Getting In The Front of the Line
These folks might get their requests in… someday… if they wait just a few months more…
Yesterday I mentioned that there are three folks who deal with the tax foreclosure lawsuits: The RETU, GRB and Linebarger. Today we’re going to cover the different agencies.
RETU
The Real Estate Tax Unit is a team within the City of Philadelphia’s Revenue Department that handles every aspect of the Real Estate Tax that all properties are assessed with every year. This unit maintains the accounts in the City’s property book (the records the City keeps on who owes what on which property). They set up payment plans for low-income and seniors, establish installment agreements for those who have fallen behind on their taxes, answer taxpayer questions, and they also do collections. However, the RETU used to take deed poll deposits but does no longer. I have been told repeatedly from two different City Council office staffers that going forward the Sheriff’s Department is handling them all. Yeah, I know.
March 31st is Tax Day in Philadelphia. No, not Income Tax Day, that’s April 15th.
Taxes on all property in Philadelphia is due March 31st of every year. When the property owner doesn’t pay, the account is automatically delinquent. There’s no such thing as “late”, like with a credit card or an installment loan. It’s a delinquent account on midnight of April 1st. The property owner will start receiving dunning notices from the City of Philadelphia on a regular basis several months after the account goes delinquent and this will keep going on for years. The City of Philadelphia burns a mountain of paper every year sending notices out. For most property owners who aren’t dead, the owner is well-aware that the taxes are not paid so long as the OPA records have the correct mailing address for the owner.
After a full year has passed with the account being delinquent, after March 31st the RETU will review their records looking at all the delinquent accounts. If last year’s taxes are still not paid by then, then the RETU automatically prepares a lien which is then filed against the property. These liens are automatic and there is no way to fight them, and this includes the situation where the property is currently under an appraisal dispute. Appealing your appraisal with the BRT does not get you a temporary pass out of paying your Real Estate Tax bill anywhere in Pennsylvania. Many property owners make this mistake.
By around late April/May is when the RETU sets the liens on the property accounts.
Now, does this mean a Sheriff’s Sale is coming? Absolutely not. The only way a property goes directly to Sheriff’s Sale on a first lien is when the property is commercial and a developer wants to get their hands on it. In which case, the District Councilperson’s office will be involved (usually) because inertia normally dictates that the tax liens must marinate for a while (2+ years on a commercial property in a viable area, minimum) before the City will act.
According to research done by eConsult analyzing the City of Philadelphia’s tax records, the average time it taxes the City to start a Sheriff’s sale on a property is at least 6 years, the worst of all large cities in America. For neighborhoods considered by the general population to be unviable (in other words, poor neighborhoods with a lot of blight), that figure might be decades or never.
Once the liens are set on a property, usually around the same time frame the RETU will farm the liens out to two collection agencies: GRB Law and Linebarger.
Linebarger Goggan Blair & Sampson
The Texas law firm of Linebarger is the longest-serving outsourcing firm that the City of Philadelphia uses to chase Real Estate Tax deadbeats. Usually once a lien is set and the City decides to farm the account out to Linebarger, the City sells the right to collect on the account to them. That being said, and there is much public confusion about this, when Linebarger gets the tax lien that does not mean that they “own” the property or the right to get the property. They also don’t keep most of the tax lien, either. If the taxpayer settles the account with Linebarger, then Linebarger gets a pre-determined cut of the money and some fees which the City of Philadelphia lets Linebarger charge.
If Linebarger decides to file suit, the Sheriff’s Office holds an auction only after a court case has completed its way through the Court of Common Pleas. It is absolutely no different than the City of Philadelphia filing suit directly.
Linebarger is also required to help taxpayers get repayment agreements if they can’t afford to pay off all the liens, and it helps those taxpayers out with that, while also collecting fees for doing so.
When Linebarger gets the account, at any time they want to, they may exercise the right of assignment given to them by the City of Philadelphia to sue the property owner (or the estate if they’re deceased) seeking the right to foreclose. Linebarger can sue a taxpayer independently, or it can team up with the City Solicitor’s office where a lawyer from both Linebarger and also the City of Philadelphia join together to file the case.
