Earlier this year, the Commonwealth Court decided the case Pennsylvania Land Title v. East Stroudsburg Area School District and threw a wrench into the application of the Municipal Claim and Tax Lien Act and the Real Estate Tax Sale Law and the collection of delinquent real estate taxes by school districts and municipalities. The Commonwealth Court’s decision held that school districts and municipalities who choose to collect delinquent real estate taxes themselves or through contractors were nevertheless required to remit a 5% fee to the local County Tax Claim Bureau. As a result of this case, it has become less financially advantageous for districts and municipalities to undertake their own delinquent tax collections. The Pennsylvania Supreme Court declined to review the Commonwealth Court’s decision.
The Pennsylvania legislature is presently considering a bill which would amend the Municipal Claim and Tax Lien Law and remove this requirement, thus freeing the School Districts and Municipalities from paying the additional 5% fee. Senate Bill 777 was recently voted out of the Senate Finance Committee and is scheduled to be considered by the full Pennsylvania House and Senate in the very near future. This potential legislation is of great interest to school districts to maximize the possible benefits of delinquent real estate tax collection. We will provide updates regarding the status of this legislation.