Real Estate Tax Sales The Upset Sale
Upset Sale: The Initial Tax Sale
The municipal taxing districts “return" to the tax claim bureau all tax accounts that remain unpaid at the end of the year on or before April 30 of the following year.
Notice of Sale: Service 72 P.S. 5860.308; 5860.602; 72 P.S. 5860.607a
a. By July 31 of that following year, the TCB sends a notice to the owner by certified mail, return receipt.
(1.)Only one notice required to be sent to husband and wife although both are in title.
(2.) If letter is returned, property is to be posted.
b. The sale is held in September of the year following the first notice and the TCB is required to give the following additional notices:
30 day notice: publication in 2 newspapers and 1 legal journal; mailing certified mail, return receipt. Notice to each of husband and wife required.
10 day notice if property is owner occupied or if thirty day notice is returned:
i. personal service. Query service on each of husband and wife? (See, Teslovich v. Johnson, 486 Pa. 622 (1979))
(3.) TCB has a duty to maintain records of attempted service.
(4.) Section 7101 defines “owner" as “the person or persons in whose name the property is registered, if registered according to law, and, in all other cases, means any person or persons in open, peaceable and notorious possession of the property, as apparent owner or owners thereof, if any, or the reputed owner or owners thereof in the neighborhood of such property." account; nonetheless, the Commonwealth Court has held that in localities where deed registration is not required, the record owner is the "owner" for purposes of satisfying the procedural requirements for collecting municipal claims. Borough of Towanda v. Brannaka, 434 A.2d 889, 61 Pa.Cmwlth. 622 (Pa.Cmwlth. 1981). Compare Spramelli v. Borough of Punxsutawney, 102 Pa.Super. 557, 157 A. 522 (1931), in which the court held that, “registered owner" does not mean “owner of record," and applies only to towns having system for title registration.
(a). Vendor and vendee of property held to be "owners." Borough of Towanda v. Brannaka, 61 Pa.Cmwlth. 622, 434 A.2d 889 (1981).
(b). Where there is no registered owner or occupier of the premises, the record owner is entitled to notice. Ibid.
a. Usually conducted by the Tax Claim Bureau. Access to the room in some counties is limited.
b. Upset sale: minimum price is outstanding taxes and costs of sale.
c. All other liens remain.
After sale, notice of sale to owner (certified mail return receipt) within 30 days.
60 days after sale, return to Common Pleas for decree nisi.
Decree final after 30 days objection period.
a. Statutory limitation on the filing of objections to the sale not applicable to notice issues. 72 P.S. 5860.607(g)
b. No limitation for Constitutional issues regarding lack of due process, particularly failure of service and thus in personam jurisdiction. Laches has been held to be applicable in certain cases.
- Setting Aside Upset Sales
a. The notice provisions are strictly construed to guard against deprivation of property without due process of law. See In re Upset Sale, Tax Claims Bureau of Montgomery County, 204 Pa.Super. 409, 205 A.2d 104, (1964). The tax claim bureau must make reasonable efforts to locate, for notification purposes, any landowner whose property has been exposed for tax sale. See Rinier v. Tax Claim Bureau of Delaware County, 146 Pa.Cmwlth. 568, 606 A.2d 635 (1992). The tax claim bureau must make reasonable efforts to locate, for notification purposes, any landowner whose property has been exposed for tax sale. See Rinier v. Tax Claim Bureau of Delaware County, 146 Pa.Cmwlth. 568, 606 A.2d 635 (1992). For the most recent United States Supreme Court view on this subject, see, Jones v. Flowers, 126 S.Ct. 1708 (2006).
b. After the owner files his petition alleging lack of service, the burden falls on the TCB to prove that its service was effective or that it had done all that it was required to do. Fernandez v. Tax Claim Bureau of Northampton County, 925 A.2d 207 (Pa.Cmwlth. 2007).
i. Incompetence of the taxpayer may be another reason to have the sale upset, so that a guardian can be appointed to protect the incompetent’s interest. See, Glyder Realty Corp. Appeal, 75 Pa.Cmwlth. 108, 461 A.2d 1329 (1983).See, Glyder Realty Corp. Appeal, 75 Pa.Cmwlth. 108, 461 A.2d 1329 (1983).
c. Standing to challenge the sale. For years it has been clear that the buyer at an upset sale may not come in to challenge a sale. Likewise, where an owner of the property at the time of the sale, later conveys (or quit claims) his or her interest in the property, the former owner has no standing. Recently in Oris v. Fongsue, 964 A.2d 506, appeal denied 981 A.2d 221 (Pa. 2009) the Court held the Grantee in the deed from the owner, who was equitable owner at the time of the sale, is also incompetent to challenge the sale. The Court thus created a factual pattern where even though the sale did not comply with RETSL, there is no party able to right the wrong. While this decision is in the category of un-reported decisions, it was unsuccessfully appealed to the Supreme Court.
- Divesture of Junior Lien Holders. The RETSL has no requirement that notice of an upset sale be given to third party lienholders and, consequently, does not divest any claims not included in the upset price. 72 P.S. §§5860.602 and 5860.609;