Are County Tax Sales Fundamentally Unjust? What happens when you lose your Residence at a County Tax Upset Sale for Unpaid County Real Estate Taxes
If you fail to timely pay your County Real Estate Taxes on your home, then you run the risk of the County subjecting your house to a tax sale by the County Tax Claim Bureau, whereby investors may bid to purchase your Residence. The successful bid, in most cases, are substantially lower than the fair market value of your Residence.
Given that County Real Estate are smaller than your School Real Estate taxes (which is an entirely different procedure that permits a redemption period of 7 months after the judicial sale to reacquire your Residence), once your home is sold at a County Tax Upset sale, you do not have any redemption rights to reacquire your house but rather must immediately file Objections to the Tax Sale to have it vacated.
For example, as my Office has seen, residents may lose their home after the mere nonpayment of one year of County Real Estate Taxes, which may be under $1,000.00. Bidders will acquire your Residence at Tax Sale subject to any liens on your home, including your mortgage. If you do not challenge the Tax Sale, the winning Bidder/Purchaser may file a Complaint in Ejectment to evict you from your Home as the new owner by Tax Sale Deed conveyed to them by the County Tax Claim Bureau after the Tax Sale.
To successfully object to the County Tax Upset Sale of your Home, the Court must find that you did not receive constitutionally valid due process notice by the County Tax Claim Bureau. A property owner’s right to notice of an impending tax sale is protected under the Due Process Clause of the 14th Amendment to the U.S. Constitution. Rice v. Compro Distributing, Inc., 901 A.2d 570, 574 (Pa. Cmwlth. 2006).
Real Estate Tax Sale Law (“RETSL”), 72 P.S. §§ 5860.101 – 5860.803 provides that there are three (3) forms of notice required under 72 P.S. Section 5860.602 before a delinquent taxpayer’s real estate may be sold for unpaid taxes, namely: (a) by publication, (b) posting, and (c) certified mail.
Owner-occupied properties (your primary residence) are provided an additional protection to ensure actual notice of the impending sale. McKelvey v. Westmorland County Tax Claim Bureau, 983 A.2d 1271, 1273 (Pa. Commw. Ct. 2009). Specifically, the Tax Sale Law provides that an owner-occupied property cannot be sold unless the owner has been personally served with written notice of the sale at least ten (10) days prior to the date of the actual sale. 72 P.S. § 5860.601(a)(3). This is typically personally served on the taxpayer by a Sheriff’s deputy.
In recent case my Office successfully appealed to the Commonwealth Court after the Trial Court denied the Resident’s Objections to the Tax Sale to have it undone, the Appellate Court found that Tax Claim Bureau failed to strictly comply with the Real Estate Tax Sale Law (“RETSL”). A failure to comply with each and every statutory requirement will nullify a tax upset sale. Moreno v. Schuylkill County Tax Claim Bureau, 314 A.3d 943 (PA Super. Feb 6, 2024) (Section 5860.602(e)(1) requires “at least thirty (30) days before the date of the sale, by United States certified mail, restricted delivery, return receipt requested, postage prepaid”). In the Moreno case, the Tax Claim Bureau only sent a certified mailing receipt to the taxpayer and was signed by the taxpayer’s ex-girlfriend. No additional efforts were made by the Tax Claim Bureau to locate the taxpayer to ensure actual notice of the sale being served. Thus, the Appellant Court reversed the Trial Court and vacated the Tax Sale.
Generally speaking, RESTL is for the collection of taxes and is not intended to create investment opportunities for others, or to strip taxpayers of their properties. In re Sale of Tax Delinquent Prop., 308 A.3d 890, 896-98 (Pa. Cmwlth. 2024) (“Our Supreme Court has said that tax sale laws were never meant to punish taxpayers who omitted through oversight or error (from which the best of use are never exempt) to pay their taxes”).
However, if your home is sold at tax sale, this comes at great shock and horror to the homeowner and you may feel that the legal system is set up against you. This is especially true if you paid off your home, have retired, and inadvertently lost your home at tax sale for nominal value.
Many times, the Purchaser of your home at tax sale will show up at your home after the sale to try to convince you to strike a deal with him or her. This may include a request to sign a rent-to-own agreement to prevent an eviction action being filed against you, a request that you pay them the equity in your home based upon its fair market value to re-deed the home back to you, and/or a request to sign a quitclaim deed in purchaser’s favor along with a lease agreement to stay in your residence. A purchaser may also threaten to drive up your legal costs and make it difficult for you if seek to challenge the tax sale to have it vacated.
A purchaser at tax sale cannot evict you without legal process of the law. This requires a Complaint in Ejectment to be filed against you in the County Courthouse in which you would have an opportunity to defend.
It is important that you consult an attorney immediately if you home is sold at sheriff’s sale, as you need to take immediate action to regain the title of your home.
Also, if you are delinquent in your taxes, you may also be able to file a Chapter 13 Bankruptcy to catch up on your past due arrears before your home is subjected to a tax sale.
Before the tax sale of your home, by statute, pursuant to 72 P.S. § 5860.603, any owner may, prior to the actual sale, enter into an agreement with the bureau to stay the sale of the property upon payment of 25% of the amount due on all tax claims, and agreeing therein to pay the balance of said claims in not more than three (3) installments all within 1 year of the agreement.
After your property is sold at tax sale, then you must file objections to vacate the tax sale as the state of Pennsylvania law says you lost the title to your home once the gavel falls to the highest bidder at the tax sale auction of your home.
Contact Us for Legal Help
For help with an impending tax sale for unpaid county real estate taxes, or if your home was already sold at tax sale, contact our Lehighton & Carbon County attorney at Adam R. Weaver, Esq. immediately to review your options.
