Miscellaneous Pennsylvania Provisions
This chapter gathers additional Pennsylvania-specific topics, including transfer taxes, foreclosure practice, and related state rules. These provisions round out the licensee's understanding of Pennsylvania real estate law.
Realty Transfer Tax
Pennsylvania imposes a state realty transfer tax of 1% on the value of most real estate conveyances. Local municipalities and school districts typically add their own transfer tax, commonly another 1%, so the combined rate varies by location. By custom the tax is often split between buyer and seller, though the agreement of sale controls. Certain transfers, such as some between family members, are exempt.
Foreclosure and Lien Theory
Pennsylvania primarily follows a lien theory of mortgages, meaning the borrower holds title while the lender holds a lien as security. Foreclosure in Pennsylvania is judicial, requiring the lender to file a court action before the property can be sold at a sheriff's sale. This process gives borrowers procedural protections and a chance to cure the default. Understanding the judicial process is important when advising distressed sellers.
Related Consumer Protections
Pennsylvania law addresses matters such as property condition, stigmatized property, and consumer protection in real estate transactions. Certain psychological factors, like a death on the property, are generally not required to be disclosed under Pennsylvania law. Licensees must still answer direct questions honestly and avoid misrepresentation. These rules balance seller privacy with buyers' right to material information.