Real Estate Foreclosure Procedures in PennsylvaniaDaniel C. Fleming
To initiate a real property foreclosure in Pennsylvania, the plaintiff must file a writ of execution and an affidavit, to be served upon the defendant, with the sheriff. Pa.R.C.P. 3129.1(a). The affidavit must include, to the best of the affiant’s knowledge or information and belief, the name and last known address of the owner of the real property, the defendant, every person who has a record lien on the property, and every person who has an interest in the property which may be affected by the sale and of which the plaintiff has knowledge. Pa.R.C.P. 3129.1(b).
The plaintiff must also provide notice of the sale of the real property. The notice must be provided in the forms of handbills and written notice to all persons whose names are included in the affidavit served on the defendant and by publication. Pa.R.C.P. 3129.2(a). The handbills are posted in the sheriff’s office and upon the subject property at least 30 days before the sale, and must include a brief description of the property (including any improvements thereto), the location, the judgment of the court on which the sale is being held, the owner or reputed owner’s name, and the time and place of the sale. The handbills must also inform all parties in interest and claimants that a schedule of distribution of the sale proceeds will be filed at a date later specified by the sheriff, but no later than 30 days after the sale, and that the distribution will be made unless exceptions thereto are filed within 10 days after the filing of the schedule. Pa.R.C.P. 3129.2(b). The written notice is prepared by the plaintiff. It consists of the same information as the handbills or could consist of the handbill itself, and is served at least 30 days before the sale of the property on all persons whose names appear on the affidavit. Pa.R.C.P. 3129.2(c). The person who serves the notice must file a return of service. Pa.R.C.P. 3129.2(c)(2). If service is not made at least 30 days before the date of sale stated in the notice, the notice is considered timely if the sale is stayed, continued, postponed or adjourned to a date which is at least 30 days after the date of the last required service. Pa.R.C.P. 3129.2(c)(3). Finally, notice by publication is effectuated by the sheriff once a week for 3 successive weeks in a newspaper of general circulation in the county and in any legal publication designated by rule of court which, in Philadelphia, is The Legal Intelligencer. The first publication must be made at least 21 days before the date of sale. Pa.R.C.P. 3129.2(d).
Normally, if a sale of real property is stayed, continued, postponed or adjourned, new notice must be issued. Pa.R.C.P. 3129.3(a). However, if the stay, continuance postponement or adjournment is to a date within 100 days of the scheduled date, and public announcement thereof is made to the bidders assembled at the time and place of the original sale, no new notice is required. In any case, only one such stay, continuance, postponement or adjournment is permitted without new notice. Pa.R.C.P. 3129.3(b).
Sometimes the real property that is the subject of the sale is located in more than one county. In such a case, the writ of execution is to be directed to the sheriff of one of those two counties and the plaintiff must file a petition with the court of that same county to sell the real property at execution. Pa.R.C.P. 3131(a). This petition must include a description of the property, whether the property is severable and whether the portion of the property in either county can be sold separately without prejudice to any remainder interest, and the estimated value of the property within each county. If the value of the property in any county is insufficient to satisfy the judgment, however, the petition must also include a statement of how much of the property in any adjoining county is required to be included in the order of sale to satisfy the judgment. Pa.R.C.P. 3131(b). The court then orders the extent of the real property that is subject to the execution, designates the place of sale, and then controls the distribution of the proceeds of the sale. In distributing the proceeds of the sale, the court may apportion the proceeds to satisfy prior lien holders, even where the lien holders’ security interests are in a portion of the property laying in a different county which was not sold on execution. Pa.R.C.P. 3131(c). If the court orders a sale to include land in another county, the plaintiff must file a copy of the pleadings and the court order with the prothonotary’s office of the other county. Notice must then be advertised in each county. Pa.R.C.P. 3131(d). In any case, the court has a right to set the sale aside. Pa.R.C.P. 3132.
Assuming that there is no petition filed to set the sale aside, after 20 days after either the filing of the schedule of distribution or the execution sale (if no schedule is filed), the sheriff will execute and acknowledge before the prothonotary a deed to the property sold. Pa.R.C.P. 3135(a). If the sheriff’s return is defective or the sheriff has executed a defective deed, the court may correct the return or deed or order the execution of a new one. Pa.R.C.P. 3135(b).
Within 30 days after the sale, the sheriff prepares the schedule of proposed distribution of the proceeds unless the property is sold to the plaintiff for costs only. Any schedule of distribution must include the name and address of the plaintiff or lien holder, the amount of the judgment lien, and the amount of credit claimed and allowed upon the purchase price. The sheriff must attach to the schedule a certified list of liens upon the property. The costs of certifying the list of liens, the acknowledgment, recording and registry of the deed and transfer or documentary stamps are charged as an expense of distribution. If no exceptions are filed within 10 days after the filing of the proposed schedule, the sheriff distributes the proceeds of the sale. Where exceptions are filed within the required period, the court must determine the exceptions. Pa.R.C.P. 3136.
The plaintiff is responsible for all of the sheriff’s costs, charges, and expenses incident to the execution sale, the maintenance of the lien of the execution, and the preservation of the property. Pa.R.C.P. 3138(a). The plaintiff’s failure to make prompt payment relieves the sheriff of all liability for loss, removal or distribution of the property and allows the sheriff to return the writ as abandoned. Pa.R.C.P. 3138(b). The sheriff’s return is made upon the completion or abandonment of the execution proceedings or, if no sale occurs, is made for want of buyers. In a case where service has not been made and the writ has not been reissued, the return is made upon the expiration of the period allowed for service. Pa.R.C.P. 3139(a). The return is made to the prothonotary of the county in which the writ was issued and shall include any schedule of distribution that must be filed. Pa.R.C.P. 3139(c). If the sheriff sells real property under a writ of execution from another county, a copy of the return must also be filed with the prothonotary of the county in which the real property is located. Pa.R.C.P. 3139(d).
Under certain situations, the execution sale may be stayed by the court either upon its own motion or upon application of any party in interest, which shows a defect in the writ or service or shows other legal or equitable ground. Pa.R.C.P. 3183(b). The court may set aside the writ or service for a defect therein or upon a showing that the subject property is exempt from or immune to execution. Pa.R.C.P. 3183(d).
In Philadelphia, once an execution sale has been effectuated, a petition to establish the fair market value of the property is filed. The petition names as respondents those who may be liable to the petitioner for the payment of the debt. The petition includes the location and description of the real property sold, the fair market value, the date of the sheriff’s sale, the date of entry and the amount of judgment, the amount interest to the date of the sale, and the costs of the proceedings. The petition also includes an itemized statement of all items, such as prior liens and taxes, which are not discharged by the sale, and the amount of any such items paid at distribution on the sale. Where the sheriff is unable to locate the respondents named in the petition, service may be accomplished by publishing a notice to the respondent or respondents. This notice is published in both The Legal Intelligencer and a newspaper of general circulation inPhiladelphia once a week for two consecutive weeks. The last publication of the notice is to appear at least 15 days prior to the day fixed for the hearing of the petition. Philadelphia Civil Rule *3133.1.