New registration requirements in effect for Luzerne County tax sale bidders

Bidders interested in buying property in Luzerne County’s Sept. 23 delinquent tax auction face must register by today and face increased reporting requirements and scrutiny due to new state legislation.

Aimed at cracking down on irresponsible bidders who contribute to blight, the state’s amendment of the Real Estate Tax Law that took effect Aug. 29 requires county tax claim offices to cut off bid registration sooner so municipalities have time to research whether prospective buyers have code violations.

Companies also must provide additional information to ensure the identity of parties involved is known. This includes an affidavit disclosing the name, business address and phone number of all company officers and all members, managers and individuals with an ownership interest or right in limited liability companies.

Under the new requirements, bidders will have until 4:30 p.m. today to register in person at the tax claim office on the first floor of the county courthouse in Wilkes-Barre, said Sean Shamany, of county tax-claim operator Elite Revenue Solutions LLC.

“If anyone comes in after that, they will be out of luck,” Shamany said.

Elite prominently posted information about the change on its website, luzernecountytaxclaim.com, including an alert that bidders previously registered this year must re-register using the new forms.

Shamany said he also alerted both the county law office and Council Real Estate Committee Chairwoman LeeAnn McDermott in case they receive complaints or inquiries about the rejection of bidders due to a missed registration deadline.

The county’s Sept. 23 auction is a first-stage “upset” sale, which means buyers must pay all delinquent taxes and accept responsibility for any outstanding mortgages and liens. Unsold properties advance to a future “judicial” free-and-clear sale, when all liens and delinquent taxes are forgiven unless bidding competition drives up the purchase price to cover some or all of that debt.

Shamany said it is helpful that the new requirements coincide with a less-popular upset sale because the changes will be an adjustment for bidders, tax claim and municipalities.

The county had around 400 active bidders in last month’s free-and-clear sale, meaning ones who registered and appeared at the sale to obtain a bid number, he said. As of Wednesday last week, approximately 55 had registered for the Sept. 23 sale under the new requirements, he said.

After today’s deadline has passed, Shamany said Elite will send a master list of bidder registration information to all 76 municipalities.

Elite’s website contains copies of the new registration forms that can be downloaded for both individual and business bidders.

Bidders must attest that they are not delinquent on real estate taxes and have no municipal utility bills outstanding for more than a year anywhere in the state.

It also requires bidders to attest they are not bidding for or acting as an agent for a person who is barred from participating in the sale and have not:

• Engaged in or allowed a housing code violation to continue unabated after being convicted of an uncorrected housing code violation within the last three years.

• Owned and failed to maintain property in a reasonable manner so that it does not pose a health/safety threat.

• Permitted use of a property in an unsafe, illegal or unsanitary manner.

For business bidders, the form discloses a purchase will be voided if it requires a fictitious name registration that has not been filed with the state.

Good-standing certificates from the last 90 days must be submitted by LLC, corporate and partnership bidders.

LLCs must provide a copy of their operating agreement. Corporations have to provide a copy of their bylaws, and a partnership agreement is mandated for partnerships, according to the forms posted by Elite.

State Rep. Doyle Heffley, R-Carbon County, a prime sponsor of the legislation, has said he discovered the need for the changes speaking to residents and municipal officials suffering from an increasing number of entities buying tax-delinquent properties “dirt cheap” and sight-unseen and then failing to repair them.

Municipalities are forced to waste money and resources fruitlessly attempting to enforce code violations on these ghost entities with a post office box in another state, and years of delinquency must pass until these properties can be brought to auction again, Heffley has said.

Upcoming sale

Approximately 1,300 properties remained in the Sept. 23 upset sale the middle of last week, but Shamany said the list will shrink dramatically.

Properties become eligible for auction if taxes have gone unpaid for two years.

Delinquent owners can avoid an upset auction by paying the portion of taxes dating back two or more years — in this sale everything owed through 2019, he said.

A sale also can be averted if owners comply with a repayment plan, file for bankruptcy or convince a judge that temporary removal is warranted.

Shamany stressed Elite strictly follows state law governing repayment plans. Property owners must pay 25% of everything owed through 2020 and the remainder in set installments, he said. Owners who default on a prior repayment plan cannot obtain a new one for three years.

The courthouse is typically packed with property owners waiting in line to pay a few days before the sale. He advises those intending to pay to act sooner if they want to avoid processing delays.

Elite periodically updates the upset sale list on its website to remove properties that are no longer eligible for the sale, which starts at 10 a.m. in the King’s College Scandlon Physical Education Center, 150 N. Main St., in Wilkes-Barre.