Sale of West Penn property by tax bureau is set aside

A Schuylkill County judge set aside the sale of a property in West Penn Township which was included in an upset sale held last September by the Schuylkill County Tax Claim Bureau. The ruling was made by Judge Jacqueline Russell

The property in question is located at 815 Lizard Creek Road, Andreas. FANNIE MAE Company, Dallas, Tex., lodged the objection, claiming it received title to the property as a result of a sheriff's sale on Aug. 21, 2009, after being the successful bidder for the mortgage on the property. The tax claim bureau had the owners of the property listed as George T. Baldwin Jr. and Catherine M. Smith, of 115 Fell Street, Summit Hill.

At the hearing in court on FANNIE MAE's petition, the tax claim bureau claimed it had no knowledge that FANNIE MAE had become the owner of the property before the upset sale and that it would be unjust to invalidate the upset sale simply because the property was transferred to a new owner between the time of service of notice of sale on the old owners and the upset sale.

Russell noted the tax claim bureau did not dispute that, as of the upset sale, FANNIE MAE had been the record owner of the property. Russell ruled the statutory law provides it is the tax claim bureau's pre-sale duty to notify a property owner of a pending upset sale. She said the question before the court is whether a new owner's receipt and recording of title to a property, between the date notice of the upcoming upset sale had been given to the prior owner and the date the upset sale was held, impacts the validity of the sale if the new owner did not receive all statutory pre-sale notices.

FANNIE MAE contended that it became owner after the execution and recording of a sheriff's deed on Sept. 10, 2009, and believes that it is the tax claim bureau's responsibility to monitor the state of title of all properties on the upset sale list and that a change in ownership before the sale, without the requisite statutory notices having been provided to the record owner, precludes or invalidates a sale.

The tax claim bureau claimed that after it properly notifies the record owners of a pending sale, a subsequent transfer of the tax delinquent property to a new owner does not prohibit, or affect the validity of the tax sale. They argued to the court FANNIE MAE should be charged with knowing the status of any tax delinquency on a property to which it obtains title, rather than the tax claim bureau being obligated to monitor title records for ownership changes before sales.

Court ruling

Russell ruled the court understands the tax claim bureau's concern about monitoring the title of properties, but the case law supports FANNIE MAE's position and the bureau need only delist a property for which it either did not or could not provide the requisite statutory notices. "Consequently,:" Russell stated, "as the mandated notices were not provided to FANNIE MAE, which was the owner of the property on that date of the upset sale, the upset sale is set aside."