Appeal from the Order of the Court of Common Pleas of Montgomery County, in the case of Advanced Living, Inc. v. Montgomery County Board of Assessment Appeals, No. 82-03279.
Gerald F. Glackin, for appellant.
Andrew B. Cantor, with him, Bernard A. Moore, Bert M. Goodman, R. Stephen Barrett, and Frank W. Jenkins, for appellee.
Judges MacPhail, Doyle, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge MacPhail.
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In this appeal, Advanced Living, Inc. (Appellant) challenges the denial by the Court of Common Pleas of
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Montgomery County of Appellant's request for tax-exempt status as a charitable institution. At issue is approximately thirteen acres of land on which Appellant has constructed 107 independent living units for persons with limited income who are at least 62 years of age and/or handicapped. For the reasons which follow, we affirm the denial of tax-exempt status regarding the subject property.
The facts of this matter are undisputed and were presented to the common pleas court on a case stated basis.*fn1 The facts reveal that Appellant, a non-profit corporation, was formed in 1962 as the housing development arm of the General Conference of the Schwenckfelder Church. The corporation was intended to serve as the borrower of federal funds to develop housing for the elderly or handicapped under Section 202 of the Housing Act of 1959, 12 U.S.C. § 1701q.
In 1978, Appellant entered into a regulatory agreement with the Secretary of Housing and Urban Development (HUD) which provided $3,290,400 in financing for the construction of the subject facility and for rent subsidization for the tenants of the premises after construction in accord with Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1437f. Pursuant to the agreement, Appellant is barred from charging any admission fee, founder's fee, or life care fee to prospective tenants. Though there is no minimum income required for admission to the facility, there is a maximum income eligibility requirement which limits income for single persons to $15,600 and couples to $17,850. Rental
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schedules are approved by HUD, as are eligibility criteria for admission. Appellant's annual budget is subject to HUD approval. Real estate taxes are included as a line item in determining budgetary operating expenses. Rent is subsidized by HUD to a total monthly amount of $415.00 per unit. As of April, 1984, actual payment by tenants ranged from a low $23.00 per month to a high of $346.00 per month. Appellant has never paid any portion of the rentals established by HUD.
The fact stipulation further reveals that the General Conference of the Schwenckfelder Church assisted in raising a total of $45,000 which was applied, in 1962, toward the purchase of approximately 21 acres of real estate and to enable Appellant to initiate its program. A portion of this real estate was later used for the construction of the housing units here at issue.*fn2 Member churches and individual church members provide additional contributions and render personal services to the residents of the facility. The amount of such contributions does not appear of record. The directors and officers of Appellant serve without compensation with the exception of a consultant's fee of $250.00 per month which is paid for ...