Subject to additional definitions contained in subsequent provisions of this subpart which are applicable to specific provisions of this subpart, the following words and phrases when used in this subpart and in the declaration and bylaws shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Affiliate of a declarant." Any person who controls, is controlled by or is under common control with a declarant.

(1) A person "controls" a declarant if the person:

(i) is a general partner, officer, director or employer of the declarant;

(ii) directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, holds with power to vote or holds proxies representing more than 20% of the voting interest in the declarant;

(iii) controls in any manner the election of a majority of the directors of the declarant; or

(iv) has contributed more than 20% of the capital of the declarant.

(2) A person "is controlled by" a declarant if the declarant:

(i) is a general partner, officer, director or employer of the person;

(ii) directly or indirectly or acting in concert with one or more other persons, or through one or more subsidiaries, owns, controls, holds with power to vote or holds proxies representing more than 20% of the voting interest in the person;

(iii) controls in any manner the election of a majority of the directors of the person; or

(iv) has contributed more than 20% of the capital of the person.

(3) Control does not exist if the powers described in paragraph (1) or (2) are held solely as security for an obligation and are not exercised.

"Allocated interests." The common expense liability and the ownership interest and votes in the association allocated to each cooperative interest.

"Alternative dispute resolution." A procedure for settling a dispute by means other than litigation, such as arbitration or mediation.

"Association" or "proprietary lessees' association." The proprietary lessees' association organized under section 4301 (relating to organization of association).

"Common elements." All portions of a cooperative other than the units.

"Common expense liability." The liability for common expenses allocated to each cooperative interest pursuant to section 4207 (relating to allocation of ownership interests, votes and common expense liabilities).

"Common expenses." Expenditures made by or financial liabilities of the association, together with any allocations to reserves.

"Conversion building." A building that, at any time before the conversion notice date with respect to a cooperative in which that building is located, was occupied wholly or partially by persons other than purchasers and persons who occupy with the consent of purchasers.

"Conversion notice." The notice to be given to certain tenants or subtenants by the terms of section 4412(a) (relating to cooperatives containing conversion buildings).

"Conversion notice date." The date on which the notice is placed in the United States mail or is delivered to the unit leased by the recipient, depending upon whether the conversion notice is mailed or hand delivered.

"Cooperative." Real estate owned by an association, each of whose members is entitled, by virtue of his ownership interest in the association, to exclusive possession of a unit.

"Cooperative interest." An ownership interest in the association coupled with a possessory interest in a unit under a proprietary lease. For the purposes of this subpart, a declarant is treated as the owner of any cooperative interests or potential cooperative interests to which allocated interests have been allocated pursuant to section 4207 (relating to allocation of ownership interests, votes and common expense liabilities) until that cooperative interest has been created and conveyed to another person.

"Declarant." Any person or group of persons acting in concert who:

(1) as part of a common promotional plan, offers to dispose of his or its cooperative interest not previously disposed of; or

(2) reserves or succeeds to any special declarant right.

"Declaration." Any instruments, however denominated, that create a cooperative and any amendments to those instruments.

"Development rights." Any right or combination of rights reserved by a declarant in the declaration to:

(1) add real estate to a cooperative;

(2) create units, common elements or limited common elements within a cooperative;

(3) subdivide units or convert units into common elements; or

(4) withdraw real estate from a cooperative.

"Dispose" or "disposition." A voluntary transfer to a purchaser of any legal or equitable interest in a cooperative interest. The term does not include the creation, transfer, satisfaction or release of a security interest.

"Executive board." The body, regardless of name, designated in the declaration to act on behalf of the association.

"Identifying number." A symbol or address that identifies only one unit in a cooperative.

"Leasehold cooperative." A cooperative in which all or a portion of the real estate is subject to a lease, the expiration or termination of which will terminate the cooperative or reduce its size.

"Limited common element." A portion of the common elements allocated by the declaration or by operation of section 4202(2) or (4) (relating to unit boundaries) for the exclusive use of one or more but fewer than all of the units.

"Limited equity cooperative." A cooperative whose declaration and bylaws impose a restriction or limitation, in a specified amount or in an amount determined pursuant to a specified formula, upon the consideration that may be paid to the transferor of a cooperative interest. The formula may not include the fair market value of the cooperative interest as a factor in establishing the restriction or limitation.

"Limited equity cooperative association." An association for a limited equity cooperative.

