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It is undeniable that the deprivation of an owner’s property rights is not a concept act to be taken lightly. The stringent notice requirements contained within Pennsylvania’s Real Estate Tax Law are emblematic of that law’s emphasis upon affording a property owner adequate constitutional safeguards. By way of illustration, that law provides: “Service of the rule (approving and scheduling a sale) shall be made in the same manner as writs of scire facias are served in this Commonwealth . . . If service of the rule cannot be made (by the sheriff) . . . then the rule shall be served on the person named in the rule by the sheriff, by sending him, by registered mail, return receipt requested, postage prepaid, at least 15 days before the return day of the rule, a true and attested copy thereof, addressed to such person’s last known post office address.” Naturally the failure to comply with such a mandate can provide a clear basis for invalidating a sale. And that is precisely what transpired in the case of Fulton v. Bedford County Tax Claim Bureau. Back in 2005, Cynthia Fulton’s property was exposed to an upset sale due to non-payment of taxes. No bids were received and hence the Bedford County trial court issued a rule to show cause why her property should not be sold at a judicial sale. Despite the law’s clear directive, the sheriff’s office failed to comply; Fulton was never served with that rule. A sale was ordered and the property was eventually sold to Gary Horton. A deed was conveyed to Horton several weeks later. Fulton filed her petition to set aside the sale, claiming obvious due process violations. Upon a hearing, the lower court ordered that the sale be set aside as the sheriff never effectuated alternative service. Notably however, the purchaser, Horton, had no knowledge of Fulton’s action. Assuredly miffed by the sudden unprofitable turn of events, he attempted to intervene several months later. He fancied himself an indispensable party and was optimistic the trial court would reconsider its set aside order. In essence, he was making the same basic constitutional argument as Fulton. Fulton even conceded that she never served Horton with her petition. As the trial court in Fulton discovered, demarcating the constitutional protections to be afforded a purchaser at a judicial sale can prove a much more challenging task. The crucial question of course was whether Horton was an indispensable party. The lower court balked, however, concluding that defining his status was really irrelevant in light of a clearly invalid sale with respect to the owner. Intervention should be denied because Horton would have been unable to overcome the bureau’s failure to properly serve Fulton. Of course, the failure to join an indispensable party to a suit deprives a court of subject matter jurisdiction. And lack of subject matter jurisdiction is one of several bases utilized to open or vacate an order after the expiration of the 30-day period (which was the case in Fulton). For the purpose of defining an indispensable party in this context, the Fulton court scrutinized a tax sale matter that had confronted the Commonwealth Court about a year earlier. In In re 2005 Sale of Real Estate by Clinton County Tax Claim Bureau, the property owner was a limited partnership whose registered address was listed on the deed. Nevertheless, the bureau had been forwarding all notices to a former limited partner’s address; that partner’s interest in the partnership was divested in bankruptcy. Despite these notices being accepted at that address, the tax sale notice was returned “unclaimed.” That prompted the bureau to check telephone directories and assessment office records but not the recorder of deeds. Eventually, the property was sold at a public sale and a confirmation nisi issued. The owner naturally filed objections, yet failed to serve the purchasers. Somehow the purchasers managed to get wind of those objections and attended the hearing. At no point did buyers petition for intervention. For the purpose of having the trial court’s set aside order vacated, the purchasers contended they were indispensable parties. Unfortunately for them, the Commonwealth Court begged to differ. The law is well settled that successful bidders must petition to intervene in order to be regarded as parties in an objection proceeding challenging a confirmation nisi. The buyers in that case learned that merely showing up to champion the cause of the bureau is not enough. They lacked party status and waived the right to intervene. Another second, older Commonwealth Court decision case also provides context for the Fulton matter. In M.J.M. Financial v. Burgess, as in Fulton, the successful purchaser, MJM, did not receive notice of the petition to set aside or the resultant order until after the order’s entry. There, the bureau, despite notice of the appointment of a guardian, forwarded the notice of sale to the owner’s address. The bureau conceded inadequate notice under the law and the sale was set aside by the Delaware County Court of Common Pleas. Where did that leave MJM though? MJM’s petition to intervene was denied and an appeal ensued. The Commonwealth Court ultimately held that intervention should have been permitted due to the presence of extraordinary circumstances (such circumstances are necessary for intervention post-decree). MJM should have been afforded an opportunity to present evidence that the sale was compliant with the law, more specifically that the guardian did in fact receive notice of the sale. So if intervention was improperly denied in MJM, it would logically follow that Horton should have also had the chance to intervene. According to the Fulton court, his case was even more compelling. Unlike MJM, Horton actually became the legal owner – a deed was conveyed to him. As such, there can be little doubt that he became an indispensable party and one who enjoyed all of the same constitutional protections as the owner herself. Although the rights of a purchaser might appear to take a proverbial back seat to those of an owner, the Fulton decision unabashedly declares the inaccuracy of such a belief, especially where that purchaser acquires legal title. However strong the buyer’s rights might be though, the most prudent course of action would be to petition for intervention at the earliest opportunity. Harper Dimmerman represents clients in real estate matters and is the principal of his firm and president of DST Land Transfer, Inc., a title insurance company licensed in Pennsylvania and New Jersey. He may be reached via e-mail at [email protected] or telephone at 215-545-0600. He is co-chairman of the Philadelphia Bar Association’s solo and small firm committee and an executive committee member of the law practice management committee and YLD.

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