The Supreme Court Strikes Down Home Equity Theft

Thomas A. Berry andIsaiah McKinneyToday, ina  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 inTyler 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.The crux of this case was whether the $25,000  in equity was in fact Ms. Tyler’s property. The Fifth Amendment prohibits the taking of private property without payment of just compensation, but the Constitution does not define what “private property” is. Courts traditionally look to state law...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs