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Supreme Court rules against county for keeping a woman’s assets after a property seizure.


tvc184

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In yet another unanimous ruling, the Supreme Court ruled in favor of a 94 year old woman.

The woman owned or had equity in a condo/apartment and was behind on taxes. The county in Minnesota eventually seized the property and sold it at auction. That was not the issue though. 

In most states (likely all), property can be seized for taxes. Then after property is seized and sold, the government gets to keep the taxes owed but the rest (after liens are paid) is supposed to be returned to the owner.

For example: A person has a $200,000 home. He is behind $10,000 in taxes and legal fees. The guy still owed $50,000 on the mortgage. So the government seized the property and sells it at auction for $175,000. They keep $10,000 for the taxes and fees owed and $50,000 will go to pay off the mortgage. That still leaves $115,000 after everyone has been paid off. That is supposed to be given to the owner. 

Apparently in some states (such as this MN case, instead of returning the ballance to the rightful owner, the county (or state)  gets to keep it. It is like civil asset forfeiture on steroids. The county got back what they were owed in taxes and fees however they kept the rest of it.

You might think, surely that can’t be legal… but it was… until today.

Tyler v. Hennepin County, MN
 

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1 hour ago, tvc184 said:

In yet another unanimous ruling, the Supreme Court ruled in favor of a 94 year old woman.

The woman owned or had equity in a condo/apartment and was behind on taxes. The county in Minnesota eventually seized the property and sold it at auction. That was not the issue though. 

In most states (likely all), property can be seized for taxes. Then after property is seized and sold, the government gets to keep the taxes owed but the rest (after liens are paid) is supposed to be returned to the owner.

For example: A person has a $200,000 home. He is behind $10,000 in taxes and legal fees. The guy still owed $50,000 on the mortgage. So the government seized the property and sells it at auction for $175,000. They keep $10,000 for the taxes and fees owed and $50,000 will go to pay off the mortgage. That still leaves $115,000 after everyone has been paid off. That is supposed to be given to the owner. 

Apparently in some states (such as this MN case, instead of returning the ballance to the rightful owner, the county (or state)  gets to keep it. It is like civil asset forfeiture on steroids. The county got back what they were owed in taxes and fees however they kept the rest of it.

You might think, surely that can’t be legal… but it was… until today.

Tyler v. Hennepin County, MN
 

This is the hidden content, please

 

Was it actually legal or did they just do it?

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With this ruling, I'm curious if any "incentive" exists for the property to be sold for actual value. For example, if the State is owed...say $10,000, but the property is worth...say $200,000, what would prevent the State from selling the property for just $10,000 (especially to a campaign donor). I'm 100% in favor of the ruling. If some kind of fair market value rules do not exist for these types of sales, that definitely should be looked into.

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7 hours ago, Englebert said:

With this ruling, I'm curious if any "incentive" exists for the property to be sold for actual value. For example, if the State is owed...say $10,000, but the property is worth...say $200,000, what would prevent the State from selling the property for just $10,000 (especially to a campaign donor). I'm 100% in favor of the ruling. If some kind of fair market value rules do not exist for these types of sales, that definitely should be looked into.

I believe that all states probably have a law requiring it to be put at auction.

 They seize the property, sell it at auction, pay off any liens/mortgages, take what they are owed and the rest goes back to the owner.

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On 5/26/2023 at 4:41 PM, Englebert said:

With this ruling, I'm curious if any "incentive" exists for the property to be sold for actual value. For example, if the State is owed...say $10,000, but the property is worth...say $200,000, what would prevent the State from selling the property for just $10,000 (especially to a campaign donor). I'm 100% in favor of the ruling. If some kind of fair market value rules do not exist for these types of sales, that definitely should be looked into.

Good question 

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On 5/27/2023 at 12:43 AM, tvc184 said:

I believe that all states probably have a law requiring it to be put at auction.

 They seize the property, sell it at auction, pay off any liens/mortgages, take what they are owed and the rest goes back to the owner.

You are correct... the minimum bid for the property is required to be the amount of taxes/costs due, or it's "market value".... whichever is lower.  If the property sells for more than the minimum bid, the taxpayer has two years to request the excess proceeds from the sale... in Texas, anyways.  

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