PRINTER'S NO. 2243
No. 1745 Session of 1983
INTRODUCED BY ITKIN, IRVIS, PISTELLA, CESSAR, McVERRY, OLASZ,
PRESTON, SEVENTY, PETRONE, POTT AND DAWIDA, DECEMBER 5, 1983
REFERRED TO COMMITTEE ON URBAN AFFAIRS, DECEMBER 5, 1983
AN ACT
1 Establishing a system for the collection of municipal liens and
2 tax claims in cities of the second class through the sale of
3 real property encumbered by such liens and claims; abolishing
4 the office of solicitor for liens for delinquent taxes,
5 rates, claims and charges in cities of the second class;
6 authorizing the treasurer to conduct treasurer's sales and
7 granting the treasurer certain powers in connection
8 therewith; providing a structure for the conduct of the sale;
9 setting up a system whereby the properties at treasurer's
10 sale are acquired, administered, maintained and resold for
11 the benefit of cojurisdictional taxing bodies; providing for
12 the redemption of the property within 90 days of sale;
13 providing a means for establishing title to real property
14 taken at treasurer's sale; providing for cooperation among
15 cojurisdictional taxing bodies; and preserving rights not
16 specifically repealed.
17 TABLE OF CONTENTS
18 Chapter 1. Preliminary Provisions
19 Section 101. Short title.
20 Section 102. Definitions.
21 Chapter 2. Procedure Prior to Treasurer's Sale
22 Section 201. Authorization and time of treasurer's sale.
23 Section 202. Lien of claims.
24 Section 203. Notice.
1 Section 204. Advertisement and posting.
2 Section 205. Costs of notice.
3 Section 206. Authorization to remove from sale.
4 Section 207. Agreement to stay sale.
5 Chapter 3. Treasurer's Sale Procedure
6 Section 301. Sale or upset price.
7 Section 302. Payment by purchaser.
8 Section 303. Appeal.
9 Section 304. Redemption.
10 Section 305. Report and confirmation of sale.
11 Section 306. Excess over upset price.
12 Section 307. Deed to purchaser.
13 Chapter 4. Management of Property Acquired by City at
14 Treasurer's Sale
15 Section 401. Title in city.
16 Section 402. Agency established.
17 Section 403. Operation of agency.
18 Section 404. Distribution.
19 Section 405. Action to quiet title.
20 Chapter 5. Private Sale of Property Taken by City at
21 Treasurer's Sale
22 Section 501. Authorization.
23 Section 502. Resale to former owners.
24 Section 503. Issuance of deed.
25 Section 504. Income during agency.
26 Chapter 6. Miscellaneous Provisions
27 Section 601. Regulations.
28 Section 602. Savings clause.
29 Section 603. Severability.
30 Section 604. Repeals.
19830H1745B2243 - 2 -
1 Section 605. Abolition of office.
2 Section 606. Effective date.
3 The General Assembly of the Commonwealth of Pennsylvania
4 hereby enacts as follows:
5 CHAPTER 1
6 PRELIMINARY PROVISIONS
7 Section 101. Short title.
8 This act shall be known and may be cited as the Second Class
9 City Treasurer's Sale and Collection Act.
10 Section 102. Definitions.
11 The following words and phrases when used in this act shall
12 have the meanings given to them in this section unless the
13 context clearly indicates otherwise:
14 "Claim." The charge against real property, liened or
15 unliened, held by a taxing body on account of delinquent real
16 estate taxes, water rates, sewage charges, municipal
17 assessments, municipal judgments, demolition liens or other
18 amount due to a taxing body under the act of May 16, 1923
19 (P.L.207, No.153), referred to as the Municipal Claim and Tax
20 Lien Law, together with accrued interest, penalty and costs of
21 collection; a tax claim of the cojurisdictional taxing bodies
22 for delinquent real estate taxes, water charges and sewage
23 rates, liened or unliened.
24 "Expenses." Amounts incurred in the acquisition,
25 administration, maintenance and disposition of property involved
26 in the treasurer's sales.
27 "Interested party." A person who has an interest of record
28 in the property.
29 "Property." Land and structures existing on it, including
30 mobile homes or house trailers permanently attached to the land
19830H1745B2243 - 3 -
1 or connected to it by water, gas, electricity or sewage
2 facilities, located in a city of the second class which is
3 subject to a tax lien, either inchoate or of record, or a
4 municipal claim.
