PAR article on Act 93

Confusion regarding a recently signed bill has created some misunderstandings about how it will affect real estate and transactions.

“Act 93, originally House Bill 388 (Parker, D-Philadelphia), only changed how municipalities reduce property tax claims and tax liens to a final judgment in that county,” said PAR legal counsel Brett Woodburn. “As a result, municipalities no longer have to incur the expense of suing delinquent property owners to get a final judgment. This really expands the arsenal of weapons that municipalities have at their disposal to collect delinquent taxes and fees.

http://www.parjustlisted.com/archives/20537/comment-page-1#comment-2867

Be sure to read the comments.  Here is my response to Brett Woodburn's comment:

I agree that the laws enforcing money judgments have not changed. Presuming - as I have been told - that municipalities are on board and filing money judgments against delinquent property owners, what we have is a massive new overlay of money judgments attaching to real property.  It does not take an execution of a money judgment to make the judgment attach to real property.  It automatically attaches.  While these liens are attached to parcels, they cannot be refinanced or conveyed with good title until the liens are satisfied.  The unintended impact of Act 93 is to make distressed properties harder to sell, and in some cases impossible to sell.

The unintended consequence of allowing municipalities to forego the thought process involved in suing for final judgment is to take out of the mix review by the court and an opportunity for defense by the property owner.  The old system might have been costly and time consuming for municipalities, however, review by a competent attorney prior to filing suit would help municipalities consider which individual collection circumstances would be helped by the filing of such money judgments and which would be impeded.

PAR, MBA & PLTA members...... We need to fight for a repeal of PA Act 93 of 2013.

I come from a family of Realtors. My mother, now retired, was a broker. I cut my teeth in real estate. In 1973 one of my 3 jobs was working as a secretary in a real estate office. I eventually got my license, became a Realtor, and after selling for awhile I took a position as a loan originator in 1978.  For 16 years I made mortgage lending my career, got involved in the MBA and eventually had the privilege of serving as president of our local MBA. When I transitioned into title insurance, I joined ALTA and PLTA.

Through these years I have had a chance to watch these trade associations in action and how they choose what to champion, fight or accept from state and federal legislators. Normally trade associations fight on behalf of their members.

I am having a hard time understanding why PAR, MBA, and PLTA did not fight against passage of a law that will take a certain percentage of transactions out of the hands of their membership who frankly need every transaction these days to make ends meet.

Even if you did not initially recognize the impact this law would have on those of us who deal regularly with short sales, distressed properties, REO, second home buyers and investment property buyers, now you do know.  Why aren't you fighting for a repeal?

Every property owner, potential buyer, Realtor, lender, and title agent who deals in these properties will be impacted by this new law in a negative way. Local governments will be impacted when they are faced with properties that can't be sold because of the addition of new liens as judgments in personam overlay and crisscross over multiple parcels.  What happens to properties that can't be sold?  Lots of them go derelict and become blights in neighbors causing all sorts of problems for local officials. This is not good.

I understand PLTA is now focused on pushing for an amendment to clarify the process of lien discovery.  Well, PLTA seems to have given up and granted to the state the ability to take money out of the hands of members who count on PLTA to protect them from government actions that destroy their business.

If these trade associations do not step up to the plate to fight for their members against a law that is ill conceived, who will?

PAR, MBA and PLTA understand real estate more than any other organizations in this Commonwealth. You need to lead this fight.  Please fight for repeal.