The seizure and sale of one’s home for failure to pay real estate taxes is a tremendous exercise of governmental power. Fortunately, the Due Process Clause of the Fourteenth Amendment to the United States Constitution protects a property owner’s right to notice of an impending tax sale. In Pennsylvania, the Real Estate Tax Sale Law, 72 P.S. § 5860.101, et seq. (“Tax Sale Law”), requires notice to the property owner intended to meet the protections guaranteed by the Constitution. Nevertheless, the practical implementation of the Tax Sale Law by the various counties across Pennsylvania oftentimes fails to meet either or both, the Tax Sale Law or the Due Process Clause. This shortcoming occurs in large part due to the sheer volume of tax sales, the cost, expense and logistics of making statutorily compliant service every time among perhaps thousands of tax payers, or, simply, in some counties, laxity or unfamiliarity with the necessity of strict compliance with the Tax Sale Law.
Importantly, the courts of Pennsylvania hold that the Tax Sale Law “is for the collection of taxes and is not intended to create investment opportunities for others, or to strip taxpayers of their properties.” Brodhead Creek Assocs., LLC v. Cnty. of Monroe, 231 A.3d 69, 74 (Pa. Commw. Ct. 2020). In addition, it is well settled that:
[t]he notice provisions of the [Tax Sale Law] are designed to ‘guard against deprivation of property without due process.’ Because the government actor attempting to take property bears the constitutional duty to provide notice prior to a tax sale, our inquiry into whether adequate notice was provided must focus ‘not on the alleged neglect of the owner, which is often present in some degree, but on whether the activities of the [tax claim b]ureau comply with the requirements of the [Tax Sale Law].’
In re Consol., 132 A.3d at 644 (internal citations omitted); see also Brodhead Creek Assocs., LLC.
For any property owner facing a tax sale, should you have any concern of improper, or lacking, notice, including personal service, mailing or posting, you should consult with an attorney immediately. Note: Your obligation to pay your taxes and penalties does not end merely because the tax claim bureau did not comply with the notice provisions of the Tax Sale Law. In short, you must still pay your real estate taxes even if faulty notice, or a faulty tax sale, occurs.
Strict Compliance
The Tax Sale Law requires strict compliance with all notice provisions. Fernandez v. Tax Claim Bureau of Northampton County, 925 A.2d 207, 212 (Pa. Commw. Ct. 2007) (reversing the trial court and holding that sale must be set aside for failure to comply with 72 P.S § 5860.602(e)(2)). If “any of the notices are defective, the sale is void.” Id.
As mentioned earlier, a property owner’s right to notice of an impending tax sale is protected under the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Rice v. Compro Distributing, Inc., 901 A.2d 570, 574 (Pa. Commw. Ct. 2006). Due process is satisfied when the tax claim bureau, before a tax sale, “provide[s] ‘notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’” Jones v. Flowers, 547 U.S. 220, 226 (2006) (emphasis added) (citing Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)).
Personal Service Upon an Owner Living at the Property
Owner occupied properties are provided additional protection to ensure actual notice of the impending sale. McKelvey v. Westmorland County Tax Claim Bureau, 983 A.2d 1271, 1273 (Pa. Commw. Ct. 2009). Specifically, the Tax Sale Law provides that an owner occupied property cannot be sold unless the owner has been personally served with written notice of the sale at least ten (10) days prior to the date of the actual sale. 72 P.S. § 5860.601(a)(3).
This additional protection indicates that the legislature recognized a distinction between an owner who stands to lose his property and one who stands to lose his home as well. McKelvey, 983 A.2d at 1274. In McKelvey, the Commonwealth Court of Pennsylvania affirmed the trial court’s decision to void a tax sale because the bureau failed to personally serve the owner in an owner occupied property. Id. at 1274. The bureau’s failure to personally serve the owner necessitated voiding the sale despite the fact that the owner in that case had actual knowledge of the sale. Id. The court reasoned that the language of the statute suggests that the legislature intended to “provide a qualitatively different type of notice to an owner occupant and afford such owner increased protection by way of additional notice.” Id. at 1274.
Exception to Personal Service on Good Cause Shown
If personal service cannot be made within twenty-five (25) days of the bureau’s request for personal service, the bureau can petition the Court of Common Pleas to waive the personal service requirement for good cause shown.
Black’s Law Dictionary defines good cause as a:
[s]ubstantial reason amounting in law to a legal excuse for failing to perform an act required by law. Legally sufficient ground or reason. Phrase “good cause” depends upon circumstances of individual case, and finding of its existence lies largely in discretion of officer or court to which decision is committed.... “Good cause” is a relative and highly abstract term, and its meaning must be determined not only by verbal context of statute in which term is employed but also by context of action and procedures involved in type of case presented. . . .
Black’s Law Dictionary at 623 (6th ed. 1990) (cited with approval by Anderson v. Centennial Homes, Inc., 594 A.2d 737, 739 (Pa. Super. 1991)).