5 "Taxes." The levies imposed on real property located in a
6 city of the second class by a taxing body and water rates and
7 sewage service charges assessed against the property. The term
8 includes accrued penalty and interest which shall be considered
9 part of the tax and collectible as such. Sewage service charges
10 include delinquencies assigned to cities of the second class for
11 which the city is liable for collection.
12 "Taxing bodies." A city of the second class, a school
13 district of the first class A and the county in which they are
14 located.
15 "Taxpayer." A party who pays the taxes, water rates or
16 sewage service charges attributable to a property.
17 "Treasurer." A fiscal officer of the city who has
18 responsibility for the administration of tax laws and who has
19 the authority to collect taxes or agents of the treasurer or
20 director of finance.
21 CHAPTER 2
22 PROCEDURE PRIOR TO TREASURER'S SALE
23 Section 201. Authorization and time of treasurer's sale.
24 In addition to the remedies now provided by law for the
25 collection of delinquent taxes, water rates and sewage service
26 charges or other municipal claims and liens, the treasurer of a
27 city of the second class is authorized to sell at public sale
28 property upon which the assessed and levied taxes or other
29 municipal claims and liens have not been paid and have become
30 delinquent. The treasurer shall schedule dates for the sale of
19830H1745B2243 - 4 -
1 properties.
2 Section 202. Lien of claims.
3 Tax claims, including water rates and sewage service charges,
4 shall be a first lien against the property from the date when
5 they first become due and shall have priority over any other
6 claim against the property including mortgages, judgment claims,
7 liens or other obligations with which the property may have or
8 shall become charged. The only exceptions are costs taxed as
9 part of the sale under this act and those tax liens of the
10 Commonwealth which have priority over local tax liens under
11 existing statutes.
12 Section 203. Notice.
13 (a) System.--The treasurer shall establish a system of
14 effecting notice to interested parties. The procedure shall be
15 reasonably calculated under the circumstances to apprise the
16 interested parties of the pendency of the sale and to afford
17 parties the opportunity to defend their interests in the
18 property.
19 (b) Service.--Service of written notice made by certified
20 mail is complete when the notice is mailed. If the notice is not
21 delivered or claimed, delivery is refused, the return receipt is
22 not executed or the treasurer fails to receive information from
23 the post office respecting the notice before the date fixed for
24 sale, the validity of the service shall not be impaired and the
25 sale shall proceed at the time fixed by the notice. Information
26 or material received by the treasurer from the post office
27 respecting the notice, whether before or after the sale, shall
28 be included in the treasurer's report filed with the court under
29 section 306.
30 (c) Challenge.--A challenge by an owner to the inclusion of
19830H1745B2243 - 5 -
1 a property in the sale shall be taken by the owner within ten
2 days after service of written notice by filing a verified
3 objection in writing with the treasurer.
4 (d) Effect of notice.--No sale may be set aside and no title
5 to property sold may be invalidated if notice was given under
6 this section.
7 Section 204. Advertisement and posting.
8 (a) Advertisement.--The treasurer shall advertise those
9 properties which the treasurer intends to sell. The
10 advertisement, which shall contain only a general description of
11 the property, shall be made once a week for two successive weeks
12 prior to the date set for sale in a newspaper of general
13 circulation and in the legal newspaper printed and published in
14 the city.
15 (b) Posting.--The treasurer shall also post a notice stating
16 that the property will be sold at treasurer's sale for
17 delinquent claims in a conspicuous place on, in front of or
18 contiguous to each parcel of land advertised for sale, at least
19 ten days prior to the day of sale. The posted notice shall
20 contain the following information: the date, time and place at
21 which the property shall be sold and a telephone number or
22 address at which the owner can obtain additional information.
23 Posting of similar information shall also occur at the offices
24 of the treasurer.
25 (c) Failure.--Failure to advertise or post the property
26 shall not set aside a sale if the owner has received notice by
27 other means.
28 Section 205. Costs of notice.
29 The expense of advertisements, posting and notices, including
30 search abstract costs, shall be taxed as part of the costs of
19830H1745B2243 - 6 -
1 the sale and shall be paid by the owner, redeemer or purchaser
2 of the property in the same manner as other costs of sale.
3 Section 206. Authorization to remove from sale.
4 The treasurer may establish regulations concerning the
5 removal of property from the sale prior to the date scheduled.
