The County Sold Her Home Over Unpaid Taxes and Kept the Profit. SCOTUS Wasn’t Having It.

When local bureaucrats in Hennepin County, Minnesota, seized an elderly woman’s home over a small tax debt, sold it, and kept the profit, they likely had no idea they would set in motion a series of events that would cripple the practice known as “home equity theft” across the country.

Yet that’s what happened. The Supreme Court on Thursday unanimously ruled that the government violated the Constitution when it took possession of Geraldine Tyler’s condo over an overdue property tax bill, auctioned the home, and pocketed the proceeds in excess of what she actually owed.

Tyler, who is now 94 years old, purchased the Minneapolis-area condo in 1999. But a series of events, including a neighborhood shooting, prompted her to relocate to a retirement community in 2010, at which point it became difficult for her to pay both her new rent and the property taxes on her former home. She accrued a $2,300 tax bill, which turned into an approximately $15,000 bill after the government added on $13,000 in penalties, interest, and fees. Local officials then sold the home for $40,000—and kept the remaining $25,000.

Tyler spent years arguing that such a taking was unconstitutional. But despite the case appearing fairly black and white from the outset, she had no such luck in the lower courts. When her case went before the U.S. Court of Appeals for the 8th Circuit, its ruling was also unanimous—in favor of the government. “Where state law recognizes no property interest in surplus proceeds from a tax foreclosure-sale conducted after adequate notice to the owner, there is no unconstitutional taking,” wrote Judge Steven Colloton.

The Supreme Court forcefully overturned that decision today. “A taxpayer who loses her $40,000 house to the State to fulfill a $15,000 tax debt has made a far greater contribution to the public fisc than she owed,” wrote Chief Justice John Roberts for the Court. “The taxpayer must render unto Caesar what is Caesar’s, but no more.” (Read more from “The County Sold Her Home Over Unpaid Taxes and Kept the Profit. SCOTUS Wasn’t Having It.” HERE)

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