Pennsylvania courts have recently handed down several important decisions in the realm of real estate law that provide context for future cases.

• Property may only pursue judicial resolution of a dispute once they have exhausted all administrative or statutory remedies.

Martel v. Allegheny County, 568 CD 2018 (2019), addressed whether owners of real property were permitted to bring a civil class action challenging their real estate tax assessments.

Joseph Nissim Martel and Ester Martel are the owners of a parcel of real property situated at 6340 Darlington Road, Pittsburgh. The Martels purchased the property in 2015 for a purchase price of $750,000. At the time of their purchase, the property was assessed at $464,700 based on a 2012 base year assessment. Almost immediately after the purchase, the city of Pittsburgh School District filed an appeal of the assessment, seeking to have the property assessed at the purchase price. At a hearing on the appeal, the only evidence submitted by the school district was the deed into the Martels, as well as comparable sales supporting current fair market value.

In response, the Martels asserted that the introduction of this evidence was impermissible as the general county assessment law only permits changes to real estate tax assessments between countywide reassessments where a change to that property has occurred, not when that property is sold. Nonetheless, the Allegheny County Board of Assessment increased the assessment of the property to $690,000, and the Martels appealed to the Allegheny County Board of Viewers.

Simultaneously, the Martels commenced a class action suit against the taxing bodies challenging their authority to file appeals based upon current market values as such actions violated the Allegheny County home rule charter and optional plans law, 53 Pa.C.S. Section 2964, and the uniformity clause of the Pennsylvania Constitution, Pa. Const. art. VIII, Section 1. In response the taxing bodies filed preliminary objections in the nature of a demurrer, asserting that the Martels had failed to state a valid cause of action. The trial court sustained the preliminary objections and dismissed the action with prejudice.

On appeal, our Commonwealth Court affirmed. However, in doing so, the court disagreed with the trial court's conclusion that the Martels had failed to set forth a valid cause of action. Rather, the court noted that, pursuant to 1 Pa.C.S. Section 1504, a party may only pursue judicial resolution of a dispute once they have exhausted all administrative or statutory remedies. Therefore, since Section 5452.14 of the Pennsylvania Assessment Law (72 P.S. Section 5452.14) provides that all complaints arising from real estate tax assessments must be brought before a board of assessment, and then subsequently appealed to the board of viewers and the Common Pleas Court, the Martels could not commence a separate civil action to challenge their real estate tax assessment. Instead, the Martels were required to pursue their pending appeal of the board of assessment's decision through to conclusion prior to commencing any type of separate civil action.

• Plaintiffs challenging a sheriff's proposed distribution of funds pursuant to a sheriff's sale must file a petition with the court within 10 days of the posting of the proposed distribution schedule.

Keller v. Bank of New York Mellon, 2019 PA. Super. 170 (2019), addressed whether the successful bidder at a sheriff's sale is permitted to challenge being assessed realty transfer taxes as part of the total purchase price. The plaintiffs were four separate sheriff's sale purchasers of real property situated in Monroe County, Pennsylvania. At the time of their purchases, they were directed by the sheriff's office to pay all state and local transfer taxes associated with the sales. However, after paying these taxes, the purchasers commenced separate civil actions against each of the foreclosing lenders asserting that their payment of these realty transfer taxes created an impermissible windfall for the lenders. The cases were consolidated, and the lenders filed preliminary objections in the nature of demurrers, asserting that the plaintiffs had failed to pursue their statutory remedies by not filing exceptions to the sheriff's proposed schedule of distribution. The trial court sustained the preliminary objections and dismissed the actions with prejudice.

On appeal, our Superior Court affirmed. In issuing its ruling the court noted that, pursuant to Pa.R.C.P. Rule 3136, any party seeking to challenge a sheriff's proposed distribution of funds pursuant to a sheriff's sale must file a petition with the court within 10 days of the posting of the proposed distribution schedule. In this matter, the record established that the Monroe County Sheriff's Office had properly posted the proposed distribution schedule, and that the plaintiffs had failed to timely challenge it. As such, the plaintiffs had waived their rights to contest their being assessed realty transfer taxes on their respective sheriff's sale purchases.

Frank Kosir Jr. is an attorney at Pittsburgh-based law firm Meyer, Unkovic & Scott. He can be reached at [email protected].