Legal Updates

Right of Redemption in Pennsylvania

Every year thousands of properties are sold at sheriff sale under tax lien foreclosure. The Office of the Sheriff of Philadelphia sells the property to collect on unpaid taxes. These properties are often sold at a fraction of their actual value. Investors are rightfully leery to purchase properties at tax lien sheriff sale because of the Right of Redemption.

53 P.S. Section 7293 governs Right of Redemption in Pennsylvania. Under the statute, a property that is sold at tax lien sheriff sale can be redeemed or essentially repurchased by the prior owner of the property within nine months of the date of the sale. The statue broadly defines the prior owner to include, “the owner… his assignees, or any party whose estate has been discharged thereby.” For example, the statute may provide for an heir to redeem a property that was sold at sheriff sale belonging to their late mother or father.

Pursuant to the Redemption Statute, the property must be occupied for ninety (90) days prior to the sheriff sale to enable redemption. Pursuant to the law there shall be, “no redemption of vacant property by any person after the date of the acknowledgement of the sheriff’s deed therefore.” The interested party must file a petition for redemption with nine months of recording of the sheriff’s deed, and serve all interested parties. The prospective redeemer must also have in escrow the purchase price of the redeemed property and ten percent interest.

Stopping a Redemption in Philadelphia, PA

Our firm has successfully halted several redemptions for investors in Pennsylvania using 53 P.S. Section 7293 and related ordinances. The burden is on the petitioner to show the Court; 1.) they have the requisite funds to redeem in escrow; 2.) they are a prior owner within the meaning of the statute; and 3.) the property was continuously occupied for at least ninety (90) days prior to the sheriff sale. The petition must also be filed timely and served on the third party-purchaser. If petitioner fails to make out any of these required showings or serve the third-party purchaser, the respondent (investor) may be able to convince the Court to deny the petition for redemption. If the petition for redemption is denied the investor will keep their property at the purchase paid at sheriff sale.

It is not a foregone conclusion that a property purchased a tax lien sheriff sale is redeemable.
– Mark Copoulos

Our Successes: Redemption Price Raised 100%

Our firm has successfully litigated a number of redemption actions for investors. In one recent case, S.P. purchased a property at sheriff sale. He invested thousands of dollars into the property making improvements, and proceeded to rent the property to tenants. Upon learning of the improved value of the property, heirs to the prior owners estate filed a petition for redemption. S.P. was not served with redemption papers and only discovered of the action after the prior owners broke into the property to re-establish possession. S.P. contacted our office to defend the redemption action. Our firm filed a petition to intervene and named S.P.’s business as a party to the action. We then answered the petition to redeem challenging the petitioners standing to bring the claim. In the alternative, we argued that even if the Court allows the heirs to redeem they must compensate S.P. for improvements made pursuant to Section 7293, which provides compensation for “necessary expenses.”

In Court, the judge raised the redemption price more than 100%. Petitioners now have thirty (30) days to pay S.P. in excess of $50,000.00 or waive their right of redemption. The property was purchased at sheriff sale for $24,000.00. If you have purchased a property at sheriff sale, contact our office to defend a petition for redemption. While you may not be able to save the property, you can take action to ensure you a rightfully compensated for any necessary expenses of the property, including the redemption price and ten percent interest.