Survey Indicates Pennsylvania Property Tax Certification Clearance Process Needs Changed

November 12, 2013

Signature Information Solutions LLC, a private, public-record research company, supports findings of a recent Pennsylvania Land Title Association (PLTA) study indicating professionals involved in real estate transactions in Pennsylvania want a change to the current property tax clearance process. Determining the payment status of property tax payments is needed on a timely basis for real estate transactions to determine outstanding amounts and to satisfy or prorate them at the closing table.

ORC International, a leading global market research firm, conducted the survey on behalf of the PLTA, which represents title insurance agents and underwriters, real estate attorneys and other real estate professionals serving Pennsylvania.

The study results show the majority of respondents would not recommend the current process be adopted by other states and that respondents would change the process if they could.

“These sentiments are even stronger from the group of respondents who personally deal with the elected tax collectors and who manage the highest number of real estate transactions per month,” according to the report.

The study also cited that four out of five of those who manage high order volumes and/or obtain such information daily would change the process with more than half showing strong feelings because they would definitely change it.

“The results of the survey do not surprise us at all,” said Patrick T. Roe, general manager at Signature Solutions. “We have been in this business since 1996, and have dealt with the many inconsistencies with turnaround time and fees. The elected tax collector who actually owns the data has no legislative or statutory responsibility to provide it for the real estate closing. This has adverse consequences for the Pennsylvania consumer.”

Signature recently produced a white paper on “How to Fix the Pennsylvania Tax Certification Process” which draws from the PLTA study and outlines challenges with the current government system.

Some of the points made in the paper include:

  • Governmental inconsistencies, which include both fees and turnaround time;
  • “Zip code discrimination” – with “home” zip codes receiving more favorable service than those outside the fulfilling tax collector’s area;
  • And recent legislation that seeks to protect the status quo and favors the financial interests of the locally elected tax collector over the interests of the Pennsylvania consumer.
The paper acknowledges that there are some elected Tax Collectors who do an outstanding job and provide a fair price and quality turn time. However, the paper further states, ” there are others who may allow up to two months to pass before issuing the Tax Certification and charges can total upward of $195 to provide this vital public record information.”

The paper also focuses on favoritism by elected tax collectors that it refers to as “zip code discrimination." The survey results state, “While 65 percent say they have generally positive experiences when obtaining the information from their local tax collector, only 49 percent say this is the case when obtaining the information from tax collectors outside of their area.” More than half of the respondents who deal with procuring this information have negative experiences trying to obtain it from elected collectors in other regions of the state. This is problematic as it is giving one business a competitive advantage over another based simply on their zip code, and results in Pennsylvania consumers receiving disparate treatment, according to Signature Solutions.

It also discusses pending legislation that may further cement the current process. Pennsylvania Senate Bill 444 (SB 444) seeks to amend the current “Right to Know Law” and exempt property tax information while requiring elected tax collectors to establish “a process to provide a clearance certificate.” The paper states, “The current version of Senate Bill 444 appears to favor the financial interests of the elected tax collector over the interests of the public citizen who needs timely and reliable access to the information maintained by the collector. By exempting property tax information and asking for a process to be established that has no deadline for implementation, no maximum fulfillment time frame, and does nothing to rein in fees that are sometimes exorbitant, the legislation effectively creates a government monopoly with consistently poor service that does not benefit the citizens of the Commonwealth of Pennsylvania.”

“Protecting the status quo is not in the best interest of Pennsylvania consumers,” Roe said, “In neighboring New Jersey, these records are openly public and allow private industry to relieve government of their labor burden and provide higher service levels. We believe that SB 444 should either declare the tax payment records as public records or tighten the parameters of the proposed process to establish clear service level standards with reasonable fees. As currently drafted, it will perpetuate the existing problem that the majority of the respondents to the survey indicated they wanted changed.”

Contact ALTA at 202-296-3671 or [email protected].