In all cases, Linebarger will perform a title search before it decides to start this process and they do this to protect themselves from suing the wrong individual(s) in case there’s any doubt about the ownership of the lot.
For a neighborhood resident that is hoping to convince Linebarger to put a particular property in the front of the queue, I can give you the following tips:
- Research the property before you call Linebarger. Find out who owns the thing. If an investor or corporation owns the property and they’re hiding behind a company name, go to the Pennsylvania Department of State to try to see if you can get further clues about the owner. You can use the Property Lookup feature (top of this website) to find the account and see the owner and the taxes.
- Make sure you have your valid reason ready why you want Linebarger to work on your property first before you call them. The reason why you’re contacting Linebarger is because you want to convince them to move the property further up in the queue to be worked. A developer who has a very strong interest in purchasing the property is the strongest reason (which is better if the developer’s attorney contact Linebarger directly), followed closely by the property sitting in a market-rate area, in which case you want to point out to Linebarger that this is real estate that is worth taking to Sheriff’s Sale. If there’s new home construction all around the property, this will also convince them to take the account to foreclosure.
- Don’t call Linebarger if there’s just one tax lien. Call them when it has several. Nobody at Linebarger is going to lift a finger if the property only has a single lien against it, unless the lien is for a massive amount of money and it’s a very prime property. And even so, if you’re trying to buy the property, you should have your lawyer contact Linebarger directly with a bona-fide purchase offer and make sure to carbon-copy the City Council person’s office at the same time and make sure Linebarger knows it. If Linebarger says the property is lost in a chain of cloudy title and you own the property immediately next door, then have your attorney send a veiled threat that you will file a Quiet Title claim if they don’t move and you’ll settle the taxes with Linebarger afterwards. They won’t doubt that there won’t be a buyer for the property if you’re having to go to that far to convince them you want to see movement to foreclose.
- The people who answer the phone at Linebarger are not very swift. Be direct and forceful and if they still can’t understand you, and if all else fails, send a fax instead. Linebarger is a Big Law firm. It seems like every time I call them, the folks who answer are completely unfamiliar with what tax foreclosures are and that people other than the tax deadbeats want to talk to them, so I will usually get misdirected to “Taxpayer Assistance,” which is where Linebarger sends deadbeats who call them. Make it easier for the front-line staff and just send a fax instead. Linebarger’s fax number is (215) 790-1197. Make sure to include a cover sheet and address it to “Counsel for RETU Collections and Foreclosures” and put the OPA account number of the property on your letter asking about the account. The front office will forward your fax to the attorneys who deal with tax foreclosure who will look at the property and then contact you. Be sure to include all your contact info so their real estate attorney can call you back.
- Do be sure to let Linebarger know that you’re keeping your City Council person’s office in the loop. You just won’t get the same kind of treatment if Linebarger suspects you might just be an upset neighbor with a grudge if you call them directly. Remember: you’re in a situation where you’re trying to force a Sheriff’s Sale, usually as a last-resort to fix a problem that’s quite bad and has gone on for a long time. Avoid ranting and ALL CAPS in any communications you have with Linebarger. If you start doing that, they will blow you off and ignore you.
- You can get Linebarger to fax you back more detail. If you get Linebarger on the phone and you manage to also get a hold of someone who works the collections queue, ask them to fax you a current account statement. You may get the “Privacy” excuse and brush-off but sometimes they will fax it over. You probably won’t see much beyond what you can already see on the RETU site but if Linebarger has recently helped set up a repayment agreement, their statement will reflect that.
- Linebarger no longer accepts deed poll deposits to force a Sheriff’s Sale. The “$750″ bribe that Linebarger used to accept years ago to bump a drug house to Sheriff’s Sale no longer works with them. While Pennsylvania counties are required to accept deed poll deposits, that doesn’t mean the collections agencies have to take them. So if you have to go this route, visit the Sheriff’s Office. Linebarger stopped this practice after the housing crash (I’m told) although buyer interest in Philadelphia hasn’t really changed much between 2005 and right now. I guess they read all the bad news about the housing market and figured that most of the requests to push properties will result in nobody turning up at auction time. C’est la vie.
