Supreme Court rules for Minneapolis woman in home equity theft

By MARK SHERMAN

Associated Press

Published: 05-25-2023 6:36 PM

WASHINGTON — A unanimous Supreme Court on Thursday ruled a 94-year-old Minneapolis woman can recover the balance of what the county kept over what she owed in back taxes and penalties after it sold her condominium for $40,000 over an unpaid tax bill.

The justices ruled that Hennepin County, Minnesota violated the constitutional rights of the woman, Geraldine Tyler, by taking her property without paying “just compensation.”

“The County had the power to sell Tyler’s home to recover the unpaid property taxes. But it could not use the toehold of the tax debt to confiscate more property than was due,” Chief Justice John Roberts wrote for the court.

Put another way, he wrote: “The taxpayer must render unto Caesar what is Caesar’s but no more.”

Tyler’s home in Hennepin County, which includes the city of Minneapolis, was seized because she owed $15,000 in taxes and fees. But the county sold the home for $40,000 and kept all the proceeds, Tyler’s lawyers at the Pacific Legal Foundation said. The nonprofit represented Tyler at the Supreme Court.

Minnesota is among roughly a dozen states and the District of Columbia that allow local jurisdictions to keep the excess money, known by foes as “home equity theft.”

At least 8,950 homes were sold because of unpaid taxes and the former owners received little or nothing in those states between 2014 and 2021, according to Pacific Legal.

The other states are: Alabama, Arizona, Colorado, Illinois, Maine, Massachusetts, Nebraska, New Jersey, New York, Oregon and South Dakota, the group said.

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Lower courts had sided with the county before the justices agreed to step in.

The case is Tyler v. Hennepin County, Minnesota, 22-166.

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