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SCOTUS To Decide if Property Tax Forfeiture Constitutes Taking​

A judge's gavel and a house and cash.
By Eric Harvey, J.D. | Last updated on

An elderly woman in the Twin Cities stopped paying property taxes on her condo, so the county government seized her property and sold it. Now her case is up before the U.S. Supreme Court.

Geraldine Tyler, 94, moved into her Minneapolis condo in 1999, and lived there for a decade. In 2010, at the urging of her children, she moved into a home for the elderly. After she left the condo, she stopped paying her property taxes. By 2015, she owed $15,000 in unpaid taxes and homeowner's association fees.

Tyler's condominium was seized by Hennepin County, after she had failed to pay property taxes for years. The county put the property up for auction, where it sold for $40,000.

Tyler sued the county, and the case made its way up through the courts over the years. Just last week, SCOTUS heard oral arguments on the case. The core issue has become much more than one elderly lady's property dispute; it now has constitutional implications that could change the future of what governments throughout the country can do with civilian property.

Tyler Alleges Unconstitutional Property Seizure

In arguments before SCOTUS, Tyler's attorney did not dispute that her client was notified Hennepin would seize the property in the event Tyler continued to fail to pay her property taxes.

However, she claims that when the Hennepin County government did not pay Tyler the $25,000 difference between the unpaid property taxes and the auction sale price, it committed an unlawful "taking" of the property in violation of the Fifth Amendment to the U.S. Constitution. By not paying her the difference, Hennepin County did not provide just compensation in taking the house.

The legal underpinnings of Tyler's plea before SCOTUS find their roots in eminent domain. Tyler's attorney claims that Hennepin County committed "home equity theft" in its failure to provide just compensation to her client. Under the Fifth Amendment to the U.S. Constitution, the government cannot take private property without providing "just compensation." FindLaw provides more information about the government's power to take private lands here.

The Supreme Court has long upheld property tax forfeitures. Tyler's case will be the first time that SCOTUS considers whether a property tax forfeiture can be considered a "taking" under the Constitution.

Hennepin County's Response

The county responded to Tyler's claims by emphasizing that it does not make a profit from seizing private property in cases of such as these. Its attorney claimed that the local government "doesn't even break even through its administration of the tax forfeiture laws."

According to the government's attorney, Minnesota homeowners can avoid forfeiture through a variety of means. In one of these options, a person can pay what they owe over a 10-year period. Another of the programs allows the elderly to pay up to 3% of their yearly income toward satisfying their property tax obligations. The government thus claims that Tyler could have avoided the seizure by taking advantage of one of the programs that Minnesota provides for people whose property taxes are in arrears.

At the same time, the government's attorney has said that the county would prefer not to be in the business of default-related real estate, as abandoned homes reduce property values, while the expenses involved in restoring such homes to a sellable condition are high.

Hennepin County also claims that Tyler could have simply sold the home herself. But apparently, Tyler had no equity in the home when the forfeiture took place. The public record reflects that Tyler owed $48,0000 on her mortgage. In addition, she owed more than $11,000 in homeowner's association fees. Those debts were cancelled under state laws dictating forfeitures. These facts also seem to contradict what Tyler's attorney has claimed about the county committing home equity theft.

Main Takeaways From Tyler's Case

Tyler's attorney has claimed that the people most vulnerable to these types of takings are the sick and the elderly. This case is thus not just an issue of protecting against unconstitutional takings of property by the government. Tyler's case also speaks to a need to prevent abuses of power by the government, specifically abuses of power that victimize vulnerable peoples. This just adds to the stakes in front of SCOTUS for its first ever direct review of whether a property tax forfeiture constitutes a taking under the Fifth Amendment to the U.S. Constitution.

Read more about your property rights in FindLaw's Learn About the Law resource pages:

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