Bill Summary – FastDemocracy

PRINTER'S NO.   1981
                     THE GENERAL ASSEMBLY OF PENNSYLVANIA
                         HOUSE BILL
                         No. 1750
                                               Session of
                                                 2021
     INTRODUCED BY A. DAVIS, KINSEY, N. NELSON, KINKEAD, DELLOSO,
        SANCHEZ AND DEASY, JULY 30, 2021
     REFERRED TO COMMITTEE ON URBAN AFFAIRS, JULY 30, 2021
                                    AN ACT
 Amending the act of May 16, 1923 (P.L.207, No.153), entitled "An
    act providing when, how, upon what property, and to what
    extent, liens shall be allowed for taxes and for municipal
    improvements, for the removal of nuisances, and for water
    rents or rates, sewer rates, and lighting rates; for the
    procedure upon claims filed therefor; the methods for
    preserving such liens and enforcing payment of such claims;
    the effect of judicial sales of the properties liened; the
    distribution of the proceeds of such sales, and the
    redemption of the property therefrom; for the lien and
    collection of certain taxes heretofore assessed, and of
    claims for municipal improvements made and nuisances removed,
    within six months before the passage of this act; and for the
    procedure on tax and municipal claims filed under other and
    prior acts of Assembly," further providing for municipal
    claims first lien, cities of first class, docketing, judgment
    and execution, for cities of the first class, recovery of
    judgment and sale free from claims, for redemption and for
    rule to show cause, decree, service and notice and providing
    disposition of property in cities of the second class.
    The General Assembly of the Commonwealth of Pennsylvania
 hereby enacts as follows:
    Section 1.    Sections 3(b), 31.2(a), (b.1) and (b.2)(1), 32(a)
 and 39.2(a), (a.1), (b), (b.1) and (c) of the act of May 16,
 1923 (P.L.207, No.153), referred to as the Municipal Claim and
 Tax Lien Law, are amended to read:
    Section 3.    * * *
    (b)   With the exception of those claims which have been
 assigned, any municipal claim, municipal lien, tax, tax claim or
 tax lien, including interest, penalty and costs, imposed by a
 city of the first [class,] or second class or by a county of the
 second class or by a municipality therein, shall be a judgment
 only against the said property when the lien has been docketed
 by the prothonotary. The docketing of the lien shall be given
 the effect of a judgment against the said property only with
 respect to which the claim is filed as a lien. The prothonotary
 shall maintain an in rem index, the form and location of which
 shall be within the prothonotary's discretion. All tax claims,
 water rents or rates, lighting rates, power rates and sewer
 rates heretofore filed are hereby ratified, confirmed and made
 valid subsisting liens as of the date of their original filing.
    * * *
    Section 31.2.   (a)   In addition to the remedies prescribed in
 sections [28,] 31 and 31.1 of this act, in cities of the first
 [class,] or second class and counties of the second class and
 any municipalities therein, whenever a claimant has filed its
 tax or municipal claim in accordance with the requirements of
 this act, it may file its petition in the court in which the
 proceeding is pending, setting forth the facts necessary to show
 the right to sell, together with searches or a title insurance
 policy, showing the state of record and the ownership of the
 property, and of all tax and municipal claims, liens, mortgages,
 ground rents or other charges on, or estates in, the land, as
 shown by the official records of the city or county, or the
 political subdivision in which the real estate is situate, and
 thereupon the court shall grant a rule upon all parties thus
 shown to be interested, to appear and show cause why a decree
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 should not be made that the property be sold, freed and cleared
 of their respective claims, liens, mortgages, ground rents,
 charges and estates. If upon a hearing, the court is satisfied
 that service had been made of the rule upon the parties
 respondent in the manner provided in [this act for the service
 of writs of scire facias to obtain judgments upon tax and
 municipal claims, and that contemporaneously with the service of
 the rule on the parties respondent notice of the rule has been
 published by the claimant in at least one newspaper of general
 circulation in the county, and in a legal periodical published
 therein, if any,] section 39.2 and that the facts stated in the
 petition be true, it shall order and decree that the property be
 sold at a subsequent sheriff's sale at a time to be fixed
 thereafter by the claimant, clear of all claims, liens,
 mortgages, ground rents, charges and estates, to the highest
 bidder at such sale and after payment of the tax or municipal
 lien the balance of the proceeds realized therefrom, shall be
 distributed in accordance with the priority of the remaining
 claims, liens, mortgages, ground rents, charges and estates, and
 the purchaser at such sale shall take and forever thereafter
 have, an absolute title to the property sold, free and
 discharged of all tax and municipal claims, liens, mortgages,
 ground rents, charges and estates of whatsoever kind, subject
 only to the right of redemption as provided by law. The date of
 the sale shall be advertised in at least one newspaper of
 general circulation in the county in which the property is
 located and in the legal periodical published therein.
    * * *
    (b.1)   A city of the first or second class may, within thirty
 days of any sale held under this section, petition the court of
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 common pleas to prohibit the transfer of any deed for any
 property exposed for any sale under this act which is located in
 that city to any purchaser who is proven to meet any of the
 criteria set forth in subsection (b.2).
    (b.2)   (1)    The petition of a city of the first or second
 class shall allege that the purchaser has over the three years
 preceding the filing of the petition exhibited a course of
 conduct which demonstrates that a purchaser permitted an
 uncorrected housing code violation to continue unabated after
 being convicted of such violation and:
    (i)    failed to maintain property owned by the purchaser in a
 reasonable manner such that it posed a threat to health, safety
 or property; or
    (ii)    permitted the use of property in an unsafe, illegal or
 unsanitary manner such that it posed a threat to health, safety
 or property.
