The Pennsylvania Sheriff Sale Process
What is a sheriff sale in PA? Under Pennsylvania sheriff sale law, properties which suffer foreclosure or accrue unpaid taxes can be auctioned off in an attempt to recoup outstanding debts.
Tax sales and foreclosure sales are separate processes, but both are often called “Sheriff’s Sales” because the Sheriff’s Office typically arranges the auction of such properties.
In all counties across Pennsylvania, local Sheriff’s Offices handle the sale of foreclosed properties. Philadelphia assigns both tax and foreclosure sales to the Sheriff, but many other counties, including Dauphin County and Bucks County, handle tax sales through the county’s Tax Claim Bureau.
Each jurisdiction sets its own schedule for property sales. Philadelphia holds Sheriff’s Sales every month to clear delinquent properties. Smaller counties often hold these sales quarterly.
David M. Offen has spent over 20 years practicing bankruptcy and foreclosure law in Philadelphia. As a foreclosure attorney in Philadelphia, Mr. Offen has helped thousands of clients save their homes. Call (215) 625-9600 to schedule a free consultation.
Are you facing a Sheriff Sale in Pennsylvania?
Sheriff’s Sales and Foreclosure Notices are not just threats from an angry creditor. If you don’t act, your home will be auctioned off. Even if you can’t afford to stay in your home, a sale should happen on your timetable, not the County Sheriff’s auction block.
For help with the Sheriff’s Sale process and an evaluation of whether bankruptcy is the right option for you, contact the Law Offices of David M. Offen. He has spent over 20 years practicing bankruptcy law in Philadelphia and his firm has helped more than 10,000 clients through the bankruptcy process. Call (215) 625-9600 to schedule your free consultation.
Judicial Mortgage Foreclosure Sales
When a homeowner becomes delinquent on mortgage payments, most banks will move forward with foreclosure proceedings. The Sheriff of the county in which the foreclosed property resides will be responsible for managing the auction process. There is no guarantee of the property’s condition, nor is there any promise that outstanding liens or municipal fines will be paid by the sale.
Tax Sales
If municipal taxes go unpaid, most municipalities across Pennsylvania will eventually levy the property to recoup what is owed. Typically this is the result of unpaid property taxes, but can also be triggered by unpaid public utility bills.
Right of Redemption
In Philadelphia, if you are the owner of a property sold due to unpaid taxes, you have nine months to pay in full all back taxes on the property, repay the winning bid, and reimburse the winning bidder for any work done to bring the property into compliance with local building codes.
The Right of Redemption only applies to properties sold through Delinquent Tax Sales. You cannot file for redemption on foreclosed homes.
The right is also forfeited if the home was vacated less than 90 days from the date of sale.
If you are facing a Pennsylvania right of redemption tax sale, call our office as soon as you can – we have limited time to help you save your home.
When can you face a Sheriff’s Sale in PA?
The Sheriff Sales most people are familiar with are caused by foreclosures. Foreclosure is a judicial process. If you receive a notice of intent to foreclose, it is not an empty threat-it means the lender is moving forward with plans to foreclose, and upon successful foreclosure will allow the property to be listed for Sheriff’s Sale.
Such a notice should not be a surprise, as lenders will not move forward with foreclosure until a number of mortgage payments have been missed.
Unpaid taxes and utility bills can also result in your home being auctioned at a Sheriff’s Sale. Much like the foreclosure notice, this will not come as a surprise. A lien will be placed on the property long before it is auctioned, and there will be a series of notices sent notifying you of your rights to redemption as a property owner.
Act 91 Notice—Your 30-Day Warning
The Commonwealth of Pennsylvania requires lenders to send you a warning called an Act 91 Notice at least 30 days before they file foreclosure proceedings. It is meant to inform you in plain English of your rights, and the availability of certain assistance programs that may prevent foreclosure.
Lenders are not required to file foreclosure 30 days after mailing the notice, as it’s simply a warning that the requirements to begin foreclosure have been met by nonpayment. In practice, a foreclosure will be filed promptly after the 30-day window unless a bankruptcy has been declared or the homeowner has entered a divergence program like Pennsylvania’s Homeowner Emergency Mortgage Assistance Program. At that point PA sheriff sale law governs.
What Happens After a Sheriff Sale in PA?
Under limited circumstances you can challenge the sheriff sale by filing a motion to set aside the sale before transfer of the deed to the buyer. Otherwise the deed is transferred after 21 days in Pennsylvania.
When the deed is transferred to the buyer, what happens next depends upon whether you are the previous owner or you rented from the previous owner. Either way, the buyer must file a complaint and obtain a court order to remove you from the property. If you were the previous owner, the buyer will file an Ejectment Complaint. If you are a tenant, the buyer will file an Eviction Complaint.
In either case, you will be personally served with the Complaint and you will have 30 days in total to answer. Your answer must be in writing and filed with the Court of Common Pleas in the county in which the property is. If you answer the complaint, litigation may take anywhere from six to nine months to run its course and during this time you may remain in the property. If you fail to answer, the buyer will get a default judgment and a final judgment by default, and you will be sent a letter by the county sheriff advising you of the time you have to remove your belongings and vacate the property.
How to Stop a Sheriff Sale in PA
There are three ways of stopping a sheriff sale in PA:
1. Short Sale
A foreclosed home offered at Sheriff’s Sale is unlikely to sell for more than a fraction of full market value. Lenders can suspend the home’s listing at any time until the gavel falls at the Sheriff’s auction. If the owner or an agent of the owner can negotiate a short sale, many lenders will be willing to call off the foreclosure and consider the outstanding debt on the home settled.
Even if they are interested in accepting a short sale, a prospective buyer is not enough to stall foreclosure. Most lenders won’t delist their home from the Sheriff’s Sale until the last possible moment in case the sale falls through.
2. Tax Sale Redemption
Homeowners have 9 months from the sale of their property to file for redemption. By paying all due taxes, fees, expenses and repaying the auction price and interest, homeowners have the right to get their home back. This only applies if the property was being used as a residence within 90 days of the sale.
3. Filing Bankruptcy
Filing bankruptcy provides for an automatic stay of all collection actions, including foreclosure and wage garnishment. Effectively, this will be a stay of the Sheriff’s Sale process as well.
No matter how you proceed, a bankruptcy filing will give you the time to make informed decisions instead of reacting to your creditor’s moves. A Chapter 13 filing can even keep you in your home, dependent on the repayment plan you establish with your creditors.
Recently someone came to us whose home was scheduled for Sheriff Sale and who was over $17,000 in arrears on the mortgage. We were able to stop the Sheriff Sale, stop the home foreclosure and spread out the arrears of $17,000 over a 5 year Chapter 13 plan. This client continues to pay the regular mortgage to the mortgage company, plus a little more than $400 per month to the Chapter 13 Trustee. At the end of the plan the mortgage will be all caught up and all other unsecured debt will be discharged!
Another client of ours had a pending Sheriff’s Sale scheduled, and came to us for advice. She had filed a Chapter 13 case but that case was dismissed because her previous attorney failed to explain what she needed to do to be successful. We were able to file a second Chapter 13 case for her, this time explaining to her in detail what her responsibilities were. She did everything we told her to do and the result was that her plan, which provided for repayment of mortgage arrears over five years, was approved by the Court.
If you are threatened with sheriff’s sale, and even if you’ve filed bankruptcy before, contact Philadelphia foreclosure attorney David M. Offen Esq. today to schedule your free consultation. You will be glad you did!
