By Act 93 of 2014, Pennsylvania recently amended the Municipal Claim and Tax Lien Law to broaden the scope of a municipality’s lien for delinquent real property taxes.
Effective January 26, 2014, a recorded lien for real property taxes will not only lien the specific property subject to the delinquent taxes but also lien all other property owned by the taxpayer in the county where the judgment is entered. Like a lien for a money judgment, this lien will have priority from the date it is filed in the local Prothonotary’s office. In addition, the lien for delinquent real property taxes can be transferred to other counties and will lien all of the taxpayer’s property in the counties to which the judgment is transferred.
As a consequence of this recent amendment, when making a loan or refinancing a debt secured by real property, all delinquent property taxes reduced to judgment will have to be paid at closing whether or not a tax lien for those taxes encumbers the subject property as was the case prior to the amendment. In addition, in a workout setting, when evaluating the amount of equity in a certain parcel of real property or the priority of a judgment lien obtained or to be obtained by a bank, tax liens now must be taken into consideration because they hold the same status as a general judgment liens.