6 Section 207. Agreement to stay sale.
7 Prior to the date of sale, an owner or interested party may
8 petition the treasurer to enter into a written agreement to stay
9 the sale of the property. If the treasurer finds the execution
10 of the agreement to be in the best interests of the taxing
11 bodies, the treasurer may draw up an agreement which will
12 specify the amount due on claims entered against the property;
13 the interest, penalty and costs of the proceeding to date; and a
14 schedule of payments. The agreement may also include a
15 confession of judgment which includes an amount for attorneys'
16 fees. A down payment must be made prior to execution of the
17 agreement. The existence of an agreement shall not stay the
18 accrual of additional penalty and interest on the balance
19 remaining to be paid. So long as the taxpayer or other
20 interested party complies with the agreement, the sale of the
21 property covered by the agreement shall be stayed. In the case
22 of a breach of the agreement by the owner or other interested
23 party, the treasurer, in addition to any other remedy available
24 under this act or under any other law, may give written notice
25 of default by first class mail to the owner or interested party
26 at the address set forth in the agreement and may place the
27 property in the next treasurer's sale.
28 CHAPTER 3
29 TREASURER'S SALE PROCEDURE
30 Section 301. Sale or upset price.
19830H1745B2243 - 7 -
1 The treasurer shall fix a minimum price on each property
2 under which no bid shall be accepted. This minimum price shall
3 be sufficient to pay the delinquent taxes, liened and unliened;
4 water rents; sewage service charges; and other municipal claims.
5 Calculation of additional amounts due for other municipal claims
6 and liens, penalties, interest, lien costs and costs of sale
7 will be completed within 30 days and transmitted by the
8 treasurer to the purchaser for payment within 30 days from the
9 date of the treasurer's bill.
10 Section 302. Payment by purchaser.
11 As soon as the property is sold at the treasurer's sale, the
12 purchaser shall pay to the treasurer the full amount of the
13 successful bid. Before delivery of the deed, the treasurer shall
14 require payment of other charges of the taxing bodies set forth
15 in section 301. Failure to pay these additional amounts within
16 the 30 days following the treasurer's bill shall invalidate the
17 sale, and the purchaser shall forfeit the minimum price already
18 paid to the city.
19 Section 303. Appeal.
20 (a) Filing.--An interested party whose vested right in
21 property is adversely affected by the treasurer's sale may have
22 30 days in which to file an appeal with the court of common
23 pleas contesting the regularity of the sale procedure. Service
24 of the appeal shall be made on the treasurer simultaneously with
25 the filing of the appeal.
26 (b) Issues.--The appeal may question only the regularity of
27 the proceedings of the treasurer's sale. It may not raise the
28 legality of the taxes or the correctness of the amount of the
29 claims for which the property was sold.
30 (c) Time limits.--A hearing on the appeal shall be held
19830H1745B2243 - 8 -
1 within 20 days after its filing. Within ten days of the hearing,
2 the court shall enter an order either upholding the regularity
3 of the sale or requiring the property to be listed for the next
4 treasurer's sale.
5 Section 304. Redemption.
6 (a) Right.--Within 90 days after the date of the treasurer's
7 sale, the owner or a person legally entitled to the property
8 through the owner or an interested party or person legally
9 entitled to the property through the interested party may redeem
10 the property by payment of the full amount of the claims for
11 which the property was sold, costs of sale, costs of
12 improvements made to the property and current charges and
13 municipal claims against the property.
14 (b) Cost of divestiture.--If the property had been purchased
15 at the sale, the redeemer must also pay an additional 15% of the
16 total purchase price to be paid over by the city to the divested
17 purchaser.
18 Section 305. Report and confirmation of sale.
19 (a) Report.--Not less than 90 days after treasurer's sale,
20 the treasurer shall present a report the court of common pleas
21 of the county in which the sale was made setting forth as to
22 each property sold and not rescheduled for sale information
23 required to indicate the regularity of the sale.
24 (b) Confirmation.--On the presentation of the report, if it
25 appears to the court that the sale has been properly conducted
26 under this act, the report and the sales shall be confirmed.
27 (c) Sale below minimum price.--The report shall list
28 separately those properties for which the minimum price was not
29 met. This portion of the report shall set forth that:
30 (1) Properties which may have been retained by the city
19830H1745B2243 - 9 -
1 as agent for coexisting taxing bodies may be put up for
2 private sale under Chapter 5 or held for public purposes.
3 (2) Properties which the city has retained as agent
4 shall be the subject of a petition to the court to clear
5 title in favor of the city under section 406, if necessary.