Lack of Good Cause Shown
Good cause is not established if the tax claim bureau did not attempt personal service in good faith. For example, personal service attempts made during business hours (when most persons would be away from home at their places of employment) may be deficient. Accordingly, the service attempts must be reasonably calculated to actually personally serve the owner. Service attempts that are not cannot serve as the basis for good cause to waive the personal service requirement. Other examples of service attempts that are not reasonably calculated to actually personally serve the owner may be, leaving notice with an unidentified person, or an improper person, such as a minor or a workman, or placing notice within a door instead of handing it to a proper person.
A tax claim bureau must actually demonstrate good cause as to the individual person for whom personal service is sought to be waived. A generalized petition lumping together many owners, and giving generalized grounds for good cause, is insufficient to bypass the Tax Sale Law’s personal service requirement. At a minimum, some specificity and particularized showing must be presented as to what prevented personal service as to each owner. A generic good cause petition undercuts the intention of the legislature in providing for additional protection for owner occupied properties above and beyond those elsewhere in the Tax Sale Law. See Black’s Law Dictionary at 623 (noting the need to consider individual circumstances).
Thus, even if a tax claim bureau represents to a court that it has good cause to seek waiver of personal service, the grounds of good cause may well not have been established and may be challenged. Remember, seizure and sale of one’s home is an extreme and powerful remedy, and the tax claim bureau must strictly comply with the Tax Sale Law and satisfy due process protections of the United States Constitution, before making such a seizure and sale.
Service By Mail
Service by mail is permitted as to an owner not living at the property to be sold, or, as to an owner of an owner occupied property, after an order permitting the waiver of personal service on good cause shown.
The Tax Sale Law requires that the bureau give at least thirty (30) days’ notice of an upset sale by “United States certified mail, restricted delivery, return receipt requested, postage prepaid” to each owner of a property to be sold. 72 P.S. § 5860.602(e)(1). If the bureau does not receive the required return receipt, the Tax Sale Law requires that similar notice of the sale must be sent to each owner at least ten (10) days before the sale by United States first class mail, proof of mailing, at the owner’s last known post office address. 72 P.S § 5860.602(e)(2). As a matter of law, the proof of mailing requirement of section 72 P.S § 5860.602(e)(2) refers to a document obtained from the United States Postal Service (“USPS”). In Re York County Tax Claim Bureau, 3 A.3d 765, 769 (Pa. Commw. Ct. 2010); Horton v. Washington County Tax Claim Bureau, 81 A.3d 883, 891-892 (Pa. 2013).
In Horton, the Pennsylvania Supreme Court held that while there is no single USPS document necessary to satisfy the proof of mailing requirement, the proffered evidence must be documentation provided by the USPS. Horton, 81 A.3d at 891 (emphasis added). In Horton, the bureau provided a “United States Postal Service Consolidated Postage Statement—First–Class Mail & Priority Mail”, signed by a USPS employee, bearing a USPS stamp, and showing a mailing date and the total number of pieces mailed. Id. The bureau further attached a list containing the individuals and addresses to whom the second notice mailings were sent. Id. Finally, the bureau produced the actual envelopes sent via first-class mail to the petitioners in that case. Id. The Court held that these documents taken together established the proof of mailing requirement. Id. The Washington County Tax Claim Bureau took deliberate and careful steps to demonstrate proof of mailing with multiple pieces of evidence.
In contrast, documents that are not United States Post Office forms cannot be proof of mailing under the Tax Sale Law. Nor should a USPS stamp on a non-USPS document demonstrate proof of mailing. Likewise, there must be proof of mailing of the notice to the owner, not just generalized, non-specific proof of mailing. A list of the names and addresses of property owners who were allegedly mailed notice of the sale by first class mail, even if bearing a USPS date-stamp, but not on USPS forms, without more, is not sufficient proof of mailing.
Posting
The tax claim bureau is also required to post each property scheduled for sale at least ten (10) days prior to the sale pursuant to 72 P.S § 5860.602(e)(3). The act of posting is not a substitute for personal service upon an owner of owner occupied property. Posting must not only be sufficient to notify the owner of the pending sale, but also must provide sufficient notice to the public at large so that any interested parties will have an opportunity to participate in the auction process, increasing the number of potential bidders, and to notify others, such as mortgage and lien holders.
