Gutierrrez v. Washington County Tax Claim Bureau – Cmwlth. Court – June 10, 2021
Published, precedential opinion (after motion to publish granted)
Held: Tax sale of owner-occupied manuf. home (MH) voided due to failure of tax claim bureau (TCB) to make personal service of the notice of the tax sale, as required by RETSL (Real Estate Tax Sale Law), 72 P.S. sec. 5860.601 (a)(3).
Kudos to Dan Vitek of Community Justice Project for litigating this case and getting the opinion published.
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Facts: Seller of manuf. home failed to give notice of sale and change of ownership to proper authorities, nor did the Buyer, whom the trial court recognized was “[i]nexperienced and unwitting of real estate tax matters concerning mobile homes and possessing only a bare understanding of the English language.”
When Buyer failed to pay taxes, TCB started tax sale proceedings, but sent all notices to the seller/prior owner. Two notice were returned to the TCB. The TCB posted notices of the sale on the manuf. home. Buyer saw the notices but “was unable to read them and did not seek help in translating them.”
The trial court held that tax sale was valid and that personal service of the notice of sale could be waived, since Buyer was “neither an owner of record nor an apparent owner” under 72 P.S. sec. 5860.201 (“owner”), despite undisputed evidence that Buyer entered into a lease with the MH park owner, who had a copy of the lease. The only attempt at personal service was by knocking on the MH door at a time when Buyer was not at home.
From the opinion
The notice provisions of the Tax Sale law must be strictly construed – A presumption of regularity attaches to tax sale cases. However, once exceptions are filed, the burden shifts to the tax claim bureau to show that proper notice was given. In re Upset Sale Tax Claim Bureau McKean Cnty. on Sept. 10, 2007, 965 A.2d 1244, 1248 (Pa. Cmwlth. 2009). The Tax Sale Law’s notice provisions must be strictly construed and a tax claim bureau’s failure to comply with all the notice requirements ordinarily will nullify a tax sale. Cruder v. Westmoreland Cnty. Tax Claim Bureau, 861 A.2d 411, 415 (Pa. Cmwlth. 2004).
Special notice requirements for owner-occupied property - Where owner-occupied property is at issue, Section 601(a)(3) of the Tax Sale Law provides that the notice described in Section 602 must be personally served on an owner-occupant at least ten days prior to the date of the actual sale by the sheriff. 72 P.S. § 5860.601(a)(3). Section 601(a)(3)’s personal service requirement “expresse[s] a desire to provide a qualitatively different type of notice to an owner[-]occupant and afford such owner [with] increased protection by way of additional notice.” McKelvey v. Westmoreland Cnty. Tax Claim Bureau, 983 A.2d 1271, 1274 (Pa. Cmwlth. 2009). The attribution of enhanced importance to personal service for owner-occupied property requires a tax claim bureau to establish good cause for a waiver of the requirement of personal service.
The Buyer was an “apparent or reputed owner” of the property – The Buyer was not an “owner” of the property, because both the Seller and Buyer failed to provide the proper documentation of the transaction. However, Buyer was an “apparent or reputed owner. . .open, peaceable and notorious possession of the property, as apparent owner. . .or the reputed owner. . .thereof in the neighborhood of such property” and thus was entitled to personal service of the notice of the sale, 72 P.S. sec. 5860.102 (“owner). . . The accepted evidence establishes that Buyer is an apparent or reputed owner under Section 102’s definition of “owner.” The parties stipulated that the title issued by the Department described the mobile home that Buyer was living in and named her as its owner. Additionally, there is no dispute that Buyer and her family openly reside in the mobile home located at the address of the property sold at tax sale. Further, the trial court summarized the parties’ stipulation that Buyer lived there and had a lot lease at a mobile home court.
Actual notice does not negate the statutory requirement of personal service - Actual notice does not waive strict compliance with Section 601(a)(3)’s personal service requirement. Consequently, “unless a taxing bureau obtains an order waiving the personal service requirement for good cause shown, its failure to comply with [S]ection 601(a)(3) of the [Tax Sale Law] will render a tax sale invalid.” Montgomery Cnty. Tax Claim Bureau v. Queenan, 108 A.3d 947, 952 (Pa. Cmwlth. 2015). . .
The TCB did not show good cause for waiving personal service of the notice of sale – Determination of good cause involves consideration of the facts of the case “in light of the fundamental purposes of the [Tax Sale] Law.”9 Appeal of Neff, 132 A.3d at 650. “The primary purpose of tax sale laws is to ensure ‘the collection of taxes, and not to strip away citizens’ property rights.’” Id. at 650 [quoting Rice v. Compro Distrib., Inc., 901 A.2d 570, 575 (Pa. Cmwlth. 2006)]. In other words, the aim of these laws is not to punish taxpayers who did not pay taxes due to mere oversight or error. Appeal of Neff. Instead, the purpose is to protect local governments from persistent tax delinquents such that “failed attempts at personal service of notice may be, depending on the specific facts of the case, legally sufficient to obtain a waiver under Section 601(a)(3) of the Law.” Id. at 651. However, we must be mindful of the legislature’s heightened concern for owner- occupants being divested of the very property in which they are living. Id. at 646. In other words, someone’s home could be at stake. Id. at 651. The TCB made only one attempt at personal service and should have been on notice that there was a new owner, the Buyer, since its two mailed notices to the Seller were returned with notations that they were “undeliverable.”
