Question Regarding Judicial Sale

[Ozzie Konar]

Hi all,
I am planning to attend a judicial sale in PA, and i printed out the property list and spent last weeking driving around to see how each house looks like.

I found a couple of possible opportunies, but alot of them are still occupied with tenants.

So my question is, how would I evict tenants after, let's say i buy one of those properties at auction??

Thanks

[Steve Babiak]

OK, lots of misconceptions posted above here, due to the state of PA having its own RE law quirks (and posts coming from those in other states).

Let's start with the terms "Judicial Sale". In PA, this will be a tax deed sale resulting from a tax lien on the subject property. Specifically, a number of junior liens will also be extinguished by the judicial nature of this sale; the judicial order will specify that the liens junior to the tax lien position will be extinguished, where the county has the power to do so (so an IRS lien will still retain redemption rights since the county can't usurp Federal gov't rights, but a mortgage lien will be released).

Next, let's talk "eviction". In PA, "Eviction" refers to landlord-tenant actions. The purchase of property at foreclosure or tax sale does NOT create a landlord-tenant relationship in PA. So, the removal of occupants (former owners) will not be by eviction, but by a different type of lawsuit called an "ejectment" - eviction is handled by district justices, whereas ejectment is in a higher level of court (common pleas). Of course, there is an exception, and that is when the property in question is tenant occupied; in that case, you do have the landlord-tenant relationship (with of course a change in landlord) and it is a matter of eviction.

Of course, these Judicial Sales in PA are public sales, and as such are open to bidding from various parties, including as mentioned by somebody else a lender representative. The lender can certainly just pay the delinquent taxes and make this sort of sale stop before the date of the auction. The lender can also just choose to be among the bidders, and cause the bidding to be high. That doesn't mean that the lender will bid as high as the loan amount owed - they can stop at any number where they feel they have recovered enough of the loan that is owed. The lender might not want to own the property, so they might not bid high at all.

Regarding the comment above that a lot of properties aren't even bid on - yes that is true. Much of the stuff that goes to Judicial sale in PA is vacant land or mobile homes, many of which have tax bills due that might exceed any value in the real estate. The other stuff that goes to the Judicial Sale will usually be a property with a larger mortgage; the properties with no or little mortgages are usually bought as the earlier Tax Upset Sale. Since the judicial order will release the mortgage liens, properties with a mortgage are usually sold at the Judicial Sale (if the lender hasn't paid the taxes ahead of the auction).