Pocono Springs Civic Association Inc., v. MacKenzie

667 A.2d 233 (1995)

• MacKenzie bought a vacant lot in the Pocono Springs subdivision. They never built on the land for over twenty years.
• Eventually, they attempted to sell the land, but there were soil problems and the sale fell apart.
• There was no way to build a sewer or septic tank on the land.
• MacKenzie got tired of paying the homeowners' association fees on a piece of property that they felt was worthless and had no use for. So they declared the land abandoned and stopped paying fees. Pocono Springs sued.
• MacKenzie had not visited the property for years and attempted to give the land to Pocono Springs, but they refused to accept.
• MacKenzie stopped paying real-estate taxes on the land and the local tax board attempted to auction the property off, but no one would buy it.
• The Trial Court found for Pocono Springs in summary judgment. MacKenzie appealed.
• The Trial Court ruled that abandonment is not a valid defense in this case.
• The Appellate Court affirmed.
• The Appellate Court found that MacKenzie remained the owner of the property in fee simple with perfect title.
• Even the MacKenzie's admitted that there was no way under Pennsylvania law to legal abandon a property owned in perfect title.
• Fee simple means that you own the land completely, and can transfer or sell it to anyone you like, or let your heirs inherit it. There are no restrictions to your ownership.
• In the olden days the King used to give out land to people, but required that they take certain actions to maintain ownership of it (like fight in the King's wars). But land owned in fee simple didn't have any requirements.
• A perfect title is a title that is free of liens and legal questions as to ownership of the property.
• Preseault v. United States said that you can abandon an easement.
• The State has a vested interest in maintaining an owner for the property.
• The State needs to collect property taxes for civic means, and they need someone to blame if there is a tort claim when someone hurts themselves on the property.
• MacKenzie was probably going about this the wrong way. Under Restatement of Property, there are ways to get a covenant terminated if the obligations to pay fees for services becomes excessive or unconscionable. MacKenzie should have argued to get the covenant terminated, not abandon the property.
• Of course Restatement of Property also says that you can't use that excuse to get out of covenants involving common interest communities (like this one).
• Another thing that MacKenzie could have done was to create a corporation, and then transfer the property to the corporation. Since the corporation has no assets, and debts of the corporation are not transferable to its shareholders (aka MacKenzie), Pocono Springs would have no one they could recover from.
• This is why you want to hire a good lawyer. They think of things like this.