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Saturday, May 27, 2023

Supreme Court Strikes Down Home Equity Theft


Considering the current make-up of the U.S. Supreme Court these days, any unanimous decision by the court is a major deal.

Such is the case of Tyler vs. Hennepin County in Minnesota that violated the constitution's Fifth Amendment. 

From the Cato Institute:

Today, in a unanimous decision, the Supreme Court held that local governments cannot take surplus home equity after liquidating delinquent taxpayers’ property to pay their tax bill. Typically, if a property owner is behind on her property taxes, governments will take the property, liquidate it, and use the funds to pay off the tax bill and any accrued fees. Most states then return any remainder back to the property owner. However, Minnesota and 13 other states maintained a practice of greedily pocketing any surplus equity instead of returning it to the rightful property owner.

That is what happened to 94‐​year‐​old Geraldine Tyler, the plaintiff in Tyler v. Hennepin County. She fell behind on her property taxes, owing $2,700 and another $12,300 in fees. Hennepin County took her property and sold it for $40,000. But instead of returning Ms. Tyler her remaining $25,000, the County took that money for its own use.

The Supreme Court correctly decided that this practice is unconstitutional. Writing for a unanimous Court, Chief Justice John Roberts explained that governments cannot take more property than necessary to satisfy a tax debt.

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