A landlord learned an expensive lesson this week about the Municipal Claims and Tax Liens Act (“MCTLA”), when the Commonwealth Court of Pennsylvania found liens placed on the property by the City of Philadelphia were his responsibility. Property owner, Raymond Perfetti,  discovered liens had been placed on his properties after tenants who were responsible for their own gas bills vacated the property without paying the respective gas bills.  Perfetti argued that his due process was  violated by the City’s filing of liens against his property for the unpaid bills and claimed to have no notice of his tenants’ delinquencies, or of the four liens placed on the property,  only discovering them three years later.

The trial court disagreed, finding his due process rights were not violated, reasoning that notice prior to filing the liens was not mandated because Perfetti was able to ensure proper payment for gas services that benefited the property through the terms of the lease. Perfetti appealed.

On appeal, the Commonwealth Court affirmed the trial court’s ruling, finding: (1) the liens did not impair Perfetti’s use or control over the property, (2) under Mathews v. Eldridge, 424 U.S. 319, 333 (1976), the government interest in securing payment for services rendered at the property is significant when balanced against any burden on the property, (3) the risk of erroneous deprivation of Perfetti’s property interest is low, and (4) Perfetti is in a vastly superior position to control the presence and performance of third-party tenants at the property than the municipality. Further, the court noted that the statute of limitations may not deprive Perfetti of an equitable relief action against the tenants after this holding.

Click here to read: City of Philadelphia v. Perfetti, 2171–74 C.D. 2014 (Pa. Cmwlth. June 8, 2015).

Edited by:

HJA for PAZ Website Hugh J. Algeo IV, Esq.