Pennsylvania Tax Foreclosure
Prevention

Pennsylvania has tax foreclosure surplus funds, but the state imposes a 15% finder's fee limit and has a unique claim window: surplus funds cannot be claimed until at least two years after confirmation of the tax sale, and must be claimed within five years. This unusual timing structure, combined with the finder's fee cap, makes Pennsylvania a regulated but still viable state for surplus fund recovery. Under 72 P.S. Section 5971m (Bond for surplus purchase money), purchasers at tax sales must execute a bond for any surplus remaining after payment of taxes, interest, and costs. The former property owners, their heirs, assigns, or legal representatives can cause judgment to be entered on the bond within the two-to-five-year window. This guide explains Pennsylvania's distinctive tax sale surplus system, the legal framework, the claim process, and how AuctionBlock.org can help. Note: This guide reflects information current as of April 2026. Tax foreclosure laws are actively evolving following the landmark Tyler v. Hennepin County Supreme Court decision (2023). Always verify current statutes and consult with a licensed attorney before taking action.

Pennsylvania's tax foreclosure system involves the sale of properties for delinquent taxes through a court-confirmed process. When a property owner fails to pay property taxes, the county treasurer may initiate a tax sale. After the sale, the court confirms the sale, and the purchaser receives a deed to the property. What makes Pennsylvania distinctive is the bond requirement. Under Section 5971m, when the bid at a tax sale exceeds the taxes, interest, and costs owed, the purchaser must make and execute a bond to the county treasurer for the surplus money. This bond includes a warrant of attorney to confess judgment, and the treasurer files the bond in the office of the prothonotary (the clerk of court) of the proper county. The surplus bond, from the date of the deed, binds the property as effectually as a judgment. This means the surplus is secured by a lien on the very property that was sold, giving the former owner a powerful legal mechanism for recovery. For mortgage foreclosures, the sheriff or other officer conducting the sale handles the distribution of proceeds, with any surplus available through the Sheriff/Clerk's office.

Surplus funds in Pennsylvania are the amount by which the winning bid at a tax sale exceeds the delinquent taxes, interest, and costs. Under Section 5971m, the surplus is secured by a bond executed by the purchaser. The following parties are entitled to claim the surplus: - The owners of the lands at the time of sale - Their heirs - Their assigns - Other legal representatives The statute is broad in defining who can claim, allowing not only the original owner but also heirs and assigns to pursue the surplus. This is particularly important in cases where the former owner has passed away or has transferred their claim to another party. The claim is made by causing judgment to be entered upon the bond, in the name of the treasurer, for the use of the entitled party. If the bond amount (with legal interest) is not paid within 30 days after judgment, execution may issue against the property, and the property can be sold again to satisfy the surplus obligation.

The key Pennsylvania statute governing tax sale surplus funds is: - 72 P.S. Section 5971m (Bond for surplus purchase money): This is the central statute. It requires the purchaser at a tax sale to execute a bond for surplus money when the bid exceeds taxes, interest, and costs. The bond is filed with the prothonotary and creates a lien on the property. The former owner or their heirs/assigns/representatives may cause judgment to be entered on the bond not less than two years or more than five years after confirmation of the sale. Key elements of the statute: 1. Bond requirement: The purchaser must post a bond for the surplus amount 2. Lien on property: The bond binds the property like a judgment 3. Two-year waiting period: No claim can be filed earlier than two years after confirmation 4. Five-year deadline: Claims must be filed within five years after confirmation 5. Enforcement: If the surplus is not paid within 30 days of judgment, the property can be sold via execution 6. 15% finder's fee limit: Pennsylvania limits finder's fees to 15% of the surplus recovered For mortgage foreclosure surplus, contact the Sheriff/Clerk in the county where the sale took place. In Tyler v. Hennepin County (2023), the U.S. Supreme Court ruled unanimously that governments cannot keep surplus proceeds from tax sales beyond what is owed, finding this violates the Takings Clause of the Fifth Amendment. This landmark ruling has strengthened property owners' rights to surplus funds nationwide.

The claim process in Pennsylvania is more formal and legalistic than in many other states due to the bond and judgment mechanism: 1. Identify the county and sale: Determine which county conducted the tax sale and the date of court confirmation. 2. Wait for the two-year period: Under Section 5971m, you cannot cause judgment to be entered on the surplus bond until at least two years after confirmation of the tax sale. 3. File within five years: You must cause judgment to be entered within five years of confirmation. Missing this deadline may forfeit your claim. 4. Cause judgment to be entered: This is a legal process. You (or your attorney) must cause judgment to be entered in the court upon the bond, in the name of the county treasurer, for your use as the owner, heir, assign, or legal representative. 5. Wait 30 days for payment: Once judgment is entered, the purchaser has 30 days to pay the bond amount with legal interest. 6. Enforce if necessary: If payment is not made within 30 days, you may issue execution against the property under a writ of fieri facias, and the property can be sold to satisfy the surplus obligation. 7. Contact the County Treasurer: The treasurer's office is the primary point of contact for tax sale surplus. For mortgage foreclosure surplus, contact the Sheriff/Clerk. Due to the legal complexity of the bond and judgment process, it is strongly recommended that Pennsylvania claimants work with an attorney or a knowledgeable mission-driven company.

Pennsylvania has a unique deadline structure for tax sale surplus claims: - Minimum two years after confirmation: You cannot file a claim (cause judgment to be entered on the bond) until at least two years after the court confirms the tax sale. This is an unusual minimum waiting period not found in most other states. - Maximum five years after confirmation: Your claim must be filed within five years of confirmation. After five years, the right to cause judgment on the bond may be extinguished. - 30 days after judgment: Once judgment is entered, the purchaser has 30 days to pay the surplus with interest. The two-to-five-year window is distinctive. It means that recently completed tax sales are not immediately actionable — former owners must wait at least two years. However, it also means that surplus funds remain available for a relatively long period compared to states with one-year escheatment timelines. Former property owners should mark their calendars for two years after the confirmation of the tax sale and be prepared to act promptly at that point. The five-year outer deadline provides a reasonable cushion, but should not encourage procrastination.