By: Michael G. Louis, Esquire
Over the last year I have been hard at work on “tax sales”.
I have been able to save six people’s homes from tax sale, exercise the right to redeem someone’s home that was sold at sheriff’s sale for taxes, and overturned a private sale of someone’s home. In addition, I was able to settle the sale of a million dollar commercial property that had been sold at tax sale.
In an upset tax sale, the party buying the property at tax sale buys it under and subject to all existing liens that are on the property. Therefore, most properties that are sold at tax sale have no liens on them. That is why they are so difficult for the homeowners who have worked their whole life to buy their property and pay it off over time only to lose it for pennies on the dollar at tax sale. That is why I am working hard to help people save their properties from tax sale.
I am also currently advising a purchaser at tax sale that did not realize there was a mortgage on the property and now owns it under and subject to the mortgage.
There is another kind of sale where the taxing authority, rather than going through the tax claim bureau to do the tax sale, has an attorney such as Portnoff & Associates, file an action for the taxes and obtains a judgment and then takes the property to sheriff’s sale. The good thing about someone who loses their property at sheriff’s sale for their taxes is that they have nine months after the deed is recorded to redeem the property by paying back the purchaser what they bid at sheriff’s sale plus 10% interest. They do not have to show that there was any defect with the sheriff’s sale.
If a property is not purchased at an upset tax sale it then goes to a judicial tax sale where all of the lienholders are notified. A judicial sale purchaser acquires title free and clear of liens and encumbrances. If it still isn’t sold at judicial sale then it can go to a private tax sale where anyone can come in and make a bid for the property. I just had a private tax sale overturned. The way to do that is you need to prove that the original upset tax sale was not properly done which is what I alleged in that case and we were able to settle it for a very reasonable sum of money.
Finally, I was able to overturn the sale of a commercial property worth close to $1 million dollars. In that case, we had to pay $50,000.00 to the purchaser but it was worth it in light of the value of the property. I was able to find my client a lender who would loan them the money to pay the delinquent taxes, pay $50,000.00 to the purchaser and some extra money to do some work on the property.
The key is to act quickly. Most purchasers at tax sale would rather settle for some amount quickly rather than have their purchase monies tied up in litigation for six months or a year. If the tax sale is eventually overturned, all they get back is their money with no interest having been earned on it over the last six months or a year.
If you are a homeowner or a commercial property owner who lost your real estate at a tax sale or sheriff sale for delinquent real estate taxes, please contact me as soon as possible to try to save your property by having the tax sale overturned, settling with the purchaser or redeeming your property after sheriff sale.
Michael Louis is Chair of MacElree Harvey’s Banking and Finance Litigation Practice. Michael’s personal practice supports the needs of businesses and homeowners in a changing economic environment. He has extensive experience defending clients in mortgage foreclosures, collections and loan workouts, general counsel work and real estate litigation, including landlord-tenant litigation. In addition to practicing civil litigation as referenced above, Michael does bankruptcy for debtors and creditors. To contact Michael, call 610-840-0228 or email [email protected]