Charles Jones Blog
The majority of real estate industry professionals in a recent Pennsylvania Land Title Association survey think so. A majority said they would not recommend the current process to other states, would change it if they could, and that the process doesn’t benefit Pennsylvania consumers. The more transactions you conduct, the more likely you think the system should change. In fact, an overwhelming 79% of title agents and underwriters, who most often request this information, and 82% of those who personally obtain the information would change the process if they could. Not exactly a ringing endorsement. Locally elected tax collectors demonstrate inconsistent service levels that can result in closings having to be rescheduled. A rescheduled closing can cause a consumer’s rate lock to expire or a seller’s subsequent purchase deal to collapse. Home buying has a lot of moving parts and is stressful enough without government officials contributing to the anxiety level.
The survey also demonstrated that service levels differ if you’re a local. The experience in your “local area” is significantly better than from elected collectors outside your area. Signature Information makes these requests all over the state and we’ve definitely experienced this phenomenon. While we acknowledge that some tax collectors get it right, we have also had elected tax collectors boast of such discrimination. They have no shame. We call this “zip code discrimination” and while it creates a government funded competitive advantage for the local businesses, it is the consumer who chooses an out-of-area provider who suffers. In the end, it’s their local real estate deal that may get scuttled.
It doesn’t have to be this way. In neighboring NJ, the Open Public Records Act allows for a free inspection of the record. You don’t have to wait for a government official to perform the act when they feel like it. As a result, private industry can take the labor burden off of government and get these results back to the consumer in less than 24 hours.
Right now, Pennsylvania local tax collectors are not required by statute or regulation to provide tax payment information. They also are not considered “agents of the state” and aren’t bound by the state’s Right to Know law. Senate Bill 444 is trying to reinforce that by exempting property tax payment records from the law as well. Why would the government limit private sector involvement that would help the consumer? Is it because they favor the financial interests of the elected collector over the best interests of the consumers they were elected to serve? What do you think?
The good news is SB 444 does ask the collectors to establish a process for a “tax clearance certificate.” Unfortunately, as drafted the bill doesn’t tell them when they have to have to put this process in place and doesn’t address time service limits or set caps on the wide ranging fees for this public information. The bill has an opportunity to clean up this mess. You can read our white paper to learn more about the current challenges and ways to fix it.
Have you had deals that had to be rescheduled because the tax information wasn’t back? Do you have a war story of the adverse impact to a consumer? Do you think the process should change? Sound off here and let us know. Or, even better, let your state senator know the process should change. For Pennsylvania residents, click here to find the email contact for your State Senator.
Patrick T. Roe