PENNSYLVANIA SUPREME COURT APPROVES TAX SALE FINDING LIMITATIONS UNDER THE REAL ESTATE TAX SALE LAW PREVENTED EQUITABLE RELIEF

Earlier this year, the Pennsylvania Supreme Court accepted jurisdiction to consider whether confirmation of an “upset tax sale” was proper where the property, nearly 53 acres of land located in Tioga County and valued at $465,000, sold for $83,000, about 18% of its fair market value. Ostapowicz v. Tioga Cty. Tax Claim Bureau (In re Upset Sale), 349 A.3d 933, 936 (Pa. 2026). Martin J. Ostapowicz, the property owner (“Owner”), raised due process violations for lack of notice and asserted the inadequate sale price rendered the sale an illegal government taking.[1]

The trial court conducted an evidentiary hearing on the Owner’s objections and considered testimony from an employee of the Tioga County Tax Claim Bureau (“Bureau”), Joshua Zeyn. Zeyn testified that the Owner “had been delinquent on his taxes every year since 2004” and that the Bureau had sent the Owner multiple notices by “restricted mail” advising of the most recent tax delinquency and eventually of the tax sale date.[2] The Bureau also physically posted a conspicuous notice of the sale on the Owner’s property and personally served the Owner in June 2021 with details of the sale.[3]

Zeyn also testified that the Bureau received a call from the Owner on September 1, 2021, and advised the Owner that he was required to pay $2,595.50 by 3:30 PM on September 23, 2021, to avoid the sale. Despite these efforts to inform the Owner of the pending sale, the Owner claimed he was unaware of the sale until his realtor told him about the sale on September 24, 2021, the day of the sale. After learning of the sale, the Owner claimed that he attempted to pay the delinquent amount, but his payment was rejected because the sale had already taken place. The trial court found the Bureau’s testimony to be credible and rejected the Owner’s testimony.[4]

The trial court concluded there was no legal basis for granting the Owner relief from the sale and the Commonwealth Court affirmed that decision on appeal. Pennsylvania’s Supreme Court accepted jurisdiction to determine whether both lower courts erred by affirming the tax sale.[5] On review, the Court conducted an analysis of Pennsylvania’s Real Estate Tax Sale Law (“RETSL”)[6] and noted that the parties “[s]eemingly conced[ed]” that based on the Court’s prior holdings and the provisions of RETSL an upset tax sale could not be set aside based only on an inadequate sale price.[7] That being the case, the Owner argued that the Court could overturn a sale based on both the inadequate sale price and an arbitrary or capricious government-led deprivation of land.[8]

The Owner asserted that he could challenge the sale “based on issues other than those relating to mailed notices…” and he maintained that the inadequate sale price “constitute[d] an irregularity under Section 5860.607(d).” Lastly, the Owner argued that under the common law sheriff’s sales could be set aside based only on inadequate sale price, so applying a different standard to an upset tax sale was illogical.[9] The Bureau rebutted that the parties’ rights were “specifically established in the RETSL” and since the Bureau complied with all the requirements of the RETSL by providing notice of the tax sale through “publication, posting, mail, and personal service” equity followed the law and could “not come to the rescue” to undo the lawful sale. 

The Bureau[10] also argued that even if the Court could unwind the sale based solely on equitable grounds, equity favored affirming the sale given the Owner’s history of delinquencies which required extra effort on the part of the Bureau to collect taxes and given the Owner’s failure to take reasonable steps to prevent the sale from taking place in the first place.[11] Lastly, the Bureau argued that in cases where a sale price was found to be grossly inadequate, the price was 5% of the fair market value or at least less than 10%, so the 18% sale price was not grossly inadequate.[12]

In its analysis, the Supreme Court noted the trial court’s credibility findings with regard to the Bureau’s testimony and the Owner’s testimony and summarily concluded the Owner’s claim that he lacked notice of the sale did not provide a basis for relief.[13] Likewise, based on the plain language of the RETSL and a clear distinction - established by Pennsylvania’s common law – distinguishing between procedural irregularities in the sale process and an inadequate sale price, the Court rejected the Owner’s arguments that the low sale price constituted a procedural “irregularity” as contemplated under § 5860.607(d).[14]