Posting should be placed somewhere on the property for all to observe, and not merely for notice to just the owner. To constitute posting that is reasonable and likely to ensure notice, and thus be valid notice by posting, the posting must be conspicuous, attract attention, and be placed there for all to observe. Posting has been invalidated, and tax sales set aside, in numerous circumstances, including where:
- the sheriff folded the notice and thumbtacked it at key hole level to the door frame of a side door of the house between the main door and the storm door;
- the sheriff posted notice of the sale on the back door, on a side of the home that did not face a public road and was accessed only by a private walkway;
- the posting was small in size, wrapped around a small branch, and placed on a tree on a road that was not passable;
- witnesses did not see the notice posted, and where the individual that had posted the notice could not recall exactly how he had secured the notice to a pole, and could not demonstrate that the notice was “reasonably secured;”
- the posting was placed upon a decorative fence, located up a private driveway approximately 300 yards from a township road and there was no credible evidence demonstrating that the posting was conspicuous, or that it was done in a manner likely to inform the taxpayer and other interested buyers of the intended sale;
- the tax claim bureau representative could not independently recall how a parcel of property had been posted, but relied only upon bureau exhibits merely indicating that notice was posted on a tree;
- the property owner was present and the sheriff deputy handed the posting notice to the owner instead of posting it.
Certainly, any defect regarding posting should be explored with counsel to examine whether it is conspicuous, placed so as to attract attention, and placed there for all to observe.
Strict compliance with the Tax Sale Law’s notice requirements is not required when the tax claim bureau proves that a property owner received actual notice of a pending tax sale. If an owner does have actual notice of a pending tax sale, then defects as to posting that affect notice to an owner likely will not set aside a sale. Nevertheless, posting defects affecting notice to the public are not affected by actual notice to the owner. This distinction should not go overlooked.
Additional Notification Efforts
In certain circumstances, before deprivation of property rights occur, the Tax Sale Law requires additional notification efforts by the tax claim bureau when mailed notification is either returned without the required receipted personal signature of the addressee or under other circumstances raising a significant doubt as to the actual receipt of such notification by the named addressee or is not returned or acknowledged at all. In those cased, before the tax sale can be conducted or confirmed, the bureau must exercise reasonable efforts to discover the whereabouts of such person or entity and notify him.
The bureau’s efforts shall include, but not necessarily be restricted to, a search of current telephone directories for the county and of the dockets and indices of the county tax assessment offices, the office of the recorder of deeds and prothonotary’s office, as well as contacts made to any apparent alternate address or telephone number which may have been written on or in the file pertinent to such property. When such reasonable efforts have been exhausted, regardless of whether or not the notification efforts have been successful, a notation shall be placed in the property file describing the efforts made and the results thereof, and the property may be rescheduled for sale or the sale may be confirmed.
These statutorily required additional notification efforts are not a substitute for proper notice under the Tax Sale Law.
Time to Challenge Sale
Within sixty (60) days after a tax sale, the tax claim bureau must make a consolidated return to the Court of Common Pleas of the county. The consolidated return must include certain information required by statute. See 72 P.S. § 5860.607(a). If it appears to the court that the tax sale was regularly conducted in accordance with the Tax Sale Law, the consolidated return and the sale shall be confirmed unless an adversely affected party appears and shows cause why the confirmation should be withdrawn.
Within thirty (30) days of the actual sale, the tax claim bureau must give notice to each owner that the property was sold, and that the owner may file objections or exceptions with the court relating to the regularity and procedures followed during the sale. The notice must be sent by United States certified mail, restricted delivery, return receipt requested, postage prepaid, to each owner at his last known post office address, and the form of notice is mandated by the Tax Law. See 72 P.S. § 5860.607(a.1).
The notice must state, among other things, that the owner may file objections or exceptions to the sale immediately, but no later than thirty (30) days following the confirmation of the return by the court. If no exceptions or objections are filed within thirty (30) days of the confirmation, or if exceptions or objections are overruled, the court will enter a decree of absolute confirmation of the sale. See 72 P.S. § 5860.607(c), (g).
Thus, generally, objections or exceptions to a tax sale must be filed not later than thirty (30) days after confirmation of the consolidated return of the tax claim bureau. Certainly defective notice in violation of the Tax Sale Law and constitutional due process are a basis to set aside a tax sale, even after absolute confirmation, delivery of the deed to purchaser and payment of the sale price. Husak v. Fayette County Tax Claim Bureau, 61 A.3d 302 (Pa. Commw. Ct. 2013). Be cautioned, however, that, regardless of notice, one must act promptly to assert rights to recover real estate upon learning of an impending, or actual occurrence of a, tax sale. To avoid arguments that a post-confirmation challenge to a tax sale is untimely, a challenge should be brought as soon as possible, and generally not later than within six years of the date of the tax sale. See Pfeifer v. Westmoreland Cty. Tax Claim Bureau, 127 A.3d 848, 855 (Pa. Commw. Ct. 2015).
Regardless of any defect in the notice or sale process, be prepared to pay your taxes and related penalties and costs.
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If you have a question concerning the Tax Sale Law or proceedings to set aside a tax sale, please contact Eric B. Smith, Esquire, 215-540-2653 or esmith@timoneyknox.com.
Mr. Smith, a partner of Timoney Knox, LLP, serves as Chair of the Firm’s Litigation Group and has been consistently recognized by Super Lawyers and Best Attorneys since 2005. In 2017 he served as President of the Montgomery Bar Association. For more information about Mr. Smith, please click here.