"Low-income and moderate-income persons." Persons who are members of households and whose incomes are less than 80% of the median household income in the area which the cooperative is located, as established by the United States Department of Housing and Urban Development or a successor organization, for the smallest geographic area which includes the cooperative and for which such income data is established by such organization.

"Master association." An organization described in section 4219 (relating to master associations), whether or not it is also an association described in section 4301 (relating to organization of association).

"Offer" or "offering." Any advertisement, inducement, solicitation or attempt to encourage any person to acquire any interest in a cooperative interest, other than as security for an obligation. An advertisement in a newspaper or other periodical of general circulation or in any broadcast medium to the general public of a cooperative not located in this Commonwealth is not an offer or offering if the advertisement states that an offer or offering may be made only in compliance with the law of the jurisdiction in which the cooperative is located.

"Original lease termination date." The date on which the lease or sublease of a residential tenant or subtenant in possession of a unit in a conversion building will expire by the terms of such lease or sublease after taking into account any renewal or extension rights that may have been exercised prior to the conversion notice date.

"Person." A natural person, corporation, business trust, estate, trust, general or limited partnership, association, joint venture, government, governmental subdivision or agency, other legal or commercial entity or any combination of the foregoing. In the case of a land trust, the term means the beneficiary of the trust rather than the trust or the trustee.

"Proprietary lease." An agreement with the association pursuant to which a proprietary lessee has a possessory interest in a unit.

"Proprietary lessee." A person who owns a cooperative interest, other than as security for an obligation, and the declarant with respect to cooperative interests or potential cooperative interests to which allocated interests have been allocated pursuant to section 4207 (relating to allocation of ownership interests, votes and common expense liabilities) until that cooperative interest has been created and conveyed to another person.

"Proprietary lessee in good standing." A proprietary lessee who is current in payment of assessments and fines, unless the assessments or fines are directly related to a complaint filed with the Bureau of Consumer Protection in the Office of Attorney General regarding section 4308 (relating to meetings), 4309 (relating to quorums), 4310 (relating to voting; proxies) or 4317 (relating to association records).

"Purchaser." Any person, other than a declarant or a person in the business of selling cooperative interests for his own account, who, by means of a disposition, acquires or contracts to acquire a cooperative interest other than as security for an obligation.

"Real estate." Any fee, leasehold or other estate or interest in, over or under land, including structures, fixtures and other improvements and interests which by custom, usage or law pass with a conveyance of land though not described in the contract of sale or instrument of conveyance. The term includes parcels with or without upper or lower boundaries and spaces that may be filled with air or water.

"Residential purposes." Use for dwelling or recreational purposes or both.

"Residential tenant" or "residential subtenant." A tenant or subtenant, respectively, who is a natural person lawfully occupying real estate for residential use.

"Security interest." An interest in real or personal property created by contract or conveyance which secures payment or performance of an obligation. The term includes a mortgage, deed of trust, trust deed, security deed, contract for deed, land sales contract, lease intended as security, security agreement, assignment of lease or rents intended as security, pledge of an ownership interest in an association and any other consensual lien or title retention contract intended as security for an obligation.

"Special declarant rights." Rights reserved for the benefit of a declarant to:

(1) Complete improvements described in the public offering statement (section 4403(a)(2)).

(2) Exercise any development right (section 4209).

(3) Maintain sales offices, management offices, signs advertising the cooperative and models (section 4214).

(4) Use easements through the common elements for the purpose of making improvements within the cooperative or within real estate which may be added to the cooperative (section 4215).

(5) Make the cooperative part of a larger cooperative or group of cooperatives (section 4220).

(6) Make the cooperative subject to a master association (section 4219).

(7) Appoint or remove any officer of the association or any master association or any executive board member during any period of declarant control (section 4303(d)).

"Time share." A right to occupy a unit or any of several units during five or more separated time periods over a period of at least five years, including renewal options, whether or not coupled with an estate or interest in a cooperative or a specified portion thereof.

"Unit." A physical portion of the cooperative designated for separate occupancy under a proprietary lease.

(May 4, 2018, P.L.96, No.17, eff. 60 days)

2018 Amendment. Act 17 added the defs. of "alternative dispute resolution" and "proprietary lessee in good standing."

Cross References. Section 4103 is referred to in sections 4102, 4205, 4304, 7302 of this title; section 8401 of Title 53 (Municipalities Generally).