Delaware County Tax Sale: Upset, Judicial, and Repository

A Delaware County tax sale is the county Tax Claim Bureau’s auction of properties with unpaid real estate taxes, conducted under Pennsylvania’s Real Estate Tax Sale Law. The bureau runs three different sales, and which one you buy at determines almost everything about the risk you take on: an upset sale leaves mortgages and most liens attached to the property, a judicial sale wipes most of them out, and a repository sale lets you buy leftover properties for as little as $1,000. Federal tax liens and bankruptcy filings can complicate any of them.

The Three Types of Sales

Upset Sale

The upset sale is the first attempt to auction a tax-delinquent property. The minimum bid must cover all unpaid taxes, costs, and municipal liens. What makes this sale dangerous for inexperienced buyers is what the winning bidder inherits along with the deed: mortgages, judgments, and other recorded liens stay on the property. Delaware County’s own instructions put it plainly: “If you buy a property in the upset sale, mortgages and liens on the property remain in effect, even though you have paid all taxes that were due.”¹ A $5,000 winning bid on a property carrying a $150,000 mortgage leaves you responsible for the mortgage. Section 609 of the Real Estate Tax Sale Law confirms that title transfers subject to every recorded obligation, mortgage, ground rent, and Commonwealth tax lien not covered by the upset price.²

Judicial Sale

Properties that don’t sell at the upset stage can advance to a judicial sale, often called a “free and clear” sale. The Tax Claim Bureau petitions the Court of Common Pleas under Section 612 for an order authorizing the sale, and the resulting deed conveys title “free and clear of all tax and municipal claims, mortgages, liens and charges and estates of whatever kind, except ground rents separately taxed.”³ Ground rents are the only carve-out and are worth checking if the property has one. Because the financial picture is far cleaner, judicial sales draw more investor interest and typically command higher prices than upset sales.

Repository Sale

Properties that fail to sell at both the upset and judicial stages land on Delaware County’s repository list, which is available for purchase outside a live auction. The county sets the starting bid at $1,000, and properties are sold free and clear of delinquent taxes and liens.⁴ Prices are low because these are properties nobody wanted at two prior sales. The county makes no guarantees about condition or title and recommends hiring an attorney and researching the title first. Physical problems, unclear boundaries, and title defects are common.

Registering to Bid

You have to register in person at the Tax Claim Bureau at least 10 days before an upset or judicial sale.⁵ Registration for the upset sale runs over three consecutive days and is capped at 120 bidders, so the last day is a gamble.⁶ Bring a current photo ID and completed paperwork: a Bidder Application, a notarized Bidder Affidavit, and a signed Conditions of Sale. Incomplete forms mean you’ll be turned away.

Two fees apply. A non-refundable $25 application fee can be paid by certified check, money order, cash, or credit card (with a 3% convenience fee on cards). A separate $1,000 registration fee must be paid by certified check or money order only.¹

The notarized affidavit is where disqualifications happen. Section 502-A of the Real Estate Tax Sale Law requires each applicant to certify they are not delinquent on real estate taxes anywhere in Pennsylvania and have no municipal utility bills more than one year past due statewide. Applicants must also certify they haven’t had a landlord license revoked in the county and aren’t acting as an agent for someone barred from the sale. Businesses must provide documentation showing the signer’s authority along with the names and addresses of all officers or members.⁷ Filing a false affidavit is a second-degree misdemeanor.

Winning a Bid and Paying On Time

Bidding starts at the upset price for upset sales or the court-approved minimum for judicial sales. The rule that trips up new buyers is the payment deadline. Before leaving the courthouse after the sale, winning bidders must visit the Tax Claim Bureau for paperwork showing the correct payment amounts and payees. Payment in full is due by noon the following day, and only certified checks or money orders are accepted.⁵ Personal checks are not.

If you win multiple properties, you must close on every one. Failing to close on any single property means you cannot finalize any of them, you forfeit the $1,000 registration fee, and you are barred from future Delaware County sales for five years.¹ Don’t bid on anything you can’t fund by noon the next day.

Budget beyond the bid, too. Pennsylvania imposes a 1% state realty transfer tax, and local jurisdictions typically add another 1%, so combined transfer taxes usually run about 2% of the sale price. Recording fees are the buyer’s responsibility.