Lastly, the Court noted the RETSL limited challenges to the sale based “only” on “the giving of notice, …the time of holding the sale, or…the time of petitioning the court for an order of sale.” [15] Based on the plain language of RETSL, the Court rejected the Owner’s pleas to grant relief on equitable grounds. The Court explained that when parties' rights are "regulated and fixed by a comprehensive scheme of legislation, the maxim 'equity follows the law' is entitled to the greatest deference."[16] The Court concluded that RETSL comprised “the entire statutory scheme regarding upset tax sales” and that the Court was “bound by its provisions.”

This decision leaves no room to question the basis on which an upset tax sale can be challenged. Regardless of the amount of the sale price, a property owner will not receive relief from a tax sale without demonstrating a lack of notice or other irregularities in the sale process itself. This clear cut decision will eliminate confusion regarding whether a tax sale will stand and will likely eliminate many of the more frivolous challenges to these sales.

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1. Earlier this year, the Pennsylvania Supreme Court accepted jurisdiction to consider whether confirmation of an “upset tax sale” was proper where the property, nearly 53 acres of land located in Tioga County and valued at $465,000, sold for $83,000, about 18% of its fair market value. Ostapowicz v. Tioga Cty. Tax Claim Bureau (In re Upset Sale), 349 A.3d 933, 936 (Pa. 2026). Martin J. Ostapowicz, the property owner (“Owner”), raised due process violations for lack of notice and asserted the inadequate sale price rendered the sale an illegal government taking.

2. The trial court conducted an evidentiary hearing on the Owner’s objections to the tax sale and found the testimony of the Tioga County Tax Claim Bureau (“Bureau”) that they mailed multiple notices of the sale, posted notice of sale on the property, and spoke to the Owner about the sale to be credible. Conversely, the court did not believe the Owner’s explanation that he was unaware of the sale until his realtor advised him of the sale on the day of the sale. The trial court affirmed the sale and the Commonwealth Court affirmed that decision on appeal. Pennsylvania’s Supreme Court accepted jurisdiction to determine whether both lower courts erred by affirming the tax sale.

3. Pennsylvania’s Supreme Court, relying on the plain language of the RESTL which limited challenges to the sale to issues regarding the “giving of notice,” the “time of holding the sale,” or the “time of petitioning the court for an order of sale,” rejected the Owner’s pleas to grant relief on equitable grounds. The Court explained that when parties' rights are "regulated and fixed by a comprehensive scheme of legislation, the maxim 'equity follows the law' is entitled to the greatest deference." The Court affirmed the lowers courts’ holdings reiterating the Court was bound by the provisions of RESTL. This clearcut decision will eliminate confusion regarding whether a tax sale will stand and will likely eliminate many of the more frivolous challenges to these sales.

1 Ostapowicz, at *936.

2 Ostapowicz, at *937.

3 Ostapowicz, at *938. Future references to this case are to this citation until indicated

otherwise.

4 Ostapowicz, at *939. Future references to this case are to this citation until indicated

otherwise.

5 Ostapowicz, at *940.

6 RETSL is codified at 72 P.S. § 5860.101, et seq.

7 Ostapowicz, at *941.

8 Ostapowicz, at *942. Future references to this case are to this citation until indicated

otherwise.

9 Ostapowicz, at *943. Future references to this case are to this citation until indicated

otherwise.

10 The purchaser of the property, identified as Timothy Smith, intervened in the case and

made some of these arguments.

11 Ostapowicz, at *944.

12 Ostapowicz, at *943.

13 Ostapowicz, at *945.

14 Ostapowicz, at *945-48.

15 Ostapowicz, at *948-49. Future references to this case are to this citation until

indicated otherwise.

16 Ostapowicz, at *949 (quoting First Fed. Sav. & Loan Asso. v. Swift, 457 Pa. 206, 321

A.2d 895, 898 (1974)). Much of the Court’s analysis and the parties’ arguments centered around the findings in Swift, but in the interest of brevity a deeper analysis of

that case is outside the scope of this article.

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