Patrick and Anna Regan haven’t paid property property taxes on their Plains Township townhouse since they bought it in February 1990, Luzerne County records show.
The property will be listed in a back-tax auction next week, but how did they escape tax sales for more than two decades?
The primary answer, according to county tax claim operator Northeast Revenue Service LLC: bankruptcies.
Four of them.
Northeast Revenue President John Rodgers said his company fought the most recent bankruptcy and convinced a judge to ban further tax sale removals of the property due to bankruptcy filings.
Some property owners “abuse the system” by filing bankruptcies to avoid tax sales, Rodgers said. His company retains an attorney who specializes in bankruptcies to crack down on stagnant or questionable bankruptcies.
“Because the owners of the townhouse filed for bankruptcy so many times, they can no longer get an automatic stay precluding us from selling the property,” Rodgers said.
The Regans could not be reached for comment on several attempts.
Properties are supposed to be listed for sale if real estate taxes are unpaid for two years unless the owners obtain court orders, pay off the debt, enter a repayment plan or file for bankruptcy.
According to Northeast Revenue, the Regans were removed from the first tax sale listing in 1992 because they filed for bankruptcy. That bankruptcy was dismissed in 1993.
At some point the property owners went on a payment plan but defaulted. The property was listed for auction in 2002 but pulled due to the second bankruptcy filing, the company said.
The property also was removed from 2007 and 2012 sales due to bankruptcies, the company said.
It’s unlikely the property will sell at Thursday’s sale because bidders must pay the $141,716.32 in taxes that have piled up over 23 years.
Properties that don’t sell at this first-stage auction will advance to a free-and-clear sale later in the year, when back taxes and liens are forgiven.
The Regans paid $100,000 for the 2,000-square-foot property, and it’s assessed at $167,400, county records show.
Thursday’s sale, which begins at 10 a.m. in the Luzerne County Courthouse, is primarily for properties with defaulted payment plans and dismissed bankruptcies. Most of the property owners entered into payment plans to keep their properties out of a sale last September but then failed to make subsequent payments after the sale, according to Northeast Revenue.
The tax claim operator chose to hold a special sale now instead of waiting until the next regular upset sale in the fall. The strategy of holding a sale sooner has prompted a significant number of property owners to pay up. A total of 339 properties were listed, and 171 have been removed due to payments.
The remaining roster of properties includes the former Spinning Wheel Restaurant on Carey Avenue in Hanover Township, the Hollywood Diner and Sports Bar on the Airport Beltway in Hazle Township and an apartment and vacant store building at 521 Fellows Ave. in Hanover Township.
Eight properties owned by Selma Wootton in Warrior Run also are listed.
A list of the properties scheduled for the sale and information on how to bid may be viewed at www.luzernecountytaxclaim.com.