Home>Levelset Community>Legal Help>Mechanics lien enforcement and county real properties tax liens

Mechanics lien enforcement and county real properties tax liens

I have a couple of mechanics lien filed here in PA vs. a landowner who is behind in his taxes. The county is threatening to foreclosure for non payment of taxes. If I file a complaint to enforce the lien and force a foreclosure of the property, and subsequent sheriffs sale, what happens to the outstanding unpaid taxes claim? Are they eliminated at the sale? The mechanics lien claim is about $45k and the taxes owed are about $89K. I understand that both claims are considered "secured claims". The mechanics lien claims were filed before the county imposed a lien on the property. The building is valued around $60k. So, hypothetically, if the building is sold for $40k, do I get paid first from the sale since I filed my mechanics lien first and the county taxes are wiped out? Let me know your thoughts.

1 reply

Oct 2, 2019

Generally, as you hint at above, secured debts are paid in order of priority when there's a forced sale of property. So, typically, the lien with the highest priority will be paid first, then the next in line, and so on. As discussed in another recent Pennsylvania mechanics lien/tax lien priority question, Pennsylvania isn't exactly clear (and at some points, may be contradictory) regarding lien priority and what happens upon a forced sale of property. Though, based on Section 205(d) of Pennsylvania's Real Estate Tax Sale Law, it appears that state and local tax liens will have priority ahead of other types of liens - such as mechanics liens. Due to the intricate nature of these questions, and because we're not necessarily experts on the Pennsylvania foreclosure process or on Pennsylvania tax liens, it would probably be a good idea to consult a local Pennsylvania lawyer familiar with both Pennsylvania tax law. They'll be able to review all of the relevant claims, procedures, and other relevant information and help you proceed with your claim for payment.

0 people found this helpful

Helpful