6 (d) Finality.--After the court has issued its order of
7 confirmation, there shall be no right to challenge the sale or
8 the transfer of title judicially, in law or in equity, by the
9 person in whose name the property was sold; the person's heirs,
10 grantees or assigns; or an interested party or anyone claiming
11 through an interested party. If the period of redemption has
12 expired, the city may convey the property to a purchaser free of
13 liens.
14 Section 306. Excess over upset price.
15 If the amount paid for the property by the purchaser is
16 greater than the total of claims and costs which gave rise to
17 the sale of the property, after the order of confirmation has
18 been entered by the court, the excess shall be held for the
19 person who owned the property just prior to the treasurer's
20 sale, that person's heirs, assigns or other legal representative
21 or lien holders of record at time of treasurer's sale. If a
22 properly qualified party fails to make a written and verified
23 demand to the treasurer within two years from the date of the
24 sale, the treasurer shall cause the excess to be placed in the
25 agency fund established under section 403(b).
26 Section 307. Deed to purchaser.
27 (a) Delivery.--After the purchaser has paid the amount of
28 the minimum bid and all other charges set forth in section 301
29 and has complied with this act, and after the court has entered
30 an order of confirmation, the treasurer shall deliver to the
19830H1745B2243 - 10 -
1 purchaser a deed for the property purchased at treasurer's sale.
2 The deed shall be acknowledged in the court of common pleas and
3 the acknowledgment shall be entered and recorded by the
4 prothonotary of the court in the treasurer's deed book. The
5 prothonotary's charge for the service shall be paid by the
6 person receiving the deed.
7 (b) Title.--Title issued under this act shall be equivalent
8 to that acquired at sheriff's sale.
9 (c) Taxation.--Property purchased by a purchaser who
10 receives a deed from the treasurer shall be taxable in the year
11 following the purchase at treasurer's sale.
12 CHAPTER 4
13 MANAGEMENT OF PROPERTY ACQUIRED BY CITY
14 AT TREASURER'S SALE
15 Section 401. Title in city.
16 If a property has not been redeemed and has not been
17 purchased by a third party at the treasurer's sale for the upset
18 price or more, the city, at its option, may take title to the
19 property as agent for taxing bodies having claims against the
20 property. The interests of taxing bodies shall be fixed and
21 determined as of the time of the filing of the report with the
22 court. The interest of taxing bodies shall remain fixed without
23 the necessity of filing or reviving liens or otherwise
24 preserving taxes or claims.
25 Section 402. Agency established.
26 (a) Creation.--The mayor of the city shall designate an
27 agency for the acquisition, administration, maintenance and
28 disposition of property acquired by the city at treasurer's
29 sale. The city shall act as agent for taxing bodies having
30 claims against the property. Expenses of the agency shall be
19830H1745B2243 - 11 -
1 borne jointly by the taxing bodies in proportion to their
2 respective annual revenues from the disposition of these
3 properties by sale. Compensation for expenses shall be retained
4 by the city from income from the sale or rental of delinquent
5 property prior to distribution of income to the taxing bodies.
6 If income is insufficient to pay expenses of acquisition,
7 administration, maintenance and disposition, the taxing bodies
8 shall make up the deficiency.
9 (b) Action by city.--The city as agent is authorized through
10 its proper officials to do all things necessary to protect and
11 defend the taxing bodies' rights and obligations under this act.
12 Section 403. Operation of agency.
13 (a) Political subdivision.--In addition to the taxing
14 bodies, a political subdivision coexisting with the city or
15 school district may, at the city's option, subject properties
16 within its jurisdiction to treasurer's sale if it pays expenses
17 of the sale of its delinquent properties.
18 (b) Disposition of funds collected.--Money collected as a
19 result of treasurer's sales, rentals of sale property, and the
20 resale of property and the contributions from the taxing bodies
21 shall be placed in a fund for the support of the agency.
22 Section 404. Distribution.
23 (a) Disbursement.--After the expenses of the agency have
24 been met, disbursement of excess amounts not necessary to pay
25 the expenses of the agency shall be made to the taxing bodies in
26 their pro rata shares on an annual basis.
27 (b) Retained funds.--Amounts retained in the fund for
28 anticipated expenses of operation may be invested through the
29 treasurer in the same manner as city funds.
30 Section 405. Action to quiet title.
19830H1745B2243 - 12 -
1 After the sale has been confirmed, if no redemption has
2 occurred, no objection has been sustained to purchase of the
3 property by the city and the city finds that an interested party
4 did not have notice, it may file a petition with the court to
5 quiet title, in favor of the city to the property acquired at
6 treasurer's sale in favor of the city. Only those interested
7 parties who had no prior notice may appear and protect their
8 interest by paying claims and liens having priority senior to
9 their interest. Liens, including tax liens and municipal claims,
10 shall be stricken from the subject property by the order
11 granting clear title.
12 CHAPTER 5
13 PRIVATE SALE OF PROPERTY TAKEN BY
14 CITY AT TREASURER'S SALE
15 Section 501. Authorization.
16 The city may sell the title and interest it or a taxing body
17 has in property acquired at treasurer's sale, sheriff's sale, or
18 sale for nonpayment of delinquent taxes or municipal claims in
19 the same manner as if the city held sole title and interest.
20 Section 502. Resale to former owners.
21 After the period of redemption expires, the city may not
22 resell the property to its former owner.
23 Section 503. Issuance of deed.
24 When the requirements of the prior sections of this chapter
25 have been complied with, the treasurer shall deliver to the
26 purchaser, as grantee, a deed for the resold property. The deed
27 shall be acknowledged by the treasurer and entered and recorded
28 by the prothonotary in the treasurer's deed book. The property
29 shall be taxable in the year following its sale by the city.
30 Section 504. Income during agency.
19830H1745B2243 - 13 -
1 If rents are collected during the redemption period and the
2 property is redeemed under this act prior to the expiration of
3 the redemption period, the accumulated rentals shall be
4 delivered to the owner or a legal representative less any cost
5 incurred by the deposed purchaser for collection of income or
6 for improvement and maintenance of the property during the
7 period in which the purchaser was entitled to the property
8 unless the tenant of the city was the redeeming owner or his
9 lienor.
10 CHAPTER 6
11 MISCELLANEOUS PROVISIONS
12 Section 601. Regulations.
13 The treasurer is authorized to promulgate regulations to aid
14 in the administration of this act, which regulations shall have
15 the force of law.
16 Section 602. Savings clause.
17 This act does not affect rights and obligations under the
18 following statutes, except insofar as inconsistent with specific
19 provisions of this act:
20 Act of April 15, 1834 (P.L.509, No.232), entitled "An act
21 relating to county rates and levies and township rates and
22 levies."
23 Act of May 16, 1923 (P.L.207, No.153), referred to as the
24 Municipal Claim and Tax Lien Law.
25 Act of May 25, 1945 (P.L.1050, No.394), known as the Local
26 Tax Collection Law.
27 Act of July 7, 1947 (P.L.1368, No.542), known as the Real
28 Estate Tax Sale Law.
29 Section 603. Severability.
30 If any provision of this act or its application to any person
19830H1745B2243 - 14 -
1 or circumstances is held invalid, the invalidity shall not
2 affect other provisions or applications of this act which can be
3 given effect without the invalid provision or application.
4 Section 604. Repeals.
5 (a) Specific repeals.--The following acts are repealed:
6 Act of May 26, 1943 (P.L.629, No.275), entitled, as amended,
7 "An act relating to the filing and revival of liens for taxes,
8 water rates, sewer rates and other municipal claims and charges,
9 in the office of the prothonotary of common pleas court on real
10 estate within the territorial limits of cities of the second
11 class, prescribing duties and fees of prothonotaries;
12 establishing the office of solicitor for liens for delinquent
13 taxes, rates, claims and charges, defining the powers and duties
14 of said office; providing for enforced collection of said taxes,
15 rates, claims and charges; imposing duties upon cities of the
16 second class, and school districts within the territorial limits
17 of cities of the second class."
18 Act of July 5, 1947 (P.L.1258, No.514), entitled "An act
19 authorizing and empowering city treasurers of cities of the
20 second class to sell at public sale, lands or real estate upon
21 which the taxes, assessed and levied by the city or school
22 district, are delinquent and unpaid; fixing the interests of all
23 taxing authorities where such lands are purchased by the city;
24 providing for the distribution of moneys received as income from
25 or resale of such lands; and providing for a method of reselling
26 such lands purchased, by the city or by the city and school
27 district within said city, at any sale for the nonpayment of
28 taxes, free and clear of all mortgages, ground rents, interest
29 in or claims against said lands."
30 (b) General repeal.--All other acts and parts of acts are
19830H1745B2243 - 15 -
1 repealed insofar as they are inconsistent with this act.
2 Section 605. Abolition of office.
3 The office of solicitor for liens for delinquent rates,
4 claims and charges is abolished.
5 Section 606. Effective date.
6 This act shall take effect in 60 days.
J24L11VDL/19830H1745B2243 - 16 -