59, Private Sale - Citizen Audit

The Mercer County Tax Claim Bureau posts a list of properties that are eligible for Judicial or Private tax sale.

The private sale clears tax liens and government fee arrearages but not private loan liens.

The list of properties are posted with the names of the current owners of record before the designated sale date. So, it appears then that the private sale scheduled for September 12, 2018,  has allowed for delinquent property owners to expunge their delinquency for a nominal amount.

While Pennsylvania Law makes it unlawful for a delinquent property owner to extinguish their delinquency themselves, the law is silent as to straw buyers. Why would someone buy a property at private sale given the risk that there remain other liens? Is it because they can do so for a few hundred dollars and they are willing to take the risk? Is it because they are not exposed to an open, competitive bidding process as there is at a Judicial Sale? Given that unscrupulous persons can seek the median rent of $617 a month, are they then wiling willing to go forward for the rent returns for very little money invested? Or, might a straw buyer be used because the property owner has the goal to evade taxes? The delinquent owners knows the status of private loans or mortgages and can manage those private liens through the straw buyer?

For a citizen to be aware  of a scheduled  private sale one has do a periodic search of the appropriate county legal journal published by the county bar association. http://www.palegalads.org/

The public record persons who have applied for the private sale is available at the court house. The straw buyer routine works because of the inconvenience involved for a citizen audit. Is the applicant restricted from purchase? Is the applicant likely part of a straw buyer tax evasion scheme? etc. Does the applicant have a history of building code violations? Is the applicant or has the applicant have a warrant issued for chronic code violations?

As the application process requires personal identification and address, this is an audit item of importance. Local applicants can be easily verified. The out of area, out of state applicants are a concern as they are difficult to hold accountable for code violations.

§ 5860.619. Restrictions on Purchases

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 72 P.S. Taxation and Fiscal Affairs

Purdon's Pennsylvania Statutes and Consolidated Statutes

Title 72 P.S. Taxation and Fiscal Affairs

Chapter 4. Local Taxation (Refs & Annos)

Delinquent Taxes in Counties, Cities of Third Class, Boroughs, Etc. (Refs & Annos)

Article VI. Sale of Property (Refs & Annos)

(e) Miscellaneous

72 P.S. § 5860.619

§ 5860.619. Restrictions on Purchases

Currentness

(a) Deeds for any property exposed for any sale under Subarticle (b) of Article VI of this act shall not be exchanged any sooner than twenty (20) days nor later than forty-five (45) days after any sale held under subarticle (b) of Article VI.¹

(b) A municipality may, within fifteen (15) days of any sale held under subarticle (b) of Article VI of this act, petition the court of common pleas to prohibit the transfer of any deed for any property exposed for any sale under subarticle (b) of Article VI which is located in that municipality to any purchaser who is proven to meet any of the criteria set forth in the municipality's petition.

(c)(1) The petition of the municipality shall allege that the purchaser has over the last three years preceding the filing of the petition exhibited a course of conduct which demonstrates that a purchaser permitted an uncorrected housing code violation to continue unabated after being convicted of such violation; and

(i) failed to maintain property owned by that purchaser in a reasonable manner such that it posed a threat to health, safety or property; or

(ii) permitted the use of property in an unsafe, illegal or unsanitary manner such that it posed a threat to health, safety or property.

(2) A person who acts as an agent for a purchaser who sought to avoid the limitations placed on the purchase of property by this section shall be subject to the restrictions imposed by this section.

(3) Allegations under this subsection shall be proved by a preponderance of the evidence. In ruling on the petition, a court shall consider whether violations were caused by malicious acts of a current non-owner occupant and the control exercised by a purchaser in regard to his ownership interest or rights with other properties.

(d) A change of name or business status shall not defeat the purpose of this section.

(e) As used in this section:

“Municipality,” any county, city, borough, incorporated town, township, home rule municipality, optional plan municipality, optional charter municipality or any similar general purpose unit of government which may be created or authorized by statute.

“Purchaser,” any individual, partner, limited or general partner, shareholder, trustee, beneficiary, any other individual with any ownership interest or right in a business association, sole proprietorship, partnership, limited partnership, S or C corporation, limited liability company or corporation, trust, business trust or any other business association.

“Uncorrected housing code violation,” any conviction of a violation of the local building, housing, property maintenance or fire code which is not remedied within six (6) months of conviction.

“Violation,” any conviction under a building, housing, property maintenance or fire code which posed a threat to health, safety or property, but not a conviction deemed by a court to be de minimis.

Credits

1947, July 7, P.L. 1368, No. 542, § 619, added 1998, Jan. 29, P.L. 24, No. 5, § 2, effective in 60 days.

HISTORICAL AND STATUTORY NOTES

Act 1998-5 legislation

Section 3 of Act 1998, Jan. 29, No. 5 provides that the addition of this section shall apply to all sales conducted on or after the effective date of that act.

Footnotes

1

72 P.S. § 5860.610 et seq.

72 P.S. § 5860.619, PA ST 72 P.S. § 5860.619

Current through 2018 Regular Session Acts 1 to 41, 43 to 47, 51, 52, 54, 65, 66 and 72.

§ 5860.619a. Additional restrictions

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 72 P.S. Taxation and Fiscal Affairs

Purdon's Pennsylvania Statutes and Consolidated Statutes

Title 72 P.S. Taxation and Fiscal Affairs

Chapter 4. Local Taxation (Refs & Annos)

Delinquent Taxes in Counties, Cities of Third Class, Boroughs, Etc. (Refs & Annos)

Article VI. Sale of Property (Refs & Annos)

(e) Miscellaneous

72 P.S. § 5860.619a

§ 5860.619a. Additional restrictions

Currentness

(a) Within twenty (20) days following any sale under this act, a successful bidder shall be required to provide certification to the bureau that the person is not delinquent in paying real estate taxes to any of the taxing districts where the property is located and that the person has no municipal utility bills that are more than one year outstanding.

(b) As used in this section, the following terms shall have the following meanings:

“Certification,” shall mean proof via receipts of paid real estate taxes and municipal utility bills within the jurisdiction or a notarized affidavit by the bidder evidencing payment of such real estate taxes and municipal utility bills.

“Municipal utility bills,” shall mean bills for services provided by a utility which is wholly owned and operated by a municipality or municipal authority. The term shall include, but not be limited to, water, sewer and solid waste disposal utility bills.

“Municipality,” refers to any county, city, borough, incorporated town, township, home rule municipality, optional plan municipality, optional charter municipality or any similar general purpose unit of government which may be authorized by statute.

“Person,” includes a corporation; partnership; limited liability company; business trust; other association; government entity, other than the Commonwealth; estate; trust; foundation; or natural person.

Credits

1947, July 7, P.L. 1368, No. 542, § 619.1, added 1998, Dec. 21, P.L. 1008, No. 133, § 3, effective in 60 days.

HISTORICAL AND STATUTORY NOTES

Act 1998-133 legislation

Section 4 of Act 1998-133 provides that this act shall apply to all sales conducted on or after the effective date of that act.

72 P.S. § 5860.619a, PA ST 72 P.S. § 5860.619a

Current through 2018 Regular Session Acts 1 to 41, 43 to 47, 51, 52, 54, 65, 66 and 72.