Friday, March 21, 2014

I know you are getting sick and tired of hearing about Act 93, but I have news.

Examined a title in Somerset County yesterday and we have our first transaction impacted by Act 93 of 2013.  Our seller owns 5 properties in the county that have delinquent taxes owing for 2012 and 2013.

Since the 2013 taxes haven't yet reached the "claim absolute" stage, we aren't concerning ourselves with them.  The 2012 taxes, however, are claims absolute and therefore are "reduced to judgment" and must be paid in order to clear the title for our buyers.

Total additional tab to our sellers?  They are paying roughly $6000 to clear 2012 taxes on the 4 extra properties so that they can convey the 1 property to our insured buyer.

We can mark this one as a win for the municipality since the deal did not fall thru.  The sellers are elderly and own the property free and clear.

2 comments:

Vincent Baro said...

Diane,

Act 93 took effect on January 27th, 2014. It was my understanding that the act does not retroactively create in personam liens from of tax judgments entered in 2012. OR was a judgment for the taxes entered after 2014?

Could you please provide some clarification?

Warmest holiday wishes,

Vincent

Diane Cipa said...

Hi, Vincent. The quandary we have is that the wording in the law does not require the filing of a judgment. The folks who wrote the law have explained that they intended that a judgment was to be filed. There was an effort by some trade associations to draft language to add clarity to the law but my understanding is that this effort was not successful.

Pending some kind of amendment, when we find situations where the seller has delinquent taxes on other property owned in the same county as the subject property - other than REO which all underwriters have decided to insure over - we seek underwriter guidance. In the case outlined in this post, the underwriter wanted us to pay the tax. I don't disagree with that conclusion given the language in the law.