How Can Municipalities Collect on Liens From Landowners?July 19, 2020
What is Scire Facias?
By Steven Miner
In today’s tough economic climate, cities, townships, and boroughs alike are cash strapped. More and more municipalities are filing for, or at least strongly considering Act 47 protection.
Facing a $3 million deficit, Middletown Borough has made headlines with the possibility of filing for Act 47 protection. Since 1987 when Act 47 was adopted, 27 municipalities have applied for Act 147 protection. While the reasons for filing Act 47 are numerous, one of the reasons is that municipalities are struggling to collect on their municipal liens. For example, in 2010, Palmyra Borough had over 500 municipal liens with the top 10 ranging from $145,000 to $109,000. The problem is not just in Pennsylvania—according to the National Conference of State Legislatures, nationwide, states had a combined $510.5 billion deficit in 2011. However, despite the gloom and doom, municipalities do have an option of collecting past debts—the writ of scire facias.
Municipal Claims and Tax Liens Act
Under the “Municipal Claims and Tax Liens Act” claims for water rents or rates, lighting rates, power rates and sewer rates may be filed in the court of common pleas of the county in which the property is located.
The claims must be filed within three (3) years. In the case of municipal improvements, the claim must be filed within six (6) months of when the improvement was finalized. Municipalities do this on regular basis and this part is rather simple. (On a side note for the purpose of this post the terms “lien” and “claim” are synonymous.)
What Happens Once the Lien is Filed?
The problem becomes what happens once the lien is filed? When a property owner disputes a purported lien filed the Act does not provide a mechanism by which to dispute the claim or if the property owner simply decides to do nothing.
There are 3 methods by which to handle the lien:
- Both landowner and municipality can do nothing
- The landowner can challenge the amount of the lien
- The municipality can execute on the lien.
First both the landowner and the municipality can do nothing in which case as a practical matter, the lien continues forever until the property deed is transferred because although the lien continues for 20 years, the lien can easily be revived. While this option may be enticing because the lien will most often continue to accrue interest, this option does nothing to help municipalities that are presently cash strapped. This brings me to the final two options—challenge the amount of the lien or execute on the lien through a writ of scire facias proceeding.
Writ of Scire Facias Pennsylvania
What is scire facias? The writ of scire facias (“scire facias”) provides a mechanism by which a municipality can obtain money from past judgments. More specifically, a scire facias proceeding is one in which a lien holder, such as a municipality obtains a judgment against the property itself, (an “in rem” proceeding—as opposed to against the person, an “in personam” proceeding).
The writ of scire facias serves 3 goals:
- To ascertain the amount of the lien due
- To allow the Defendant landowner the opportunity to dispute the amount of the lien
- To allow the municipality to collect on the judgment.
For information about the process see the next post.
Steve respects the law and believes that lawyers have more social responsibilities than other citizens. To Steve, there is nothing better than representing clients who take business ethics seriously. He works best with clients who wish to forge long-term relationships. He likes to advise clients proactively to avoid litigation. Conservative in his beliefs, he respects predictability in the law – Read Full Bio