Mike is an attorney in Obermayer’s Business & Finance Department. He has a transactional practice focusing on banking (public and private financing) and real estate matters, as well as corporate formation and...Read More by Author
There’s No Problem with “Paper Streets” that Time Can’t Solve
Unfortunately, it’s a tale as old as time. Picture this, you find a beautiful piece of land that you can develop profitably for years to come. You engage architects and engineers to bring your vision to life. You want to close on the property, but then it happens: your hired professionals unexpectedly tell you that you are going to have a significant challenge redeveloping the property as you had envisioned because there is a “paper street” running through it. Now what? Depending on the facts and circumstances, it may not be as bad as it sounds.
The Pennsylvania Borough Code (“Code”) grants boroughs throughout the Commonwealth of Pennsylvania the right to “lay out, open, widen, straighten, alter, extend and improve” streets within the borough’s limits¹. In Pennsylvania, there are four (4) ways a borough may create a street under the Code. The pertinent one with respect to “paper streets” is if the street or portion of the street appears on a formally adopted borough plan or map.
A “paper street” is a term of art given to those streets or alleyways that have been laid out on officially adopted plans or maps, but have never been improved or opened by the borough. As such, the street appears only on the recorded paper plan; hence the “paper street” reference. In reality, instead of being an improved street used for ingress or egress, these “paper streets” are usually wooded or undeveloped pieces of your or your neighbor’s property that have remained unimproved since they appear on a recorded plan as a street. Even though these streets have been laid out on recorded plans the likelihood is that they will never be improved.
Fortunately, the Code provides guidance on extinguishing “paper streets” so you may be able to reclaim your property and develop it in accordance with applicable zoning and land development restrictions. Under the Code, there are two methods to reclaim your property which depends on: (i) if the street remains unopened after ten (10) years; or (ii) if the street remains unopened after twenty-one (21) years.
If the street is laid out but remains unopened for a period of at least ten (10) years, the owner of at least fifty percent (50%) of the front feet of the land over which the street or portion of the street is laid out on has the right to petition borough council to have the street disregarded. Upon receipt of the petition, the Code requires the council to properly advertise a public hearing notifying the community of a public hearing to consider canceling the street. It is important to note that in addition to a general public advertisement done in a newspaper, the Code requires at least fifteen (15) days’ advance personal notice to the owners of any land abutting the street or portion of the street which cancellation is being requested. After appropriate notice is given, the borough council will hold a public hearing and determine whether or not to cancel the street, and once all appeals by the aggrieved parties are exhausted, if the requesting party is successful, the council will pass an ordinance providing for the cancellation of the street. It is also important to note that the enacted ordinance must be promptly recorded in the recorder of deeds office to officially cancel the street and reclaim your development rights.
If a street is laid out but remains unopened for a period of at least twenty-one (21) years, the Code prohibits the street from being opened without: (i) the consent of at least fifty-one (51%) of the number of property owners of the abutting land; and (ii) the consent of at least fifty-one (51%) of the property owners of property abutting the street, as determined based on a front foot basis. Generally the property owners abutting the land and the property owners abutting the street are the same.
Furthermore, common law dictates that when a municipality fails to open a paper street appearing on a recorded plan for a period of at least twenty-one (21) years, the municipality has effectively abandoned its rights to the street.² Accordingly, if the property owners abutting the street and the land do not agree to re-open the dormant unimproved street, the borough abandons its rights (and title) to the street. When a “paper street” is abandoned, ownership will either revert to the property owners³ or an easement will be created for the benefit of the public over the “paper street.”4 Unfortunately, as the court in Ferko v. Spisak noted, there is no one rule as to what happens to title in the “paper street” upon abandonment.5 Instead, we must look at the totality of the facts involving the abandonment, dating back to how the “paper street” was created and who created it. There is no one size fits all approach.
Please note that this blog post provides general information regarding “paper streets” in Pennsylvania. If you own or are interested in purchasing a property which has an unimproved roadway or alleyway on it, it is important to reach out to a member of our team so we can provide more specific advice based on the facts and circumstances relating to your property. Additionally, as mentioned above, determining the title to abandoned “paper streets” depends on specific circumstances in the original recorded documents. As such, the information on that subject matter is merely an overview and cannot be applied to your specific set of facts without additional information.
For “paper street” questions and concerns, please contact Michael Thom.
¹ Pennsylvania Borough Code Act 37 of 2014/Title 8 of the Pennsylvania Consolidated Statutes