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Tax sale challenged by owner who failed to pay property taxes

Virtually all property owners in Philadelphia understand that a failure to pay real estate taxes may ultimately result in losing title to the property. At least one such owner, however, has commenced a novel real estate dispute with the city and is now challenging the validity of a tax sale that transferred title to his property to another person.

The property in question is a filling station in Erie, Pa. The current owner waged and lost a lengthy battle with the city of Erie over cleaning up the lot by removing defunct cars. The owner also apparently failed (or perhaps refused) to pay real property taxes on the land. On Sept. 28, 2015 a man from Philadelphia purchased the land at a delinquent tax sale by paying all unpaid taxes and other liens against the property for a total of $16,392. However, the county has not yet issued a deed because the current owner is disputing the validity of the sale.

The present owner of the property has filed a court action claiming that he never received notice of the sale. His second challenge is based upon the difference between an "upset sale" and a "lien-free" tax sale. The man claiming to have purchased the land says that it was properly sold by the Erie county Tax Claim Bureau as an upset sale because it does not meet the criteria for a lien-free sale. The current owner is nevertheless claiming that the land should have been sold as a lien-free tax sale and that the upset sale is invalid. This case may be far from resolution because its outcome depends upon the resolution of disputed factual claims.

As this case demonstrates, the procedures involved in resolving real estate tax forfeitures are very complex. Anyone who is contemplating the purchase of land at either an upset or lien-free sale may wish to consult an experienced real estate attorney. A knowledgeable lawyer can provide an analysis of the facts of the case and the legal rules which govern tax forfeiture sales.

Source: Erie Times-News, "Downtown Erie garage caught up in ownership dispute," Ed Palattella, Nov. 30, 2015

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