Argued May 8, 2015
Appealed from No. 2008-13494. Common Pleas Court of the County of Chester. Griffith, J.
Kevin M. Kelly, Berwyn, for designated appellant.
Andrew Schneider, Philadelphia, for designated appellees.
BEFORE: HONORABLE DAN PELLEGRINI, President Judge, HONORABLE P. KEVIN BROBSON, Judge, HONORABLE ANNE E. COVEY, Judge.
The Malvern Hunt Homeowners Association (Association) appeals from an order of the Court of Common Pleas of Chester County (trial court), striking certain amendments from the Association's Recorded Declaration. For the reasons stated below, we affirm in part, reverse in part, and remand for further proceedings.
A. The Dispute
The David Cutler Group (Cutler) was the developer of a planned community known as Malvern Hunt (the Development), which consists of 279 properties and was subdivided into three communities: The Reserve, The Chase, and The Ridings. The Reserve consists of 101 minimum-maintenance single-family lots, The Chase consists of 95 carriage homes, and The Ridings consists of 83 standard single-family units. Open spaces and amenities, including tennis courts and two playgrounds, are owned and maintained by the Association. William and Bette Belleville (the Bellevilles) own property in The Ridings.
Membership in the Association consists of the 196 lot owners of The Chase and The Reserve. The Bellevilles and the other 82 residents of The Ridings are excluded from membership in the Association.
Per the requirements for creating a planned community under the Uniform Planned Community Act (UPCA), Cutler filed a Declaration with the Office of the Recorder of Deeds for Chester County (Chester County Recorder of Deeds) on March 20, 2001 (the Recorded Declaration). The Recorded Declaration provided that only members of the Association ( i.e., owners in The Chase and The Reserve) received snow removal services for their sidewalks and driveways, grass-cutting services, weed treatments and mulching services. The owners in The Ridings received no services from the Association and were responsible for all aspects of their own property maintenance.
The Recorded Declaration also provided that " Single Family Lots [(The Ridings)] shall be exempt from all assessments, charges or liens" except for a $1,000 contribution at the time of conveyance. (Recorded Declaration, art. IV, § 10;  Reproduced Record (R.R.) 895a.) Furthermore, the Recorded Declaration provided that, outside of the $1,000 lump sum payment made at the time of conveyance, " [n]o other terms or provisions of Article IV [(pertaining to maintenance assessments)] shall apply" to The Ridings. (Recorded Declaration, art. XI;  R.R. 910a.) The Recorded Declaration also prohibited the Association from making amendments to the Recorded Declaration that impose any further monetary obligation on owners in The Ridings. (R.R. 907a.)
The Bellevilles purchased their home in August 2001, five months after the Recorded Declaration was recorded. The Bellevilles, however, did not receive a copy of the Recorded Declaration. Instead, Cutler provided the Bellevilles with a declaration that had not been recorded (Unrecorded Declaration), which contained different language than the Recorded Declaration. Specifically, the Unrecorded Declaration required residents of The Ridings to pay a one-time $1,000 contribution to the Association plus an annual assessment of 20% of the uniform assessment paid by the owners of The Chase and The Reserve. (Unrecorded Declaration, art. XI; Ex. P-13 at 11, 29-30.) Cutler provided the Bellevilles with a summary of the Unrecorded Declaration (Summary), which provides, in pertinent part:
1. The open space and amenities within same as depicted on the approved subdivision plan for all of [the Development], which includes the carriage houses known as The Chase at Malvern Hunt, the minimum lot maintenance single family dwelling units known as The Reserve at Malvern Hunt and the standard single family lots known as The Ridings of Malvern Hunt is available for the use and enjoyment of the owners of lots and dwelling units in all three such areas.
. . .
3. The standard Single Family Lots [(The Ridings)] are intended to be owned and enjoyed without the Association providing any services with regard to snow removal, lawn mowing or any other type of lot maintenance. In short, the standard Single Family Lots are afforded the use and enjoyment of the Common Open Space, but the owners of these lots are not members of the [Association] never to be assessed for use and enjoyment of the open space or in any other matter impacted by the operation of the Association.
4. Each standard Single Family Lot [(The Ridings)] will have contributed $1,000.00 toward the Association funds, as a one time only contribution upon settlement between the Developer and the initial buyer of each standard Single Family Lot. It shall be this sum, in concert with the percentage payment of the annual assessment as set forth hereinbelow, which will be the contribution towards use, enjoyment and maintenance of the Common Open Space, without any further financial obligation upon the standard Single Family Lots. Article XI provides that each Single Family Lot Owner shall pay a sum equal to twenty percent (20%) of the annual assessment as established by the Association and applicable to all other types of lot owners being those within The Chase at Malvern Hunt and The Reserve at Malvern Hunt, which annual sum shall be the sole financial obligation upon Single Family Lot [(The Ridings)] Owners with regard to the use, enjoyment and maintenance of the Common Open Space and Association Facilities, without any further financial obligation upon the standard Single Family Lots. Moreover, the Declaration, at Article X, Section 1, expressly prohibits any future amendments to the Declaration that could affect the rights of the standard Single Family Lot Owners or impose any financial obligation above and beyond the initial $1,000.00 contribution and the annual payment equal to twenty (20%) percent of the standard annual assessment as imposed by the Association on all other Lot Owners.
(R.R. 942-43a (emphasis in original).) In reliance on the Unrecorded Declaration provided to them, the Bellevilles paid the 20% annual assessment.
More than two years later, in October 2003, Cutler filed and recorded with the Chester County Recorder of Deeds a First Amendment to the Recorded Declaration (First Amendment) to " clarify" that property owners in The Ridings were to pay an annual 20% assessment. (R.R. 917a.) Notably, the First Amendment also, for the first time, indicates that owners in The Chase and The Reserve may be charged differing annual assessments. The Recorded Declaration and Unrecorded Declaration both state, in Article IV, Section 3, that the annual assessment " shall be fixed at a uniform rate for all Lots." (R.R. 891a; Ex. P-13 at 11.) The Bellevilles and other homeowners in the Development were not notified of the First Amendment or provided with a copy.
In 2006, the Association took control of the Development from Cutler in accordance with Article II, Section 2 of the Recorded Declaration. On August 15, 2007, the Association filed a Second Amendment to the Recorded Declaration, allegedly to cure an ambiguity as it related to a budget shortfall (Second Amendment).
On May 7, 2008, the Association recorded a Third Amendment to the Recorded Declaration, allegedly to cure an ambiguity regarding the collection of late fees, interests, costs, and attorney fees related to the non-payment of annual assessments (Third Amendment). In January 2008, the Association sent the Bellevilles an assessment notice that was calculated differently from all previous invoices. The 2008 assessment used a two-tiered format for owners in The Chase and The Reserve, and charged owners in The Ridings 20% of the higher amount. The Bellevilles disputed the calculation using the two-tiered system as unauthorized by the Declaration. The ...