5402 - Public offering statement; general provisions.
§ 5402. 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 planned community. (2) A general description of the planned community, including, without limitation, the types, number and declarant's schedule of commencement and completion of construction of all buildings, units and amenities. (3) 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 units offered. (4) The total number of additional units that may be included in the planned community and the proportion of units the declarant intends to rent or market in blocks of units to investors. (5) A brief narrative description of any options reserved by a declarant to withdraw withdrawable real estate under section 5206(1) (relating to contents of declaration for flexible planned communities) and the expected effect that withdrawal would have on the remaining portion of the planned community. (6) 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, 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 planned community that will or may be subject to cancellation by the association under section 5305 (relating to termination of contracts and leases of declarant). (7) 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. (8) Any of the following: (i) Services not reflected in the budget that the declarant provides or expenses that the declarant pays and that the declarant expects may become at any subsequent time a common expense of the association. (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. (9) Any initial or special fee due from the purchaser at closing, together with a description of the purpose and method of calculating the fee. (10) A description of any liens, defects or encumbrances on or affecting the title to the planned community. (11) A description of any financing for purchasers offered or arranged by the declarant. (12) The terms and significant limitations of any warranties provided by the declarant, including statutory warranties and limitations on the enforcement thereof or on damages. (13) A statement in at least ten-point boldface type, appearing on the first page of the public offering statement, as follows: (i) That, within seven days after receipt of a public offering statement 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 to a purchaser before conveying a unit, the purchaser may recover from the declarant damages as provided in section 5406(c) (relating to purchaser's right to cancel). (iii) A description of damages under section 5406(c). (iv) That, if a purchaser receives the public offering statement more than seven days before signing a contract, the purchaser cannot cancel the contract unless there is an amendment to the public offering statement that would have a material and adverse effect on the rights or obligations of that purchaser. (14) 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 planned community of which a declarant has actual knowledge. (15) 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 5408 (relating to escrow of deposits) and will be returned to the purchaser if the purchaser cancels the contract pursuant to section 5406. (16) Any restraints on alienation of any portion of the planned community. (17) 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, in accordance with section 5312 (relating to insurance). (18) 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 planned community. (19) The extent to which financial arrangements have been provided for completion of all improvements labeled "MUST BE BUILT" under section 5414 (relating to declarant's obligation to complete and restore). (20) All unusual and material circumstances, features and characteristics of the planned community and the units. (21) In the case of a leasehold planned community, 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 5207(a) (relating to leasehold planned communities). (vii) The following notice in boldface type: "Purchasers should be aware that this is a leasehold planned community, and the purchaser's interest therein may be less valuable than a fee interest, may depreciate over time and may be of questionable marketability." (22) 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. (23) 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. The statement shall also explain the operation of cumulative or class voting. (24) A description of any circumstances under which the association is to become a master association or part of a master association. (25) A statement of all governmental approvals and permits required for the use and occupancy of the planned community, indicating the name and expiration date of each such approval or permit that has been obtained and, as to any approvals or permits that have not been obtained, a statement indicating when each such approval or permit is expected to be obtained and the person responsible for the expense of obtaining each such approval or permit. (26) 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. (27) A statement as to whether the declarant has knowledge of any one or more of the following: (i) Hazardous conditions, including contamination, affecting the planned community 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 planned community 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. The 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 planned community site may be obtained. (28) A summary and description of all the provisions of the declaration for the planned community to comply with section 5205(16) (relating to contents of declaration; all planned communities). (29) A statement identifying all facilities and amenities in the planned community which the declarant shall be obligated to complete and with respect thereto: (i) The time within which each identified facility or amenity shall be completed. (ii) Whether there is a source of funding to complete the facilities and amenities or any security for the completion, and a description of any such funding source and security. (iii) Who will own the facilities and amenities to be completed by the declarant. (iv) The responsibilities of unit owners and the association, respectively, for the maintenance, repair, improvement, administration and regulation of the facilities and amenities. (b) Exceptions.--If a planned community composed of not more than 12 units is not a flexible planned community and no power is received to a declarant to make the planned community part of a larger planned community, a group of planned communities or other real estate, a public offering statement may, but need not, include the information otherwise required by subsection (a)(4) and (5) and the narrative descriptions of documents required by subsection (a)(6). (c) Amendment for material change in information.--A declarant shall promptly amend the public offering statement to report any material change in the information required by this section. (Nov. 30, 2004, P.L.1486, No.189, eff. 60 days) 2004 Amendment. Act 189 amended subsec. (a)(13)(i) and (iv). Cross References. Section 5402 is referred to in sections 5102, 5320, 5401, 5403, 5404, 5407, 5410, 5414 of this title.