    * * *
    Section 32.    (a)   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 if the property
 is not located in a city of the second class or a county of the
 second class or a municipality therein at any time within nine
 months from the date of the acknowledgment of the sheriff's deed
 [therefor,] and if the property is located in a city of the
 second class or a county of the second class or a municipality
 therein at any time within three 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
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 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 if the property is not located in a
 city of the second class or a county of the second class or a
 municipality therein or within three months if the property is
 located in a city of the second class or a county of the second
 class or a municipality therein, 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] the time specified in this section.
    * * *
    Section 39.2.   (a)   In cities of the first [class,] or second
 class and counties of the second class and municipalities
 therein, notice of a rule to show cause why a property should
 not be sold free and clear of all encumbrances issued by a court
 pursuant to a petition filed by a claimant under section 31.2 of
 this act shall be served by the claimant upon owners,
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 mortgagees, holders of ground rents, liens and charges or
 estates of whatsoever kind as follows:
    (1)   By posting a true and correct copy of the petition and
 rule on the most public part of the property;
    (2)   By mailing by first class mail to the address registered
 by any interested party pursuant to section 39.1 of this act a
 true and correct copy of the petition and rule; and
    (3)   By reviewing a title search, title insurance policy or
 tax information certificate that identifies interested parties
 of record who have not registered their addresses pursuant to
 section 39.1 of this act, the [city] claimant shall mail by
 first class mail and either by certified mail, return receipt
 requested, or by registered mail to such addresses as appear on
 the respective records relating to the premises a true and
 correct copy of the petition and rule.
    Service of notice pursuant to this section shall be deemed
 accomplished on the date of mailing. The [city] claimant shall
 file an affidavit of service with the court prior to seeking a
 decree ordering the sale of the premises.
    (a.1)   In counties of the second class and municipalities
 therein, notice of a rule to show cause why a property should
 not be sold free and clear of all liens and encumbrances issued
 by a court pursuant to a petition filed by a claimant under
 sections [28] 31 and 31.1 of this act shall be served by the
 claimant upon owners, mortgagees, holders of ground rents, liens
 and charges or estates of whatsoever kind as follows:
    (1)   By posting a true and correct copy of the petition and
 rule on the most public part of the property.
    (2)   By reviewing a title search, title insurance policy or
 tax information certificate that identifies interested parties
20210HB1750PN1981                  - 6 -
 of record, the county or municipality shall mail by first class
 mail and either by certified mail, return receipt requested, or
 by certificate of mailing to such addresses as appear on the
 respective records relating to the premises a true and correct
 copy of the petition and rule. Notice pursuant to this section
 shall be deemed accomplished on the date of mailing. The [county
 or municipality] claimant shall file an affidavit of service
 with the court prior to seeking a decree ordering the sale of
 the premises.
    (b)   No party whose interest did not appear on a title
 search, title insurance policy or tax information certificate or
 who failed to accurately register his interest and address
 pursuant to section 39.1 of this act shall have standing to
 complain of improper notice if the [city] claimant shall have
 complied with subsection (a) of this section. This provision
 shall not apply if the mortgage or interest was otherwise
 properly recorded in the Office of the Recorder of Deeds or the
 Department of Real Estate, as applicable, and the document
 contains a current address sufficient to satisfy the notice
 requirements of this section. Notwithstanding any other
 requirement set forth in this act or any other law to the
 contrary, the notice required by subsection (a) of this section
 shall constitute the only notice required before a court may
 enter a decree ordering a tax sale.
    (b.1)   No party whose interest did not appear on a title
 search or title insurance policy, because of the party's failure
 to record or properly record its interest, shall have standing
 to complain of improper notice if the county or municipality
 shall have complied with subsection (a.1). This provision shall
 not apply if the mortgage or interest was otherwise properly
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 recorded in the Office of the Recorder of Deeds or the
 Department of Real Estate, as applicable, and the document
 contains a current address sufficient to satisfy the notice
 requirements of this section. Notwithstanding any other
 requirement set forth by subsection (a.1), notice thereunder
 shall constitute the only notice required before a court may
 enter a decree ordering a tax sale free and clear of liens.
    (c)   Notice of the court's decree ordering a tax sale,
 together with the time, place and date of the sale, shall be
 served by first class mail on all parties served with the
 petition and rule, on any parties whose interest appeared of
 record after the filing of the petition but before the court's
 decree and on any creditor who has obtained judgment against the
 owner of the premises prior to the date of the decree. The
 [city] claimant shall file an affidavit of service of these
 notices prior to the date of the sale.
    * * *
    Section 2.   The act is amended by adding a section to read:
    Section 39.6.   The mayor of a city of the second class may
 designate an agency for the acquisition, administration,
 maintenance and disposition of property acquired by the city of
 the second class at a sheriff's sale. The city of the second
 class, or its agent, may act as an agent for a taxing authority
 having a claim against property under this section, pursuant to
 a locally negotiated agreement that positively affirms the
 consent by each taxing authority to allow the city of a second
 class to act as an agent on each taxing authority's behalf. A
 city of the second class acting as an agent for a taxing
 authority under this section may take any actions necessary to
 protect and defend a taxing authority's rights and obligations
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 under this act.
    Section 3.     The amendment of section 32(a) of the act shall
 apply to a sheriff's sale conducted on or after the effective
 date of this section.
    Section 4.     This act shall take effect in 60 days.
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Statutes/Laws affected: 
Printer's No. 1981: P.L.207, No.153