The U.S. Supreme Court will soon hear arguments in the case of Tyler v. Hennepin County. In this case, Geraldine Tyler lost her condo in Minneapolis, Minnesota, after neglecting to pay $15,000 worth of property taxes by 2015. Hennepin County seized and sold the condo for $40,000 to cover the taxes, interest, and fees due. The sale left Hazelwood with no equity. The Pacific Legal Foundation represented Tyler, arguing that the county’s retention of the excess amount was unconstitutional.
Tyler’s representation states that the county had the right to take Tyler’s property for failing to pay property tax but not to take more than what was owed. Tyler’s side states that the county took the property without just compensation. The county’s representation argues that there was no profit made, as Tyler did not have any equity in her home at the time of forfeiture. She had outstanding debts totaling $48,000 on her mortgage and over $11,000 in homeowner’s association fees. Furthermore, they state that payment plans and programs exist to help seniors pay their taxes based on their income. They argue that a homeowner must sell the property themselves if they want equity.
The case of Tyler v. Hennepin County is the first the Supreme Court will consider whether taking a property due to unpaid tax is unconstitutional. Unfortunately, most people affected by property forfeitures are the sick and the elderly. The Supreme Court will deliver a ruling on the case by summer.
Forfeiture in California
Several states have forfeiture clauses where the local tax assessor would keep the entire sales price of the house. In California, it is possible to lose a house for unpaid property tax, but if the person who owes the tax takes the proper steps, they can receive the equity from the house. The process requires filling out a form and asking for equity. So here in CA, if a person owed $15k in tax, and the house was worth $40k, they can ask for the $25k difference (the equity) after the home sells. The expert attorneys here at Law & Stein are ready and prepared to ensure you take the right steps during this process. Contact us to learn more today.