What is an upset tax sale?

Upset tax sales are the process by which Pennsylvania counties sell properties to recover unpaid real estate taxes. Upset sales occur in September each year.  The properties are sold at auction.

What are the notice requirements of the upset tax sale law?

It is well settled that the statutory notice provisions of the Commonwealth Tax Sale Law must be strictly followed. Maya v. County of Erie Tax Claim Bureau, 59 A.3d 50, 55 (Pa.Cmwlth.2013) (citations omitted)(“The statutory notice provisions in the Tax Sale Law must be strictly construed lest a person be deprived of property without due process.”) It is equally well settled that when a taxing authority fails to strictly comply with the Tax Sale Law’s notice provisions the tax sale of a property is void. Sabarese v. Tax Claim Bureau of Monroe County, 451 A.2d 793 (Pa.Cmwlth.1982).

The primary purpose of the Tax Sale Law is to ensure the collection of taxes, not to strip away a citizen’s property rights. Rice v. Compro Distributing, Inc., 901 A.2d 570, 575 (Pa. Cmwlth. 2006). Adequate notice is a prerequisite before the execution of any tax sale. Id. “The statutory notice provisions in the Tax Sale Law must be strictly construed lest a person be deprived of property without due process.” Maya v. County of Erie Tax Claim Bureau, 59 A.3d 50, 55 (Pa.Cmwlth.2013) (citations omitted); Smith v. Tax Claim Bureau of Pike County, 834 A.2d 1247, 1251 (Pa.Cmwlth.2003)(“[T]he focus is not on the alleged neglect of the owner, which is often present in some degree, but on whether the activities of the Bureau comply with the requirements of the statute.”)

The Tax Sale Law mandates that the taxing authority provide three types of notice: (1) published notice, (2) mail notice and (3) posted notice. 72 P.S. § 5860.602. For an upset sale to be valid, the County must strictly comply with all three of these statutorily prescribed notices. In re Upset Tax Sale Conducted on September 11, 2014, 2016 WL 916867, at *1 (Pa.Cmwlth. Mar. 8, 2016)(“In Pennsylvania, a valid tax sale requires strict compliance with three statutorily prescribed notice provisions: published notice, mail notice and posted notice.”) The Bureau, not the owner, bears the burden of proving compliance with the notice provisions.  Id. at *3. Additionally, the County must take additional efforts to contact an owner when mail is returned as unclaimed.  Those additional efforts “shall include, but not necessarily be restricted to, a search of current telephone directories for the county and of the dockets and indices of the county tax assessment offices, recorder of deeds office and prothonotary’s office, as well as contacts made to any apparent alternate address or telephone number which may have been written on or in the file pertinent to such property.” 72 P.S. § 5860.607a(a)(emphasis added).

The most common mistake a County makes is not sending mailed notice restricted delivery to an owner. Regarding statutorily required mailed notice, the Tax Sale Law requires that “at least thirty (30) days before the date of the sale, by United States certified mail, restricted delivery, return receipt requested, postage prepaid, to each owner as defined by this act.” 72 P.S. § 5860.602(e)(1)(emphasis added). This requirement applies to mailed notice sent to individuals and business entities like partnerships. Terra Properties, II v. Berks Cty. Tax Claim Bureau, 92 Pa.Cmwlth. 97, 99, 498 A.2d 57, 58 (1985)(holding that the “Personal Addressee Only” requirement applies to equally to partnerships.) The cases are legion that when, as here, a tax claim bureau fails to properly notify an owner by mail a tax sale is invalid.  In Sabarese, the Commonwealth Court affirmed the trial court’s invalidation of a tax sale because the tax sale notices were not marked “personal addressee only.” Sabarese, 451 A.2d at 793. At the time, the Section 602(e)(1) of the Tax Sale Law, required notice “[a]t least thirty (30) days before the date of the sale, by United States certified mail, personal addressee only, return receipt requested, postage prepaid, to each owner as defined by this act.” Former 72 P.S. § 5860.602(e)(1)(emphasis added).8 “Although Section 602(e)’s terminology changed from ‘personal addressee only’ to ‘restricted delivery,’ USPS’s meanings have not.” In re Upset Tax Sale Conducted on September 11, 2014, 2016 WL 916867, at *4 Both services restrict who may sign for receipt of a mailing and are synonymous. Id. Likewise, in Kemler v. Lackawanna County Tax Claim Bureau, 2015 WL 5430360 (Pa.Cmwlth. 2015), the Commonwealth Court reversed the trial court and set aside a tax sale because taxing bureau, like the Bureau here, did not meet its burden of proving that it sent notice via certified mail, restricted delivery to one of the property’s owners. Finally, in Perma Coal-Sales, Inc., the Commonwealth Court overturned a decision of the trial court and directed that an upset sale be set aside where the property was owned by a corporation and mailed notice was sent to the corporations registered address but was signed for by an individual who had no apparent authority to accept mail on behalf of the corporation.  Perma Coal-Sale, Inc., 638 A.2d at 331.

How long do you have to challenge the sale?

Following the sale, the County must file a consolidated return with the court to confirm the sale. The Court will then enter an order stating that all objections to the upset tax sale must be made within thirty days of the date of the order. However, if an owner wishes to challenge a sale after that thirty day period it can request that the Court accept the petition to side aside the sale nunc pro tunc.