Wednesday, December 20, 2017

tax sale - notice - "reasonable efforts" to find/notify property owner

Klemmer v. Fayette Co. Tax Claim Bureau – Cmwlth. Court – December 14, 2017

Upset tax sale set aside because tax claim bureau (TCB) failed to make any effort to locate the property owner, much less “reasonable efforts” required by 72 P.S. 5860.607a(a), where the certified mail notice was returned unsigned to the TCB, because the property owner was incarcerated during all relevant periods.

From the opinion:

Notice, due process
The Tax Sale Law requires a tax claim bureau to give notice to the delinquent taxpayer before his property can be sold in satisfaction of overdue taxes.  . . .The United States Supreme Court has held that due process is implicated when property is taken for the collection of taxes, stating: [p]eople must pay their taxes, and the government may hold citizens accountable for tax delinquency by taking their property.   But before forcing a citizen to satisfy his debt by forfeiting his property, due process requires the government to provide adequate notice of the impending taking. . . .To satisfy due process, a tax claim bureau must provide “notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” . . . .The notice provisions of the Tax Sale Law “assure that no one is deprived of property without due process of law.” . . . .Accordingly, a tax claim bureau must strictly comply with each and every statutory notice provision, or the tax sale will be set aside.

Focus on the actions of the TCB, not the property owner
In reviewing the validity of a tax sale, the court must focus “not on the alleged neglect of the owner, which is often present in some degree, but on whether the activities of the [tax claim bureau] comply with the requirements of the [statute].” Consolidated Reports, 132 A.3d at 644 (quoting Smith, 834 A.2d at 1251). It is the conduct of the tax claim bureau that is determinative of compliance with the statutory notice provisions.

Reasonable efforts requirement

Where a notice to the property owner is either returned without the required signed return receipt, or there are other circumstances which raise a “significant doubt” as to actual receipt of the notice, then before a tax sale can take place, the TCB “must exercise reasonable efforts to discover the whereabouts of [the property owner]and notify him.  72 P.S./ 5860.607a(a).      The statutory list of possible “reasonable efforts” details the “mandatory minimum search required,” but what constitutes a reasonable effort is fact-specific.  . . . .It matters not that the reasonable effort may not have borne fruit. An effort must still be undertaken. . . . Futility is not a defense to a tax claim bureau’s failure to exercise reasonable efforts.  Further, the tax claim bureau must do a reasonable search even where the address to which the tax claim bureau sent the notices is correct. . . .. Here, the Tax Claim Bureau did not offer evidence that it undertook any effort to locate Taxpayer.