Act 27 and Pennsylvania Title Washing: Restoring Certainty After Proctor

A century-old dispute over Pennsylvania mineral rights has now drawn a legislative response. On July 12, 2026, the Pennsylvania Legislature enacted Act 27[1], amending the Real Estate Tax Sale Law, after a 2025 Supreme Court decision changed long-standing assumptions about historic tax sales and the doctrine known as “title washing.” The decision grew out of claims brought by the Proctor heirs, descendants and successors of Thomas E. Proctor, a 19th-century landowner and industrialist whose mineral reservations still affect large tracts of land in northeastern Pennsylvania. Act 27 is intended to restore certainty to those historic titles, but it may also invite the next round of litigation.

What Act 27 Does

Act 27 amends Pennsylvania’s Real Estate Tax Sale Law to address a specific but important title issue: how historic tax sales of unseated lands affect previously severed oil, gas, and mineral interests. The statute was enacted in direct response to the Pennsylvania Supreme Court’s 2025 decision involving the Proctor Heirs Trust[2], which raised new questions about whether certain early tax sales actually divested severed mineral owners of their interests.

For oil and gas operators, landowners, and title professionals, the stakes are significant. If a historic tax sale resulted in a valid “title wash,” the purchaser at the tax sale may have acquired both the surface estate and previously severed subsurface rights. If no title wash occurred, the old mineral reservation may still be valid, potentially affecting lease bonus payments, royalty ownership, and marketable title.

Background: What Is Title Washing?

“Title washing” refers to a Pennsylvania doctrine involving unseated land –generally, undeveloped land that was historically assessed and taxed differently than seated land. Before 1948, if unseated land was sold at a tax sale and previously severed mineral rights had not been separately assessed, the tax sale could extinguish those severed mineral interests. In practical terms, the tax sale purchaser could acquire the entire property, including the surface and the oil, gas, and minerals.

That rule provided the basis for many title conclusions involving older Pennsylvania lands. For decades, title examiners looked to whether the land was unseated, whether the subsurface estate had been severed, whether the mineral interest was separately assessed, and whether any exception to the title-washing doctrine applied.

The Powell Rule and the Proctor Decision

One important exception came from the Pennsylvania Supreme Court’s 1896 decision establishing what is commonly known as the Powell Rule[3]. Under that rule, a landowner could not improve its own title by allowing property taxes to go unpaid and then reacquiring the property at tax sale. In other words, a party responsible for the tax delinquency could not use the tax sale process to obtain a better title than it already had.

The Proctor Heirs Trust case extended that concern. In that case, the Pennsylvania Game Commission sued to quiet title to subsurface rights beneath approximately 2,500 acres in Sullivan County. The dispute involved the Haines Warrant, an unseated tract that was sold at a 1908 tax sale after the surface owner, Central Pennsylvania Lumber Company, failed to pay the 1907 taxes. The purchaser, Calvin H. McCauley, Jr., was the company’s treasurer and was found to have acted as its agent.

The Supreme Court held that the 1908 tax sale did not wash out the Proctor heirs’ reserved subsurface rights. Instead, the Court treated the tax sale as the functional equivalent of a redemption or payment of the delinquent taxes by the surface owner through its agent. Because of the relationship between the delinquent taxpayer and the tax sale purchaser, the Court concluded that the sale did not divest the Proctor heirs of their mineral interest.

Why the Decision Mattered

The decision created uncertainty beyond the Proctor lands. Before the ruling, title examiners could often determine whether title washing occurred by reviewing the tax sale, assessment status, and severance history. After the Proctor decision, the relationship between the tax sale purchaser and the delinquent taxpayer became potentially significant.

That change created a practical problem. Many pre-1948 tax sale records are incomplete, and they often do not identify whether the purchaser had a relationship with the delinquent owner. As a result, title examiners could be forced to investigate facts that may no longer be available. The decision also may have invited similarly situated mineral owners to challenge historic tax sales that had long been treated as having washed severed mineral interests.

How Act 27 Responds

Act 27 attempts to restore predictability by adding a new Article VII-A to the Real Estate Tax Sale Law addressing unseated lands. The statute confirms that, subject to limited exceptions, tax sales of unseated lands may have the effect of divesting unassessed subsurface interests.

Most importantly, Section 702-A provides that title washing applies “without regard to whether the purchaser owned any estate in the property at the time taxes became due.” That language directly addresses the issue at the center of the Proctor decision. Under Act 27, the relationship between the tax sale purchaser and the delinquent landowner should no longer defeat title washing if the statutory requirements are otherwise met.

The statute also limits challenges to the effect of a tax sale. Provided a tax sale was not challenged within the applicable five-year limitations period, Act 27 substantially reduces the risk that the effect of a pre-1948 tax sale can be challenged successfully.

Important Exceptions and Notice Provisions

Act 27 does not apply to every subsurface interest. Section 702-A(b)(2) confirms that title washing does not apply to severed subsurface interests owned by a governmental entity. That exception should be considered in any title review involving public lands, public agencies, or governmental ownership of mineral interests.

The Act also addresses notice. Section 705-A provides that sales for nonpayment of taxes on unseated land are proceedings against the property itself, rather than against a particular owner personally. As a result, personal notice to the landowner is not required in the same way it may be in other contexts. That provision should reduce some of the procedural uncertainty associated with historic tax sales of unseated lands.

What This Means for Existing Title Matters

For current title work, Act 27 is helpful but not necessarily the final word. The statute appears designed to restore the title-washing analysis that many Pennsylvania oil and gas operators and title professionals relied on before the Proctor decision. It should make it easier to evaluate historic tax sales without having to prove the absence of a relationship between the tax sale purchaser and the delinquent taxpayer.

At the same time, Act 27 may itself be challenged on the constitutionality of the legislation by the Proctor Heirs Trust or another mineral owner whose claimed interest is affected by the new law. Until any such challenge is resolved, title examiners should continue to identify historic tax sales involving unseated lands, confirm whether subsurface interests were separately assessed, and consider whether the new statutory provisions apply.

Key Takeaway

Act 27 gives operators, landowners, and title professionals a clearer framework for evaluating pre-1948 tax sales of unseated lands. The legislation is intended to reduce uncertainty created by the Proctor decision and to restore greater predictability to title-washing analyses. Even so, because the statute affects valuable mineral rights and directly responds to recent litigation, additional court challenges remain possible.

Please contact us if you have questions about Act 27 or would like assistance evaluating how the statute may affect pending title opinions, leasing decisions, royalty ownership, or other open title matters.

[1] Real Estate Tax Sale Law – Delinquent Real Estate Tax Notification to Designated Individual, Unseated Lands and Imposing Duties on the Department of Community and Economic Development (Act of July 12, 2026, P.L. 391, No. 27).

[2] Commonwealth v. Thomas E. Proctor Heirs Trust, 335 A.3d 1108 (Pa. 2025).

[3] Powell v. Lantzy, 173 Pa. 543 (1896).