Pennsylvania, Chester County Tax lien purchase

[Mark Davis]

Good Morning BP!!!

from what i understand, purchasing a property at a judicial sale wipes liens.

using imaginary numbers, here is the scenario.

house purchased at judicial sale for 40,000   (property worth 150,000)

tax liens 2500

municipality liens 2000

utility liens 2000

the owner sara (name changed) is deceased and the sister Mary (name changed) of the owner (who lives next door) is the intended heir.

from what we know, the title/deed was never transfered from sara  to the sister Mary.

Mary is also old, and has 3 powers of attorney. 2 sons and a grand daughter.

so as far as we know the house is in the name of the Estate of sara 

from what i understand...   the proceeds are use to pay off the liens 

---so the 6500 from the above listed liens are paid...

---leaving 33500 

so this check goes to the estate of sara.   right?

ok now here is the twist.  (well, there are a lot of twists with this one but that is subject of another post)...

there was also a medicare lien placed on the house.

is medicare a "federal" lien?

is this lien expunged by the judical sale?

can the medicare lien move from the house to the estate of sara?

per the tax claim office of chester county, there are no current liens on the house ...  can we find out if there WAS a medicare lien on the house and that there is NO LONGER a medicare lien on the house?

would the judicial sale purchaser be liable for the medicare lien?

[David Krulac]

@Steve Babiak

There are liens from the Welfare Department for assisted living fees, there are liens from nursing homes etc.  These can be state related or from a private nursing home company, some of which are for profit, some non-profit.

Title Searches DO NOT tell you all the liens on the property @Patrick Liska some liens that are not on title searches are:

Department of Revenue liens

Department of Welfare liens

Private nursing liens

Pa. Inheritance Tax

Pa. Non-residence inheritance tax  accrues at 6% per year from the date of death

Mechanics Liens

Most IRS liens are not recorded at county courthouses, only at Federal Courthouse.

@Mark Davis only liens that have been "noticed" as a result of the Judicial Sale are wiped out.  Sometimes the lien holder is not notified and as a result their lien is NOT WIPED out.  In one case that I'm familiar with, notice was sent to Chase Bank, but the address of the office was closed and the forwarding address had expired, so the certified mail came back to the tax office unclaimed.  Therefore that Chase lien was not wiped out and the Judicial Sale sold the property "subject to" the Chase mortgage.

In one county, they use law school graduates who have NOT passed the bar doing the title searches, which are sometimes flawed.  In addition they only do "one owner searches" so if there are mortgages or liens from a previous owner, those are NOT searched and NOT wiped out.

Plus an lien not of record like the list above are not noticed and therefore not wiped out by the Judicial Sale.

As I have said multiple times before, Tax Sales are the most hazardous way to buy real estate and be very careful, its dangerous out there!