For properties with outstanding tax debts, the City of Philadelphia has the right to request a court-appointed “sequestrator” to collect rent, manage a property, and pay its expenses—including current and delinquent taxes—until any debts to the City are paid off.
This arrangement is known as the Real Estate Tax Sequestration Program.
Properties at risk of entering sequestration
If you are delinquent in paying your Real Estate Tax, the City will notify you by certified mail to alert you that it will be requesting that the Court appoint a sequestrator. If you do not make arrangements to take care of your debts by the date stated in the letter, the City will file a petition with the Court of Common Pleas for the appointment of a sequestrator.
Failing to pay your debt to the City and ending up in sequestration may lead to mortgage default.
You can prevent Real Estate Tax Sequestration before the Court appoints a sequestrator by paying your delinquent bills or by entering into and remaining current on a City-approved payment agreement.
Make a payment
To make payment, use the payment coupon sent to you in the mail. Visit the City’s Real Estate Tax portal to pay by e-check, credit, or debit card, or call (877) 309-3710 to pay by credit card. You can pay in person at the Concourse of the Municipal Services Building at 1401 John F. Kennedy Blvd., Monday through Friday, 8:30 a.m. to 5 p.m.
If you can’t pay in full
Contact us at (215) 686-3629 if you need help making payments on time. Our customer representatives will review your file to determine if you’re eligible to make payments on an installment plan.
Owning a property in sequestration
If you don’t resolve your debt to the City and a sequestrator is appointed, the sequestrator will be authorized by the Court to direct you to turn over the keys, leases, and other information about the property. If you do not comply, the sequestrator will still take over management of the building and will commence collecting rents and paying expenses.
During sequestration, the ownership of the property stays the same as before the Court appoints the sequestrator. However, all decisions about the sale, lease, or financing of the property will be made by the sequestrator, in consultation with the City and the Court.
You do not have the right to collect income from the property, or sell, lease, or refinance the property while it’s under sequestration. The sequestration ends only when all debts to the City and sequestrator fees are paid.
Sequestrator responsibilities and powers
Once appointed, the sequestrator is authorized by the Court to direct you to turn over the keys, leases, and other information about the property to them. The sequestrator will manage the property until the delinquent taxes and all management fees are paid.
After taking over the building’s management, the sequestrator will contact tenants and building employees and let them know that they will now be responsible for:
- Collecting tenants’ rent
- Making necessary repairs
- Paying expenses for the building, including current and back taxes
Sequestrators are experienced managers of troubled properties. They have the power to make improvements, enter into leases, and even sell the property if that is what is necessary to get the debt repaid.
Tenant debts and leases
If a property in sequestration has tenants who owe back rent, the sequestrator will direct the tenants to pay. If they do not, the sequestrator will remove the tenants and install new ones.
Once a sequestration ends, the property owner must honor any lease terms that the sequestrator put into place. However, the sequestrator may only enter into leases of up to one year.
The sequestrator, who is under contract with the City, is paid a management fee out of the rents collected from the building. This fee, along with all delinquent debts, must be repaid before the management of the property can be returned to the owner.
The City has the statutory authority to have its Real Estate Taxes paid before anything else, except the sequestrator’s fees. The sequestrator will also pay expenses related to operating the building, provided that funds are available from the rents collected.
Tenants of a property in sequestration
Tenants (residential and commercial) of properties with a Court-appointed sequestrator must pay rent to the sequestrator and will direct all building management issues to him or her. The powers of the sequestrator are laid out in the City’s contract with the sequestrator, which you can request from the sequestrator. Failure to pay rent to the sequestrator can result in eviction.
The sequestrators are:
Gary F. Seitz, Esquire
Brya M. Keilson, Esquire