- If you want to attempt a deed poll deposit, do it at the Sheriff’s Office. 100 S. Broad Street – 5th Floor. Be sure to call (215) 686-3530 and talk to the staff before you make the trip with a cashier’s check in hand. The deposit is still $800 on average.
Goehring Rutter and Boehm
GRB Law is the new kid in town and they’ve been taking on property accounts for the last couple of years. Most of the newer delinquencies are winding up in GRB’s hands.
GRB Law is a smaller firm and they have a small office in Center City, not far away from Linebarger’s or the Sheriff’s office. While Linebarger pushes more volume through the courts, I’ve noticed that the pace of GRB-generated foreclosures has started to pick up.
After a frank half-hour long conversation I had with one GRB attorney, here’s some advice I can pass on to you:
- Research the property before you contact GRB. Find out who owns the thing. If an investor or corporation owns the property and they’re hiding behind a company name, go to the Pennsylvania Department of State to try to see if you can get further clues about the owner. You can use the Property Lookup feature (top of this website) to find the account and see the owner and the taxes.
- The attorneys who handle collections and foreclosures at GRB are very, very busy. They don’t have that many people here, and they’re swamped. So it’s better to fax them than to call them. The folks who answer the phones at GRB Law are quite helpful but you’ll eventually wind up faxing them anyway and waiting for a return phone call from them later. GRB’s fax number is (215) 735-1618
- When you contact GRB, do give them information about the property market where the property is located. I’ve found it helpful if you can describe other real estate activity that’s going on close-by to the property. For instance, if there’s new home construction going up near a drug house, or there’s landlord investors buying up houses close by, pass this on. (GRB doesn’t care WHAT kind of people are buying property near-by, they just want to gauge whether or not there will be someone to buy THAT property) Tell GRB which addresses have recently sold and for how much. Tell GRB what the condition of the property is. Now, GRB will use Google StreetView and MLS to look at what you’re telling them, too…. so don’t go off on a tall tale. GRB has taken properties in marginal areas of the City to tax foreclosure, but they won’t bother if they’re convinced that nobody will turn up at auction to put in a bid. GRB wants to score fees at the auction, just like Linebarger.
- You don’t need to involve GRB in drama. No need to let GRB Law know that you’re also working with a City Councilperson. They are friendly and their attorneys are quite candid on the prospects of the property they’re dealing with. I’m sure given enough time GRB may deteriorate to the customer service level of the City and Linebarger, but for now–they’re pretty great to talk to.
- GRB can fax you back information. I love it when a deadbeat’s liens are at GRB, because I can easily phone them up and ask for an account statement faxback. GRB has no problems sending these out. It won’t have much additional information beyond what the RETU has but every so often I catch something that doesn’t yet reflect on the RETU’s website. It’s useful info to have in any case and I file it away (like you should be doing when you’re working on a nuisance property–always keep meticulous records of your complaining and information-gathering!).
- GRB Law does not accept deed poll deposits. If you want to go this route, you need to do it with the Sheriff. Unline Linebarger, GRB has never ever accepted them and has no plans to. I’ve tried. Go to the Sheriff’s office.
- If you want to attempt a deed poll deposit, do it at the Sheriff’s Office. 100 S. Broad Street – 5th Floor. Be sure to call (215) 686-3530 and talk to the staff before you make the trip with a cashier’s check in hand. The deposit is still $800 on average.
So, that’s it on the collections agencies.
In Part Three (yes, there’s more!) I’m going to go through what levers you can pull politically (City Council, involving your local civics, your State reps and senators in Harrisburg) to raise awareness about the nuisance property you need put into Sheriff’s Sale. Also, I will cover Judicial Foreclosures which are filed by the District Attorney’s office when a property is declared a public nuisance, and how you go about getting a nuisance property on the radar of the District Attorney’s office.