Tax Repository Purchase & Tax Assessment Appeal (PA)

[Kevin Sobilo]

In Pennsylvania when a property doesn't sell at the Judicial Tax Sale (Free & Clear Sale), it goes on a list (Repository List) where it can be purchases anytime for a nominal price. When the sale is complete, the tax assessment by law should be changed to be the purchase price until the next reassessment or until improvements have been made triggering a reassessment of that property.

In some areas, they don't automatically change the assessment even though its required by law. They force the buyer to go through the tax appeal process and that usually causes the buyer to pay at least 1 years worth of taxes at the full rate before getting them substantially reduced.

Further, I suspect they purposefully delay completing these types of sales until after the deadline to apply for a tax assessment appeal.

My question is once I have made the bid and they have cashed the check for my offer, do I have "equitable title" and does that give me standing to appeal the assessment even before the sale closes and I have title to the property? The taxing bodies each have to approve the offer, which taxes time, but they are only legally allowed to say no to the offer if I owe delinquent taxes or have had my landlording license revoked in that municipality. Neither of those things is true, so the should not be able to deny me.

[Chris K.]

@Kevin Sobilo

I suppose someone could make an RTK request to see how many properties they sold over the years. But I would be surprised if it is the potential damages are that high for a few reasons. 

• Repository properties don't get sold that often. There are many properties on the list that ended up there in my first year of law school. This is essentially why Luzerne County is trying to dump them. 

• Luzerne County may reassess the property after a triggering event --- whether it's a sale, rehab, or something else. Presumably, people who buys these properties at a repository sale are not just sitting on them for no reason. So I doubt there are many cases where the damages would last for 10 years.

• I personally don't see a claim for spot reassessment claim. It's also an incredibly time-consuming claim to bring. Hence most spot reassessment litigation involves large commercial properties --- typically properties that don't end up at a repository sale. 

Realistically, I think the only way this gets litigated is via a class action lawsuit. But even at a few million dollars, I can't see too many lawyers wanting to jump on this one --- maybe if someone could make a bring a suit against multiple counties.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.