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Professors' Corner - Tyler v. Hennepin County - Home Equity Theft, Tax Forfeitures and Excessive Fines

Michael Wolf, Christina Martin, Jessica Lynn Asbridge, and Rosa Marie Newman-Ruffin

In 2010, Geraldine Tyler's family moved her from the one-bedroom condominium in Minneapolis she had purchased in 1999 to a senior community. Unfortunately, neither Tyler nor her family complied with the county's property tax requirements and, by 2015, it had accumulated about $2,300 in unpaid taxes and $13,000 in interest and penalties. Acting under Minnesota’s forfeiture procedures, Hennepin County seized the condo and sold it for $40,000, extinguishing the $15,000 debt. The County kept the remaining $25,000 for its own use. This practice is commonly known as home equity theft.

On May 25, 2023, the Supreme Court issued a ruling in the case of Tyler v. Hennepin County which expanded the constitutional protections afforded private property owners by finding that a local government’s retention of funds yielded by a tax sale that exceed the amounts owed by delinquent taxpayers could amount to an illegal taking without just compensation in violation of the Fifth Amendment’s Takings Clause.