Among Friends

[PickyPicky3]

@gardenman   @NYCLatinaMe and others interested in real estate issues

The Supreme Court will hear the case of a 94-year-old woman who moved out of her Minneapolis condo because there was so much crime in her neighborhood. She couldn't afford the new apartment rent and her condo property taxes and fell behind. (I don't know why she didn't sell the condo.)

She owed $2,300 in taxes which grew to $15,000 with late fees, penalties etc. Minneapolis seized the condo and sold it for $40,000. It kept the full $40,000 instead of returning $25,000 to the woman. 

The lawsuit questions whether this is constitutional. I'll be interested in how this one comes out. It certainly affects many people. 

[FlyersGirl]

It will be interesting to see how this resolves. There are several states, New Jersey being one of the worst, that do not protect people from home equity theft. 

I am guessing this has been in litigation for some time as I saw that the property seizure and sale took place in 2015 and she actually left the premises several years prior.

@PickyPicky3  thanks for posting this

[PickyPicky3]

@FlyersGirl   It takes a long time for a case to reach the Supreme Court. Did you learn why she didn't just sell the condo and avoid all this?

[FlyersGirl]

@PickyPicky3 No, I didn't see why she did not sell the condo. It doesn't make sense to me. I am guessing she didn't rent it either as that could have helped with her expenses. I also wonder if she had family that could have helped. She is apparently in assisted living now. It will be interesting to see more details.

[PickyPicky3]

@FlyersGirl   Most people get their 15 minutes of fame at a much younger age.  

[781Florist]

Even if this was something that happened in 2015, $40,000 would be a deposit on a property around here.  Minneapolis is not cheap, either.  If the state of Minnesota is going to keep the entire proceeds from a sale they should try to get closer to market value. Hmmmmm....

Somebody in government had a sister/aunt/cousin etc... that got a great deal on a piece of property.

[Desertdi]

A case this seemingly simple doesn't get to the Supreme  Court....there has to be MORE to it than just a tax lien.

[gardenman]

Property taxes really need to be looked at anew. With interest rates as high as 18% for overdue taxes and tax liens,  it becomes more than a bit insane. There needs to be some leeway in the system.  The average property tax in my township is $7,111 a year. That's $592+ a month. And this isn't even close to being the most expensive community in NJ. There are a number of communities in NJ where the average property tax bill exceeds $20,000 a year. 

[Jaspersmom]

According to the PLF, Minnesota allows county governments to seize property for unpaid taxes, force a sale, and keep any excess value. From 2014 to 2021, at least 1,360 Minnesotans lost their homes in this way for debts that averaged only 8 percent of the home’s value, representing a stunning total of over $100 million in home equity lost.

This constitutes “home equity theft,” argues PLF, when the government takes more than what is necessary to satisfy the tax debt, and is a violation of the Constitution’s Fifth Amendment prohibition on taking property without just compensation and the Eighth Amendment prohibition on excessive fines and fees.

And Minnesota is far from the only state that permits home equity theft. A PLF review of laws across the country found it is allowed in a total of twelve states plus the District of Columbia and permitted “in limited situations” in an additional nine states.

[Jaspersmom]

To Garden Man:

The same in NYS because property taxes pay for public schools.  Other states operate under a different system.  NYS could fix it and make it more equitable, but upstate NY will never agree to it since their taxes would probably bump up a bit.