A little-noticed provision in Pennsylvania's HB2704 will reshape how investors and landlords buy residential property starting in 2028.
Most Pennsylvania real estate owners and property managers haven't heard about a provision buried in HB2704 that will directly affect how they buy single-family homes. Starting January 1, 2028, the rule changes the timeline and process for purchasing residential property if you own a certain threshold of homes.
Under § 7604(a) in Section 5 of HB2704, any person or entity that collectively owns 10 or more single-family or low-density residential properties becomes what the law calls a "covered entity." Once you hit that threshold, you cannot simply purchase additional single-family or low-density residential properties on your normal timeline.
Instead, you must wait 90 days after publicly listing the property before you can complete a purchase. The property must be listed in a public manner during this entire waiting period.
This applies to individual investors, partnerships, limited liability companies, corporations, and any other entity structure that owns 10 or more qualifying residential properties. If you're a small landlord with 9 homes, you're not affected. If you own 10 or more—whether through direct ownership or collective ownership across related entities—the rule applies to your next purchase.
The definition of "single-family or low-density residential property" is central here, though the statute focuses on properties typically held as rental or investment properties rather than owner-occupied primary residences.
The penalties are significant. Violations carry fines up to $100,000 per violation. More importantly, if you acquire a property in violation of the waiting period requirement, the law requires forfeiture of that illegally acquired property. This isn't a slap on the wrist—it means losing the property itself.
The Department of State and the Office of Attorney General are responsible for enforcing these provisions, giving the state active oversight of covered entity purchases.
If you own or manage residential property portfolios in Pennsylvania, review your current holdings before January 1, 2028. Understand whether you currently meet or will soon meet the 10-property threshold. If you're planning acquisitions, understand how the 90-day waiting period will affect your timeline and strategy.
The waiting period is mandatory—there are no exemptions or expedited processes described in the statute. Planning purchases well in advance, understanding your entity structure, and ensuring compliance with the public-listing requirement will be essential.
This provision represents a significant shift in how Pennsylvania regulates residential property investment. It's worth understanding now, before the January 1, 2028 effective date arrives.
Source: Pennsylvania HB2704, Section 5, § 7604(a), Page 10; effective January 1, 2028.