York County Tax Upset Sale

Are you behind on your real estate taxes? Every September, the York County Tax Assessment Office conducts a “Tax Upset Sale.” For those property owners who do not pay their real estate taxes in a timely fashion, the County may sell the real estate on which the taxes are owed for an amount equal to the delinquent taxes. If the real estate taxes are not paid for the year two years prior to the sale date, the property will be sold at the tax sale, subject to any mortgages or other liens and encumbrances. This year, the real estate tax sale is September 20, 2012 in York County. In order to remove a property from the tax sale list, it is necessary to pay in full the amount of the 2010 taxes, plus any applicable interest and penalties for that tax year. For property owners that are delinquent and have properties on the tax sale list, there are a few options. First, the easiest way is to pay the applicable tax and penalties and interest. In the event that a property owner does not have the cash to make a lump sum payment on account of the taxes due for the sale date, a Chapter 13 Bankruptcy may be an appropriate mechanism to pay back the real estate taxes over time. When a property owner files bankruptcy, the Automatic Stay imposed by the Bankruptcy Code automatically stops the Tax Upset Sale or Sheriff Sale, as well as any other collection activity against the property owner. After the bankruptcy is filed, the property owner must promptly resume making monthly payments and propose a plan with the Court to pay back the delinquent real estate taxes in full over the course of 3 to 5 years. If the property owner is also behind on payments to the mortgage company or other taxes, these arrears also must be included in the Chapter 13 Plan. No Sheriff Sale may be conducted while a property owner is in a Chapter 13 Bankruptcy, and so long as the monthly payments continue to the mortgage lender. Property owners should take action early to develop a strategy and consult a qualified legal counsel to understand all options that are available to them to save their property. This is especially the case for property owners who own real estate worth more than the mortgage owed on the property. Savvy real estate investors may decide to purchase the property at the Tax Upset Sale by simply paying the taxes on the property and taking the property subject to the mortgage. Generally speaking, once a property is sold at the tax upset sale, there is no right of redemption for the property owner to get the property back. However, the Tax Claim Bureau must closely follow the law to insure that property owners are given notice of the sale.