CHAPTER 374
FORMERLY
HOUSE BILL NO. 881
AN ACT TO AMEND CHAPTER 29 OF TITLE 25 OF THE DELAWARE CODE BY ADDING A NEW SECTION THERETO AND AMENDING EXISTING SECTIONS TO PROVIDE FOR THE ESTABLISHMENT OF A LIEN FOR TAXES AND OTHER GOVERNMENT CHARGES AND SETTING FORTH THEIR RESPECTIVE PRIORITIES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two-thirds of all members elected to each House thereof concurring therein):
Section I. Title 25, Delaware Code is amended by deleting the existing Section 2901 and adding in lieu thereof the following:
CHAPTER 29. LIENS OF THE STATE AND/OR ITS POLITICAL SUBDIVISIONS. Section 2901. Lien of Taxes and Other Charges; Priority.
(a) All taxes and all charges for water service, sewer service, garbage collection, or other such services levied or imposed by the State or its political subdivisions (including the Levy Court or County Council of a County, any united, consolidated or incorporated School district, or any incorporated town or city in this State) shall be and constitute a lien, hereinafter more specifically defined, upon all the real estate of the taxable against or upon whom such taxes and/or charges are laid or imposed, of which such taxable was seized at any time after such taxes and/or charges have been levied and imposed, situate in the County in which such taxes and/or charges are assessed and collectable. Such liens shall have preference and priority to all other liens on such real estate created or suffered by the taxable, although such other lien or liens may be of a date prior to the time of attaching of the liens for taxes and/or other government charges.
(b) Except as otherwise specified, "lien" or "liens" as used in this chapter shall arise whenever taxes, charges or other costs are levied or Imposed by the State or any of its political subdivisions and become due. "Lien" or "liens" shall include but shall not be limited to the following:
(1) Real property taxes, including penalty and interest thereon;
(2) School taxes, including taxes for a vocational, technical high school district or country vocational, technical center district, and including penalty and interest thereon;
(3) Service charges for maintenance or use of sewer systems;
(4) Service charges for maintenance or use of water systems; and
(5) Service charges for garbage collection, "Liens" shall not include administrative costs incurred by the Sheriff in the Sheriff Sale process.
Section 2. Title 25, Delaware Code is amended by adding thereto the following:
"Section 2906. Priority of Liens of the State and Political Subdivisions on Real Estate;
Extinction of such Liens.
(a) Except as otherwise provided in subsection (b), liens for taxes and other government charges levied and imposed by the State or its political subdivisions, which liens are assessed against real property, shall be equal in status, regardless of the time of assessment of said lien; no such lien shall have priority over any other such lien in the distribution of proceeds of the sale of real facias or any other process or order of any court resulting in a Sheriff's Sale. In the event that the proceeds of a Sheriff's Sale are insufficient to satisfy all such liens encumbering the property sold, then the State and/or its political subdivisions holding such liens shall share that portion of the proceeds of the Sheriff's Sale alloted to such liens on a prorate basis.
(b) In the event that real property is sold to the State or any of its political subdivisions pursuant to a writ of venditioni exponas, levari facias or any other process or order of any court resulting in a Sheriff's Sale and such writ or process was filed by the entity purchasing the real property, then the liens of the purchasing entity shall have priority over all other liens of the State or its political subdivisions and in the event that the proceeds of the Sheriff's Sale are insufficient to satisfy all liens of the State or its political subdivisions encumbering the real estate, the liens of the purchasing entity will be paid to the extent funds are available for such purposes and the remaining funds, if any, shall then be distributed on a prorata basis to other governmental entities having such Hens on the real estate sold, in full satisfaction of all such liens.
(e) When real property is sold pursuant to a writ of venditioni exponas, levari facias or any other process resulting in a Sheriff's Sale, said writ having been filed by the State or any of its political subdivisions, the purchasing party, other than the original owner, shall take the property free and clear of any and all liens on such real property, including liens of the State and/or its political subdivisions whether or not such liens have been fully satisfied from the proceeds of the sale.
(d) Except as specifically provided herein, nothing in this section shall be construed as affecting the order or priority of payment of any other liens, charges, costs or other debts against real estate sold at Sheriff's Sale or the affect of such Sheriff's Sale on the quality of title of real estate sold as provided in any other statute or ordinance of this State or its political subdivision.
(e) All liens of the State or any of its political subdivisions encumbering real estate sold at Sheriff's Sale prior to the effective date of this statute and purchased by the State or any of its political subdivisions at such sale are hereby extinguished, provided, however, that such lien existed at the time of said Sheriff Sale.
(f) Nothing in this Act shall effect the priority of any liens not of the State or any of its political subdivisions which existed of record on or prior to the effective date of this Act.
Approved July 10, 1980.