Several prior blog posts discussed the Supreme Court case Tyler v. Hennepin County, Minnesota, which addressed to whether the government could keep surplus funds in tax lien foreclosures. Geraldine Tyler is a 94 year old woman living in Minnesota who owed $2,300.00 in unpaid property taxes for her condominium. Due to her age and safety concerns, she moved to a nursing home and the condominium was sold by the county to pay her unpaid property tax bill.
The property was sold by the County at auction for $40,000.00. Ms. Tyler’s unpaid tax bill was only $15,000.00 once interest and late fees were included. So what happened to the extra $25,000.00? Under existing law in Minnesota, Hennepin County (the County in which the condominium was located), kept the excess funds for itself.
Ms. Tyler then sued, claiming that allowing the County to keep the funds in excess of what she owed in taxes was an unconstitutional taking of her property. The relevant clause is located in the Fifth Amendment of U.S. Constitution and states that “Nor shall private property be taken for public use, without just compensation.”