Shieff Tax Sale Assignment - Philadelphia

[Michael Lenahan]

Hi All,

I am hoping to get you advice on a property that I'm thinking of buying.

This property is being sold as shieff tax sale assignment. Good deal on paper, but I'm worried about Right of Redemption.

This is what I know about the property:

Taxes owed: $3,366

I've walked through the property and it has been cleaned out and it is vacant.

There are recent L&I violations for not having a vacant license.

My questions:

Does Right of Redemption apply in this case since the property has been cleaned out and is vacant?

Is there anyway I can get title insurance or is there a way to minimize the risk?

What is the game when investing in shieff tax sale assignment properties?

[Michael Campbell]

Hi @Michael Lenahan

Per the Philadelphia Sheriff's Office website: 

http://www.officeofphiladelphiasheriff.com/en/real...

"The right of Redemption is only applicable if the property scheduled for Tax Sale is determined to be owner occupied 90 days prior to the sale. If the property is unoccupied or abandoned, there is no Right of Redemption."

However, you may still have trouble getting title insurance.  I'd recommend calling around to a few title companies to get their opinion.

[Michael Lenahan]

Thanks Michael for commenting.

I've read what is on the city's website, but the devil is in the details.

I need feedback from investors with first hand experience investing in these types of properties.

[Steve B.]

If the property is redeemed after your purchase you are entitled to your money back plus interest. Do you know what that interest rate is in your county?

Un any case I would wait out the redemption period before putting money in repairs?

[Michael Lenahan]

Thanks Steve.

I found some more details on this:

https://thephiladelphiabankruptcyattorney.com/tax/...

The interest rate appears to be 10%.

[Yuriy Skripnichenko]

@Michael Lenahan

I've recently purchased a property from a sheriff tax sale. I've decided to wait out the redemption period even though the property was not occupied. The only repairs I'm doing is that must be done immediately as leaking roof etc. And all violations if any. 

I didn't purchase title insurance, however I found a company who would insure tax sale, it's be more expensive though.  If you need contacts for the title insurance company PM me

[Steve Babiak]

Redemption in Philadelphia has been the subject of a number of court decisions, all the way to Superior Court in some cases. Both occupancy and time period have been covered in court decisions.

The state statute that the tax sales are to follow is at link below:

http://www.legis.state.pa.us/WU01/LI/LI/US/PDF/192...

That statute establishes redemption rights only under specific circumstances; see Section 32 on page 26 of that PDF file. If it was vacant, there are no redemption rights.

[Michael Nguyen]

Are all tax-delinquent properties in Philadelphia automatically put up for a sheriff's sale? 

[David Vesta]

You might consider taking the free course the sheriff's office offers - a lot of great information plus they do a Q&A at the end. Here's a link:

https://www.officeofphiladelphiasheriff.com/en/rea...

As far as insurance, this is what they said at the seminar:

• "YOU CAN GET HOMEOWNER’S INSURANCE AFTER YOU PAY FOR THE PROPERTY (DEPENDS ON THE INSURANCE COMPANY)
• YOU ARE RESPONSIBLE FOR THE PROPERTY FROM THE DATE OF THE SALE. ANYTHING THAT HAPPENS THERE IS YOUR RESPONSIBILITY"

As far as Right of Redemption:

• JUST TAX SALES (MORTGAGE SALES THERE IS NO REDEMPTION
• 9 MONTHS FROM WHEN THE DEED IS ACKNOWLEDGED
• THE FORMER OWNERS HAVE TO PAY WHAT YOU PAID PLUS 10%, PLUS ANY COSTS YOU INCURRED FOR CORRECTING STRUCTURAL ISSUES

Hope this helps.