering statement, as follows: (i) That within 15 days after receipt of a public offering statement, or within seven days in the case of the sale of a time-share estate, or an amendment to the public offering statement that materially and adversely affects the rights or obligations of the purchaser, the purchaser, before conveyance, may cancel any contract for purchase of a unit from a declarant. (ii) That if a declarant fails to provide a public offering statement, and any amendments thereto, to a purchaser before conveying a unit, that purchaser may recover from the declarant damages as provided in section 3406(c) (relating to purchaser's right to cancel). (iii) A description of such damages. (iv) That if a purchaser receives the public offering statement more than 15 days before signing a contract, he cannot cancel the contract, or more than seven days in the case of the sale of a time-share estate, except that, in accordance with subparagraph (i), he shall have the right to cancel the contract before conveyance within 15 days (seven days in the case of the sale of a time-share estate) after receipt of any amendment thereto that would have a material and adverse effect on the rights or obligations of that purchaser. (13) A statement of any judgments against the association, the status of any pending suits to which the association is a party and the status of any pending suits material to the condominium of which a declarant has actual knowledge. (14) A statement that any deposit made in connection with the purchase of a unit will be held in an escrow account in accordance with the provisions of section 3408 (relating to escrow of deposits) and will be returned to the purchaser if the purchaser cancels the contract pursuant to section 3406. (15) Any restraints on alienation of any portion of the condominium. (16) A description of all insurance coverage provided or intended to be provided if such insurance is not then in effect for the benefit of unit owners, including the types and extent of coverage and the extent to which such coverage includes or excludes improvements or betterments made to units. (17) Any current or expected fees or charges to be paid by unit owners for the use of the common elements and other facilities related to the condominium. (18) The extent to which financial arrangements have been provided for completion of all improvements labeled "MUST BE BUILT" pursuant to section 3414 (relating to declarant's obligation to complete and restore). (19) All unusual and material circumstances, features and characteristics of the condominium and the units. (20) In the case of a leasehold condominium, at least the following information: (i) The name and address of each lessor and his assignee, if any. (ii) Any relationship between the declarant and any lessor or assignee. (iii) A description of the leased property. (iv) The rent and any provision in the lease for increases in the rent and any other charges or payments required to be paid by the lessee under the lease. (v) Whether the lessee has any right to terminate the lease. (vi) The information contained in the declaration as required by section 3207(a) (relating to leasehold condominiums). (vii) The following notice in bold type: "Purchasers should be aware that this is a leasehold condominium and the purchaser's interest therein may be less valuable than a fee interest, may depreciate over time and may be of questionable marketability." (21) A statement containing a declaration as to the present condition of all structural components and major utility installations in the subject property, including the dates of construction, installation and major repairs if known or ascertainable, and the expected useful life of each item, together with the estimated cost (in current dollars) of replacing each of the same. (22) A description of how votes are allocated among the units and a statement as to whether cumulative or class voting is permitted and, if so, under what circumstances. Such statement shall also explain the operation of such cumulative or class voting. (23) A description of any circumstances under which the association is to become a master association or part of a master association. (24) A statement of all governmental approvals and permits required for the use and occupancy of the condominium indicating the name and expiration date of each such approval or permit that has been obtained and, as to any governmental approvals or permits that have not been obtained, a statement indicating when each such permit or approval is expected to be obtained and the person who shall bear the expense of obtaining each such permit or approval. (25) A statement as to whether there are any outstanding and uncured notices of violations of governmental requirements and, if there are any such notices of violations, a description of the alleged violation and a statement indicating when each violation is expected to be cured and the person who shall bear the expense of curing such violation. (26) A statement as to whether the declarant has knowledge of any one or more of the following: (i) Hazardous conditions, including contamination affecting the condominium site by hazardous substances, hazardous wastes or the like, or the existence of underground storage tanks for petroleum products or other hazardous substances. (ii) Any investigation conducted to determine the presence of hazardous conditions on or affecting the condominium site. (iii) Any finding or action recommended to be taken in the report of any such investigation or by any governmental body, agency or authority in order to correct any hazardous conditions, and any action taken pursuant to those recommendations. If the declarant has no knowledge of such matters, the declarant shall make a statement to that effect. Declarant shall also set forth the address and phone number of the regional offices of the Department of Environmental Resources and the United States Environmental Protection Agency where information concerning environmental conditions affecting the condominium site may be obtained. (b) Exceptions.--If a condominium composed of not more than 12 units is not a flexible condominium and no power is reserved to a declarant to make the condominium part of a larger condominium, group of condominiums or other real estate, a public offering statement may but need not include the information otherwise required by subsection (a)(3), (4) and (18) and the narrative descriptions of documents required by subsection (a)(5). (c) Amendment for material change in information.--A declarant promptly shall amend the public offering statement to report any material change in the information required by this section. (Dec. 18, 1992, P.L.1279, No.168, eff. 45 days) References in Text. The Department of Environmental Resources, referred to in subsec. (a), was abolished by Act 18 of 1995. Its functions were transferred to the Department of Conservation and Natural Resources and the Department of Environmental Protection. Cross References. Section 3402 is referred to in sections 3102, 3320, 3401, 3403, 3404, 3407, 3410, 3414 of this title.