Mortgagee Had No Right to Redeem Vacant Property after Tax Sale

A mortgagee could not redeem unoccupied vacated property after the sheriff’s deed was acknowledged in a tax sale, the Commonwealth Court ruled in Brentwood Borough School District v. HSBC Bank USA, N.A., __ A.3d __ (No. 2346 CD 2013, filed March 24, 2015). The subject property in this case was sold to a third-party purchaser in a tax sale for delinquent real estate and school taxes. Because the gas service had been shut off, the former owner was no longer residing in the home before the tax sale, although many of her belongings remained there. HSBC Bank, as mortgagee, filed a redemption petition under Section 32(a) of the Municipal Claims and Tax Liens Act, 53 P.S. §7293(a). The trial court denied the petition, holding that it was untimely and that HSBC had no right to redeem after the sheriff’s acknowledgment of the deed because the property was vacant at the time of the sale.

On appeal, Judge McGinley, writing for the unanimous panel, first noted that the trial court had incorrectly applied a 90-day deadline for HSBC’s redemption petition; Section 32(a) imposes a nine-month deadline, which HSBC met. The Court agreed with the trial court that HSBC’s petition failed under Section 32(c) of the Act, which states that “

[t]here shall be no right of redemption of vacant property by any person after the date of the acknowledgment of the sheriff’s deed therefor.” 53 P.S. §7293(c). Noting that this was a case of first impression on the meaning of “vacant property” in Section 32(c), the Court emphasized that, without gas and running hot water, no one could have lived in the home. That the former owner had left her belongings there was irrelevant, the Court held, because “to invoke the right of redemption … the occupancy must be as a residence, not as a storage unit.” The Court observed that enforcing a short redemption period for this type of property comported with the goal of the Act to facilitate the sale and rehabilitation of abandoned, uninhabitable properties and return them to the tax rolls.
By | 2017-05-19T22:51:29+00:00 April 23rd, 2015|Categories: Government Law, Municipal Law, Real Property|Tags: , , , , , , |Comments Off on Mortgagee Had No Right to Redeem Vacant Property after Tax Sale

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