You’ve all heard the expression that “the only things certain are death and taxes”. What can also be included in that statement is that if you don’t pay property taxes in Pennsylvania, the taxing authority will take steps to collect that debt. Historically the Municipal Claim and Tax Lien Law provided the taxing authority the means to have a court award an amount due resulting in a Municipal Lien against the property for which the taxes were delinquent. An examination of the title by a qualified Pennsylvania Title Insurance Company would discover this judgment in the court records and help the owner – whether they were the seller, buyer or borrower -obtain a payoff amount, pay and satisfy the lien. This Municipal Lien, though, only attached to that specific property so if you were buying, selling or refinancing on different Pennsylvania property, the lien wouldn’t be an issue. But now that’s all changed. When a PA title insurance company is assisting in a transaction on another property aside from one that had delinquent taxes the lien on said borrower will now for the first time need to be paid and satisfied.
On November 27, 2013, Act 93 of 2013 was signed into law by the Pennsylvania Legislature and became effective just two days ago, January 26, 2014. This Act amends the Municipal Claim and Tax Lien Law to provide for the collection of delinquent property tax claims through judgment liens as opposed to a Municipal Lien. What exactly does that mean? A municipal lien by simple definition is a monetary award in favor of a taxing or municipal authority that sticks to the specific property. A judgment, simply put, is a monetary award against a specific person or entity. Municipal Liens stay with the property; Judgments follow the person. So if an owner does not pay the real estate taxes on his Pennsylvania property, that judgment will now, in effect, attach to any and all other property he may own in the same Pennsylvania county.
As a PA Title Insurance Company we will be sure to check the appropriate courthouse records when you’re buying, selling or refinancing a piece of Pennsylvania real estate. Not only do we search for any municipal liens against your specific property, but its always been our job to investigate any judgments against all parties to the transaction. If we find any judgments relating to taxes on other properties we now must collect, payoff and satisfy said judgment in order to issue a clean PA title insurance policy. Our goal as always is to ensure your ownership free from any claims or issues. Rely on us your PA Title Insurance company to make that happen.