A widowed grandmother’s story of losing a home: The U.S. Supreme Court heard her last scheduled argument of the term – case of Geraldine Tyler

The U.S. Supreme Court on Wednesday heard its last scheduled argument of the term — a case brought by a 94-year-old widowed grandmother in Minneapolis whose condominium was seized for failure to pay property taxes. Unsurprisingly, it looked like grandma would win.

Geraldine Tyler bought her condo in Minneapolis in 1999 and lived there until 2010, when, at age 81, she moved to a senior assisted-living center at the urging of her children. After that, she stopped paying taxes on the condo, which she still owned. Tyler accepts that the county warned her that she risked losing the condo if she didn’t pay up. By 2015, she owed $15,000 in unpaid taxes, interest and fees.

The county took possession of the property under state law and sold the condo at auction for $40,000. But, like at least a dozen other states, it did not pay Tyler the surplus $25,000 from the sale.

Tyler’s lawyer said that the property was taken by the county because they kept the $25,000 surplus over the taxes. It’s a taking without just compensation that violates the Constitution, said lawyer Christina Martin.

“The county doesn’t make a profit,” Rebecca Holschuh said. The tax forfeiture laws of the county don’t break even.

She says that it’s a good idea to pay back taxes, enter into a tax payment plan, or sell the home and reap the profits five years before forfeiture. The county asserts that Tyler had no equity in the home at the time it was forfeited because she didn’t pay her mortgage or homeowner’s association fees, which were canceled under state law.

Holschuh says that the county really would rather not be a default realtor. It doesn’t want to spend a lot of money on making a property sellable, and it just doesn’t want to be stuck with abandoned homes.

“And really, if somebody wants to pull their equity out of property, the best way for them to do that is to sell the property themselves,” Holschuh said.

Whoever is right, nobody disputes that losing a home can be devastating for families. And homeowners do tell some horrible tales elsewhere in the country.

At the time, Tawana Hall lived in Detroit, but she and her husband decided to move to Mich., and bought a rundown house. But the couple fell behind on tax payments, enrolled in a tax payment plan and then fell behind again. A developer bought the home for $1 and sold it for $300,000 after it was taken over by the city.

“It’s a rollercoaster ride,” Hall said. It’s something that you put a lot into. Our children’s home was supposed to be our forever home, so we were supposed to have to move back into the city. it was a lot You know, it’s overwhelming.

A Manhattan High Court Benchmark on the Property Tax Forcing Problem: State Laws vs. Municipal Laws, and Urban Life in Minnesota

The people who are most affected by property forfeitures for back taxes are elderly, sick or unsophisticated, according to the lawyer for Pacific Legal Foundation.

That said, this is the first time that the Supreme Court has directly considered whether a property tax forfeiture, something that the court has long upheld, can be considered a taking under the Constitution. Would the county be able to maximize the sale price, not just put the property up for public auction? What if the property was not sold at the higher price? There could be competing claims on the property.

A system that crippled local government property Tax Collection and added to the already bad quality of urban life would be a disaster, according to briefs filed by County and local government associations.

The case is important because Minnesota is one of 20 states that handle the sale of such defaulted properties without sharing the proceeds with the previous owner when the property is sold.

Chief Justice John Roberts noted that traditionally such matters are left to state laws, and that, at the founding, some states did have laws like Minnesota’s.

Justice Sonia Sotomayor followed up by asking, “OK, here you have a debtor who basically doesn’t want to do anything. What’s the county supposed to do to protect itself?”

Justice Samuel Alito turned to a similar issue. He noted that some cities impound vehicles when the owner has unpaid car taxes or tickets, and then, if the owner doesn’t pay the amount that’s due, the city sells the car and keeps the proceeds, putting them into the city’s general fund. “Would that be unconstitutional in your view?” he asked.

Lawyer Martin answered yes, it would be, noting that “the history of tax collection or debt collection from the government is pretty uniform on the question of personal property.”

When did Katyal argue that the state of Minnesota had no equity in a condo? The question of real property, not the case of Tyler

If these appeared to be difficult questions, they were nothing compared to the animosity faced by Neal Katyal, a lawyer in Minneapolis.

While opening the case, she tried to convince the court that Tyler didn’t have standing to challenge the sale of her condo because she had no equity in the house. Under state law, the seizure automatically cancelled her debts on it — debts totaling $59,000 in mortgage payments and unpaid condo fees.

The court was irritated when he mentioned states with laws that were at the time of the founding. And when he cited the Statute of Gloucester in 1278, Justice Neil Gorsuch could contain himself no longer.

“Tyler was not a vassal owing fealty to her lord but a modern-day simple owner of real property,” he intoned. “I just don’t understand what on Earth any of that history has to do with this case.”

The justices heard a case in which the court upheld a law whereby a house could be sold for seven figures if the owner did not pay their water bill.

What is the point of the takings clause? The chief justice asked. “That was important to the framers and important to the way they framed it.” Why did they put that in there?”

We shouldn’t read the constitution to dis favor real property. That seems to be completely opposite.

Jackson said that most states allow for some sort of surplus or mechanism to give the money back to homeowners. “So what is the big practical problem that we would face?”