Pennsylvania Tax Sale

[Devon Pfeiffer]

quick question, if i was to buy a home at a sheriff sale in Pennsylvania being sold for back taxes, would i inherit the mortage if the property had one?

[Chris K.]

@Steve Babiak:

Great point about MCTLA! I haven't thought about that statute in a while.

To further risk of confusing folks, Pennsylvania allows most taxing bodies to collect delinquent taxes (and other fees) in two ways. One is called the Real Estate Tax Sale Law ("RETSL"). Second is called the Municipal Claims and Tax Lien Act (“MCTLA”). When taxing bodies pick the RETSL route, they must go through the Tax Claim Bureau of their county. By contrast, MCTLA allows a taxing body to hire a private law firm to pursue the case. As Steve pointed out, both options essentially require the taxing body to conduct an “upset” sale and “free and clear” sale.

In the areas that I invest in, virtually all taxing bodies pick RETSL. But I do know that many taxing bodies in other areas---especially school districts---like to utilize the MCTLA.

Note that RETSL and MCTLA are supposed to co-exist. But funny results can happen when one taxing body brings a MCTLA claim while another taxing body relies on the RETSL to collect a claim. 

If you have nothing better to do, here is a link to a famous case where a county used the RESDL to collect its claims while the borough and school district used MCTLA to collect their claims. Essentially the borough and school district was able to wipe out the county's claim due to the timing. 

http://www.pacourts.us/assets/opinions/Commonwealt...