Mont and Bux County Sheriff's Sales

[Benny Anand]

Does anyone know if properties purchased from either Montgomery or Bucks County Sheriff's Sales are able to have title insurance issued on those properties?  I recently purchased a property at MontCo tax sale and have since learned that the property is not eligible for title insurance for at least 12 months after deed transfer.  My purpose for asking this question is because if the same rule does not apply, then I would rather switch my focus to Sheriff's Sales.

[Chris K.]

@Benny Anand

Both sheriff's sale and tax sale properties can raise issues when you try to acquire title insurance. The answer depends on the underwriter that you are using. In my personal experience, I think tax sale properties are harder to deal with when it comes to title issues. But both sales can raise complicated issues. 

Note that there are different kinds of tax sales. @James Mc Ree referred to an article about MTCLA tax sales. Those have different rules compared to RETSL tax sales. And then there are other oddities like the tax-lien sale that Philly did a few years ago (not sure if they are still doing them). All of them have different nuances you have to deal with. 

As for title companies and their underwriting requirements, a lot of it has to do with the fact that Pennsylvania tax sale law is notoriously anti-buyer. I'm oversimplifying it, but courts have ruled time and time again that they have a duty to protect the owners (due to constitutional concerns) and the taxing bodies (so that they can collect tax revenue). So in many cases, the buyer gets screwed over if a mistake is made during the tax-sale process.

Maybe others will disagree with me, but I generally don't think tax sales are ideal for a quick flip. I think they are more suited for a longterm buy and hold. A large part of this has to do with that the tax-sale buyer can cure many of the title issues with time. But please note that I said "many" and not "all." There are some title issues you cannot cure even if hundreds of years pass. 

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 as legal advice. Always consult with your attorney before you rely on the above information.