I've recently had several clients ask me about newly enacted changes to Pennsylvania law regarding how liens for delinquent property taxes are indexed. Their questions reflect a series of misunderstandings about the legislation and the scope of its impact.
Act 93 of 2013, signed into law on November 27, 2013, amends Pennsylvania's Municipal Claim and Tax Lien Law. Since then, there has been much confusion among the real estate and lending communities regarding the ramifications of this new law and how it will affect real estate transactions. There has been great concern that the amendment changes the way examiners and abstractors search delinquent property taxes. One client with whom I spoke was concerned that her vendor examiners would need to start searching the tax lien records to determine if there is a lien on any and all other real estate owned by a record owner in a given county because she has been told that “a lien on one property becomes a lien on all.”
Essentially, all Act 93 does is to streamline the process which a local taxing authority must follow in order to reduce a delinquent property tax lien (which stays with the property) to a personal judgment (which follows the delinquent property owner). The law regarding enforcement of personal judgments remains unchanged.
This means that such a lien would need to be indexed against the owner personally before it could be considered a lien which would attach to "all" real estate owned by that person. In other words, the only way it would attach to "all" of the owner's real estate holdings is if it was indexed in the Prothonotary's Office, which examiners should already be checking when doing a judgment search.
This method of indexing liens against real estate has been custom and practice in the Commonwealth for as long as I can remember, and as far as I can tell, would not be changed or affected by the new legislation.
DISCLAIMER: This writer is not a licensed attorney. This article is intended for general information purposes only, and should not be construed as a legal opinion or relied upon as legal advice.