State lawmakers are considering legislation that would, in part, require anyone who wants to bid at a real estate tax sale to register at least two weeks in advance.
Proponents say the proposal – House Bill 1559 and Senate Bill 775 – would help reduce blight across the Keystone State by keeping shell companies and delinquent taxpayers from purchasing property at public auctions.
“There are many issues surrounding tax sales and loopholes that can easily be exploited by shell corporations and negligent property owners who purchase property under sale and do nothing further to enhance or even maintain the property,” state Rep. Sue Helm, R-Dauphin County, said. The bills were the subject of a joint hearing of the state Senate and House Urban Affairs & Housing committees.
Under the proposal, applicants must submit an affidavit stating they are not delinquent in paying real estate taxes anywhere in Pennsylvania. They must also verify they do not have any municipal utility bills that are more than one year outstanding in Pennsylvania.
“Under current law, property owners who are delinquent on [taxes] are not permitted to bid at [a] tax sale,” state Rep. Doyle Heffley, R-Carbon, co-sponsor of HB 1559, said.
“Yet they can easily bid at the sale and purchase the property,” Heffley said. “It is then only after the sale that counties may realize that individual is prohibited from purchasing property at a tax sale. This [legislation] allows a county to identify any potential bidders who are not able to bid prior to the sale instead of trying to play catch up after a property has sold at a tax sale.”
Many local officials see such a proposal as an opportunity to bolster their efforts to eliminate blight and neglected properties within their communities.
“One of the things that this legislation adds to the tool belt is an opportunity to further stabilize existing neighborhoods,” Crandall Jones, municipal administrator of Norristown, told lawmakers. “What we see with these property owners, these bad property owners, is so much destabilization of good neighborhoods, of folks who are trying to do the right things in their communities.
“Bad actors come in, buy a property, don’t improve it. Over time … the property values continue to go down, people decide it’s not going to get any better,” Jones added. The codes department “is doing everything they can, but nobody understands, we’re limited as a municipality in what we do. So, we think that this adds another … leg to the stool of trying to stabilize neighborhoods and communities.”
State Sen. David Argall, R-Schuylkill County, is co-sponsoring SB 775.