Federal Tax Liens Can Survive Even a “Free and Clear” Sale

This is where experienced buyers separate themselves from beginners. A judicial sale does not automatically eliminate a federal tax lien. Under 26 U.S.C. § 7425, if the United States is not properly joined as a party to the judicial proceeding, the sale leaves the federal tax lien undisturbed, and the buyer takes the property subject to the IRS’s claim whether they knew about it or not.⁸

For the federal lien to be discharged, the United States must be named as a party and receive proper service, including copies sent by certified mail to the Attorney General in Washington, D.C.⁹ For nonjudicial sales, written notice must go to the IRS by registered or certified mail at least 25 days before the sale.⁸

Search the federal tax lien index at the county prothonotary’s office before bidding. If a lien shows up and you’re unsure whether the IRS was properly notified in the tax sale action, talk to an attorney before placing a bid. A $3,000 property carrying a $90,000 federal tax lien is no bargain.

What Happens After You Win

Getting the Deed

Ownership isn’t fully official until the Tax Claim Bureau records the deed in Delaware County’s land records. That usually takes several weeks to a few months, because the court must first confirm the auction results. Every property is sold as-is with no warranty about physical condition, occupancy, or title quality.

Quiet Title

Even with a deed in hand, most tax sale buyers hit a practical wall: title insurance companies won’t insure a tax sale deed without a court order clearing the title. That means filing an action to quiet title under Pennsylvania Rule of Civil Procedure 1061, which lets a party ask the court to determine rights, liens, or interests in real property and obtain possession of land sold at a tax sale.¹⁰ Without that order, selling the property later to a buyer using conventional financing gets very difficult. Factor this cost into your bid math from the start.

Tenants Living in the Property

If your new property is occupied, federal law kicks in. The Protecting Tenants at Foreclosure Act requires a new owner who acquires residential property through foreclosure to give existing tenants at least 90 days’ notice before requiring them to vacate. Tenants with a genuine lease at arm’s-length terms and market-rate rent may stay through the end of their lease if it runs past 90 days. Section 8 voucher tenants get additional protection, and the new owner must honor the existing housing assistance payment contract.¹¹ Trying to remove a protected tenant without proper notice exposes you to legal liability.

Lead Paint Disclosures Don’t Apply

One thing you won’t get: any lead-based paint disclosure. The EPA rule that requires sellers of pre-1978 housing to disclose known lead hazards exempts foreclosure sales.¹² If the property is pre-1978 and you plan to rent it or have children living there, budget for a lead inspection.

Bankruptcy Can Unravel the Sale

If the former owner files for bankruptcy before the sale, or before a tax deed is recorded, the transaction can stall or come apart. A bankruptcy filing triggers an automatic stay that halts most collection actions, including tax sales. Courts have held that a debtor’s rights in real property can remain part of the bankruptcy estate even after a redemption period expires, as long as no tax deed has been issued or recorded. In some cases the bankruptcy court treats the tax purchaser’s interest as a secured claim the debtor can pay off through a Chapter 13 plan rather than losing the property.

There’s also a fraudulent transfer risk. If a property sells for significantly less than fair market value and the former owner is insolvent, the sale can be challenged under 11 U.S.C. § 548 as a transfer for less than reasonably equivalent value. Federal circuit courts are split on whether tax sales automatically qualify as “reasonably equivalent value” the way mortgage foreclosures do. Some circuits protect tax sales conducted through competitive bidding with proper notice; others refuse to extend that protection when the process lacks competitive safeguards. If the former owner is in active bankruptcy, the added legal risk is real, and most casual investors should stay away.

The Owner’s Last Chance to Stop the Sale

If you are the property owner rather than a buyer, Section 501 of the Real Estate Tax Sale Law lets you, your heirs, or a lien creditor stop the sale by paying the full delinquent amount, including taxes, interest, and costs, before the property is actually sold. Once the sale happens, that window closes. Pennsylvania law explicitly provides no right to redeem the property after the auction.¹³ Owners who assume they’ll have time to redeem after the fact lose the property.

1
Delaware County, Pennsylvania. Instructions and Procedures for Upset Sale
2
Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.609
3
Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.612-1
4
Delaware County, Pennsylvania. Repository Sales
5
Delaware County, Pennsylvania. Instructions and Procedures for Judicial Sale
6
Delaware County, Pennsylvania. Upset Sales
7
Pennsylvania General Assembly. Pennsylvania Code 72 PS 5860.502-A
8
Office of the Law Revision Counsel. 26 USC 7425 – Discharge of Liens
9
Office of the Law Revision Counsel. 28 USC 2410 – Actions Affecting Property on Which United States Has Lien
10
Legal Information Institute. Pennsylvania Code 231 Pa Code r 1061 – Conformity to Civil Action, Scope
11
GovInfo. 12 USC 5220 – Protecting Tenants at Foreclosure Act
12
US EPA. Real Estate Disclosures About Potential Lead Hazards
13
Pennsylvania General Assembly. Real Estate Tax Sale Law