SCOTUS to Hear Case of Elderly Widow Whose Home Was Seized by County and Sold for Profit

Photo of Geraldine Tyler provided by Pacific Legal Foundation
  • The US Supreme Court has agreed to hear the case of an elderly widow whose condo was seized and sold by the county government for unpaid property taxes — pocketing the proceeds from the equity in her property.
  • From 2014 to 2021, at least 1,360 Minnesotans lost their homes in this way for debts that averaged only 8 percent of the home’s value, representing a total of over $100 million in home equity lost.
  • This constitutes “home equity theft,” argues the Pacific Legal Foundation — when the government takes more than what is necessary to satisfy the tax debt.

The recent decision by the United States Supreme Court to hear the case of Geraldine Tyler, an elderly widow whose condo was seized and sold by the county government for unpaid property taxes, highlights the economic injustices faced by marginalized communities.

Tyler, who bought a one-bedroom condo in Minneapolis in 1999, fell on hard financial times and was unable to pay the $2,300 in property taxes that had accrued on the condo.

In 2015, the total tax debt she owed to Hennepin County was $15,000, and the county government seized her condo and sold it for $40,000.

However, instead of just keeping the $15,000 she owed them, the county pocketed the entire $40,000 proceeds from the sale, leaving Tyler with nothing.

This practice, known as “home equity theft,” is a violation of the Constitution’s Fifth Amendment prohibition on taking property without just compensation and the Eighth Amendment prohibition on excessive fines and fees.

It disproportionately affects marginalized communities, as many low-income households struggle to keep up with property taxes and are at risk of losing their homes.

In Minnesota alone, from 2014 to 2021, at least 1,360 residents lost their homes in this way for debts that averaged only 8 percent of the home’s value, resulting in over $100 million in home equity lost.

Minnesota is far from the only state that permits home equity theft, with twelve states plus the District of Columbia allowing this practice and nine more allowing it in limited situations.

This constitutes “home equity theft,” argues the Pacific Legal Foundation (PLF), when the government takes more than what is necessary to satisfy the tax debt.

PLF’s position is that this process violates the Constitution’s Fifth Amendment prohibition on taking property without just compensation and the Eighth Amendment prohibition on excessive fines and fees.

According to Law & Crime, PLF has found that home equity theft is allowed in a total of twelve states plus the District of Columbia and permitted “in limited situations” in an additional nine states, with New Jersey and Illinois being the worst offenders.

This case highlights the need for stronger protections for property owners and a reevaluation of the property tax system as a whole.



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