Tax Claim Bureau Overview
The purpose of this document is to provide interested parties with an overview of the procedures and time-frames involved in collecting and disbursing delinquent property taxes as well as options available to the taxpayer to avoid tax sale.
A Tax Claim Bureau is created in all second A through eighth class counties and is under the direct supervision of local county commissioners. The Bureau is governed by the mandates of the PA Real Estate Tax Sale Law, Act 542 of 1947 and its amendments.
Property taxes are due no later than December 31 of the year in which they are levied. If a property owner fails to pay the tax by this date, it is considered to be delinquent. The following is a calendar of the sequence of events arising from a delinquent property tax:
- Taxing authorities certify their unpaid property taxes to the Bureau. Liens must be filed with the Bureau no later than January 15th.
- The liens are posted to the Bureau’s system.
- Return and Claim Notices are sent by certified mail to the owner(s) of record no later than July 31.
- If service is not effectuated upon the owner(s) by this date, the property is physically posted no later than November 30.
- If delinquent taxes remain unpaid, upset tax sale notices are prepared and sent by restricted mail to each owner of record no later than July 31.
- An upset tax sale must be scheduled no earlier than the second Monday in September and no later than September 30.
- Notice of the sale is advertised in the Daily Local News, the Chester County Press and the Chester County Law Reporter at least 30 days prior to the scheduled sale date.
- A Second Sale Notice is sent to each delinquent owner of record by first class mail at least 10 days before the scheduled sale date.
- At least 10 days before the scheduled sale, properties must be physically posted. Owner-occupied properties must also be personally served notice of the impending sale.
- The upset sale bid price includes any current year and delinquent property taxes, municipal liens, Commonwealth liens, transfer taxes, recording fees and costs.
- The Court of Common Pleas must confirm an upset sale absolute before funds can be disbursed.
- This process takes approximately 4 to 6 months.
- Disbursement of funds occurs when the original deed is recorded; a process that takes approximately 4 to 6 weeks. Funds collected at an upset tax sale will then be disbursed in the next available payout.
- If a property exposed to an upset tax sale receives no bid, it becomes eligible for a judicial tax sale. Unlike an upset tax sale, properties sold at judicial sale are sold freed and cleared of all liens, mortgages and other judgments on the property.
- A title search of the property is completed and all lienholders and other interested parties are served a copy of the Petition for Judicial Sale by the Sheriff's department. This is a very tedious and time-consuming process controlled by many variables.
- Once service has been effectuated upon each lienholder and other interested parties, a date for the sale is set and confirmed by the Court. Notice of the date for the judicial tax sale is then advertised once in the Daily Local News at least 30 days prior to the scheduled sale.
- The judicial bid price is set by the Bureau and includes any costs incurred.
- The Bureau then petitions the Court to disburse the funds collected. If no objections are filed, a deed is prepared and recorded.
- Local taxing authorities are paid from the proceeds of a judicial tax sale on a pro-rated basis dependent on the actual bid price accepted for the property.
Options for Property Owners
There are several options available to prevent a property from exposure at Upset Tax Sale. All options are at the sole discretion of the Bureau:
- Agreement to Stay Tax Sale - This option requires a down payment of at least 25% of all delinquent real property taxes owed at the time of execution and the remaining balance to be paid in three additional, equal installments.
- Deferral of Taxes - This option requires submission of a completed application. If all criteria are met, a deferral is granted for a period of up to twelve (12) months. Deferral for a subsequent twelve (12) month period is not legally permissible.
Disbursements from the Bureau are governed by Section 205 of Act 542. Generally, payouts occur on a monthly cycle. Payouts from tax sales are dependent upon the Court’s approval of the schedule for distribution.
Additionally, the Bureau also works closely with the following agencies: