Sheriff’s sales are an important tool for acquiring ownership where a property is burdened with unpaid debt. This debt comes from former or current owners and any buyer would be responsible for paying it after gaining title to the property. Because these sales take place to raise money needed for unpaid debt (such as municipal liens), after a property is sold through sheriff’s sale, the proceeds are applied to the municipal liens. Applying the proceeds clears all liens from the property, even if the proceeds do not cover the liens entirely. Therefore, buyers of property through sheriff’s sale are able to gain title unburdened by debts or liens.
Sheriff’s sales in Philadelphia include:
- Mortgage sales—brought by the bank that holds the unpaid mortgage,
- Tax sales—brought by the City Law Department or its contracted outside collection agencies, or
- Nuisance lien sales—brought by the City Law Department on behalf of the Department of Licenses & Inspections (L&I).
When and how does debt trigger a sheriff’s sale?
Any property with an unpaid mortgage, unpaid tax bills, unpaid L&I bills, or any lien is at risk for being put up for sheriff’s sale if the owner is at least three years delinquent in paying back the debt. Several factors influence if and when a property is sent to sheriff’s sale, however, including the amount of debt, the length of delinquency, whether the owner entered into a payment plan, and the value of the property.
Who decides which properties get put up for sheriff’s sale?
The decision whether to send a property to sheriff’s sale does not lie solely with the City. Either the City or its two outside collection agencies, Linebarger or GRB, makes tax sale decisions, and mortgage companies make mortgage sale decisions.
Individuals can also request that a specific tax-delinquent property be sent to sheriff’s sale by contacting the entity that holds the tax liens. The lien holder information can be found at here, under the "View Tax Balances" tab. You can also visit the Office of Property Assessment at the Curtis Center, 601 Walnut St., 3rd floor, west side, or call 215-686-4334.
If the lien is held by the City, individuals can "certify" a property to go to sheriff sale's by placing a "deed poll" deposit (typically around $800) with the Sheriff's office. The deposit is refunded once the property is sold. The process from initiation to sale can take between 12 and 18 months to complete. Contact the Sherriff's Office for more information.
What happens during and after this sale?
At sheriff’s sale, the entity that holds the liens sets the listing price, or bid minimum. In a mortgage sale, the mortgage company sets the bid minimum. In a municipal (tax or L&I) lien sale, the City or its collection agencies sets the bid minimum. The bid minimum is typically equal to the lien amount. When the property is sold, the sale proceeds are applied to the remaining municipal liens. Applying the proceeds clears all liens from the property, even if the proceeds do not cover the liens entirely. This way, the new owner has clear title to the property. For more information on the sheriff’s sale process, visit http://www.officeofphiladelphiasheriff.com/.