Reversing a Tax Sale in Philadelphia

Most tax sales in Philadelphia are final, so how can you reverse one?
Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

Most tax sales in Philadelphia are final, so how can you reverse one?
Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

Today is the day.

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Reversing a Tax Sale in Philadelphia

Philadelphia is one of the few places in Pennsylvania where a home owner can reverse a Tax Sale. Believe it or not, most tax sales are final in Pennsylvania once the gavel comes down.

Thanks to the Municipal Claims and Tax Liens Act (Act), Act of May 16, 1923, P.L. 207, as amended, 53 P.S. § 7293, a homeowner has a statutory right to redeem their sold property within 9 months from the date of the acknowledgment of the Sheriff’s Deed conveying the Property.

Redemption Petition pursuant to Section 32(a) of the Act, 53 P.S. § 7293(a).   Section 32 of the Act provides as follows:

The owner of any property sold under a tax or municipal claim, or his assignees, or any party whose lien or estate has been discharged thereby, may, except as provided in subsection (c) of this section, redeem the same at any time within nine months from the date of the acknowledgment of the sheriff’s deed therefor, upon payment of the amount bid at such sale; the cost of drawing, acknowledging, and recording the sheriff’s deed; the amount of all taxes and municipal claims, whether not entered as liens, if actually paid; the principal and interest of estates and encumbrances, not discharged by the sale and actually paid; the insurance upon the property, and other charges and necessary expenses of the property, actually paid, less rents or other income therefrom, and a sum equal to interest at the rate of ten per centum per annum thereon, from the time of each of such payments. If both owner and creditor desire to redeem, the owner shall have the right so to do only in case he pays the creditor’s claim in full. If more than one creditor desires to redeem, the one who was lowest in lien at the time of sale shall have the prior right, upon payment in full of the claim of the one higher in lien. Within nine months, one who was lower in lien may redeem from one higher in lien who has already redeemed, and the owner may redeem from him; and so on throughout, in each case by paying the claim of the one whose right was higher; and one higher in lien may redeem from one lower in lien, unless his claim is paid; but in each case the right must be exercised within nine months.  53 P.S. § 7293(a).

In order to reverse a Tax Sale, a homeowner must be abide by the requirements under the Act:

  • The home owner or some individual or family unit must have resided in the property 90 days prior to the sale and;

Section 32(c) of the Act, 53 P.S. § 7293(c), provides that “there shall be no right of redemption of vacant property by any person after the date of the acknowledgement of the sheriff’s deed therefor.” (Emphasis added.) Section 32(c) of the Act, 53 P.S. § 7293(c), further provides:

[P]roperty shall be deemed to be `vacant property’ unless it was continuously occupied by the same individual or basic family unit as a residence for at least ninety days prior to the date of the sale and continues to be so occupied on the date of the acknowledgment of the sheriff’s deed therefore.

  • Continue to occupy the property on the date of the acknowledge of the sheriff’s deed.

As noted, under the Act, an owner may not redeem a “vacant property” after the sheriff’s deed is acknowledged. “[T]here shall be no right of redemption of vacant property by any person after the date of the acknowledgement of the sheriff’s deed therefor.” Section 32(c) of the Act, 53 P.S. § 7293(c).

According to Section 32(c), a property is deemed “vacant” unless the property owner sets forth facts showing that the property was “continually occupied by the same individual or basic family unit as a residence for at least 90 days prior to the date of the sale and continues to be so occupied on the date of the acknowledgement[3] of the sheriff’s deed therefor.”

The term “occupied” was discussed in Brentwood Borough School v. HSBC Bank USA, 111 A. 3d 807 (2015) and the court stated that the term “occupied” must be interpreted in the context of the Act meaning “occupied” implies that someone lives in the property and the property is not vacant. The Court elaborated that determining whether a property is “occupied” is a factual determination which must be made on a case-by-case basis, considering factors, such as:  whether anyone was habitually physically present at the property, i.e., regularly sleeping and eating there and using it as a place to dwell; whether any lack of physical presence was due to temporary illness, travel or renovation; whether the property was unsecured, damaged or uninhabitable; and whether the basic and necessary utilities such as water, electric and gas were operational.

  • The homeowner must file a redemption petition thing 9 months of the acknowledgement of the sheriff’s deed.

Section 32 of the Act, 53 P.S. § 7293, provides, in part: The owner of any property sold under a tax or municipal claim, or his assignees, or any party whose lien or estate has been discharged thereby, may, except as provided in subsection (c) of this section, redeem the same at any time within nine months from the date of the acknowledgment of the sheriff’s deed therefor.

A recent decision, City of Philadelphia v. FA Realty, 95 A. 3d 377, Commonwealth Court of Pennsylvania (2014) held that a home owner has the right to redeem a property any time prior to 9 months after the date that the sheriff’s deed is acknowledged. In other words, a home owner does not have to wait until after the sheriff’s deed has been acknowledged to file a petition to redeem their property. An owner of a property sold under a tax or municipal claim could redeem the Property at any time so long as the petition for redemption is filed within nine months after acknowledgment of the sheriff’s deed.

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