94-year-old’s Supreme Court case could change property rights nationwide
94-year-old Geraldine Tyler lived alone in a condo and then rented an apartment in a senior community. Now she’s before the Supreme Court and her case could change property law around the country.
When Ms. Tyler moved out of her condo, she stopped paying taxes. That eventually added up to $15,000 in taxes, fees, and other costs. The county seized her property, sold it for $40,000, and kept what she owed, plus the additional $25,000 as a windfall. Although the county argues when you add in all of their expenses, including paying left over HOA fees and the cost of getting the condo ready for sale, there was nothing left.
Neal Kumar Katyal, Hennepin County, Lawyer representing Hennepin County tc: 51:24
This court in Texaco made clear that when a property right is extinguished, due to an owner’s failure to comply with reasonable conditions on ownership, there is no taking that requires compensation.
It’s legal in Minnesota and a dozen other states for the local government to take absolute title of properties and keep all of the owner’s equity in exchange for canceling the debt. But Ms. Tyler doesn’t think it’s right.
Christina M. Martin, Pacific Legal Foundation Tc 23:10
certainly the government can tack on penalties interest in fees and they can forcibly sell it and take their cut. But when you just attempt to take everything leftover after that, that’s taking
Lower courts have ruled against Ms. Tyler. Now the justices will answer two questions:
- Whether taking and selling a home to satisfy a debt to the government, and keeping the surplus value as a windfall, violates the Takings Clause of the fifth amendment which requires just compensation be given to property owners.
- Whether the forfeiture of property worth far more than needed to satisfy a debt plus, interest, penalties, and costs, is a fine within the meaning of the Eighth Amendment – which prohibits excessive fines.
Ms. Tyler, and others in her situation, are being represented by the Pacific Legal Foundation. According to the organization’s data, 11 states foreclosed and sold 8,950 properties from 2014 to 2021. Available data for 6,200 of those homes showed that when the governments sold them, they collectively received $860 million more than the taxes that were owed. PLF describes it as home equity theft. It’s an issue that has united many organizations, including PLF and AARP.
We won’t have to wait too long to get the decision, the Justices will release it by June. Straight from DC, I’m Ray Bogan.