October 17th, 2022

What Can Happen If I Don’t Pay My Property Taxes?

As they say, nothing in life is certain but death and taxes. For many Pennsylvania homeowners, mortgage payments and real estate taxes are among the highest household expenses. Therefore, it is fairly common for the homeowner to get behind on paying their property taxes. What is not as common is the homeowner getting so far in arrears (2 years) that the County in which they live proceeds with a tax sale of the home and property. Yes, if you fall behind on your taxes, your home could be subject to a tax sale. In Pennsylvania, this is known as an Upset Tax Sale.

How it Works:

Each Pennsylvania county has a County Tax Claim Bureau. For example, in the Lehigh Valley, we have the Northampton County and Lehigh County Tax Claim Bureaus. Once a year, the County conducts an Upset Sale which is the first sale at which a delinquent taxpayer’s property may be sold. Potential buyers will be responsible for paying any liens or other encumbrances. Plus, there are no guarantees on the property – they are sold as is.

However, the County has obligations before proceeding with an Upset Sale. Failure on the County’s part to meet all its obligations could result in a void of the sale. The County’s obligations include, among other things:

  1. The owner-occupier must receive written notice of the sale at least ten days prior to the date of the actual sale. This notice must be delivered in person by the sheriff or his deputy.
  2. Notice of any scheduled Upset Sale must be sent to the owner-occupier at least 30 days before the date of the sale. This notice must be sent by United States certified mail with restricted delivery, return receipt requested, and postage prepaid.
  3. If the owner does not return or fails to acknowledge receipt of the notice (#2 above) at least ten days prior to the sale date, the County must send another, similar notice. This second notice can be sent by United States first class mail, with proof of the mailing, to the last known address of the owner.
  4. The County must use all reasonable efforts to locate the owner-occupier if both mailed notices are not returned with the requisite signatures.

Again, failure to meet these obligations could nullify the sale of the property.

For the Buyer:

For those interested in buying a property in an Upset Tax sale, there are several requirements. First, potential bidders must register and pay a bidder’s fee with the County. At registration, they also must provide a Notarized Affidavit of Bidder-Upset Sale. As previously mentioned, successful bidders will be on the hook for liens or other encumbrances on the property. The winning bidder is also responsible for transfer taxes and fees. Additionally, bidders cannot get access to the property before the sale. Therefore, it is important to do as much due diligence as possible before the sale. Remember, there are no guarantees or warranties on the condition of the property.

Get Help:

Whether your house has been designated for an Upset Sale or you are interested in becoming a bidder, it is wise to seek legal counsel. For the homeowner, a lawyer can help determine if the County properly followed the law. For the potential buyer, an attorney can help with the due diligence and deal with any lien issues.

So, please call us if you need help or have any questions about your real estate taxes.

The content found in this resource is for informational reference use only and is not considered legal advice. Laws at all levels of government change frequently and the information found here may be or become outdated. It is recommended to consult your attorney for the most up-to-date information regarding current laws and legal matters.